'World News' Political Insights -- Sticker Shock Jeopardizes President Obama's Agenda

WASHINGTON, June 20, 2010— -- President Obama has had two major messages for Congress in recent months: Keep the focus on jobs and the economy, and get serious about runaway spending.

His problem now is that they're starting to listen to him on the second point -- at the expense of the first.

In a major shift in congressional politics, Democrats have developed a severe case of sticker shock, just as many of their colleagues press to prime the pump of the economy in time for the mid-term congressional elections.

Now, even popular initiatives with widespread support -- notably an extension in unemployment benefits for those who have been out of work for more than a year, plus $50 billion the White House is asking for to help avert state layoffs of teachers and law enforcement officials – are stalled inside Congress.

The new dynamic played out last week in a series of startling Senate votes, where Democratic leaders fell short on a package of new spending and tax cut extensions – and seemed genuinely surprised that they were unable to keep their own members on board.

Combine that unease with a united Republican caucus -- the GOP is making spending a major issue this year regardless of what happens over the next few months -- and near-paralysis results on the legislative front.

The shift has major implications for the Obama agenda, as well as efforts to sell the portions of the agenda that have already passed Congress.

Democrats' vow to focus on jobs has already gotten distracted by a series of side issues, including most recently the response to the BP oil spill in the Gulf. The concerns about spending will only make it harder for Democrats to convince voters that their primary concern going into the fall is the state of the economy.

Democrats will continue to whittle down spending requests to garner the votes they need, particularly to avert a major cut in Medicare reimbursement to doctors, and for targeted help on jobs.

But as the White House plans a push this summer to sell the results of last year's massive stimulus bill, the prospects of any major new investment this year appear bleaker by the week.

It adds instability to a creaky economic recovery -- and adds a new dimension to a volatile political year, as the White House watches its pull on Capitol Hill diminish as elections approach.

Going After Special Interests

Another case of the rank-and-file bucking leadership is on display in reaction to an effort by Democrats to strengthen campaign-finance disclosure requirements in time for the elections.

In response to the Citizens United ruling by the Supreme Court, which opened the door to massive corporate spending on political races, Congress is seeking to require groups that spend money on campaigns to disclose their sources of funding.

But faced with strong opposition from some of the largest such groups -- most notably the National Rifle Association -- Democratic leaders are pushing to exempt the most established such groups from the new requirements, to get the groups to at least stay out of this fight.

That deal -- special treatment for some special interests, all in a bill designed to crack down on the power of many of those same special interests -- sparked an unexpected backlash in Congress last week. House leaders were forced to pull the bill from consideration, and are still working with members to find a solution that can pass.

Most observers still expect a major response to the Citizens United ruling. But the difficulty in getting there is just the latest example of the limits of political persuasion this year, as members of Congress grow increasingly concerned about their reelection prospects.