Transcripts For KQED Frontline 20130116

There are ten. As for the senators schedule tonight, he is now at the Hyatt Regency hotel. He will watch the election returns and then. Ohio is gone for obama. It is now 11 00 on the east coast and keith, we can report history. Barack obama is projected to be the next president. Senator barack obama of illinois will be the next president. Narrator november 4, 2008. On this night, in chicago, inside Barack Obamas private world, the news began to sink in. I kept watching obama as he transformed from this young man to the next president of the United States. This was a different man. There are tens of thousands, maybe hundreds of thousands who have gathered in grant park in chicago. Ladies and gentlemen, the next first family of the United States of america. Narrator only four years earlier, hed been a state legislator. The look on his face to me looked like someone who finally understood the weight of the job that he had just won. Almost as if the weight of the world had rested on his shoulders. The road ahead will be long, our climb will be steep. Two wars, a planet in peril, the worst financial crisis in a century. But america, i have never been more hopeful than i am tonight that we will get there. I promise you, we as a people will get there. God bless you, and may god bless the United States of america. Narrator if he had any idea that night how difficult this would be, the next day would prove it. So much for that election day euphoria. The economy has now lost 650,000 jobs just in the past three months. All eyes are now on barack obama to turn it around. Narrator the cascade of bad news began with the economy. Fear swept through the markets. He had to start thinking about this the day after he was elected. This was the most eventful and consequential president ial transition in american history. We were all worried about what we were seeing. We knew that the Credit System was pretty quickly headed towards something that looked a lot like seizure. Narrator the president elect was told that in the two months since Lehman Brothers crashed, the panic on wall street had only gotten worse. What we were facing was something that, really, he had never contemplated, never experienced. Narrator unemploymenwas nearly seven percent and climbing. The stock market was down more than 6,000 points. There was a growing sense of calamity. This could be the most climactic economic crisis in all of american history, that we were that close to a complete meltdown. Obama at that moment gets a real glimpse of the future disaster is coming. At the end of the conversation, there is basically no bright spots. And i say to the then president elect, wow, that had to have been the worst economic briefing a new president s had in, you know, almost a century. And the president says, thats not even my worst briefing this week. Narrator there were the wars in iraq and afghanistan, the pursuit of al qaeda, and above all, a huge political challenge. We can finally bring the change we need to washington. We are ready to take this country in a fundamentally new direction. Narrator during the campaign, he had promised americans he would fix the partisanship that plagued and divided washington. There is not a liberal america and a conservative america. There is the United States of america. Its the Inauguration Day of the nations first African American president. This is the biggest inaugural of all time in a country that likes the word big. The first couple to arrive at the neighborhood ball. Narrator on the very night barack obama was inaugurated, a group of republicans quietly gathered to develop plans for taking on the new president. A meeting, a dinner, took place in a famous steak house in downtn washington, with Newt Gingrich as sort of the mc, as it were. The thing i found disturbing this week. Narrator at the gathering of gop luminaries top conservative congressmen eric cantor, kevin mccarthy, paul ryan, senate power brokers jim demint, jon kyl, tom coburn, and Event Organizer frank luntz. The room was filled. It was a whos who of ranking members who had at one point been Committee Chairmen or in the majority, who now wondered, out loud, whether they were in the permanent minority. The 44th president of these United States, barack obama. Many of them had attended obamas inauguration. They had seen that breathtaking spectacle of a million and a half people on the mall. And it felt like a wholesale repudiation of the Republican Party. They walked into that dining room as depressed as ive seen any elected members of congress. They lost every senate seat they could lose. They lost all these house seats. The numbers were so great that they thought that they werent coming back again, not for an election or two, but maybe a generation or two. Narrator as the night wore on, the talk turned to the future. Three hours, some of the brightest minds in the Republican Party debated how to be relevant. The point i made was that we had to be prepared in the tradition of wooden at ucla to run a full court press. And we had to see how obama behaved and to offer an alternative to what he wanted to do. So, they decided that they needed to begin to fight obama on everything. This meant unyielding opposition to every one of the Obama Administrations legislative initiatives. He could be defeated partly by his own ideology and by his own behaviors. The feeling was that if that group could cooperate and if that group could lead, that the wilderness might not be a generation away. By the end of the evening, you began to realize, wait a second youve got nancy pelosi as an opponent, you have a clear choice of ideologies. We have a tremendous amount of hard work to do. But its doable. They all talked about this, and they began to get more and more optimistic, and they left feeling practically exuberant. Inauguration day full of events. Ten, count them, ten official inaugural balls. Narrator across washington that evening. Stunning