Miller Center

Barack Obama: Domestic Affairs

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Presidential Transition and Appointments

Since 1933, when the Twentieth Amendment to the Constitution moved up the date of the President’s inauguration from March 4 to January 20, new Presidents-elect have had about eleven weeks to make the transition from candidate to President. Several important tasks must be accomplished in this period if the transition is to be successful. None is politically more important than appointing the White House staff and the cabinet. None is personally more important than preparing the new President's family for life in the White House.

During the summer of 2008, Obama appointed John Podesta, the president of the Center for American Progress, a liberal think tank, and former chief of staff in the Clinton White House to begin preparing for the transition that would occur if Obama won the election. In October, President George W. Bush appointed a transition team to work cooperatively with whichever candidate was elected. As a result, Obama was able to hit the deck running as soon as the results were in on November 4. Just two days later, Obama announced that Representative Rahm Emanuel of Chicago would be his chief of staff.

The Obama transition team announced further high-ranking White House staff appointments in short order, with most of them going to friends and personal loyalists of the new President. As senior advisers to the President, Obama appointed David Axelrod, his chief campaign adviser, Pete Rouse, his Senate chief of staff, and Valerie Jarrett, his longtime Chicago friend and supporter. Robert Gibbs, Obama's press secretary during his Senate and presidential campaigns, was chosen as White House press secretary, and Chris Liu, Obama's legislative assistant in the Senate, became cabinet secretary. Other important staff appointments went to: Jim Messina and Mona Sutphen (deputy chiefs of staff), Greg Craig (White House counsel), Ellen Moran (communications director), and Phil Schiliro (legislative liaison). Obama also named former Marine general James L. Jones as his national security adviser, former Treasury secretary Lawrence Summers as director of the National Economic Council, and veteran congressional staffer Melody Barnes as his domestic policy adviser. Former Congressional Budget Office director Peter Orszag was appointed head of the Office of Management and Budget and Leon Panetta, a former member of Congress who had served in several administrations, was chosen as director of the Central Intelligence Agency director and retired Admiral Dennis Blair as director of national intelligence.

In appointing the cabinet—that is, the heads of the fifteen executive departments—Obama relied in part on the "team-of-rivals" approach that presidential historian Doris Kearns Goodwin attributed to Abraham Lincoln in her 2005 book, Team of Rivals: The Political Genius of Abraham Lincoln. Obama first appointed Hillary Rodham Clinton, his chief opponent for the Democratic presidential nomination, as secretary of state. Obama's nomination of another election rival, Bill Richardson, as secretary of commerce, foundered when Richardson subsequently withdrew because of a potentially embarrassing grand jury investigation into a state contract in New Mexico. Obama also included two Republicans in the cabinet, inviting Bush's secretary of defense, Robert Gates, to remain in that position, and appointing Representative Ray LaHood of Illinois as secretary of transportation. Other cabinet appointments went to: Timothy Geithner (treasury), Eric Holder (attorney general), Janet Napolitano (homeland security), Hilda Solis (labor), Shaun Donovan (housing and urban development), Steven Chu (energy), Arne Duncan (education), Ken Salazar (interior), Tom Vilsack (agriculture), Eric Shinseki (veterans affairs) and Kathleen Sebelius (health and human services).

After the midterm elections in 2010, as President Obama recovered from what he labeled the "shellacking" the Democrats received, he instituted personnel changes in his administration. His chief of staff, Rahm Emanuel, resigned in October 2010 to return to Chicago to run for mayor. In January 2011, President Obama appointed William Daley to replace Emanuel. Daley, whose father and brother had both been mayor of Chicago, had worked on various Democratic campaigns, served in the Clinton administration, and been a banker on Wall Street. Obama's press secretary, Robert Gibbs, resigned in February 2011 and was replaced by Jay Carney, a journalist who had served as Vice President Biden's director of communications. Similarly, Obama's senior adviser, David Axlerod, was replaced by David Plouffe, who managed the Obama's 2008 presidential campaign.

Financial Troubles

Like Franklin D. Roosevelt in 1933 and Ronald Reagan in 1981, Obama had to address a major economic crisis as soon as he was inaugurated on January 20, 2009. The nation's leading banks and other financial institutions were in serious danger of collapse. The economy had stopped growing and was hemorrhaging jobs, with the unemployment rate nearing 10 percent. Housing prices were in freefall, leading to numerous foreclosures.

