>> there is not a liberal america and a conservative america. there is the united states of america. >> it was a promise of changeo a divided country. >> the president walked into the presidency with an expectation that he would be able to reach across the aisle. >> but in washington, an epic battle... >> if i said the sky was blue, they said, "no." >> dealing with the white house is like dealing with a bowl of jell-o. >> you could almost see the polarization. it was palpable. >> we elected them to block obama. >> a resistance that became a political revolution. >> so, how is that hope-y, change-y thing working out for ya? >> the tea party rose up to say, "enough is enough." >> you want to kill my grandparents, you come through

me first. >> he is not an american citizen. i want my country back! >> they were just upset now with both parties. >> the speaker of the house, turns out he's a coward. >> why be here if you're not going to fight? >> and the anger that paved te way for a political outsider. >> how stupid are our leaders? >> his nomination was the hostile takeover of the republican party. >> i am your voice. >> if you wanted the exact opposite of donald trump, it's barack obama. >> part one of a special two-part series. >> obama came on the mandate of changing washington. by his very presence, he forced more polarization and gridlock than we had seen in the eight years prior. >> "divided states of america" >> frontlinis made possible by contributions to your pbs station from viewers like you.

thank you. and by the corporation for public broadcasting. major support for frontliis 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 support is provided by the park foundation, dedicated to heightening public awareness of critical issues. the john and helen glessner family trust, supporting trustworthy journalism that informs and inspires. and by the frontline journalism fund, with major support from jon and jo ann hagler. >> narrator: two days after the election, donald trump and barack obama, old antagonists,

met each other for the first time. >> there was something surreal about it. they had so much of a past. trump had said such hurtful and mean-spirited things about obama for years and years. and now here they were, just feet apart from each other. >> well, i just had the opportunity to have an excellent conversation with president-elect trump. >> to see the two of them in the oval office was kind of the, you know, the final moment of, how in the world did this happen and what have we just gone through? >> narrator: for trump, it was the beginning of a new era. for obama, it was the devastating end to a difficult presidency. >> and i have been very encouraged by the, i think, interest in president-elect trump's... >> i don't think you could have someone who embodies as clear a rebuke to the obama legacy as donald trump does.

>> i believe that it is important for all of us, regardless of party and regardless of political preferences, to now come together, work together to deal with... >> donald trump was a rejection of everything that barack obama stood for as a candidate, as a politician, and ultimately as a president. >> narrator: inside the oval office that day, it seemed civil. >> we were just going to get to know each other. we had never met each other. i have great respect. the meeting lasted for almost an hour and a half, and it could have... as far as i'm concerned, it could have gone on for a lot longer. we really, we discussed a lot of... >> narrator: but the differences between the two men and the divisions between their supporters were stark. >> and i look forward to being with you many, many more times in the future. thank you, sir. (reporters asking questions) >> thank you, everybody. we're not, we are not going to... >> obama came to washington

with the idea of hope and change, and, in fact, he finishes his presidency with the country even more divided and angrier on both sides of the divide. >> the great irony of the obama presidency, right, is, someone who came on the mandate of changing washington as we know it, someone who came on the mandate of ending this gridlock and this polarization, by his very presence-- and by his very humanity, who he was, the color of his skin, the sound of his name-- forced more polarization and gridlock than we had seen in the eight years prior. >> narrator: years of political combat in washington had taken their toll: on obama, on the republicans, and on the country. >> there is not a liberal america and a conservative america, there is the united states of america! (crowd cheering)

there is not a black america and a white america, there's the united states of america! hope, hope in the face of difficulty. hope in the face of uncertainty. the audacity of hope. >> obama is expected to be thrown into the limelight. >> he can barely show his face in public without creating some kind of sensation. >> he is an island of celebration in a sea of despair. >> fans were hungry for a star. >> narrator: in 2005, barack obama was the newly elected senator from illinois. >> and he arrives in the senate a celebrity. >> narrator: he was already a superstar. to many democrats, he was their future. >> he was sort of person who democrats were placing their hopes in. >> narrator: the veterans knew it in their bones. they gathered around him. >> he came to the senate almost immediately with everyone's high expectations, with

everyone's assumption that this was a man who was on a fast track. >> narrator: but at the very bottom of the seniority system, the new senator quickly grew impatient. >> as soon as he gets to the u.s. senate, he's bored. you know, he doesn't want... obama was never going to be the kind of guy who, you know, ends up in a wheelchair on the senate floor. >> narrator: one day during his second year in office, at a restaurant near the capitol, his mentor, the former majority leader, urged him it was time to run for the presidency. >> we went to my favorite restaurant and took the kitchen table in the back, where nobody could see us. well, i tell him he should do it, and that he shouldn't assume, if he passes up this window, that there will be another, because the longer he's in washington, the more history he has. and the more history he has, the more he's going to be explaining his votes and his actions and his statements and his positions

that undermine his message. >> narrator: he wanted to do it, but some of his closest advisers were cautious. >> he asked us to challenge him on what he would face in running for president, to really ask the tough questions. >> and some of the most skeptical people about making this race were some of his very accomplished, successful african-american friends. >> narrator: they were unsure if america was ready for a black president. >> there were four people in this country that thought that the country could elect a black president, and they all lived at the same address in the south side of chicago. >> narrator: he decided to run. (crowd cheering) on the campaign trail in iowa, he delivered his message. >> we can finally bring the change we need to washington. >> narrator: hope. >> we are ready to take this country in a fundamentally new direction. >> narrator: and change. >> ...the american people are looking for change in america...

(crowd cheering) we are in a defining moment in our history. >> narrator: the state was a crucial test of whether white voters would support obama. >> iowa turned out to be the real litmus test. did he have the capacity to draw votes from other demographic groups? >> if white people would vote for a black candidate in a mainly white state, it said this guy really has a chance. this is not... this is not playing anymore. this is not jesse. >> narrator: by the day of the caucuses, it was unclear whether obama had convinced enough iowa democrats. >> we start to initially get sort of turn-out reports, very anecdotal. "the lines are out the door." >> nobody foresaw 239,000 people participating in the iowa caucuses. i mean, so when 239,000 people came out, it's, like... you know, they just blew the

doors off every assumption about the campaign. >> at this defining moment in history, you have done what the cynics said we couldn't do. (crowd applauding) >> narrator: obama won a critical victory in a state that was over 90% white. >> all of a sudden, people woke up and said, "my god, maybe it could happen." that's what happened. it was like a jolt of electricity going through the entirety of the black community. >> you came together as democrats, republicans, and independents to stand up and say that we are one nation. we are one people. and our time for change has come! >> narrator: it was a message that put obama on the road to the white house. >> thank you, iowa! (crowd chanting) >> obama! obama! obama!