crowd of people. Narrator the new president had no idea what the republicans were planning. Ladies and gentlemen, the president of the United States and the first lady, michelle obama. crowd cheering narrator surrounded by supporters at the inaugural balls, the mood was hopeful. At last. President obama did not have a full sense of what washington was going to be like for him. He had not been in the middle of these kind of downanddirty fights, the ugly reality of governing in washington today. You have, in obamas case, gone within four years from being an Illinois State politician to the most famous person on earth, and you have confidence in both your judgment about whats the right way to go and your ability to make it go that way. If he was too confident about being able to bring people together, one can understand, given the way hed spent the previous four years. Ball gowns are on their way to the cleaners, the party is over for both the new president and the nation. Well, what does obama need to do to reassure americans right now, and the markets. Narrator that first week, the president had two goals turn the economy around. Were talking about massive job creation. Narrator . And do it by working together with the republicans. So hes got some selling to do. Right now, the big debate in washington is how big should the stimulus package be. He is facing many sobering challenges. In hammering out details for his massive economic recovery. He knew that he was dealing with a set of circumstances that required people to put politics aside and to address this crisis before it got worse. Narrator hed put together a huge, 800 billion stimulus package designed to kickstart the economy. And he tailored it to appeal to the republicans. Obama thought, you know what, im going to start off with something that is going to look pretty appealing to these guys. Im going to have about 35, 40 percent of this 800 billion package be in the form of tax cuts. A lot of democrats are going to hate that, but republicans like tax cuts, and we can just get everybody on board from the beginning. Narrator he was told right from the start the stakes couldnt be higher. This is the first of a series of tests. And if he failed this one, what would it say for his administration and his ability to deal with all the other challenges were going to face . President obama promised the American People he would bring bipartisan solutions. Narrator he decided to make a symbolic gesture hed come to them. Mr. Obama is hoping for support from both sides of the aisle. Narrator take his proposal to the republicans on their own turf. Hell try and sell his plan to the republicans. Narrator he headed right for the meeting of the republican caucus. Its a rare day when the president goes to the capitol to meet only with members of the other party. Hello, everybody. How are you . He spoke extemporaneously about the stimulus. He walked us through it probably 15 or 20 minutes, just his thought process and why he was advocating these policies. And then he opened it up for questions. Narrator the republicans were ready for him. And it was really during that q and a as the member stepped forward and asked some pretty, i think, appropriate questions about the amount of money that we were spending, the debt that wed be taking on, and i dont ever remember him saying, you know, okay well take a look at that. It was more just defending his proposal as is. Narrator and the republicans had a surprise for the new president. He arrives there thinking theyre all going to talk and come up with some kind of agreement; hes got all these tax cuts to offer them. And he finds that theyve already had a meeting and decided theyre going to oppose the stimulus package. And he was deeply burned by it. Before he showed up, eric cantor sent out an email. Said, not that im voting against it. Eric cantors email is were against this. Their leadership told the members, were not for any of it. No matter what it is, no, just say no. Narrator he came out empty handed and had to face the waiting press corps. Hello, everybody. How did it go . We had a Wonderful Exchange of ideas, and i continue to be optimistic about our ability to get this recovery package done. And we saw the president standing in the halls of the senate in the capitol. Ill never forget that. He still looked like a senator. Of course, hes now the president of the United States. Whats he even doing sort of lobbying for this . I think everybody there felt good about. That i was willing to explain how we put the package together, how we were thinking about it, and that we continue to welcome some good ideas. All right . It was a very strong signal that we were not going to get a lot of cooperation on this issue. And if we werent going to get it on this issue, it was doubtful we would get it on many others. gavel bangs on this vote the yeas are 246. Narrator but obamas party controlled the congress. The conference report is adopted. Narrator and without a single republican vote in the house, the stimulus bill passed. So much for the president s charm offensive. Today it was all partisan rancor and name calling. Not one republican voted for it, turning a Cold Shoulder to the president s appeal for bipartisan support. Obama learns that being president is about understanding the constraints and, frankly, working the system rather than changing the system. Growing backlash against wall street. As for the compensation for the ceos at four of the biggest. Gave out 18. 