Even before taking the oath of office, Obama had endorsed President George W. Bush's Troubled Asset Relief Program (TARP), a $700-billion initiative to rescue the nation's major banks by lending enough money to keep them solvent. As President, Obama also directed some TARP funds to General Motors and Chrysler in an effort to keep the automobile industry from going bankrupt. TARP worked—all the banks and auto companies survived and by the end of 2009 they already had repaid the government more than $600 billion—but many voters perceived the program as a bailout for wealthy bankers and corporate executives.

Obama's first major recommendation to Congress was for an $800-billion economic stimulus package: the American Recovery and Reinvestment Act. About one-third of the money involved grants to state governments to keep them from laying off public employees or reducing unemployment compensation; about one-third went for bridges, highways, sewage treatment facilities, and other infrastructure projects; and the remaining third was for middle-class tax cuts. Although Obama hoped to pass the Recovery Act with bipartisan support, not a single Republican House member and only three Republican senators voted for it. Democratic control of Congress was strong enough to secure its passage, however, and President Obama signed the act into law on February 17, 2009.

Health Care Reform

Obama wanted to do more as President than put out fires. He also sought to enact a major reform of the nation's health care system. Health care reform had been a leading Democratic Party goal since the presidency of Harry S. Truman. In 1965, Lyndon B. Johnson had secured the enactment of Medicare for older Americans and Medicaid for the poor. The next two Democratic Presidents, Jimmy Carter and Bill Clinton, each failed to persuade Congress to pass legislation to guarantee health care coverage for everyone else. Although Obama had only promised during the election campaign to address this issue "by the end of my four-year term," he decided that his best chance of success was during his first year in office, when his popularity was likely to be at its highest.

Obama faced major hurdles in achieving health care legislation. Although Democrats in Congress were united in support of reform, they were divided about what form it should take, with some insisting that the federal government offer a "public-option" (that is, government-run) coverage plan and others urging that private coverage be extended to those who lacked it. More than three-fourths of Americans had private health insurance in some form, and despite the steeply rising costs of health care, many of them worried that changing the system might make their own situation worse, as well as adding to the federal budget deficit that the Recovery Act had already sent soaring to more than $1 trillion per year.

In the face of these obstacles, Obama resolved that any reform proposal would have to be budget-neutral—that is, save as much money as it spent. He accommodated the interests of the pharmaceutical and hospital industries, both of which had helped to sink President Clinton's health care bill through massive advertising and extensive lobbying. He invited Congress to share in developing the bill, in contrast to the secret process of legislative formulation that Clinton had employed.

These efforts alone were not enough to secure passage, especially when members of Congress encountered angry opposition to "Obamacare" from the newly formed, grassroots conservative Tea Party movement in a series of August 2009 town-hall meetings in their home states and districts. The President, frustrated that he was not getting through to the American people, decided to speak to the nation in a prime-time address to Congress on September 9, 2009.

"The plan I'm announcing tonight would meet three basic goals," Obama declared. "It will provide more security and stability to those who have health insurance. It will provide insurance to those who don't. And it will slow the growth of health care costs for our families, our businesses, and our government." Specifically, "individuals will be required to carry basic health insurance—just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the costs of their workers."Obama's argument was overshadowed to some degree when, in response to his declaration that the "claim . . . that our reform effort will insure illegal immigrants . . . is false," Republican representative Joe Wilson of South Carolina shouted, "You lie!" from his seat in the House chamber. But the speech succeeded in arresting the months-long decline in public and congressional support for reform. In this altered political environment, the President launched a successful campaign to persuade members of Congress in face-to-face meetings. By year's end, both houses of Congress had passed different versions of health care reform legislation. On March 23, 2010, after some elaborate legislative wrangling to get the House to pass the Senate bill, Obama signed the Patient Protection and Affordable Care Act into law. One week later he signed the Health Care and Education Reconciliation Act, which restored some of the House's preferred features.