>> this is where john mccain will appear with his running mate, but we still don't know who it is. >> narrator: but first, his opponent, republican senator john mccain, would have a surprise for the country. >> rumors are swirling that senator john mccain is about to choose his running mate for vice president. >> who will john mccain pick as his running mate? >> narrator: mccain had become a fixture of the republican establishment over his 25 years in washington. he was struggling in the polls as voters seemed to want change. he needed a newcomer to neutralize obama's change candidacy. >> he needed to find someone. an african-american running, you got to find a woman. but you have to find a woman who meets some of the litmus tests in your own party. >> i am very privileged to introduce to you the next vice president of the united states, governor sarah palin of the great state of alaska.

>> narrator: at the time, few realized that the decision was a turning point for the republican party and the history of american politics. >> palin was a signal moment in the tensions that were developing and would ultimately explode within the republican party. >> mccain's advisers thought she was very different than what she turned out to be. they didn't realize that she would be this populist crusader and turn into a sort of right-wing grassroots populist. >> narrator: as she arrived at the republican convention, palin's down-home straight talk was appealing to an emerging group of rebellious conservatives. (crowd cheering) >> well, i'm not a member of the permanent political establishment. >> she gave one of the best convention speeches i have ever seen, and she mesmerized those people. >> i'm not going to washington to seek their good opinion.

i'm going to washington to serve the people of this great country. >> narrator: she electrified the crowds with her own brand of prairie populism: attacks on the washington establishment and those she labeled "the elites." >> i've learned quickly these last few days that if you're not a member in good standing of the washington elite, then some in the media consider a candidate unqualified for that reason alone. but... (crowd booing) but... >> she didn't talk like politicians. she didn't, she wasn't careful with her words that... she didn't make a lot of sense sometimes. >> i love those hockey moms. you know, they say the difference between a hockey mom and a pit bull? lipstick. (crowd laughing and cheering) >> i don't think there's ever been someone that close to the

presidency-- i mean, who, at least for as long as i can remember-- who was that seemingly, um... let's say, did not have the classic qualifications for the office. >> thank you, and god bless america! >> john mccain ushered an insurgent, somebody coming in from the outside, literally from alaska, and then also, in every other way in terms of her background and her regard for elite institutions. >> but this governor, of alaska, she's something else. >> sarah palin has completely transformed republican party and the next presidency... >> boy, were you right about this one. did you know how... >> narrator: for her base, she was heroic, but in new york, she was made into a joke. >> it's "saturday night live!" >> i present governor sarah palin. >> first off, i just want to say how excited i am to be in front of both the liberal elite media as well as the liberal regular media.

i am looking forward to a portion of your questions, so let's get started. yes, you. >> you said that you like to visit the, quote, "pro-america" parts of the country. are there parts of the country that you consider un-american? >> yes-- new york, new jersey, massachusetts, connecticut, delaware, california. (blows raspberry) >> when she was asked in an interview with katie couric what she reads everyday... >> what newspapers and magazines did you regularly read before you were tapped for this? >> she was embarrassed, and sort of squirmed a bit on camera. >> um, all of them, any of them that have been, been in front of me over all these years. i have a vast, i have a vast variety of sources where we get our news, too. >> she didn't just not have an answer, she was contemptuous of the question. >> it's kind of suggested, it seems like, "wow, how could you keep in touch with what the rest of washington, dc, may be

thinking and doing, when you live up there in alaska?" believe me, alaska is, like, a microcosm of america. >> to some people, they thought, "well, okay, that signals the end of her candidacy in some sense." but for another segment of americans, this was validating. this was vindicating. there was somebody now who had a similar suspicion and sense of alienation from these east coast effete intellectuals. >> and that was really the first time that you had this establishment versus grassroots conflict. and you had it because, for some people, sarah palin was margaret thatcher. for others, sarah palin... i don't even know who the analogy would be, but just someone who was not qualified to be where she was. >> i was reading today a copy of the new york times. (crowd booing) >> narrator: palin became the voice of a growing number of republicans who were fed up with politics as usual in their party. >> and she was, in fact, an

early indicator that things were changing in the republican party, that it was not the same party of the george h.w. bush and, and richard nixon, gerald ford, and ronald reagan era. >> drill, baby, drill. (crowd chanting) >> she was not even really conservative, she was just a bomb thrower, and i think that it took a long time for people at the top of the party to recognize what, the anger that palin was channeling. it wasn't just at democrats, but the republican elites, as well. >> narrator: palin was the beginning of a challenge to the establishment that would only grow in time. on the campaign trail, barack obama was facing his own challenge. he was being forced to deal with a subject he had hoped to avoid. >> and they wants us to sing "god bless america." no, no, no! not "god bless america," "god damn america!" that's in the bible, for killing

innocent people! god damn america for treating her citizens as less than human! >> narrator: suddenly, the issue of race was at the forefront of the campaign for president. >> obama's campaign manager david plouffe said, "that was the episode that could have destroyed our campaign." he called it "a direct torpedo to the hull." so inside, they were absolutely terrified that it all could have ended with wright. it was that big a deal at the time. >> yes, 9-1-1-0-1 happened to us, and so did slavery happen to us. >> narrator: it seemed to threaten obama's message that america could rise above its divisions. >> i think for a lot of conservatives, this prototypical angry black man in chicago was-- for them, anyway-- a clue into the real obama, the one he didn't want the public to

see. >> i am sick of negroes who just do not get it! >> narrator: obama had grappled with issues of race for his entire life. >> barack has had to deal with dueling identities all of his life, nurtured by a white family and identifying with that family, but at the same time, when he's out, when he goes out, he's identified as something else. and he has had to make sense of that duality his entire life. >> the history of obama is a belief in his own ability to bring people of disparate views and cultures and backgrounds together to solve difficult problems. >> today, obama promises to tackle the issue of race head-on... >> narrator: now his candidacy was in jeopardy because of his longtime pastor, jeremiah wright. his ability to bridge differences would be put to the test. >> his campaign is calling this speech an important moment.