4 billion in bonuses. Narrator then, just a few weeks into his presidency, another wall street problem the huge bonuses. The bonuses fueled public anger over the hundreds of billions of dollars in federal bailouts initiated by the bush administration. It really, really grates with most people that our tax money went to support these institutions. And then when the rest of the country was in the worst of the recession, you saw the big traders and the heads of the goldmansachss of the world walking out with these multimilliondollar pay packages. Do the banks need to be held accountable for their part. Narrator and in washington, the news about the banker bonuses didnt go over well in the oval office. Got more than 18 billion in bonuses. The bonus and the compensation stuff made him more angry than id ever seen him. I remember him, like, really standing up out of his chair in the oval office and just being really pretty livid. I mean, the one thing he would not stand for was the American People being played for as chumps by these banks, and that was something he just really didnt like. Narrator some on the president s staff saw this as an opportunity to get tough on the banks. David axelrod, obamas top political adviser, very much wanted some scalps. Robert gibbs, who was the press secretary, but also very senior political aide, wanted scalps. Narrator white house economic adviser Larry Summers pushed the president to take strong action even seizing a troubled bank. One school of thought was, well, we need to take over, to shut down, to nationalize the weakest of the banks. Wall street would see that if you gamble with the countrys fortunes and you fail, youre going to get shut down, youre going to lose. Narrator but there was a deep divide among the president s economic advisers. Treasury secretary Timothy Geithner urged obama to take a cautious approach. Geithner didnt want to do it, because it would kind of create this risk. It would create this conception that the government was going to come in and mess with these banks, and that would frighten off private investors. Narrator only the president could make the decision bold action against wall street banks or cautious support to strengthen them. While the bankers waited, obama kept his own counsel. For the economy, this is what freefall feels like. When will the recession end . Narrator the nations top bankers were summoned to the white house. The president invited 15 of the. After leveling some very harsh words at bankers. Narrator the president wanted to talk to them. Looking for accountability from the nations banking leaders, today president obama is meeting with ceos of some of the nations. Thirteen bankers were called into a room to meet with the president of the United States. They were told that they were going to be chastised, that this was going to be the opportunity for the president to vent the publics anger. Narrator they headed some of the largest banks in the country. Throughout the crisis, they had received massive bailouts. Walking into that meeting, these guys have not been this nervous since they were in nursery school. Theyre ultimately powerful, sovereign men atop their institutions, but now they know that they really could get whacked. Narrator no one knew what to expect summers bold action or geithners cautious encouragement. Now theyd find out what the new president wanted to do. Obama comes in, and hes all business. Narrator there were few pleasantries exchanged. Obama spoke first. The president made it pretty clear when he talked to us, you know, were between you and the pitchforks, guys. And you need to just acknowledge that. The bankers have essentially made a decision that theyre prepared to go along with what needs to be done to resolve this problem, to get the public back on the side of corporate america. Narrator but as the meeting progressed, to their astonishment, it became clear the president was in no mood for confrontation. Whats interesting is that the next statements and the rest of the meeting essentially is obama skinning back as fast as he can on that pitchforks punch. And he says right after that, what we have, gentlemen, is a Public Relations disaster thats turning into a political disaster. And im here to help. I interpreted it as kind of a watershed time. Banks are the catalyst to get us out of this morass that were in. You can talk so long about the past, but at some point, youve got to look at the present and the future. And i thought thats what he was saying. Narrator the president had decided. He would wait on reforming wall street, and adopt the cautious approach. I think the president sees himself as a pragmatist lets get through this. Lets be pragmatic. Lets not shoot for the moon and miss. Lets accomplish as much as we can, but lets do it with the certainty that we know we can produce by taking this a little more cautiously. Narrator and the president required no Firm Commitments from the bankers. I think its clear it was an opportunity lost. He had a room full of very frightened ceos. He was in a position then to make demands, and he didnt. He didnt want to disturb the banks. He wanted them on their side so that things were as calm as possible. There would be basically business as usual. Today the Obama Administration did indeed extend them an olive branch. It looks like the countrys financial giants may have turned a corner. Narrator the bankers who left the meeting had already received more than 180 billion from the federal government with almost no conditions. Many of the president s liberal supporters were outraged. No Strings Attached . I mean, everybody else homeowners, everybody else whos trying to get a loan, everybody on main street, Small Businesses not only are they not able to get loans, but if they get anything, there are huge Strings Attached. How in good conscience, in good faith, can we not ask the banks, demand from the banks, some conditions upon getting bailed out . That just seemed incredible. So if you look at their stock prices, citigroup was at 98 cents just a few weeks ago, it is now up 75 . Banks are able to borrow money at little or no interest. Narrator as the bankers left, inside the white house, the president had already moved on. He was told at one point by an adviser, your legacy is going to be preventing a second great depression. And he says, thats not good enough for me. I mean, it wasnt enough for him to simply stop the economic