The Big Idea

The Agenda

How the president can move beyond reactionary liberalism in his second term.

President Obama takes the oath of office as first lady Michelle Obama holds the Bible in the Blue Room of the White House on Jan. 20, 2013.

Pool photo by Larry Downing/Getty Images.

Four years ago, Barack Obama took his oath of office against a backdrop of enormous expectation and great peril. He was a figure of inspiration and societal change taking the stage amid the worst financial crisis in 70 years. In that context, the question of the president’s fundamental view of government’s role seldom arose. Emergency simplifies the job of a chief executive. For any president of either party, the agenda in January 2009 would have been largely the same: keep the economy from falling into another Great Depression, save the auto industry, restore the flow of credit, and get Americans back to work.

Having accomplished all that and passed national health insurance in the bargain, Obama now faces the problem of what to do for an encore. He takes his oath for the second time with greatly diminished personal promise, a far healthier economy, and facing no special peril. After some eloquent words in his inaugural address, he seems likeliest to keep on governing like a Dwight Eisenhower or George H.W. Bush—a moderate, effective problem-solver with limited aspirations. The word Obama has used more than any other to describe himself is  “pragmatist.” By continuing in this mode for another four years, he stands to leave a legacy as a fine decision-maker and manager in troubled times. Unless he raises his sights, however, he is unlikely to live up to his promise as a transformational leader. 

To say that the president has yet to develop a broad, coherent vision of government is not the same as saying he lacks an agenda. Obama’s second-term program has already begun to emerge: gun control, immigration reform, and protecting the core of the federal safety net—Medicare, Medicaid, and Social Security. But this agenda comes largely as a response to events and political opportunity: gun control because of the Sandy Hook shootings, immigration because of the rising power of Latinos, a defense of entitlements against the House Republican Jacobins.    

With such a defensive agenda, however, Obama and the Democrats face a long-term hazard. The danger is slipping into a purely reactionary liberalism—one that stands for spending on programs that please powerful constituencies rather than for basic principles.

The obstacle that prevents liberals from thinking more ambitiously about government’s role is the swelling cost of entitlement spending, which is turning the Democrats into the party of transfer payments and taking any new ideas that cost money off the table. Under budget caps the president and Congress have already agreed to, nondefense, discretionary spending is set to fall over the next decade to around 2.5 percent of GDP, its lowest level in 50 years. This decline is offset by growth in entitlement spending and interest on the national debt. The paradox is that without doing some of what Republicans want when it comes to reducing the long-term costs of retirement benefits, Democrats can’t do much of anything else to invest in the future. Restoring long-term fiscal balance has again become a prerequisite to the federal government taking on new problems.

What might a more ambitious and activist liberalism try to accomplish in the coming years? More than anything else, I would argue that it means taking on the problem of inequality. Since the 1970s, the fortunes of wealthier Americans have diverged dramatically from the middle and bottom, producing a more class-bound society and undermining common institutions of all kinds. But Democrats remain wary of taking on this problem directly for two reasons. The first is that beyond national health insurance and higher taxes on the wealthy, they really don’t know what to do about it. The second is their underlying fear that equality has fallen in the hierarchy of American values.

So long as Republicans continue to marginalize themselves, Democrats can win politically by standing pat. If he wants to be a great president, however, Obama needs to frame his signature first-term achievement of health care reform around a larger concept of renewing social equality and provide a bookend accomplishment in his second. One such goal would be at least some higher education for all Americans, an idea from his first address to a joint session of Congress since fallen by the wayside. The president retains a chance to leave his stamp on American liberalism as Franklin Roosevelt, Lyndon Johnson, and Bill Clinton did in their various ways. To join that pantheon will require moving beyond reactionary liberalism toward another reimagining of the social contract.

A version of this piece appeared in the Financial Times.