And of course Emanuel was one of the main voices—along with economic adviser Larry Summers and Treasury Secretary Timothy Geithner—counseling the president on how to deal with the financial institutions that were on the verge of collapse. He had played a lead role during his last months in Congress in passing the unpopular bank bailout. Early in Obama’s presidency, Romer was enthusiastic about the idea of taking bold action to break up some of the banks whose reckless behavior had played a major role in causing the economic crisis. Romer was an expert in the Great Depression and the New Deal, and as Ron Suskind explained in Confidence Men, she saw an opportunity for Obama to make a bold “Rooseveltian” move that would telegraph his willingness to stand up to these financial titans. Cracking down on the banks would, she indicated, show that Obama had cast his lot with the common people. Summers also supported the idea that the big banks should be broken up by the government, and Suskind reported that Obama liked the idea. But Emanuel was stridently opposed, saying it would be politically impossible to get such a move through Congress, especially since it could cost about $700 billion on top of the bailout funds already doled out. Suskind described a long and contentious meeting from which Obama ultimately left to have dinner with his family and told the debating staff to come to a decision. Emanuel took the opportunity, as Suskind described it, to get his way and keep the big banks intact—nixing the idea of breaking them up.
“Everyone shut the fuck up,” Suskind quoted Emanuel as saying. “Listen, it’s not going to fuckin’ happen. We have no fucking credibility. So give it up. The job of everyone in this room is to move the president, when he gets back, to a solution that works.”
Suskind quoted Romer saying that Rahm “killed” and “crushed” the idea of breaking up the big banks. When Obama returned, the group agreed to a much more modest plan of focusing first on Citigroup and conducting “stress tests” on other banks, essentially leaving the status quo intact. “The president,” Suskind concluded, “had been well managed.”21
Climate Change
Although Emanuel helped beat down conservative opposition to pass the job-creating stimulus bill, he seemed to cave to industry and right-wing think tank cries about “job-killing” in relation to a climate bill that would have put a price on carbon emissions through a cap-and-trade system or carbon tax.
Environmental leaders including Al Gore said it was important to pass a climate-related resolution before the December 2009 United Nations climate summit in Copenhagen if the United States wanted to take a leadership position in the crucial talks around a successor agreement to the Kyoto Protocol.22 International cooperation was considered essential to reducing global emissions enough to avoid the most catastrophic effects of climate change, and a number of countries had made significant progress since Kyoto was adopted in 1997, promoting cleaner energy sources and passing domestic legislation addressing the issue.23 Developed nations like the United States, which had already reaped the lion’s share of economic and social benefits from their disproportionate energy use, were supposed to take the lead in reducing emissions and guiding the global process. But without a domestic policy of its own, the United States—whose per capita carbon emissions dwarf those of most other countries except China—would have a serious deficiency of moral authority.24
In The Plan, Emanuel and Reed discussed the threat of climate change and stressed the importance of weaning the country from imported oil. They criticized President George W. Bush for withdrawing from the Kyoto Protocol, calling it a “foreign policy blunder” that “hurt America’s cause on other fronts.”25 But the Kyoto Protocol required each country to pass its own climate legislation—something Emanuel reportedly urged Obama not to do.
Obama promised during his campaign to address climate change, and after taking office he even created the position of “climate czar,” filled by Carol Browner, a highly respected Clinton-era EPA administrator. In June 2009 the House passed the Waxman-Markey bill (the American Clean Energy and Security Act) by a vote of 219 to 212.26 At the crucial moment Obama and Emanuel pushed hard for the bill, which would have created a cap-and-trade system and could have led to significant emissions reductions. But the legislation was doomed in the Senate; the bill died, and soon the whole idea of cap and trade or a carbon tax largely dropped off political radar screens.27
Emanuel was reportedly a major reason for the failure. Instead of muscling the bill through, he seemed to cave to pressure from industry parties, who howled that such legislation would lead to mass factory closings as power and production costs soared. Climate change was also a hot-button topic in the “culture wars,” with conservative pundits and citizens groups denying the existence of man-made climate change and framing climate legislation as an attack on freedom. The science by this point left no doubt that human-induced climate change is real, escalating, and posing a serious global threat. Experts declared that fears of dire economic consequences from putting a price on carbon were overblown, and that a carbon tax could actually help create clean energy and technology jobs and fund social programs.28 But even as the Obama administration promoted “carrots” such as tax breaks and other incentives for energy efficiency and clean energy generation, the “stick” of a price on carbon had apparently become taboo.
Eric Pooley, author of The Climate War: True Believers, Power Brokers, and the Fight to Save Planet Earth, blamed Emanuel. “The chief of staff was an obstacle to climate action,” Pooley wrote. “Climate and energy were agenda items to him, pieces on a legislative chessboard; he was only willing to play them in ways that enhanced Obama’s larger objectives. He saw no point in squandering capital on a lost cause. The White House could claim victory if Congress passed a beefy energy bill without a cap—and never mind that doing so could torpedo Copenhagen and delay serious greenhouse-gas reductions, perhaps for many years.”29
An unnamed inside source told Pooley, “You had this incredible green cabinet of really committed people, but the only thing that really matters is what the president says—so everyone was trying to get words into his mouth. And Rahm was trying to keep the words out of his mouth.”30
The Copenhagen conference came and went without a US domestic climate policy, as did the next major UN climate conference, in Durban, South Africa, which took place after Emanuel had left the White House.
Ironically, some of the same right-wing, climate-change-denying fossil fuel interests Emanuel had essentially protected on the climate front later pounced on him for his role in a $535 million federal loan guarantee to Solyndra, a California-based solar energy company that went bankrupt. Emails indicated that Energy Department officials and others were pressured to rush the loan through without a thorough vetting process, in part because Emanuel wanted Obama involved in a publicity event that had already been scheduled.31 Throughout the 2012 presidential election campaign season, Republicans pointed to Solyndra as a supposed example of Democratic waste, blunder, and corruption. Such accusations were clearly a stretch, especially given the fact that the Solyndra loan and government support for renewable energy in general pale beside longstanding financial and political support for fossil fuels. But on a relatively minor yet interesting level, the debacle may indeed have been an example of Emanuel’s misbehavior—not his corrupt pandering to the solar industry, but his famous penchant for rushing into things while steamrolling over others’ concerns and established processes.
Health Care
Emanuel reportedly “begged” Obama not to pursue health-care reform early in his term, saying instead that the president needed to focus on jobs and the economy.32 Once the president had committed to a health-care bill, Emanuel zealously devoted his efforts to making something happen.33 But in keeping with his image as a narrowly focused pragmatist, Emanuel’s vision of health-care reform greatly angered and disappointed many who had hoped for a true overhaul.
Emanuel is often blamed for the fact that the Affordable Care Act, as the bill eventually came to be known, was more “health insurance reform” than comprehensive “health-care reform.”34
Obama, House Speaker Nancy Pelosi, and other, more progressive leaders initially said they felt strongly about offering a “public option”—government-sponsored insurance that would offer coverage to needy people