Obama’s Hidden Legacy
Amid President-elect Donald Trump’s wildly contentious transition, the notably civil hearing over Elaine Chao’s nomination to be his transportation secretary did not get much attention. But for policy wonks, there was an intriguing moment when Chao was asked her opinion of an obscure Obama administration grant program known as TIGER. She replied that it seemed almost bizarrely popular in this politically polarized era and suggested she would push to get it more funding.
“From all my meetings with members of Congress, there seems to be one area of great agreement, and that’s the utility of the TIGER grants,” she said.
It’s odd to hear any Trump nominee praise anything created by Obama, but it was especially jarring to hear Chao praise a creation of the Obama stimulus. Chao’s husband, Senate Majority Leader Mitch McConnell, led the Republican fight against Obama’s $800 billion recovery bill in early 2009, and the entire GOP has ridiculed the “Porkulus” as a complete waste of money ever since. But TIGER was indeed launched by the emergency stimulus bill-its acronym stands for Transportation Investments Generating Economic Recovery-and then extended several times with bipartisan support even after Democrats no longer controlled Congress.
When President Barack Obama leaves office tomorrow, most assessments of his policy legacy will focus on a series of signature accomplishments that Trump and congressional Republicans have vowed to undo, such as health care reform, Wall Street reform, climate action, the Iran nuclear deal, and tax hikes on the rich. History will also recall that he helped reverse that economic meltdown he inherited, ordered the raid that killed Osama bin Laden, ended the combat missions in Iraq and Afghanistan, and failed to achieve his dreams of bipartisan consensus-and also, of course, that he became the first black president in the first place. But in eight incredibly busy years in the policy weeds, his administration has also ushered in a slew of unsung, unsexy and often uncontroversial innovations in the TIGER mold. His efforts to ease the burden of student loans, eliminate hidden credit-card fees, extend high-speed broadband to low-income schools, and make it easier for the poor to buy diapers weren’t as dramatic as his bailout of the auto industry or his opening to Cuba, but they will reshape the government in ways that Republicans are unlikely to even try to reverse. To cite another example from the stimulus, now that Obama has dragged the medical system into the digital age by subsidizing electronic medical records, it’s hard to imagine the system getting dragged back to analog.
So while Democrats may have lost both houses of Congress, a slew of statehouses, and ultimately the White House on Obama’s watch, many of his policy wins will survive his political failures, leaving a far deeper imprint on the government than most Americans realize. TIGER helps illustrate why. It was grounded in the strangely revolutionary notion that at least some federal transportation dollars ought to go to the worthiest projects, instead of flowing to states to spend in mandated silos according to fixed formulas and stodgy compliance rules. TIGER set up a competition for any transportation-related project-road, rail, bus, port, bike, pedestrian or any multi-modal combination-that could demonstrate significant economic and environmental benefits. And the demand from local communities and transit agencies as well as states has been overwhelming. The administration has received about 7,900 applications for about $150 billion worth of projects; in seven funding rounds, it selected just 421 of those projects, spending just over $5 billion.
TIGER’s environmental focus has given it a bit of a lefty tilt under Obama. About two thirds of regular transportation money goes to highways, but a slim majority of TIGER money has gone to rail, transit and bicycle projects designed to reduce carbon emissions as well as congestion. Only one-third has gone to road projects, often to nontraditional ones like a $19 million grant for a highway reconnecting Pittsburgh’s Hill District-the hardscrabble black neighborhood featured in Fences-to the city’s downtown, an effort to undo some of the damage inflicted by uncaring transportation planners during the era of urban renewal. But TIGER is not an inherently ideological program, except insofar as forcing projects to compete for cash represents an ideology. The projects that have been selected-from a massive effort to untangle Chicago’s spaghetti bowl of freight and passenger tracks to a Green Trade Corridor that will shift some Northern California cargo traffic from trucks to barges-have been almost uniformly praised. And Republicans like McConnell, House Speaker Paul Ryan and Vice President-elect Mike Pence have all written letters to the administration supporting projects in their states.
No wonder Chao called the current funding for TIGER “very modest” at her hearing, saying she “looks forward to reviewing it and seeing how much could be devoted to it.” Here are a few other genres of policy disruptions that Obama will leave behind after the better-reported fights over his opening to Cuba, his new federal rules for winding down failing megabanks without bailouts, and his efforts to forge free-trade agreements are still raging:
College Cost Relief: The $1.3 trillion “student debt crisis” became a hot campaign topic in 2016, with Bernie Sanders promising free college, Hillary Clinton promising debt-free college and even Trump pledging to fix a situation where 44 million borrowers are stuck with “an albatross around their necks for the rest of their lives.”
Quietly, though, Obama has largely fixed the situation already.