>> what may be the most important speech of his campaign... >> but, i mean, this is a moment of, you know, sort of maximum peril for a candidate, and his goal was to elevate out of that moment into something broader. >> jeremiah wright, god bless him, allowed barack obama to confront this issue sooner rather than later, and i think it allowed him to regain the upper hand. >> i can no more disown him than i can disown the black community. i can no more disown him than i can disown my white grandmother, a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed her by on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe. these people are part of me and they are part of america,

this country that i love. >> narrator: it worked. obama had spoken from the heart. many of his supporters hoped it would be the first of many conversations about race. >> in that speech, barack obama said that this is an opening. this is a vista that allows us to think critically about the issue of race. and it should be the first of many to come. of course, in truth, in reality, it was a summation. it was a stopgap. after he was successful with that speech, he wanted nothing of it. >> narrator: obama would move on, but the issue of race wouldn't go away. >> but it never was about jeremiah wright, really. it was about barack obama. >> how much more evidence do we need about where obama is coming from? >> the association with reverend wright has demasked obama. >> narrator: for some americans, suspicions about obama only deepened. throughout the campaign, talk

radio fueled questions about just who barack obama really was. >> here is the man that obama listened to for 20 years over and over and over again. >> one thing that was observable and yet ignored was the degree to which there was real hostility toward barack obama on the right. >> obama's a terrorist, don't you know that? >> obama's a muslim, he's a terrorist himself. >> narrator: obama's opponent, john mccain, saw the grassroots anger firsthand. >> i can't trust obama. i have read about him, and he's not, he's not, he's a... he's an arab. he is not... no? >> no, ma'am-- no, ma'am. he's a, he's a, he's a decent family man, citizen, that i just happen to have disagreements with... >> narrator: mccain believed in the old rules of politics. >> they had a rule in the mccain campaign that if you...

if there was any hint that, that the mccain campaign was going to use racial animus against barack obama, you would have been fired and banned from republican politics. it was a red line that was never crossed in 2008. >> my wife and i are expecting our first child, april 2, next year-- thank you! and frankly, we're scared. we're scared of an obama presidency. >> narrator: mccain tried to reassure his supporters. >> i have to tell you, he is a decent person, and a person that you do not have to be scared as president of the united states. (members of crowd booing) now, i just... now, now, look... >> you could see the seeds of the kind of divisiveness that happened almost immediately. >> john mccain is not my idea of a great candidate. we have to defeat the marxists

and then we have to take back the republican party. >> stock price dropped 45%... >> narrator: but that fall, with the election just over a month away, something else would shake the presidential campaign... >> the stock market dropped by hundreds of points right from the open. >> narrator: ...a catastrophic collapse on wall street. >> ...which means the turmoil in the mortgage market is far from over. >> and the number of u.s. banks in danger of failing... >> ...gasoline's up, food prices up, stocks way, way, way, way down. >> the system stopped. all forms of payment froze when we got to the depth of the panic. banks wouldn't lend money to each other. the first money market mutual fund in the united states, quote, "broke the buck." commercial paper, the most basic, one of the most basic instruments in finance, that market failed. >> aig plunging. at one point, they were down 70%. >> they face the hammer of a credit rating... >> narrator: the entire global financial system-- and the

american economy-- were at stake. >> ...the risks of a recession rising. now some say they see one lurking right around the corner. >> this is defcon 4, whatever. this was the complete nightmare. by wednesday, you basically had a complete shutdown of the world capital market. it's just... no, this is absolute terror. >> narrator: the situation was so dire that candidate barack obama was receiving regular updates from president george w. bush's secretary of the treasury, hank paulson. >> secretary paulson and the administration are calling then-candidate obama, and they're saying, "look, we think the world is close to coming to an end, and we really need your support." >> narrator: for years, paulson had been the c.e.o. of wall street giant goldman sachs. now he said the government needed to act to save the wall street banks.

paulson traveled to capitol hill for an emergency meeting. he urged congress to authorize $700 billion to bail out the banks. >> we just had what i believe was a very productive meeting... >> narrator: but as the bill was rushed to the floor: outrage, even among republicans angry at their own president. >> the reaction on capitol hill was toxic. they were furious. >> i rise in opposition to the emergency economic stabilization act. >> america, you should be outraged about what washington is about to do. >> this is essentially mr. paulson's bill to help his friends, and i can't buy it. >> it is an unprecedented and unaffordable and unacceptable expansion of federal power that our kids cannot afford... >> you could see the seeds of the division in the republican party and the muscle-flexing by the more radical element of the party against its own leaders. >> please! please don't betray this nation's great history!

>> and that may be the moment where, in a sense, the tea party began to get formed up. they're going after the... you know, they're rebelling against their own leadership. >> narrator: with president bush unable to convince members of his own party to support the bill, the bailout was stuck. suddenly, presidential politics intervened. >> tomorrow morning, i'll suspend my campaign and return to washington after speaking... >> narrator: senator john mccain called for an emergency meeting to deal with the crisis and resolve the impasse with republican congressional insurgents. >> it's time for both parties to come together to solve this problem. >> the president has invited senators mccain and obama to the white house on thursday. >> mccain is going to have this meeting, kind of a summit, today with the president and barack obama... >> narrator: on september 25, a hastily called meeting at the white house. paulson arrived first. then barack obama, john mccain,

and prominent members of the house and senate arrived. >> we go there to the white house. there is a division, with everybody on one side, house and senate democrats, senate republicans, and treasury. >> we are in a serious economic crisis in the country if we don't pass a piece of legislation. >> they sit around the cabinet room table, and president bush says, "if we don't get the money flowing, if we don't get the credit flowing, this sucker could go down," meaning the economy as a whole. and then he opens it up. >> mccain walks into the meeting with, like, a cue card with a couple of things scribbled on it. obama doesn't even wait for mccain to start. he just moves right in. >> senator obama has been talking to paulson, has been talking to warren buffett and paul volcker and larry summers, and you know, a host of other economic advisers. >> obama is prepared, and he talks about what needs to happen, and "we'll pull together," and he's been...