Controversy over the Affordable Care Act (ACA) did not end when Congress enacted it. When Republicans won control of the House in the 2010 midterm elections, they began voting regularly to repeal it. When the party gained a majority of the Senate in 2014, that chamber joined their effort. In January 2016 Obama vetoed the first repeal bill that Congress sent him, only his eighth veto as President and arguably the most consequential. The ACA also mostly survived two serious legal challenges. In the 2012 case of National Federation of Independent Business v. Sibelius, the Supreme Court ruled by a narrow 5-4 majority that the law’s requirement that everyone obtain health insurance was constitutional, but a seven-justice majority overturned the additional requirement that states expand their Medicaid coverage. Three years later, the Court ruled 6-3 in King v. Burwell that the federal government’s new power under the law to provide tax subsidies for poor and middle-class people to buy health insurance whether the state they lived in created its own purchasing exchange or not was constitutional.

The ACA’s greatest problem was neither political nor legal. The launch of the program in 2013 was seriously botched when the website through which people were to buy insurance proved inadequate to the task. For months, nearly every news story about Obamacare concerned problems with its website. The problems eventually were fixed but the damage to the program’s public reputation lingered. Even as the number of the nation’s uninsured dropped steadily through the end of Obama’s second term, the American people remained deeply divided about the ACA.

Other Domestic Policy Initiatives

President Obama's other first-term domestic policy initiatives included the Lily Ledbetter Fair Pay Act for women and Secretary of Education Arne Duncan's Race to the Top program, which created a competition among states for $4.5 billion in extra funding tied to public school reforms authorizing more charter schools and tying teacher evaluations to student learning. In 2010, Obama persuaded Congress to enact financial reform legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to prevent economic meltdowns like the one he inherited when he took office.

The Republican takeover of the House of Representatives in the 2010 midterm election brought an end to Obama’s period of dramatic legislative accomplishment. He lacked the majority needed to pass bills through the House, and the Democratic majority in the Senate was not large enough to overcome Republican filibusters, which require a three-fifths vote to be brought to a close.

Budget Negotiations

Facing the new Republican majority in the House of Representatives and an enlarged Republican minority in the Senate, President Obama spent much of 2011 and 2012 on the defensive. Most of 2011 was dominated by congressional Republicans' efforts to legislate massive cuts in domestic spending in order to bring down the annual trillion-dollar federal budget deficits. Democrats in Congress fiercely resisted these efforts, leaving the President caught in the middle. Obama shared the Republicans' goal of long-term deficit reduction, but worried that immediate reductions in federal spending would stifle the still struggling economic recovery. He also thought that any deficit reduction plan should include tax increases on high-income individuals and households, a policy he had pursued since announcing his candidacy for president in 2007.

During the summer of 2011, Obama secretly negotiated with the new Speaker of the House, Republican representative John Boehner of Ohio, to see if they could agree on a deficit reduction plan. In early August, the two leaders came close to an agreement that would impose $800 billion in tax increases and $3.2 trillion in spending reductions over a ten-year period. But when a small group of Republican and Democratic senators offered a deficit-reduction plan of their own that included $1.2 trillion of tax increases, Obama realized that he would lose the support of his party if he stuck with his and Boehner's agreement on the smaller amount. President Obama told Boehner he needed $400 billion more in taxes before he could agree to their deal, and the Republican leader, aware that most members of his party's caucus opposed any tax increases at all, broke off negotiations.

In lieu of the aborted $4 trillion deficit reduction agreement, Congress and the president settled on a more modest plan in which Congress would create a "super committee" of House and Senate Republicans and Democrats, whose purpose was to identify $1.2 trillion in tax increases, spending cuts, or some combination of both by the end of 2012. If the committee failed to reach an agreement, then the plan stipulated that $1.2 trillion in spending cuts would automatically take effect, half in defense and half in domestic programs. The rationale was that the threat of "sequestration" would motivate Republicans who did not want to see the defense budget cut and Democrats who did not want certain domestic programs cut to pressure the super committee to reach an agreement. This did not happen. As political scientists David Lewis and Terry Moe have written, "the super committee failed miserably, and most of 2012 was then wasted as legislators looked toward the November elections and refused to bite the bullet on the deficit issue. "

Supreme Court and Other Judicial Appointments

Two vacancies occurred on the U.S. Supreme Court during Obama's first two years in office. David Souter retired in 2009, and John Paul Stevens retired in 2010. Both were liberal justices, and Obama nominated two liberals to replace them: federal appeals court judge Sonia Sotomayor, the first Hispanic Supreme Court nominee in history, and Solicitor General Elena Kagan. Senate Republicans did not strenuously resist either nomination because replacing liberals with liberals did not affect the Court's ideological balance. The Senate confirmed Sotomayor on August 6, 2009, by a vote of 68 to 31, and then it confirmed Kagan on August 5, 2010, by a vote of 63 to 37.

