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Obama uses some clout on oil spill

In jawboning BP out of $20 billion, the president put Republicans temporarily off their message. A far bigger challenge will be passing an energy bill.

June 20, 2010|Doyle McManus

The high point for President Obama last week wasn't when he got BP to agree to put $20 billion aside to pay for damages from the gulf oil spill.

The high point was when an oil-state congressman, Joe L. Barton of Texas, denounced the deal as a Chicago-style "shakedown."

For weeks, Obama had seemed powerless in the face of the blowout. He'd been reduced to telling people all the things he couldn't do. "I can't dive down there and plug the hole," he said. "I can't suck it up with a straw."

But Americans didn't expect him to plug the leak — or, even sillier, to show more emotion when he talked about it. What they wanted was to see him use the federal government's powers effectively.

Last week, Obama finally found a way to do that. He summoned BP's top executives to the White House, told them he needed their help, and nudged them into ponying up.

Obama didn't raise his voice or pound on his desk when he talked to the men from BP. He didn't need to. The lineup on Obama's side of the table included Ken Salazar, the interior secretary who will decide whether BP ever drills in U.S. waters again, and Eric H. Holder Jr., the attorney general who will decide whether to pursue criminal charges against the company.

President Obama had finally embraced the wisdom of his fellow Chicagoan, Al Capone: You get much further with a kind word and a gun than with a kind word alone.

So was it a shakedown? Sure — although the polite word for it in Washington isn't "shakedown," it's "jawboning." And when the beneficiaries of a shakedown are taxpayers and the Gulf Coast, most Americans don't mind a little strong-arming.

That's something Barton didn't understand. After criticizing the "shakedown," he went on to apologize to BP for the rough treatment it had endured. Then, under pressure from terrified Republican colleagues, he had to apologize for his apology.

Presidents have long used the federal government's clout to press private industries to do their bidding, most often to settle strikes or forestall price increases. They don't always succeed; Bill Clinton summoned baseball owners and players to the White House in 1995 in an attempt to settle a strike, but they blew him off. Obama tried to shame Wall Street into trimming bonuses last year, and got negligible results. But BP, which needs federal permits to drill and has contracts to sell $2.2 billion of fuel to the U.S. military, had more to lose than the ballplayers and investment bankers did.

In fact, the deal Obama gave BP wasn't all that onerous. The president claimed credit for lifting a $75-million ceiling on the company's liability set by a 1990 oil drilling law, but BP had already said it would voluntarily agree to spend beyond that limit. (The company wasn't likely to have much choice; the ceiling is void if the company broke any regulations, and evidence is mounting that BP violated plenty.) Obama also got the company to make a "voluntary" donation of $100 million to a fund for oil workers laid off by his moratorium on deep-water drilling.

But BP benefitted from the deal as well: Obama publicly stated that it was in the United States' interest to keep the company from going bankrupt — something the markets had begun to worry about. After the deal was announced, BP's stock recovered from a low of $29 and closed the week near $32.

The political question now is: Has Obama done enough? Obama's aides acknowledge the president was too slow to recognize the impact of the disaster. It wasn't until five weeks into the crisis that he sent Coast Guard Adm. Thad Allen to the gulf to take charge of the containment effort, removed the director of the failed Minerals Management Service and declared a moratorium on deep-water drilling.

A politician who built his career on soaring words was learning that actions spoke louder.

The biggest factor in Obama's favor has been his good luck in adversaries — not only the hapless Rep. Barton, but Republicans in general, who have offered discordant messages on the crisis. Gov. Bobby Jindal (R-La.) and former Gov. Sarah Palin (R-Alaska) demanded that the federal government do more even as Gov. Haley Barbour (R-Miss.) and Rep. Michele Bachmann (R-Minn.) criticized federal action as intrusive.

Now, at length, the administration has found some footing on the issue. Aides say they're confident that the public isn't blaming Obama for the crisis, and polls suggest that the president's approval rating, which remains at an anemic 46%, hasn't been affected much by the oil spill. With luck, aides say, the containment effort will soon begin to work — and this won't be Obama's Katrina after all.

The events of last week even gave the president and his aides encouragement to renew their pitch for a comprehensive energy bill — one they once hoped could include a "cap and trade" system to reduce the nation's use of petroleum and other polluting fuels. But members of Congress, unlike BP executives, aren't worried about landing on Obama's bad side. They fear hostile voters more than they fear a vengeful White House.

Obama jawboned a giant oil company out of $20 billion, but getting an ambitious energy bill through Congress? Not even the president is that powerful.

doyle.mcmanus@latimes.com

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