problem. He wanted to have a positive transformative agenda. Narrator he wanted to take on Health Care Reform. Once again, his advisors were divided, worried about the political consequences. The white house had a debate about whether they should actually go forward with it. Vice President Biden was opposed to doing it, absolutely opposed to doing health care. So i said, if youre going to do this, go into it eyes open, know what the consequences are, and what the potentiality for success is. He was presented with all the political arguments, and he said, i get the politics of this, but if we dont do this now, it probably doesnt get done. And he said, and what are we doing here . I mean, are we going to put our Approval Rating on the shelf and admire it for eight years . This is a huge issue the president is taking on now. The question is, could Health Care Reform really happen . Narrator he had been in office only six weeks. Once again he would try to prove that bipartisanship could work. He gathered in one room at one time all sides in the debate. Theyre talking about lawmakers, doctors, nurses, hospitals. Bringing together lawmakers and interest groups. Cabinet officials, members of congress, the White House Team conferring on how to overhaul health care. The president trying to get his game on, take control of the process. Many of these players for years, if not decades, had a record of opposing any sort of Health Care Reform efforts. And what a remarkable achievement that would be. Something that democrats and republicans, business and labor, consumer groups and providers, all of us could share extraordinary pride in finally dealing with something that has been vexing us for so long. The cost of health care. Narrator in these first days a Fragile Coalition seemed possible. So lets get to work. Thank you. Narrator but to keep it together, obama had to move quickly. And that calculation is well move for a quick kill thats how they refer to it, a quick kill on capitol hill. It was thought that we. The senate was going to have a bill by june, we would have a bill by july. And we would go to conference and this would be over. Narrator the president was reminded that things have a way of slowing down in congress. Going to take you live to a Senate Finance Committee Hearing looking at health care. The process, particularly in the finance committee, just felt like that race that was being run starting on january 20th all of a sudden hit some mud, and peoples shoes got pretty soggy and pretty heavy. Narrator republicans sensed opportunity. Mitch mcconnell was the Senate Minority leader. Mcconnell was saying, dont agree to anything. Dont agree to anything. Keep me informed, but keep talking. The republicans were very clever in what they did. They pretended they were interested in this. I call it the dance of the seven veils. Im going to be there, and then im not and im going to be there, then im not, now you see it, now you dont. It was all an illusion. And meanwhile, the clock is ticking, the calendar is moving, and its getting later and later and later. And the weight of Public Opinion is turning against this Health Care Plan. Some members of congress are telling the president to slow down. Still a long way to go before the house and senate agree on. That pretty much puts a fork in the massive bill. Narrator by august, as congress headed home for the summer recess, there was still no bill. Some in washington wondered whether Health Care Reform could survive. Lets take a breather for a month. Heading into the summer recess is a period of great frustration for the white house. Everything was getting stuck. Everything was slowing down. And as they head into august, they didnt recognize whats about to hit them. Victory on his Health Care Plan is still far from assured. You want to kill my grandparents, you come through me first god will take care of health care. You dirty thieves we cant afford it afroleninism anger, by the summer of 09, had reached a boiling point. Radical communists and socialists there was a polarizing quality about barack obama that kind of came roaring forward. Baby killer abortion is murder and became much more obvious to people with the rise of the tea party and the battles over health care. There is an ugliness with these fringe people who are comparing the president to hitler. In that first week of august, the anger was spilling out, and i think members themselves were a bit taken aback by the intensity of that anger. And the rest of your damn cronies up on the hill there was anger out there and members of congress listened and they were scared. chanting kill the bill, kill the bill, kill the bill. Narrator it had been less than eight months. Health care reform had stalled, bipartisanship had collapsed, and there was still trouble with the economy. It was time to turn things around. In early september, he headed for new york, to the very wall street banks he had accommodated earlier. President obama visits new york today to deliver a major address to wall street. One year to the day after the fall of Lehman Brothers. President obama went to wall street today to mark the one Year Anniversary of the collapse of Lehman Brothers. Narrator obama came to persuade the big bankers to join a push for reform. Immediate action to reform financial regulation. Weve seen bailouts, stress tests, an alphabet soup of treasury and fed programs. He decides to have a meeting thats literally steps from wall street, right . I mean, federal hall is. You can walk down to the exchange floors. Narrator washingtons power brokers were there, congressional leaders, his economic team. The president of the United States. Narrator but the titans of wall street didnt show up. Essentially, none of the big figures from wall street show up to hear the speech. They all just stay in their offices and do their work. They dont even show up to the speech. It wasnt like the speech was scheduled, you know, without notice. They just had Better