Because Obama’s two White House predecessors as President, Bill Clinton and George W. Bush, each had only two vacancies to fill during their two terms, it seemed likely that Obama would have no further opportunities. But on February 13, 2016, Justice Antonin J. Scalia, a leader among the Court’s conservatives, unexpectedly died. About an hour after Scalia’s death was confirmed, Republican Senate Majority Leader Mitch McConnell declared that because Scalia’s seat had become vacant during an election year, the Senate would not even consider a nomination from Obama. “This vacancy should not be filled until we have a new President,” McConnell declared, arguing that “the American people should have a voice in the selection of their next Supreme Court justice.” Historically, the Senate had often denied confirmation to nominees appointed in a President’s final year in office, but it had never refused even to review a nomination.

McConnell’s declaration did not deter Obama from nominating Merrick Garland, the Chief Judge of the U.S. Court of Appeals for the District of Columbia on March 16. Garland’s judicial record revealed him to be more conservative than many Democrats would prefer but more liberal than many conservatives found acceptable, especially since his addition to the Court would mean that a majority of justices had been chosen by Democratic Presidents. 

That majority already had been obtained at the federal appellate court level. Republican domination of the presidency for 28 of the 40 years from 1969 to 2009 had left the U.S. Courts of Appeals with a majority of Republican-appointed judges for nearly all of the two decades before Obama became president. In 2008, the final year of George W. Bush’s second term, 100 of 178 federal appellate judges were Republican appointees, compared with 66 Democratic appointees and 12 vacancies. As the end of Obama’s White House tenure approached in 2016, Democratic appointees outnumbered Republican appointees on the appellate courts by 94 to 76, with 10 vacancies. Obama had chosen 54 of them. Further, Democratic appointees outnumbered Republican appointees on nine of the thirteen federal courts of appeals.

The Start of the Second Term

As with most two-term administrations, the period between the election and the second inauguration saw numerous changes in the cabinet and White House staff. Of the four "inner cabinet" posts, the heads of all but the Justice Department (Attorney General Eric Holder) decided it was time to move on. Obama chose Massachusetts senator John F. Kerry to replace Hillary Clinton as secretary of state, former Nebraska senator Chuck Hagel to replace Leon Panetta as secretary of defense, and White House chief of staff Jack Lew to replace Timothy Geithner as secretary of the treasury. Deputy national security adviser Dennis McDonough took Lew's place as chief of staff, and White House counter-terrorism adviser John Brennan was named as director of the Central Intelligence Agency (CIA). Brennan and Hagel faced sharp questioning in their Senate committee hearings, but the other nominees—for these posts and others, including secretary of labor and secretary of energy—sailed through the confirmation process largely unscathed.

Obama's second Inaugural Address, delivered on January 20, 2013, was traditional in some ways and innovative in others. Like most such addresses, he struck unifying themes grounded in the American experience. He opened the speech, for example, by quoting the Declaration of Independence's statement that "all men are created equal, and are endowed by their Creator with certain unalienable rights." But as the address unfolded, Obama became more specific than has been customary on such occasions. Among the issues he raised were climate change, same-sex marriage, and health care reform. The unifying theme of the address was that policies such as these would help to fulfill the ideals stated in the Declaration.

In his February 12, 2013, State of the Union address, Obama elaborated on the agenda that he offered at the inauguration, while adding to the list calls for greater federal support for early childhood education, immigration reform to provide a path to citizenship for undocumented immigrants, an increase in the minimum wage, and new gun control legislation. The last of these issues had taken on special urgency after December 14, 2012, when a young gunman shot and killed twenty school children and six teachers and staff members at Sandy Hook Elementary School in Newtown, Connecticut. As in the past Congressional Republicans, along with Democrats from pro-gun states, thwarted passage of any gun control legislation.