he doesn't want to take over in a country which is in depression, so he's extremely supportive of this whole emergency bailout thing. >> senator obama said, "well, i'd really like to hear from senator mccain because he's the person who called for this meeting." >> mccain is fumbling with his cue cards. he doesn't even barely get started. obama kind of patronizes him, saying, "i think senator mccain has something to say." mccain just melts on the spot. >> narrator: mccain was in a bind. republicans were at war with themselves over the bailout. >> obama took charge, had authority. john mccain had no plan, no strategy. i don't think he understood what was happening, or didn't have a plan for what he wanted to accomplish. >> president bush whispered to nancy pelosi, who was sitting next to him, when mccain was talking, he said, "you guys are going to miss me." and she kind of laughed. >> the meeting ends up breaking up into a... into a cacophony of shouting

and, and, and scream back and forth. and bush stands up and says, "well, i've clearly lost control of this meeting," and he walks out. >> and another republican at the table joked to the person sitting next to him, "after this, even we're going to vote for obama." that was the level of obama's dominance in this meeting. >> narrator: for republicans in congress about to vote on the bailout, the meeting had changed little. >> i was in the cloakroom of the senate watching that vote, and... and i didn't have a good feeling about it. >> the house republicans pull their support. everything falls apart. we're literally sitting in the newsroom, everyone expects the bill to pass, then they have the vote and the bill fails. >> they didn't pass it! >> they did not pass it. >> and i see that the dow traders are standing there

watching in amazement, and i don't blame them! >> look at the dow jones industrial average! >> the market right now is down 521 points. >> and that moment was terrifying. i remember paulson calling me that night, thought the rivets were coming off the submarine. we really thought the system was past the point of no return. it was going to collapse. it would be like the great depression. >> a history-making 777-point nosedive. >> ...plunged to the single greatest point loss in the dow average in one day ever. >> i think that that was the, the foreshadowing of so much of what we've seen since: an anti-elite, anti-wall street feeling that crystallized in that vote, but was much larger than that. i mean, it was a, it was... they're rebelling against their own leadership. >> narrator: it would take another four days before enough democrats and republicans relented. >> the yeas are 263, the nays are 171. the motion is adopted. >> ...lying to us. "give us a trillion dollars and that'll calm things down, and we'll start lending..."

>> narrator: for many republicans, that vote would be a turning point. >> it doesn't help the folks to be nationalizing the economy. >> narrator: a sign to them that their party cared more about wall street than ordinary americans. >> we folks, we believe in capitalism. >> a lot of people felt like they were betrayed by the party, that the party was actually doing something that they should not have been doing, and that the president should have vetoed. >> this is not the constitutional government that our founders had in mind. we have a run on the treasury today. >> narrator: some of the insurgent republicans laid the blame on the president, george w. bush. >> george w. bush, actually, by the time he left office, had a lot of problems among his own republicans. it was a real sign that a lot of the old order had begun to change, and really could have been a warning bell, i think, for president obama as he was coming in. >> barack obama is projected to be the next president. >> senator barack obama of illinois... >> narrator: by november, the economic crisis and the growing divisions in washington would

soon be barack obama's problem. >> ...will become the president of the united states. >> that night, when he came out, the look on his face to me looked like someone who finally understood the weight of the job that he had just won. >> and you saw this seriousness and this weightiness that had come over him suddenly, as if he knew that this giddy ride that resulted in his election was, in effect, over. and it was as if the burden of the presidency fell upon him in a split second. >> narrator: but that night, obama insisted the unity he had promised was now within sight. >> americans sent a message to the world that we have never been just a collection of individuals or a collection of red states and blue states. we are, and always will be, the united states of america! >> you have, in obama's 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 what's the right way to go and your ability to make it go that way. >> america can change. our union can be perfected. >> if he was too confident about being able to bring people together, one can understand, given the way he'd spent the previous four years. >> this is our moment. yes, we can! thank you! god bless you! and may god bless the united states of america! (crowd chanting) >> obama! obama! obama! >> narrator: across the country, in arizona, there was a different mood. >> this campaign never had a prayer and everybody knew it from the get-go. it never had a prayer. >> john mccain is a disaster, a complete, unmitigated disaster at a time in our history where we need leaders. >> a little while ago, i had the honor of calling senator barack obama to congratulate him...

(crowd booing) please. to congratulate him on being elected the next president of the country that we both love. (booing continues) >> narrator: that evening, john mccain knew his time as leader of the republican party was ending. >> i am also, of course, very thankful to governor sarah palin, one of the best campaigners i have ever seen. (crowd cheering) >> narrator: but he also knew that sarah palin had tapped into something powerful-- and, he worried-- something potentially dangerous. >> i'm glad at least he didn't blame palin. >> and when it ends, he goes up to sarah palin and says, "you know, we've lost. but now you're the future of the republican party. and the crazies are going to come to you. and the talk radio hosts on the far right are going to come to you. and they're going to want to make you their standard bearer.

do everything you can to resist them. >> she is someone republicans, conservatives, and others can rally behind... >> we love what you're doing for the republican party, it's a breath of fresh air. come on every week, talk directly to millions of americans about these issues. we hope you'll come back. >> so much for that election day euphoria. stocks are back on the down side... >> the economy has now lost 650,000 jobs... >> narrator: in chicago, as obama's transition team went to work, talk of hope was immediately confronted by the reality of the country's growing economic crisis. >> and 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 presidential 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: obama chose timothy geithner, a financial insider

and president of the new york federal reserve, as his treasury secretary. >> we'd already thrown trillions and trillions of dollars at the problem, and i think it was... you know, it was a very perilous moment, a very existential moment at that point. >> narrator: unemployment was nearly seven percent and climbing. the stock market was down more than 6,500 points. >> 700,000 americans were losing jobs every month. the housing market was in total collapse. financial sector was imploding. the auto industry was about to go under. deficits were exploding. >> 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's 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, in almost a century." and the president says, "that's not even my worst briefing this week." >> it's the inauguration day of the nation's first african-american president... >> hundreds of thousands of people already with their... >> narrator: yet, on inauguration day, the history of the moment transcended the nation's problems. >> i looked out, never forget, from the west front of the capitol all the way down to the monument. and i think it's about a mile. and all you could see were people, a sea of people. the fact that our country elected a black president is just... it was huge in significance. (crowd cheering) >> to the black community, what it obviously meant was that the highest offices of governance and decision-making in america were, in fact, open

to black people. it's a big deal. it's a big, big deal. >> the thing i remember most about that day was an older white man turning to me and my daughter, and him saying to her, "young lady, you could be up there one day. you could be president of the united states." i will never, ever forget that moment. >> the first inauguration of obama was magical realism. it's hard to overstate not only american pride, which was extraordinary, but black pride, that unapologetically looked upon this man and this figure as the fulfillment of so many dreams and aspirations. >> are you prepared to take the oath, senator? >> this is our national wound, the deepest and longest-standing wound, race. >> i, barack hussein obama, do solemnly swear...

