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Andrew Busch: The Obama Slide

Rasmussen daily tracking polls show that President Obama's presidential approval ratings hit -11. The peak was at +30 on the 2nd day he took office and has been declining ever since. As David Brooks writes , "All presidents fall from their honeymoon highs, but in the history of polling, no newly elected American president has fallen this far this fast."

This further perils his ability to get a health care bill passed in the fall and certainly means his fixation on public option will be in jeopardy. If he can't compromise on the public option, he runs the risk of what happened to Bush on social security. Bush wanted private accounts and alienated key Senators by not compromising.

President Barack Obama
Photo By: Pete Souza
President Barack Obama

As the President and the Democrats have discovered, health care is a very important and sensitive subject for the American voter.

They have lost credibility and support (i.e. poll data) on their handling of the issue.

Robert Reich believes it can be explained this way: "Obama and progressive supporters of health care were outmaneuvered in August - not because the right had any better idea for solving the health care mess but because the rights' attack on the Democrats' idea was far more disciplined than was the Democrats' ability to sell it."

Read the two NYT op-eds from this Sunday on Reagan's tax reform of 1986 and Bush's failure on reforming social security. They are an excellent primer on how to successfully avoid pitfalls and bring about health care reform. Both Hubbard and Bradley write on the topic from their experiences with the Bush White House and the Reagan White House.

As an indication of what may come from the tax reform of the 1980s, the Senate Finance committee held 130 meetings over the bill in the lead up to getting it passed. It took time, but it got done with compromises on both sides.

I would expect something similar to happen with health care: more time, more thoughtful consideration of the outcome, and more likelihood of it getting passed

The Obama administration has to decide on what parts of the health care bill it will need to compromise on to bring down costs to achieve their goal of getting more people covered. If they can’t get the CBO to agree on the cost savings and they pursue it anyway, this will be a major negative for the US fiscal deficit and a major medium term for US equity markets.

With approval ratings cratering, Obama should realize he needs to learn from the success and failures of previous Republican presidents.

On CNBC.com now:

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Andrew Busch
Andrew Busch

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Andrew B. Busch is Global FX Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece andreach him here and you can follow him on Twitter athttp://twitter.com/abusch .