Obama also called on Congress to avoid the $85 billion of across-the-board cuts in the federal budget—half in defense and half in domestic programs—that were scheduled to take place automatically on March 1, 2013, if legislators could not agree on another plan for achieving deficit reduction. The scheduled automatic cuts were a consequence of the decision Congress made in August 2011 to achieve $1.2 trillion in deficit reduction over a ten-year period through “sequestration” if no other method could be agreed on. Obama wanted Congress to forestall the scheduled sequester by raising taxes and making targeted cuts in spending. Sequestration took effect on March 1 as scheduled. In October 2013, the government shut down for two weeks when Congress and the President were unable to agree on a budget. Later that year, a compromise agreement was reached that suspended sequestration for the next foreseeable future. The combination of revived economic growth and budgetary austerity brought the annual federal budget deficit down from $1.4 trillion in 2009 to $0.4 trillion in 2015.

Congressional Republicans were loath to do nearly all of what the President wanted. An important partial exception was immigration reform, which many Republicans were open to—not because of Obama, but because their dismal performance in the election among Latino voters made them want to repair their image as an anti-immigrant party. In 2013, a bipartisan majority of the Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act—an immigration reform bill creating a path to citizenship for undocumented immigrants—by a vote of 68 to 32. The bill died when Republican conservatives in the House, responding to grassroots anti-immigration pressure from the Tea Party movement, refused to bring it to the floor.

Executive Action

Congressional Republican resistance to Obama’s legislative agenda led him to rely increasingly on executive orders, regulations, vetoes, and other unilateral actions during his second term. In the area of domestic policy, these included:

  • Issuing the Climate Action Plan, which resulted in the Environmental Protection Agency ordering such severe reductions in carbon emissions from power plants as to reduce the nation’s coal plant capacity by nearly one-third.
  • Vetoing a bill passed by Congress to authorize construction of the 1000 mile long Keystone XL Pipeline that would have connected Canada’s oil sands to the Gulf of Mexico.
  • Issuing an executive order to raise the minimum wage for federal contract employees to $10.10 per hour.
  • Requiring background checks for purchasers of guns at gun shows.
  • Issuing an executive order banning discrimination by federal contractors on the basis of sexual orientation or gender identity. In 2014, Obama publicly celebrated the Supreme Court’s Obergefell v. Hodges decision granting marriage rights to same sex couples. He called to congratulate the plaintiffs and had the exterior of the White House lit with rainbow colors.
  • Creating MyRa’s to help Americans without pensions to save for retirement.
  • Cracking down on for-profit colleges whose former students have high levels of student loan debt and low incomes.
  • Commuting the sentences of 248 (as of April 1, 2016) drug and firearms offenders in federal prison, more than his six predecessors combined after declaring his interest in doing so in 2014 for prisoners serving “unjust” sentences for low-level drug crimes.

Later Appointments

Obama’s second term drew near its close, he had additional vacancies to fill in the cabinet.  Most important, in 2015 Ash Carter replaced Chuck Hagel as secretary of defense, and Loretta Lynch replaced Eric Holder as attorney general. Sylvia Burwell moved from Office of Management and Budget director to secretary of health and human services in 2014, and Shaun Donovan moved from housing and urban development secretary to replace Burwell at OMB. Of Obama’s original cabinet, only Secretary of Agriculture Tom Vilsack remained in place in 2016, and among the president’s senior advisers on the White House staff only Valerie Jarrett remained.

Citation Information

Consulting Editor

Michael Nelson

Professor Nelson is the Fulmer Professor Political Science at Rhodes College, a senior fellow of the Miller Center, and the senior contributing editor and book editor of the Cook Political Report. He is the author of multiple books on American politics and government, including:

Resilient America: Electing Nixon in 1968, Channeling Dissent, and Dividing Government (University Press of Kansas), which won the American Political Science Association’s Richard E. Neustadt Award for Best Book on the Presidency published in 2014

How the South Joined the Gambling Nation: The Politics of State Policy Innovation (LSU Press), which won the Southern Political Science Association’s V.O. Key Award for Outstanding Book on Southern Politics published in 2006