Page last updated at 08:18 GMT, Tuesday, 15 September 2009 09:18 UK

Obama's congressional battleground

By Max Deveson
BBC News, Washington

Barack Obama
Mr Obama has an ambitious legislative agenda this autumn

US President Barack Obama has been struggling to push his healthcare reform package through the Senate.

And it looks as though he will find it equally difficult to pass some of his other key legislative priorities this autumn: establishing a "cap and trade" scheme to combat climate change; and tightening controls on Wall Street.

What obstacles lie in Mr Obama's path as he seeks to make his mark on American society? And what compromises will he be forced to make to push his agenda through?


Mr Obama's travails in Congress over healthcare have been well-documented.

He wants to extend coverage to all Americans, by mandating everyone to get insurance and subsidising the less well-off. His reforms would also introduce tough new regulations for the insurance industry.

Financial regulation: Mr Obama wants to tighten the rules governing the US banking system, but his reforms could face opposition on Wall Street, and when bankers talk, lawmakers listen.
Healthcare: Will enough senators vote through Mr Obama's ambitious health bill - and will it include a publicly-run insurance scheme?
Climate change: A bill establishing a "cap-and-trade" scheme for carbon emissions has passed through the House of Representatives, but senators from coal-producing states threaten to derail its passage through the upper chamber.

Most controversially, he wants Americans who do not have employer-provided health coverage to be able to choose a publicly-run insurance scheme, or "public option".

A bill that includes a public option looks set to pass through the House of Representatives, but moderate Democrats in the Senate have voiced opposition to any bill that would establish a government-run scheme.

Meanwhile, liberal Democrats in the House have threatened to reject any bill that does not contain a public option.

A bill looks likely to emerge from the Senate Finance Committee by the end of September, and both chambers are expected to hold floor votes on their respective versions of the bill in October.

After that, a conference committee (consisting of members of both chambers) will meet to reconcile the different versions.

If agreement can be reached - and liberals are more likely to give way on the public option than centrists - then Mr Obama could have a bill to sign by the end of November.


Mr Obama's first response to the economic crisis was to pour stimulus money into the economy in an attempt to save jobs and restart consumer spending.

He also supported and continued the government bailout - started by his predecessor - of a number of ailing financial institutions.

But he always maintained that the financial sector needed more than just bailout money to prevent a repeat of the crisis - it required tougher regulation as well.

In June, his Treasury Secretary Timothy Geithner laid out a series of rule-changes that the administration wanted to see.

US Capitol building
Congress is haggling over the details of healthcare reform and cap and trade

A new agency would be set up to protect consumers from predatory lenders. A new body would be established to oversee the regulation of the financial sector. And financial firms would be required to increase their capital holdings, so that they would be better able to weather financial turmoil in the future.

The healthcare bill took up most of the administration's legislative attention over the summer, and Mr Obama made no attempt to push financial regulation through Congress.

But as the world marked the first anniversary of the collapse of Lehman Brothers Mr Obama turned his focus back onto finance, with a speech reiterating his reform proposals.

The new regulations, although they do not go as far as some liberal economists would like, are far from popular on Wall Street.

Bankers and lenders complain that new regulatory agencies are not necessary, and will just slow business down.

Mr Obama wants to pass a bill through Congress by the end of the year. He has key allies there, like House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Chris Dodd.

But bankers have deep pockets and are big political donors, so any complaints they may have about the legislation will be given careful consideration by members of Congress.


When he entered the White House, Mr Obama made it clear that - after healthcare - combating climate change was his top domestic priority.

His favoured method for reducing carbon emissions was the creation of a cap-and-trade scheme.

Under his scheme, the amount of carbon that could be emitted in the US would be capped, and firms would be given permits (according to their size) to emit specified amounts of carbon.

Firms that produce less carbon would be able to trade their permits to firms that need to produce more than their allotted quota, so the scheme would create a financial incentive for companies to reduce their carbon emissions.

Mr Obama is keen to get legislation through Congress before the Copenhagen international climate change talks scheduled for December, and a bill narrowly scraped through the House in June, with a majority of just seven.

But the Senate, where Mr Obama's Democrats have a much smaller majority, will be a much tougher proposition.

Many senior Democrats, some from states that rely on coal-mining or heavy, energy-intensive industries, are warning that passing "cap and trade" this year will be a "heavy lift".

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