Through a statutory fix buried in the legislation that authorized Obamacare, followed by a series of inside-baseball regulatory fixes, the administration has shifted much of the burden for student loans from borrowers to taxpayers. First, it reduced the burden for borrowers eligible for “income-based repayment,” limiting monthly payments to just 10 percent of their discretionary income-defined as income above 150 percent of the poverty line-and ensuring that the loans will be forgiven after 20 years. And then it made all borrowers eligible for the income-based repayment program. Not surprisingly, enrollment is skyrocketing; 38.6 percent of borrowers are now reducing their payments through the program, up from just 14.4 percent in 2013.
Meanwhile, the Obama administration-led by the U.S. Digital Service, a new Silicon Valley-dominated tech agency created after the healthcare.gov fiasco-has streamlined the standardized form that students use to seek financial aid from their schools. The changes have already cut the average completion time by two-thirds, and this year families will be able to enter their tax data with a single click. The form will also connect to the administration’s newly created College Scorecard, giving applicants a wealth of data about the actual cost and expected value of different schools. That kind of innovation would be tough-and, honestly, weird-to undo.
Obama has taken several other actions to increase access to higher education that could be much more vulnerable in the Trump era. For example, the Obamacare language also nationalized the student loan program, expelling private lenders that had enjoyed windfall profits, then using the savings to expand Pell grants for needy students. Some Republicans now hope to reverse that, reinstating private-sector middlemen and scaling back Pell aid. The administration also pushed through harsh “gainful employment” rules cracking down on for-profit schools that fail to move students into jobs, rules that may not survive under the founder of the sketchy Trump University. Many Republicans would also like to abolish the Consumer Financial Protection Bureau that Obama created with his Wall Street reforms, an agency that has raised further alarms about for-profit schools as well as student loan servicers. Just yesterday, it sued the servicer Navient, which used to be known as Sallie Mae and is still one of the most influential firms in Washington, for cheating borrowers, an action sure to get noticed on Capitol Hill.
But Obama’s income-based repayment reforms are unlikely to go away, in part because Trump’s own student loan plan from the campaign relied heavily on income-based repayment-and looked a lot like Obama’s status quo. Obama’s reforms might end up imposing huge costs on taxpayers, but they should make sure student loans won’t be too much of an albatross for borrowers for the foreseeable future.
Closing the Diaper Gap: Diapers are a classic example of the old truism that it’s expensive to be poor. Well-off families buy in bulk online or at Costco, while low-income parents without the means, the broadband access or the storage space to buy in bulk tend to spend twice as much at their corner store. Obama proposed a modest $10 million diaper-access experiment in last year’s budget, but according to the head of his Domestic Policy Council, Cecilia Muñoz, “we knew Congress would be unhelpful, so we had to get creative ourselves.”
What the White House did was reach out to the private sector, starting with an online retailer called Jet.Com that one DPC staffer used for diaper purchases. The outreach led to the creation of the JetCares Community Diaper program, which has already shipped 5 million reduced-cost diapers to nonprofits around the country. The White House kept hammering away at the issue-including a blog post by the president-and other firms responded, distributing more than 75 million additional free or low-cost diapers to nonprofits last year. “It didn’t cost taxpayers a nickel, other than the salaries of the people who did the work,” Muñoz says. “But it’s turned into a huge project that’s cutting into a huge problem.”
There are plenty of similar examples of the Obama administration launching initiatives that won’t necessarily require government involvement now that they’re launched. The Better Buildings Challenge has signed up more than 300 corporate partners that have committed to reduce the energy use of more than 34,000 buildings by at least 20 percent, avoiding more than 10 million tons of carbon emissions while saving $1.3 billion. Vice President Joe Biden’s “It’s on Us” campaign has secured more than 400,000 pledges to help fight sexual assault on campus and will surely continue to push the issue no matter what Trump said on tape to Billy Bush.
The presidential bully pulpit is often overrated. Several of Obama’s most memorable speeches-those in Tucson, Newton, and Charleston-advocated gun control, an issue where he made no legislative progress. But Obama has often used the bully pulpit to force issues onto the national agenda. For example, his call for universal preschool in his 2013 State of the Union Address did not persuade Congress to finance universal preschool-but it did build momentum. Thirty-four states ramped up early education programs over the next two years, and Congress did approve new pre-K grants that have benefited half of all Latino toddlers. In that same speech, Obama pushed for a higher minimum wage, which of course didn’t happen at the federal level, but did happen in 17 states and the District of Columbia.