>> and this whole thing is taking place in front of the capitol dome built by slaves. >> ...so help me god. >> congratulations, mr. president. >> and barack obama is about to go spend his first night as president in a house built by slaves. >> those closest to the president thought it was a transformational moment. they believed things were about to change. >> the president walked into the presidency with an expectation that he would be able to reach across the aisle and that republicans and democrats alike would be willing to come to the table and address these issues that were a significant problem and needed to be addressed if we were going to move the country forward. (cannons firing) (crowd cheering and applauding) >> ...the first couple to arrive at the neighborhood ball... >> ...inauguration day full of events: ten, count them, ten official inaugural balls... >> narrator: that night in washington... >> it's the official parties, a

lot of them... >> the first-ever neighborhood ball, open to the public... (music playing and crowd cheering) >> narrator: as the president celebrated, he had no idea that across town, new battle lines were being drawn. 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 downtown washington, with newt gingrich as sort of the emcee, as it were. >> the thing i found disturbing this week was the gap between... >> narrator: at the gathering of top gop luminaries-- 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 who's 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... >> many of them had attended obama's 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 i've 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 weren't coming back again not for an election or two, but maybe a generation or two. >> narrator: they came and went, but as the night wore on, those who stayed began to talk about the future. >> three hours, some of the brightest minds in the republican party debated how to be relevant. >> the point i made was that, 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. >> narrator: the republicans agreed on a tough new strategy: to block the president, fight his agenda. >> 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 reorient and realize, "wait a second. you got nancy pelosi as an opponent. you got, you know, you have a clear choice of ideologies. we have a tremendous amount of hard work to do, but it's doable." >> they all talked about this, and they began to get more and more optimistic, and they left feeling practically exuberant. >> 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... >> obama and his team... what we're looking at is a package, this is an ambitious plan... >> narrator: he would start with the economic crisis. >> ...hammering out details for his massive economic recovery plan... >> narrator: he wanted congress to immediately pass a massive spending bill that would stimulate the economy. >> he was told that we were on a cliff about to fall into a depression. he had to do something big, and he had to do it, he had to do it quick. he had to act right away. >> narrator: and he saw an opportunity to persuade the republicans to join him. >> president obama felt that the nature of the problems were so severe and so significant and so consequential, that he could find some way to work better with the republicans in congress to try to find some common ground. >> narrator: but as he met with republican leaders to sell his stimulus bill, he discovered that minority whip eric cantor had his own ideas.

>> i asked the president, "with all due respect, could i distribute a white paper that i had come up with?"-- at his request, because he said, "bring us your ideas." >> narrator: to the new president, determined to work with republicans, it seemed reasonable. >> and i'll never forget what the president said. he looked at it and he said, "well, i don't want to get into all this now," but he took a look at it and he says, "well, there's nothing crazy in here." so i took that as a really good sign. >> narrator: but the president's staff, experienced in the ways of washington, didn't trust cantor. >> congressman cantor wanted to dictate what the package would be. the republicans weren't interested in reaching a compromise with the president. if they could get 100 percent of what they wanted, they'd be happy. but if they couldn't get 100 percent of what they wanted, they didn't want, they didn't want any part of it. >> narrator: obama delivered the news to cantor: they weren't going to go along with everything he wanted. >> and we had an exchange, the president and i, and the president said, "look, eric, let me just tell you right up

front, you know, the elections have consequences and i won, so we're going to do it my way." and i think that that was an indication to me that this was going to be a one-way street. we really weren't going to be engaged in this mutual discussion here of a collaborative approach to solving problems. >> narrator: the president decided he'd make his own republican-friendly proposal: nearly $300 billion in tax cuts as part of the stimulus. >> and, you know, it was an example of how obama again and again would propose things he assumed that republicans should like, rather than actually trying to talk to them in a way that got what they really wanted. >> president obama promised the american people he would bring bipartisan solutions... >> narrator: and then, in a symbolic gesture, the president traveled to the capitol to sell his plan to cantor's members directly. >> he has a tough sales job ahead... >> ...will try and sell his plan to republicans. >> narrator: it was an

unprecedented move. >> mr. obama is hoping for support from both... >> it's a rare day when a president goes to the capitol to meet only with members of the other party. >> it was an extraordinary moment in many respects because a president rarely comes to the capitol hill. "i'm going to demonstrate by my actions how much i want to find the kind of opportunities for consensus and common ground" that were so essential to his agenda. >> hello, everybody. >> he arrives there thinking they're all going to talk and come up with some kind of agreement. he's got all these tax cuts to offer them. >> 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. >> the republicans didn't want to be told what their beliefs were or how this proposal would meet their beliefs. >> and it was really during that q&a, as the members stepped forward and asked some pretty, i think, appropriate

questions about the amount of money that we were spending, the debt that we'd be taking on, and i don't ever remember him saying, you know, "okay, we'll take a look at that." it was more just defending his proposal as is. >> we said, "you know what? they have summarily decided that we're not going to be a part of this, so we're going to oppose the bill." >> narrator: obama came out empty-handed and had to face the waiting press corps. >> hello, everybody. (reporters greeting obama) 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. i'll never forget that. it's, like, he still looked like a senator. of course, he's now the president of the united states. what's 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... >> the president is very transparent. you can read his facial expressions quite easily. this was one of those cases. this was his baptism by fire. >> ...obama administration's plans hit a bit of a rough patch. >> but there's still deep republican opposition... >> ...president is now saying, "do it my way." >> he failed completely at his goal for bipartisan support. >> it was a very strong signal that we were not going to get a lot of cooperation on this issue. and if we weren't going to get it on this issue, it was doubtful that we were going to get it on many others. >> their leadership told the members, "we're not for any of it, no matter what it is. no. just say no." (gavel banging) >> on this vote, the yeas are 246... >> narrator: obama's democrats controlled the congress. >> the conference report is adopted. >> narrator: the stimulus bill passed the house without a single republican vote. >> you watch, the republicans are going to come under severe criticism for this. >> not one republican voted for it, turning a cold

