How Obama and the Dems can make a comeback

President Obama and his party experienced a humiliating defeat in Massachusetts when Scott Brown, a Republican, won a special election to replace the late Senator Edward Kennedy. There is more than enough blame to go around. Martha Coakley, the Democrat in the race, has been criticized for running a lackluster campaign, taking a vacation during the Senate race, and expecting a coronation as the heir apparent to the Kennedy legacy.

Meanwhile, a new poll found that Obama supporters who voted for Brown, or stayed home, believed that "Democratic policies were doing more to help Wall Street than Main Street." A majority of people polled favored a public option, and opposed the Senate health care bill because it didn't go far enough.

Things look uncertain for the Democrats. With control of the White House and both houses of Congress, the party in power appears unprepared to lead at times, and unable to make good on its 2008 campaign promises. But there is opportunity in times of crisis, and the Obama administration just got a badly needed wake-up call, a "come to Jesus" moment, if you will. The future still looks bright for the Democrats, provided they take a number of important steps:

1. Obama must take the lead and set the agenda. The administration made a fatal mistake when it timidly took a backseat in the health care reform debate, and left all of the work to a dysfunctional and broken Congress. The result, particularly with respect to the Senate, was legislation written and blessed by corporate lobbyists, a disappointment to Obama supporters. In all future policy battles, the President must articulate what he wants, and show that he is willing to do what is necessary to make it happen. He should be willing to rein in uncooperative, freelancing Democratic lawmakers and play hardball politics with them, Lyndon Johnson-style.

2. Democrats must resist the temptation to moderate and move to the center. Senator Joe Lieberman and Evan Bayh have suggested that the Democrats overreached, attempting to accomplish too many things and moving too far to the left. Such inside-the-beltway Monday morning quarterbacking misses the point: the public is angry because the Democrats have not done enough. Voters, including Obama's base, are frustrated and mad because they wanted change in 2008, yet they aren't seeing enough change in 2010. The sad state of the economy demands that President Obama and the Congress take a stand, act boldly, and throw bipartisanship out the window. After all, the Republicans have refused to participate as good-faith partners in this government.

3. Pass real health care reform with a public option. With a sixty-seat, filibuster-proof majority in the Senate, the Democrats failed at health care reform. Now they have fifty-nine seats, which is still a majority that will allow them to pass legislation. Democrats must find a way--whether through budget reconciliation, changing the Senate filibuster rules, intestinal fortitude, or other means--to pass health care reform. If the Senate Republicans want to filibuster, and justify a broken system that allows 45,000 people to die each year for lack of health insurance, then so be it. This is President Obama's signature issue, and he has spent a great deal of political capital on it. Meaningful reform with a public option would allow the Democrats to move ahead on to other important issues such as jobs and the environment. Success would galvanize the base and help ensure their enthusiastic participation in the 2010 and 2012 elections.

4. Go after the banks. Obama captured the presidency on a message of change, disrupting the status quo and challenging entrenched centers of power. In the days of the Great Recession, millions of people are suffering from chronic unemployment, home foreclosures and financial ruin. The public has properly identified the big banks as the cause of America's economic meltdown. These financial institutions gambled their depositors' funds on the functional equivalent of a high-risk Las Vegas casino, and lost. And the public seethes as these banks receive billions of dollars in bailout money. The President recently announced a new proposal that would limit the size of America's largest commercial banks, and restrict their involvement in sketchy practices. This move suggests that Obama is now listening to advisors other than Larry Summers and Timothy Geithner, industry insiders who are out of tune with Main Street, and have not served the President well.

In addition, Obama proposed a tax on 50 of the largest banks, which would recoup the cost of the financial bailout. And the President and Congress have vowed to battle against a Supreme Court ruling that eliminates longstanding restrictions on corporate funding of political campaigns. The Democrats can reclaim their standing as the party of Franklin Delano Roosevelt with a massive jobs program, creation of a Consumer Financial Protection Agency, and passage of the Employee Free Choice Act (EFCA), which would make it easier for workers to unionize.

The 2010 elections are still far away, and a lot can happen between now and November. Ironically, the defeat in the Massachusetts U.S. Senate race was the best thing that could have happened to President Obama. Still faced with a weakened and unpopular opposition, the Democratic Party has a unique opportunity to learn from its missteps, and come back stronger than ever.