Obama's 5 biggest mistakes

As I wrote last week, President Obama can point to several successes as he runs for re-election. But like all presidents, he has made his share of mistakes as well. I promised to list what I think are his five biggest errors. Here they are:

5. Jamming through health-care reform

In last week's article, this made the list of the president's biggest successes. But it also makes his list of mistakes. The president spent most of his political capital in his first year in office on health care, which he saw as a defining issue of his presidency. Aside from lingering questions over the constitutionality of the law's central provision — the Supreme Court will likely rule this summer whether the government can mandate that all Americans have health insurance — and questions about how much the program may cost, Obama did himself and the Democratic Party immense damage in terms of how the bill was passed. The president and congressional Democrats used divisive, bare-knuckled tactics, shoving the law down the throats of anyone in their way. "Hell no!" cried then-House Minority Leader John Boehner moments before the bill was passed. Anger over the Democrats' tactics helped fuel the rise of the Tea Party and the "wave election" of 2010, in which the GOP stormed back into the House majority. Obama has since complained of steady GOP obstructionism and a "do-nothing" Congress — but in a sense, he created this problem by passing major social legislation without first achieving any kind of bipartisan consensus. That's not how a president makes good policy.

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The president used divisive, bare-knuckled tactics, shoving the health-care law down the throats of anyone in their way.

4. Failing to stop Iran

Over the weekend we learned that the Pentagon wants $82 million to make what is already its biggest bunker-buster bomb even bigger. The bomb is needed, officials say, to dig deep underground and hit Iranian nuclear facilities. This is a tacit reminder that the president has thus far failed to achieve his principle goal with respect to Iran: Bringing its nuclear weapons program to a halt. Obama has hurt the regime with tightened sanctions, but not enough to change its behavior. The president also passed on an opportunity to weaken the regime internally by supporting Iran's Green movement — the massive protests that erupted in June 2009 after an election was rigged to ensure another term for President Mahmoud Ahmadinejad. At the time, Obama paid lip service to the Iranian protesters, but said "the United States respects the sovereignty of the Islamic Republic of Iran, and is not interfering with Iran's affairs." The protest movement — the true beginning of the Arab Spring — was brutally crushed (remember the video of the young woman named Neda being gunned down?) and the regime marched on. Now the president appears closer than ever to "interfering with Iran's affairs" in a far more consequential way — with military force.

3. Ballooning the deficit

In April 2010, the president launched a much-hyped deficit reduction commission, headed by Republican Alan Simpson and Democrat Erskine Bowles. Obama claimed to take Simpson-Bowles seriously. "Once the bipartisan fiscal commission finishes its work," he told an Ohio crowd, "I will spend the next year making the tough choices necessary to further reduce our deficit and lower our debt." The commission produced a plan to slash the deficit by $4 trillion over a decade. No sacred cows were spared: Three-quarters of the reduction would come from cutting government services and entitlement programs, and the rest from military cuts and the elimination of tax loopholes. But the president failed to endorse the plan. This opened the door to a series of 2011 fights: The debt ceiling clash between Obama and congressional Republicans, two missed opportunities for a "Grand Bargain" on deficits, the subsequent credit downgrade by S&P, and last fall's badly-misnamed "super committee." One of the president's economic allies, mega-billionaire Warren Buffett, said, "What happened with Simpson-Bowles was an absolute tragedy." The Republicans share the blame for the circus that was 2011, of course, but by tabling the recommendations of his very own blue-ribbon panel, Obama gave some voters — and GOP rivals — an early and perhaps lasting impression that he wasn't serious about making those tough choices.

2. Failing to fix the housing market

The bursting of the housing bubble six years ago has cost Americans more than $7 trillion in home equity, and sparked the recession and the near collapse of the U.S. economy. Home prices have continued to fall since Obama was inaugurated, and now stand at 2002 levels. The president can rightly say that the crash began on George W. Bush's watch (Bush's 2008 bailouts of Fannie Mae and Freddie Mac have so far cost taxpayers $141 billion), but after three years, it's fair to ask what the president has done to fix housing. Answer: Not much. Efforts to stem foreclosures and help folks refinance were poorly designed and have fallen well short of expectations. A short-lived tax credit to encourage first-time buyers wasn't extended by Congress, and ongoing waves of foreclosures continue to depress prices. Today, 22 percent of all homeowners are underwater on their mortgages. The problem for the president is that housing is not an isolated issue. It's tied to jobs, and until the labor market heals, housing will continue to grind along. The Standard & Poor's/Case-Shiller Index for November warned bluntly that "the troubled housing market remains weak and won't recover anytime soon." Housing, jobs, and long-term consumer confidence can be a virtuous — or vicious circle. They have been the latter for the better part of a decade already. This leads to what I think has been President Obama's greatest mistake of all.

1. Overpromising on the economic recovery

How many times have we heard the president say the downturn of 2007–09 was the "worst since the Great Depression"? Here's the rub: Given that it took Franklin Roosevelt 10 years and a world war to fix the Depression, why on earth would Obama compare our downturn to FDR's — but promise to fix it in a fraction of the time? Consider this February 2009 statement to NBC's Matt Lauer: "If I don't have this done in three years, then there's gonna be a one-term proposition." And why, given the "worst downturn since the Depression," would the administration estimate that unemployment would only hit around 8 percent? The projection, made in a January 9, 2009, report called "The Job Impact of the American Recovery and Reinvestment Plan" (written by former economic advisors Christina Romer and Jared Bernstein) also forecast that the president's stimulus plan would create between 3 and 4 million jobs by the end of 2010. Fast forward just nine months, to October 2009, and the jobless rate hit 10 percent. (It has since fallen to 8.5 percent.) As for job creation, the administration was off as well. It has created 3 million jobs, but it took until the end of 2011 to get there. Because the president overpromised and under-delivered on the economic recovery, he may be right about that one-term proposition.

Read about Obama's top 5 successes here.