shoulder... >> so much for the president's charm offensive. today was all partisan rancor... >> so i think from that point forward, we saw a very downward tilt towards the possibility of bipartisanship. and that was very on... that was very early on. that was in january and february of '09. >> i hope the stimulus bill fails. >> he is addicting this country to heroin, the heroin that is government slavery. >> i want, once and for all, the american people to see full-frontal nudity on what liberalism is, and what a lie it is. they have been sold a bill of goods... >> narrator: obama had been in office just over a week. >> you could almost see the polarization. it was palpable. it was, very, very real. it was just the beginning. >> growing backlash against wall street. >> it's a frustration with the economy. >> narrator: and the economic crisis was creating another problem. anger in america was growing

over the ongoing government bailout. >> anger from the u.s. public towards bankers is high. >> ...took to the streets to express their anger. >> frustration with financial bigwigs... >> narrator: wall street banks had received hundreds of billions while unemployment skyrocketed, destroying the savings of millions. >> 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, the big traders and the heads of the goldman sachses of the world walking out with these multi- million-dollar pay packages. >> this is exactly the kind of story the obama administration doesn't need. >> the average american begins to think that the entire game is rigged against them and in favor of the fat cats. >> over to the sidewalk, let's go! over to the sidewalk! >> narrator: much of the outrage was directed at washington, where protesters and police clashed. (protesters yelling and screaming)

>> something significant is happening. people don't believe that the government has saved them. most americans believe that george bush and barack obama and all their economic advisers bailed out wall street and did not bail out main street. >> ...on the heels of growing public anger aimed at banks... >> narrator: the public outcry only grew as news broke that the bailed-out bankers had paid themselves massive bonuses. >> ...$18.4 billion in bonuses. >> narrator: now obama faced a crucial decision. >> that sparks another wave of just understandable human aversion, anger. we're trying to figure out how we preserve some political capacity to continue to throw as much firepower at this crisis as we could. >> outrage over executive salaries... >> narrator: for obama, the news of the bonuses was infuriating. >> ...got more than $18 billion

in bonuses in... >> the bonus and the compensation stuff made him more angry than i'd 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... one thing he would not stand for was, you know, the american people being played for, as chumps by these, by these banks, and that, that was something he, he just really didn't like. >> narrator: some in the white house wanted the president to side with the growing outrage and aggressively take on the banks. >> a lot of the communications, political people worried about the president's popularity and his political capital, saying, "the banking industry and banking executives ought to pay a price." >> david axelrod, obama's top political adviser, very much wanted some scalps. robert gibbs, who was the press secretary but also a very senior political aide, wanted scalps. >> narrator: but treasury secretary timothy geithner urged caution, warning that giving

into populist fury could further destabilize the financial system. >> you had to make sure you kept concentrated focus on the core basic imperative that was going to affect the fortunes of, you know, hundreds of millions of americans, not get too wrapped up in trying to design political theater that might create the hope of taking some of the sting out of that. >> geithner didn't 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 that would frighten off private investors. >> narrator: in the end, it was up to the president to decide whether to support the banks or take them on and heed the public's anger. >> for the economy, this is what free fall feels like. >> when will the recession end? >> narrator: the nation's top bankers were summoned to the white house. >> the president invited 15 of the banks... >> narrator: the bankers feared the president would deliver the punishment many americans were

demanding. >> 13 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 public's anger. >> narrator: some held these men responsible for a crisis that had destroyed 5.1 million american jobs and sent the stock market down 50 percent. >> walking into that meeting, these guys have not been this nervous since they were in nursery school. they're ultimately powerful, sovereign men atop their institutions, but now they know that they really could get whacked. >> narrator: now, no one knew what to expect, whether the president would be their punisher or their protector. >> it was his decision. he'd been through hours of those conversations, so... and i'm sure he knew exactly what he wanted to say and how

he wanted to say it and what his strategic approach was going into that meeting with the bankers. >> obama comes in, and he's all business. >> narrator: there were few pleasantries exchanged. obama spoke first. >> the president made it pretty clear when he talked to us, you know, "we're between you and the pitchforks, guys, and you need to just acknowledge that." >> the bankers have essentially made a decision that they're 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, the president was in no mood for confrontation. >> what's interesting is that the next statements and the rest of the meeting essentially is obama skinning back as fast as he can on that pitchfork's punch. and he says right after that, "what we have, gentlemen, is a public relations disaster that's turning into a political

disaster. and i'm here to help." >> i interpreted it as kind of a watershed time. banks are the catalyst to get us out of this morass that we're in. you can talk so long about the past, but at some point, you got to look at the present and the future. and i thought that's what he was saying. >> narrator: the president had made his choice. he would not give into the outrage and risk upsetting the markets. >> he was deeply aware of and pained by the basic sense of injustice, the immorality of what the bailouts meant in that case. but he also felt you had to try to keep your eye on the fundamental moral obligation about what set of policies were going to produce the... the fairest outcome in terms of getting people back to work and repairing some of the damage. >> narrator: and the president required no firm commitments from the bankers. >> i think it's 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 didn't. >> he didn't 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 country's financial giants may have turned a corner. >> there was almost two faces of obama. publicly, he wanted to tell you that these were the fat cat bankers. but privately, when he was with the bankers, he wanted to get them on board. >> well, good afternoon. i'm john stumpf with wells fargo. just want to thank you for... >> narrator: the bankers made it clear the president had let them off. >> we had a wonderful meeting today with the president. the basic message is we're all in this thing together. >> we're quite pleased with the cooperation that's evidenced with the group and with the white house. >> i think the bankers came out of that meeting realizing that they had dodged a bullet.

and that what was required of them was to go out, stand before the cameras and speak as though everyone were in harmony, that they and the president were on board, to make this great expression of confidence and reassurance. >> i believe all of us walked out of there knowing fully that we're all in it together. and we're all looking forward to promoting a recovery-- economic recovery. thank you. >> the president's message to them: wall street and main street are in this together. >> banking giant citigroup... >> there were significant moments like when those bank executives took those bonuses when he could have read them the riot act and getting the public even more angry and supportive of even more dramatic measures in terms of regulating the banks, he didn't. he chose instead to be in effect on their side, saying, "we're all in this together." >> so if you look at their stock stock prices, citigroup was at 98 cents just a few weeks ago. it's now up 75%. >> banks are able to borrow money at little or no interest.