Things to do that day. Narrator earlier the president had taken the cautious course; none of the bank ceos had been fired. If you go have a speech on wall street and people from wall street dont even show up for your speech, and youre the president of the United States, what more public display can you make to try and force these guys to come and participate . And they apparently just felt like they could just wash their hands and walk away. Its a very difficult day for barack obama. We will not go back to the days of reckless behavior and unchecked exce that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Once everythings calmed down, once the banks have gotten what they want, once revenues have gone up again, once things seem stable, they just completely disengaged. And there was no way for the white house to force them to the table. There was nothing that the white house could do. Narrator the speech had not gone well. In the end, obama would leave it to congress to address financial reform. The young president prepares to deliver the most important speech of his first term in office. Narrator meanwhile in washington, the president turned his attention back to health care. President obama gets ready to take the stage. Narrator he summoned a joint session of congress. After consulting with a number of people, i think the president concluded, i need to take back control of this. Madame speaker, the president of the United States applause he understood that his presidency was at stake. He understood that he was asking people to make a very difficult vote. He also tried to explain the historic opportunity. His audience really in that speech wasnt the public in general, it was the people sitting in that chamber. The time for bickering is over. The time for games has passed. Now is the season for action now is when we must bring the best ideas of both parties together and show the American People that we can still do what we were sent here to do. It was an attempt to sort of recapture the high ground. It was an attempt to bring the debate back to a loftier level. If you misrepresent whats in this plan, we will call you out. Narrator but the tone immediately sunk to a new low. There are also those who claim that our Reform Efforts would insure illegal immigrants. This too is false. The reforms im proposing would not apply to those who are here illegally. You lie congresspeople shouting thats not true. A lone congressman says, you lie. You lie narrator it was republican representative joe wilson from south carolina. It crystallized this moment in washington. It crystallized the anger, it crystallized the fervor of the opposition. An outburst that continues to reverberate across the country. Totally disrespectful, no place for it. How did we get to the point where its okay to yell you lie at the president while hes speaking to congress . Narrator with partisan tensions and the American People increasingly unhappy with the bill, many of the president s top advisers believed Health Reform was now dead. Everyone on the team was very discouraged. His head of legislative affairs, phil schiliro, said, mr. President , unless you are feeling lucky, i just dont think were going to get this done. And the president got out of his chair and walked over to his desk and looked out the window and said, phil, where are we . And phil says, were in the oval office. And the president said, and whats my name . And he said, barack obama. And he said, well, of course im feeling lucky. Now, get back to work and figure out how to get this passed. In the end, they told him if he wanted to get it done, he would have to abandon bipartisanship and take on the republicans. The choice was do nothing or to do something with the tools you had and the majority you had. He chose to do that. Narrator once again, barack obama the campaigner hit the road to sell the bill. Do not quit do not give up we keep on going we are going to get this done we are going to make history we are going to Fix Health Care in america with your help god bless you and god bless the United States of america but first, down to the wire on Health Care Reform. The house votes just hours from now. Narrator it had taken more than a year. On sunday, march 21, 2010. It is a 15minute vote. Narrator the president asked the democrats in congress to take what they call a hard vote a potentially careerending vote for an unpopular bill. The motion is adopted. The 216th vote comes over, a big cheer erupts. Its 219 to 212. No votes are republicans. All democrats, no republicans. Not a single republican in the house or the senate voted for the Health Care Bill. Its a huge piece of legislation, and it is extremely unusual. When any of the other major programs were passed, signed into law, they were ultimately done with both democrat and republican votes. Narrator it was victory, but experienced washington knew the president would pay for it. It came at a high price, the entire first year basically dedicated to this, having their hopes for bipartisanship dashed. Narrator now, he and his party would have to wait for a verdict from the electorate the midterm elections. An historic election for the Republican Party. Its a whole new political world for the president. Narrator in november of 2010, the president s party suffered a significant defeat. Now the republicans back in power in the house of representatives. Narrator for them, the midterm elections were a disaster. Democrats are nursing a major midterm hangover. It was really one of the first times when the country had a chance to register their opposition to obama. Tuesdays election was a game changer. And boy, did they. Repudiation of the president and his policies. And that, i think, came as a surprise to this person who thought that people pretty much loved him. The gop gaining at least 58 seats. I can tell you that, you know, some election nights are more fun than others. Some are exhilarating; some are humbling. Narrator many of