President Obama's Policy Time Bombs

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Politico:

President Obama's policy time bombs

By CHRIS FRATES & BEN WHITE | 7/12/10 6:18 AM EDT

By the time his promised reforms arrive, he could be long gone from the White House.


President Barack Obama has long boasted about the transformative change he’s bringing to the country.

But by the time those reforms finally arrive, he could be long gone from the White House.

Some of Obama’s biggest promises won’t go into effect until long after his first term — and in some cases, well past a second. In fact, buried deep within some of the Democrats’ most significant reform bills are dozens of policy time bombs set to blow at more politically convenient times.

The Democratic reform triumvirate — health care, Wall Street and energy — is filled with provisions designed to front-load policy benefits and delay political pain.

Health care reform cracks down on insurers right away but won’t force people to buy insurance until 2014. A new consumer financial protection agency kicks in almost immediately under the Wall Street reform bill, but banks won’t feel its full force for more than 10 years. And even Democrats’ nascent immigration reforms include at least an eight-year wait before illegal immigrants can apply for permanent residency — after Obama leaves office.

The delicate balance aims to gradually get a skittish public accustomed to the enormous changes, while insulating lawmakers from potential backlash.

“You always delay anything that might be disruptive or difficult,” said Frances Lee, professor of political science at the University of Maryland. “The goal is to do it in a way that no one feels it and no one writes news stories about it — minimize the blowback.”

Lawmakers and the White House justifiably, and almost reflexively, argue that it’s logical to phase in the sweeping changes over time. Forcing massive industries like Wall Street and health care to make drastic changes overnight would be virtually impossible and incredibly destabilizing.

That doesn’t mean politics aren’t a factor.

Perhaps most famously, House Democrats practically demanded that their leaders load the health care bill with goodies that take effect before November’s election, giving them something to sell on the campaign trail.

In the Wall Street reform bill, some of the toughest crackdowns on the financial sector were delayed. The bill offers long timetables for compliance and generous opportunities for extensions.

For instance, a new rule to drastically cut the amount banks can invest in hedge funds and private equity doesn’t sound as tough when banks could get more than a decade to do it, as some analysts believe.

The bill also calls for a six-month study of the so-called Volcker rule, which restricts banks’ ability to make the risky transactions. The actual rule-making, however, doesn’t take place until the fall of 2011. The new rules are supposed to take effect by mid-2012, with full compliance by 2014.