The Quiet Revolutions: Trump and the Republicans are already struggling to find a politically palatable way to repeal Obamacare. It won’t be easy to gut reforms that extended coverage to 20 million uninsured Americans and enhanced coverage-by eliminating caps on claims, denials for pre-existing conditions, and co-payments for preventive care-for 170 million insured Americans. But even if they do agree on a repeal plan, they probably won’t be able to, and probably wouldn’t even want to, reverse the little-noticed trends Obamacare has triggered in the delivery of health care.
The quick summary is that America’s volume-based “fee-for-service” system, which rewards providers for doing more tests and procedures as well as filling more hospital beds, is being transformed into a value-based system that pays for quality instead of quantity. Obamacare accelerated these changes with a variety of carrots and sticks, but federal health officials believe features of the new system, like “accountable care organizations” and “global budgets,” will continue to expand no matter what happens to Obamacare. The changes already seem to be improving care, reducing unnecessary readmissions as well as hospital-acquired infections, while reining in costs, which are growing at the slowest rate in half a century and saving taxpayers tens of billions of dollars a year. And in 2015, Congress actually passed a bipartisan Medicare bill that doubled down on those changes.
A similar story could unfold in the world of energy and climate, as Trump will surely try to kill Obama’s EPA restrictions on carbon emissions from power plants, and might also pull out of the Paris climate accords, but probably won’t reverse America’s shift away from dirty coal toward a clean-energy future. Coal has gotten expensive-partly because of Obama rules limiting mercury, smog, soot and other pollutants that predated Obama’s better-known Clean Power Plan limiting carbon. Even if Trump attacks those rules as well, it will be too late to prevent them from forcing the retirement of about a third of the coal fleet since 2010. Meanwhile, renewables have gotten dramatically cheaper-aided by massive incentive programs in the Obama stimulus, as well as an Energy Department “SunShot” initiative designed to drive down the price of solar power. As a result, wind power has tripled and solar installations have increased more than 30-fold under Obama.
At the same time, U.S. electricity use is basically plateauing, even though the economy is growing. One major reason has been more than 50 efficiency standards the Obama administration has enacted for appliances ranging from pool pumps to air conditioners to vending machines. Unlike his historic but contentious fuel-efficiency standards for cars and trucks, which may be in serious danger under Trump, most of his appliance standards were finalized with industry support-and overall, they are expected to save Americans more than $500 billion by 2030, while reducing more than 200 million tons of carbon emissions every year. They’re yet another reason why overall, the electricity sector is on the verge of meeting its 2030 emissions goals under the Clean Power Plan 13 years early-even though a federal court suspended the plan just six months after it was finalized.
Home health aides, juvenile solitary, and more: The Labor Department’s long-awaited “overtime rule” was one of Obama’s most ambitious efforts to help workers, ensuring time-and-a-half for 4 million Americans with modest incomes even if they’re classified as managers. But last month, just a week before it was supposed to go into effect, a judge put it on hold, and Trump is now likely to kill it. It’s hard to get things done in Washington.
But with less fanfare, the Obama administration pushed through a similar rule for home health care aides, and that survived a court challenge in 2015. It is now guaranteeing overtime protections as well as the minimum wage for nearly 2 million workers who clean bedpans and do the other tough work of helping sick, disabled and elderly patients stay at home. That rule is probably safe, because it’s even harder to get things undone in Washington.
And the Obama administration has done a lot of things. It has provided federal protection for over half a billion acres of land and water, more than any previous administration. It has authorized Indian tribes to request federal disaster declarations. Its Race to the Top education grants in the stimulus helped persuade 38 states to adopt Obama-friendly reforms-like eliminating caps on charter schools-just to qualify for the grant competition. It created a popular new clean-energy research agency called APRA-E, modeled on the Pentagon's DARPA incubator that helped invent the Internet and GPS. It approved over-the-counter sales of the morning-after birth-control pill, launched an initiative for homeless veterans that helped cut their numbers in half, and ended solitary confinement of juveniles in federal custody. Obama also granted clemency to more federal prisoners than the last dozen presidents combined, and Trump can’t throw them back in jail.
Still, Trump will have multiple opportunities to chip away at Obama’s legacy. He can go after rules cracking down on financial advisers with conflicts of interest, mines with unhealthy dust levels, and drainage of disconnected wetlands. He could overturn some of Obama’s protections for gay and transgender federal workers and contractors. And at the macro level, he seems likely to pursue diametrically opposed foreign and domestic policies that will point America in a fundamentally different direction. Obama may have done a lot of things, and those things may have helped produce the results that Americans wanted-cutting unemployment in half, the deficit by two-thirds, and the uninsured, teen pregnancy, and high-school dropout rates to their lowest levels ever. But Americans still voted for change, and they’re going to get it.
“There’s been so much policy work, and you can show empirically that it’s made a real difference in the country,” Muñoz says. “But you can make the case that people don’t really believe the policies were affecting them.”
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