Obama's gamble: Big plans have big risks

WASHINGTON -- Until Tuesday, President Obama was already dealing with the worst economy since the Depression: failing industries, teetering banks, a stock market sliced in half and millions of people losing their homes.

Now he's added overhauling the nation's health care system to his to-do list — a challenge that has vexed presidents from Harry Truman to Bill Clinton. Not to mention weaning America off Middle East oil, fixing its schools, bolstering Social Security and declaring war on deficits and debt.

"The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care, the schools that aren't preparing our children and the mountain of debt they stand to inherit," Obama said in his first address to Congress Tuesday. "That is our responsibility."

It's a high-risk strategy, doing everything at once. Obama is doing it for two reasons: The economy is in free fall, and the voters gave him a sizeable mandate in November.

"We've never seen an administration get out of the starting blocks as rapidly or try to clear as many hurdles in the first 50 yards," says Robert Reischauer, president of the Urban Institute and former director of the Congressional Budget Office. "But moving at a more moderate pace I don't think decreases the risk appreciably, because then you're going to be driven by events, reacting to crises. He is trying to be proactive."

That won praise even from Republicans on Tuesday. "The president deserves much credit for his willingness to tackle health care reform, the budget deficit, Social Security and the recession all at once," said Rep. Dave Camp, R-Mich., while warning against tax increases.

The challenge for Obama is all the greater because he's presiding over an incomplete government. Nearly all departments and agencies are without key political appointees who will design and implement policy, because they've yet to be nominated or confirmed.

Three Cabinet-level departments still lack leaders, including the Department of Health and Human Services following the withdrawal of former Senate Democratic leader Tom Daschle over personal tax problems. The White House has slowed the nomination process and stepped up its vetting of candidates to avoid additional public relations calamities.

On the other hand, Obama is helped by his willingness to name many veterans of the Clinton administration to his top echelon of advisers. And if he needs advice on the pitfalls of overhauling health care, Hillary Rodham Clinton is down the street at the State Department.

Her advice could come in handy on what not to do. Her health care effort failed in 1994 due largely to the Clinton administration's decision to craft its own plan, rather than work with Congress. It took most of 1993 to do that, delaying the legislative process well beyond President Clinton's honeymoon period.

The last three presidents who represented a party that reclaimed the White House used their first budgets to make major changes, something Obama hopes to do in the budget outline he unveils Thursday. Republican Ronald Reagan cut spending and taxes. Democrat Bill Clinton pushed through a major deficit-reduction deal that helped lead to budget surpluses. Republican George W. Bush focused almost single-mindedly on his massive tax cuts.

"History suggests that particularly when the White House changes parties … the president has a window to make bigger changes than he may be able to get later in his term," says Robert Greenstein, founder of the liberal Center on Budget and Policy Priorities.

With the country in economic crisis, Obama is betting that Americans are more prepared to fix the nation's problems than they have been: 46 million people uninsured and soaring costs for others, dependency on fossil fuels from foreign lands, a debt approaching $11 trillion due to unsustainable government benefits.

The risk is obvious: failing.

"Clinton paid a price for not succeeding on health care," says Steve Elmendorf, who was chief of staff to former House Democratic leader Richard Gephardt. "So if you go out and announce, 'I'm going to do X on health care' and you don't succeed, you pay a price."