those democrats who had taken the hard vote to support obamas Health Care Bill had lost. Team boehner and team obama dig in their heels. Narrator now the house belonged to the opposition. A president trying to figure out what he does with this. President obama acknowledged that hed taken a shellacking. I now pass this gavel and the sacred trust that goes with it to the new speaker. God bless you, Speaker Boehner. Narrator Speaker John Boehner had 87 new republican lawmakers, many of them deeply conservative. These were not people who spent 25 years in politics. In fact, that was a big strike against you. They were elected not to sell out the way so many politicians had done, that they were elected to speak truth to power. Theyd spent the last two years running around, particularly a lot of these new congressmen in their districts, saying absolutely horrible things about the president his ability to lead, his ideology, his integrity, his birth certificate. These are not easy people to deal with. This is a very difficult, ideological caucus, with a very strong sense of selfrighteousness and great vitriol and animosity for the president. Narrator for the president , it was a whole new game. I think he understood that the glory days were over, that the moment of celebration of barack obama was passed and he was heading into a much tougher, more trenchant period of his presidency when everything was going to be difficult, when everything was going to be more challenging. Narrator like all his predecessors, the president had one arena where he could act on his own. You are clear to engage him. Lets go, roll it in. explosions good shot. Go for the vehicle. All american president s hit that moment where they come to the conclusion that dealing with congress is simply too difficult, and they become Foreign Policy president s in part because they have so much more leeway. But for barack obama, i think this happened early. Today, we got the obama plan for leaving iraq. President obama announced the current phase of the war is coming to an end. Narrator early on, obama had set a timetable for withdrawing troops from iraq. Within 19 months. He came into office promising to get out of iraq. His rise had a lot to do with his opposition to the iraq war. And i dont think he ever looked back. Narrator but there was another, secret side to obamas approach to the world. Candidate obama had been critical of much of the bush administrations top secret war on terror. As president , it was a different story. His people made it clear that in the terrorism arena, he was going to be as tough if not tougher than the bush people. He was going to be extraordinarily aggressive. He and his people reviewed all existing ongoing cia covert operations and with the exception of aggressive interrogations, endorsed all of them, and doubled down on a number of them. Narrator at the center of obamas covert war targeted killings death by drone. The fact that barack obama would be the guy that leads america into this world of predator drones and navy seals and cyber warfare and sort of the dark arts of the special forces and the cia and that would be a major part of his Foreign Policy i dont think anyone would have predicted that. Hes the first Nobel Peace Prize winner with a kill list. And it is very disappointing to his base. It is very disappointing to Civil Liberties supporters who thought he was going to be much more of a stereotypical liberal. Narrator in the spring of 2011, obamas covert war scored a significant victory. It began with a single piece of intelligence. Cia director leon panetta had learned Osama Bin Laden might be living in a compound in pakistan. The intelligence case was entirely circumstantial. Nobody saw Osama Bin Laden, had a full id on him. How could he live for many years inside a walled compound and never leave . Why would Osama Bin Laden want to be 35 miles from islamabad . Why would he want to be steps away from pakistans equivalent of west point . Did any of this make sense . Narrator the president called together his National Security team. He said to his National Security team in the situation room, i want everybody to tell me what your view is, what you would do, what your recommendation is. And he got a very mixed response. I think of the people in the room, it was probably 50 , roughly, were in favor of the raid option that we ended up taking. Narrator only the president could make the final decision on whether to send u. S. Troops into pakistan. He also knew that if it had gone wrong, there would not only have been dramatically negative consequences for the men he sent in, and for our countrys security, but also for his own politics. It very well could have been a careerending decision. Narrator the president decided to authorize the operation for sunday, may 1. I think that was one of the longest days that hes had as president. He said to us at the time that the minutes were feeling like hours, as we waited for the operation to begin. Narrator they waited for the signal that bin laden was in the compound. Admiral mcraven provided the call sign geronimo kia killed in action. And at that point, people kind of started to make eye contact and there was this sense of not just relief, but great pride and admiration in what had taken place. And nobody spoke until the president said to everybody around him, looks like we got him. The United States has conducted an operation that killed Osama Bin Laden, the leader of al qaeda. Narrator the killing of Osama Bin Laden was a high point. Thank you, and may god bless the United States of america. Bin laden is dead bin laden is dead a man with thousands of americans blood on his hands. thunder narrator that spring, the president would face another dramatic confrontation, this time with the new republicans in congress. It began with a warning from treasury secretary Timothy Geithner the country was in danger of running out of cash. Geithner says, we could trigger a depression