>> narrator: the banks would recover. >> wall street investors breathing a sigh of relief... >> narrator: but the building anger against the government would not go away. >> got to be kidding me. what are we putting up with, america? >> that'll get the economy kicking. it didn't, no, it didn't. $415 billion down the crapper. >> he's facing anger on both the left and the right. there's anger on the right that obama's policies are socialist, that there never should have been a bailout, that this whole thing was a subversion of the free market. and then there's anger on the left that this was too friendly to the banks and that somehow banks were rescued at the expense of taxpayers and homeowners. so you have anger coming at him, really, from all directions. he's kind of stranded in the middle. >> the government is promoting bad behavior. because we certainly don't want to put stimulus... >> narrator: and on cable television, the talk had already begun of something they called "a tea party." >> the word tea party is born in a cnbc moment when rick santelli a somewhat agitated, even under

the best of circumstances, reporter for cnbc in chicago starts an uproar. >> how about this, president and new administration? why don't you put up a website to have people vote on the internet as a referendum to see if we really want to subsidize the losers' mortgages, and reward people that could carry the water instead of drink the water. >> that's a novel idea. (cheers and applause) >> they're like putty in your hands. did you hear? >> no, they're not, joe. they're not like putty in our hands. this is america. how many of you people want to pay for your neighbor's mortgage, that has an extra bathroom, and can't pay their bills? raise their hand. (booing) how about we all... president obama, are you listening? >> narrator: it was a moment that would become iconic-- digitized, uploaded, shared. >> for that period, the match was lit on cnbc.

that started a firestorm. >> we're thinking of having a chicago tea party in july. all you capitalists that want to show up to lake michigan, i'm gonna start organizing. (whistling, cheering) >> what are you dumping in this time? >> i think we're gonna be dumping in some derivative... >> narrator: it gave a name to a movement that would plague obama for the rest of his presidency. >> ...rabble rousers... >> narrator: but in those early months, obama turned his attention to another looming issue, one that would define his legacy: fixing the broken healthcare system. >> i remember i said, "well, mr. president, you've got one obligation, which is to prevent a second great depression. unless you do that, nothing else is possible. and he spoke back, i would say quite sharply, and said, "i'm not going to be defined by what i prevented." and i remember being struck by how ambitious he was in the face of that storm at that point. >> narrator: his ambitions were

huge: to deal with the tens of millions of uninsured americans and to get the republicans to help. but some on his staff argued it was too politically dangerous. >> 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 you're 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 don't do this now, it probably doesn't 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?" >> the president said, "it's about health care, but it's not really about health care. it's also about proving whether we can still solve big problems in this country." and this was going to be the test case for that. >> narrator: he headed to capitol hill to try to secure agreement from both democrats and republicans.

>> let there be no doubt. health care reform cannot wait, it must not wait, and it will not wait another year! (cheers and applause) >> the president staked his entire first term on this. >> there's no bigger priority than health care. >> given these facts, we can no longer afford to put health care reform on hold. we can't afford to do it. >> narrator: for obama, and the country, the stakes were high. >> i don't think anyone in the white house or on capitol hill believe that failure's an option here. they have to be successful in getting health care reform done or they'll pay a tremendous political price. >> this is a huge issue the president is taking on now. >> the question is: could health care reform really happen? >> narrator: early on, the president made a strategic decision. to pass health care reform, he'd work with the establishment's power players. >> lawmakers, doctors, nurses, hospitals... >> ...conferring on how to

overhaul health care. >> 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 those first days, a fragile coalition seemed possible. >> so let's get to work. thank you. (applause) >> narrator: but to keep it together, obama had to move quickly. >> and that calculation is, "we'll move for a quick kill," that's 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: but the president

didn't just want a bill, he wanted democrats and republicans to get behind it. >> a bipartisan outcome, even in a minimalist sense, was certainly a very, very high priority of president obama. >> narrator: unlike the stimulus bill, this time obama wanted congress to work out the details. democratic senator max baucus would take the lead. >> max baucus, a moderate from montana, who immediately sets up a working group, a gang of six, with three conservative republicans. >> narrator: baucus had a close relationship with the ranking republican, chuck grassley. >> senator baucus and i working on what we thought ought to be a not just a bipartisan bill, but a kind of a consensus bill. in other words, something that would get 75 or 80 votes. >> narrator: but even from the beginning, there were signs it would not be as easy as the president had hoped.

>> i found myself coming out of those secret meetings, those private meetings, and criticizing virtually everything they were doing. so i talked to max, i talked to chuck grassley and others and said, "look, i don't think i can support this." >> narrator: and grassley was under intense pressure from his own party. >> charles grassley is in line for a committee chairmanship. the republican party plays hardball with its members. the message got through that he was jeopardizing his standing in the party by playing too nice to health care reform. >> it became clear that the republican game plan was going to be just to say no, to deny this president any victories. >> and mcconnell was saying, "don't agree to anything. don't agree to anything. keep me informed, but keep talking." >> the republicans were very clever in what they did. they pretended that they were interested in this. i call it the dance of the seven veils. i'm going to be there, and then i'm not, and then i'm going to be there, then i'm not, now you see it, now you don't. it was all an illusion.

>> narrator: however, some republicans, including the minority whip, eric cantor, say there were real disagreements. >> they wanted the government to be a provider in competition with the private sector. and to me, that just didn't make any sense. and i said if that is the price of collaboration, i mean, it's basically saying bipartisanship means my way and nothing else, i said we can't work like that. >> members of congress telling the president to slow down. >> narrator: as congress bickered, obama could only watch. >> he didn't carry a big stick. he wasn't like lbj, of course, because he hadn't sort come up through the ranks of the senate. but it didn't seem like he had any leverage or any ability to bring people along. >> narrator: and some said the president's political style didn't help. >> he's not the person who's going to be the back-slapper. he's not an arm-twister. he has people who work with him who are able to do aspects of

the role of engagement that he doesn't necessarily... that he doesn't necessarily find a value in himself engaging in. >> he is not the type of person that can, you know, invite boehner and the republicans to dinner at the white house every night and schmooze them, like lbj or clinton could. that's not him. he doesn't even want to do that. so he has this grander vision of what he is and what the world should be, but that doesn't mean he can bring other people along with him to that place because he doesn't have that personality. >> narrator: and out in america, right wing radio was fueling people's outrage over health care reform. >> americans are seriously worried that this is going to seriously destroy the health care their parents get. >> narrator: they were worried about big government taking away choices... >> it's about too much power going to the federal government. >> the whole point of this is get everybody enrolled in the government health care plan.

