Taking on the Banks: Obama's New Populist Pitch

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Ron Sachs-Pool / Getty

In December 2009, Obama met with labor, manufacturing and small-business leaders at a Home Depot store in Alexandria, Va.

So how is the White House hoping to avert an electoral catastrophe in November? One clue can be found coded in the attack ads now chewing up the airwaves in New England. "Who is Scott Brown really?" an ominous voiceover asks about the Republican candidate vying for Ted Kennedy's former Senate seat. The ad's answer comes in a quick montage of conservative Republicans, past and present — George W. Bush, Dick Cheney, Rush Limbaugh, Mitch McConnell — followed by a populist pitch. "He'll block tougher oversight of Wall Street, give more tax breaks to the wealthiest," the breathy announcer continues.

The ad is paid for by the Senate campaign of Democrat Martha Coakley, but its regular-guy-against-the-rich strategy was developed months ago by top White House aides, who know their party faces a perilous election this fall. This same strategy was much in evidence at the White House Thursday, when President Obama proposed a new tax on large banks to compensate for losses suffered by taxpayers in bailouts of the financial industry that began in the final months of the Bush Administration. "We want our money back, and we are going to get it," the President said, using unusually informal language to identify with the great mass of American taxpayers. Massachusetts Democrat Coakley took that as a cue to release a statement putting her opponent on the spot: "Now is the time for Scott Brown to tell us what side he's on, and who he wants to fight for," it read.

For the strategy to work, the President, his aides and Democratic candidates such as Coakley will have to accomplish two difficult tasks. First, they must convince voters that their outrage over the state of the country ought to be directed against Republicans rather than against the party that has controlled both ends of Pennsylvania Avenue for the past year. Then, they must successfully sell the idea that the GOP is the party of the wealthy and powerful — a classic Democratic theme. "There are two entities in this country who are working very hard to defeat health reform," White House communications director Dan Pfeiffer told TIME on Wednesday. "The insurers and the Republican Party." At present, however, polls show that a majority of Americans oppose the current health-reform effort, which Democrats appear close to passing with the support of the drug industry and several other major segments of the medical establishment, including the hospitals association and the major lobbying organization for doctors.

David Axelrod, Obama's top political adviser, explained the overarching Democratic campaign message during a recent interview with the National Journal. "[If] they want to stand with the insurance industry on health care and protect the status quo, then let them defend that in an election," he said. "If they want to stand with the banks and the financial industries and protect the status quo, then let them explain that in an election."

Last November, a polling firm with close ties to the White House, Greenberg, Quinlan Rosner Research, released a memo warning of the punishment that could await Democrats at the polls in 2010 if unemployment remains high and no steps are taken to deal with voter concerns about the deficit. The memo also cited polling showing many voters may be sympathetic to populist appeals. When asked to choose from a list what makes them most upset, 40% of respondents chose the phrase "big banks and Wall Street getting handouts while nothing is done for working Americans" as either their first or second choice. By contrast, the phrase "not enough is being done to create jobs" was chosen by only 16% of voters.

As it stands, there is little reason for Democrats to be optimistic about 2010. On Thursday, the widely-respected political handicapper Charlie Cook explained that current polls suggest Republicans will enjoy a net gain of 20-30 House seats this fall. But he added a cautionary note: "It is important to note that while one party has never won all of the competitive races in any given election cycle (currently Republicans would need to win all 50 competitive seats to win 218 seats in the House), the likelihood of one or two dozen potentially competitive Democratic seats entering the danger zone at some point in this cycle is high."

Underscoring the point, both Cook and Stuart Rothenberg, another independent handicapper, on Thursday reclassified the special election in Massachusetts between Coakley and Brown as a "toss-up," a major surprise given that they're running for a seat long held by Ted Kennedy. But the White House has more than a crucial Senate vote riding on the outcome: Tuesday's election will be the first crucial test of the effectiveness of their entire 2010 campaign plan.