worse than the 1930s. It will be indelible. It will be. It will last for generations. Tim geithner is one scared secretary of the treasury. The stakes are very high. And so there is a great deal of. I think you can only call it panic. Narrator the new republicans in congress were threatening to vote against raising the debt ceiling. If congress didnt act by august 2, the federal government would be unable to pay its bills. In 2010, when all these republicans were running for congress, many of them avowed tea partiers and the rest of them riding the tea party wave, the subject of the impending debt ceiling came up frequently and virtually all of them campaigned saying. Pledging not to raise the debt ceiling. Narrator early on, republican freshmen attended orientation sessions. Republican strategist frank luntz ran one of them. And i asked the question, how many of you are going to vote for the debt ceiling . And only three or four of them raised their hands. And i said, if you vote for the debt ceiling, the people who put you in office are going to knock you out. If you vote for the debt ceiling, youre voting for your own death certificate, political death certificate. Narrator for his part, the president decided to try something new personal politics. He figured he could connect to the republican leader, john boehner. Obama told his staff, john boehner is a country club republican, a golfplaying, cigarette smoking dealmaker. Narrator the president invited boehner to play golf with him at Andrews Air Force base. And afterward, they go back to the clubhouse, and theyre having a drink; theres a photo op. And its at that point when boehner says to the president , hey, you know, on this debt ceiling stuff, we ought to do something big. Narrator on and off for weeks, obama and boehner met in secret. Boehner calls these the nicorettes and merlot sessions. The president is having iced tea and chewing a nicorette. And boehner is having a glass of merlot red wine and smoking a cigarette. Narrator it was obamas dream negotiation. A bipartisan deal. If the speaker and the president could come to a deal, and they both, as we used to say, hold hands and kind of jump off the ledge together, then they could not ram through, but they surely, with the strength of their positions, would have a very good chance to sell them the package. Narrator the president offered entitlement cuts. The speaker offered increased revenue from taxes. With less than two weeks to go, they thought they had a deal. It became known as the grand bargain. Its not every day that the speaker comes to see the president quietly and says, im willing to do a deal that Everybody Knows is going to be dangerous for him politically. Narrator back at the capitol, boehner would have to convince the new republicans to go along. John boehner discovers that deal making is not part of the program for a lot of these freshmen who have just come into office on the strength of conviction politics. These freshmen understood what washington was about and chose not to be of washington. And so they wouldnt cave like a typical politician did because they werent typical politicians. They got elected on principle, not on politics. Narrator as the week wore on, obama began to worry about the grand bargain. He calls boehner that night and leaves a voicemail. Boehner doesnt pick up. The president said, get back to me tonight, john. The president didnt hear. I think he called me around 10 00, 10 30 and said, have you heard anything . I said no. I tried to reach the speaker and i had his cell phone, and he didnt answer. Which is very unlike him, because he always answered his cell phone. I reported that i hadnt heard back from him yet. So we were, there was. Trying to figure out what the hell was going on here. The white house, they get kind of angry as time goes on, because they start to understand that theyre getting doublecrossed in some way and boehner wont call back. Narrator by friday, Speaker Boehner called a press conference. We get this announcement that theres going to be a briefing in boehners conference room. We dont know. We still think theres a deal. We think this is to announce a deal. And i get to the conference room, and boehners in there and hes sort of chuckling around with reporters or joking about his tan and been on the golf course and he seems in a good mood. Narrator he left the waiting press. Now he was ready to return the president s call. The speaker called back, and by then everybody knew what was going on. The president was pretty ticked. We were all pretty ticked. In the oval office, when the president is on that phone call, rob nabors, the head of congressional relations, sees the president is so angry, nabors worries that hes going to break the phone receiver. Boehner put it quite succinctly. He said the president was angry, and so angry and so hot, he was spewing coals. Narrator outraged, obama immediately called his own press conference. Good evening, everybody. I just got a call about a half hour ago from Speaker Boehner. It is hard to understand why Speaker Boehner would walk away from this kind of deal, and frankly, i think that one of the questions the Republican Party is going to have to ask itself is, can they say yes to anything. Can they say yes to anything . Tensions were unbelievably high. You know, this is now one week from dday. Narrator then it was boehners turn. Now let me just say that dealing with the white house is like dealing with a bowl of jello. They refuse to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform. Thats the bottom line. Were heading into the weekend with the best opportunity for preventing economic cataclysm on a global level from occurring. Is now gone. There is no deal. Congress now has less than narrator just hours before the deadline expired, a compromise that pushed the problem until after the president ial election. The deal that finally emerged was one that everybody hated. It was the creation of a committee to try to come up with enough spending cuts to meet a target. And if they failed, to put in place a mechanism for automatic cuts that would meet those targets. Narrator the compromise created what would become known as the fiscal cliff. Bipartisanship had failed. Obama would once again have to recalibrate. Once the grand bargain fails, once he, frankly, has proven that he could not bridge the divide between himself and john boehner, that he was wrong about the nature of american politics, he was wrong about how close the two parties were to each other ideologically, his message shifts to, you know what, American People . We have two ideologies in this country and youve got to pick one or the other. President obama is battling for his own second term. Narrator three and a half years after he came to washington on a promise of change. A different president obama out on the campaign trail today. Narrator barack obama returned to the campaign trail, himself changed. A difficult road ahead for the president. I think you see today a president obama with a thicker skin, more jaundiced eyes. Has grown more skeptical, even cynical, perhaps, about washington. Narrator as he made the case for reelection, the man who promised to transcend differences emphasized them. If i said the sky was blue, they said no. If i said there were fish in the sea, they said no. They figured, if obama fails, then we win. Its hard to believe that it is the same person who was talking about bringing red america and blue america together, because he is now a polarizing figure. Because of their policies, the republicans messed up so bad. Having seen the collapse around washington from the debt ceiling debacle, he knew he had to go into a different mode. And he was prepared to do it. And it was a much tougher campaign, it was a grittier campaign. It was not a message of uplift in the same way, by any means, that the First Campaign was. Its the same agenda that they have been pushing for years. And his entire Campaign Message is about the differences between the two parties, not the similarities. This is a cbs news special report. Narrator by november 6, the campaign was over. Barack obama has been reelected. The president wins this battle. Another four years for president barack obama. The president won a big electoral victory, but his margin of victory was by no means a landslide. Most incumbents do a little bit better the second time around; he did worse the second time around. So he has a lot that he has to deal with. I believe we can seize this future together. Narrator that night, the divisive rhetoric from the campaign was gone. Because we are not as divided as our politics suggest. The first theme he returns to after the election is the old obama. Goes back to the famous line. We remain more than a collection of red states and blue states. And delivers it with gusto. The United States of america. In his first four years, he wasnt as successful as i think he promised to be in 2008. Hes now won reelection. Its a whole new day and hes got another shot. And together, with your help and gods grace, we will continue our journey forward. But i think it is a lot harder the second time around. The words alone wont do it. It has to be through a series of actions that well see. Thank you, america. God bless you. God bless these United States. crowd cheering next timfrontline. Fraud and potential criminal conduct were at the heart of the financial crisis. Titans of wall street. No one going to jail, no individuals being held accountable. Too big to jail. A pervasively corrupt pattern of behavior. More than 90 of the underlying loans were defective. Isnt that fraudulent . Yes. Frontline investigates. This is a stain on the american justice system. The untouchables. Go to pbs. Org frontline for analysis from top journalists and historians on the highs and lows of obamas first term, a closer look at the top items on the president s agenda for his second term, plus watch all of frontlineprograms on the Obama Presidency and explore our interviews with Top Administration insiders. Connect to the Frontline Community on facebook and twitter, or tell us what you think at pbs. Org frontline. Frontlinis made possible by contributions to your pbs station from viewers like you. And by the corporation for public broadcasting. Major support for frontline is provided by the john d. And catherine t. Macarthur foundation, committed to building a more just, verdant, and peaceful world. More information is available at macfound. Org. Additional funding is provided by the park foundation, dedicated to heightening Public Awareness of critical issues. And by the frontline journalism fund, supporting investigative reporting and enterprise journalism. Captioned by Media Access Group at wgbh access. Wgbh. Org for more on this and other frontline programs, visit our website at pbs. Org frontline. Frontlines inside obamas presidency is available on dvd. To order, visit shoppbs. Org or call 1800playpbs. Frontline is also available for download on itunes. Turn to pbs. For stories that define the american experience. All of this stuff was just erupting revealing our strengths. You create a new future. Our struggles. Its very american to say this is not right. These are our stories. We were so innocent and oddly enough we were so american our american experience. Only on pbs. This program is made possible by the corporation for public broadcasting. Woman so who do you vote for, joseph cao or who . Daddy. Daddy. Cao im looking forward to being over whether we win or lose. Its almost like waiting to see a dentist before you get your teeth pulled out. Ha ha ha no. Im not the mayor. Im the congressman you elected. Man, voiceover its a democratic district. Two years ago, they elected an asianamerican republican over a black, democratic incumbent. Man, voiceover unfortunately, i think hes in the wrong party. Hes in the party thats represented the interests of the upper classes in america,