>> narrator: ...skyrocketing costs... >> got a plan that increases deficit spending when we already have trillion dollar deficits as far as the eye can see. >> narrator: ...and sarah palin said the government would use "death panels." >> she introduced the term "death panels." >> you might even say that we got death panels going on here. >> narrator: ...stoking fears that obama's plan would let americans die to save money. >> ...allegation arose out of an idea to allow... >> the charges made against health reform like death panels, to many of us seemed so ridiculous and so absurd that we probably didn't take it as seriously soon enough. >> we now have leftist radicals in charge of your health care decisions rather than doctors. we're hanging by a thread. >> narrator: the president had seen divisions explode over his handling of the economy and health reform. >> narrator: and that summer, another flash point would re-emerge-- race.

>> narrator: it involved a friend of the president's. >> henry louis gates, one of the most prominent and esteemed black academics and researchers in the nation, you know, is returning to his home, gets himself, you know, locked out and his cab driver helping him get inside and a police officer arrives. and they're going back and forth with this question of, you know, should he be there, is this his house, what's happening? you know, and at one point he ends up getting detained by this officer. >> narrator: gates was arrested for disorderly conduct. >> prominent african american harvard scholar henry louis gates jr... >> ...arrested in his own home. >> his arrest is prompting outrage. >> narrator: in the year since his reverend wright speech, obama had rarely addressed race.

>> one of the paradoxes of barack obama's candidacy was that at the same time that he was on his way to becoming the first black president, he was very uncomfortable talking in overtly... in overt terms about race. he tended to be elliptical. he tended to try to operate at 30,000 feet. >> good evening. please be seated. >> narrator: but now, he would not avoid the topic. >> recently professor henry louis gates jr. was arrested at his home in cambridge. what does that incident say to you and what does it say about race relations in america? >> obama then addresses it at a press conference. i don't think he went out of his way to, but he was asked to. and this was an instance where he, i'm sure in retrospect, felt he went too far because he dared to say that this could have happened to him in chicago. >> i mean, if i was trying to jigger into-- well, i guess this is my house now so... (laughter) it probably wouldn't happen. but let's say my old house in chicago... (laughter) here i'd get shot. (laughter)

>> and then he even joked, "if i'd been trying to break into my own house now," meaning the white house, "i would have gotten shot." ha, ha, ha. >> i don't know, not having been there and not seeing all the facts, what role race played in that, but i think it's fair to say, number one, any of us would be pretty angry. >> what was so striking about the skip gates incident was incident was that obama's very careful articulation on racial issues in general gave way to a sort of normal human reaction, which is, "of course they treated the black guy badly." >> number two, that the cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home. >> narrator: obama's comments ignited a fierce backlash. >> hope you heard last night, ladies and gentleman, as president obama did after all listen to reverend wright all those 20 years.

>> a rookie president unknowingly waded into a media firestorm when he said that the cambridge police department acted "stupidly." >> what we got was the reaction of a community organizer. >> obama was surprised by the intensity and the reaction to what seemed pretty obvious, that you would effectively arrest a senior citizen with a cane because you didn't like how he sassed you, seemed pretty stupid. seemed pretty stupid. >> what kind of president of the united states immediately jumps on the police? >> the president says the cops are stupid. the president says the cops are racist. >> that was something that people were not willing to hear from the first black president. certainly not willing to hear from the person who they voted for hoping that they could, you know, be done with race once and for all. and now this person's actually saying, "hey, this looks like racism." >> that is unbelievable. this president i think has exposed himself as a guy over and over and over again who has a deep-seated hatred for white people or the white culture, i don't know what it is.

>> the uproar that came afterwards really singed, i think. it really did sort of teach him, no, don't get near this stuff unless you really have to because it's only going to cause trouble, and it's going to distract from the things he felt like he had to do. >> you can't sit in a pew with jeremiah wright for 20 years and not hear some of that stuff and not have it wash over. >> it matters that it's a black man, it matters that his name is barack hussein obama. i think for a lot of people, that was very threatening. that was not the direction they wanted to see the country go in. >> listen, you can't say he doesn't like white people. david axelrod is white. rahm emanuel is white. >> i'm not saying that he doesn't like white people, i'm saying he has a problem. he has a... this guy is, i believe, a racist. >> so barack obama in his own way ambled into a moment that even i don't think he at the time realized what it would represent. and that was a constellation of indicators to a certain kind of far right american conservative that the situation was changing

and changing very fast, and that white americans were going to find themselves, as they saw it, disenfranchised and certainly disaffected. >> narrator: in front of the press, obama went into full damage control. >> these are issues that are still very sensitive here in america. and so to the extent that my choice of words didn't illuminate, but rather contributed to more media frenzy, i think that was unfortunate. >> narrator: he didn't leave it there. he and his staff created a photo op. he called it a teachable moment. >> and so obama did this very awkward thing where he called in henry louis gates and the police officer, and they had this beer summit. >> what's the big news of the day? a beer summit outside... >> president obama will have those beers with a policeman and a professor. >> he would probably say that that was one of the most ridiculous moments of his presidency.

>> the drinks are on the house tonight-- the white house. >> not so much that he brought a black harvard professor and a white cambridge cop together, but the fact that the media anointed it a "beer summit." >> beer summit, president obama hopes a cold beer and a conversation will put an end to the controversial arrest. >> time for a little healing over some beers, my friends. >> he wants you to pay attention because his poll numbers are tanking. >> this is a just... it is a lousy, lousy image to present to america. >> it is a great example how obama simply believed at that time that if you simply sat down at a table, of course rational people of good will could find a way to join hands and get together. >> hopefully today's happy hour at the white house will finally put this one incident to rest. >> narrator: after 40 minutes, the event was over. the president said he had learned an important lesson. >> obama said, "look, you have to remember that for me to talk about race, and if i set a foot a little bit wrong, i have the

capacity with a word to enflame a huge number of people on this side or that." >> he certainly told me in the oval office that he didn't want to be seen as the black president, which is why he kept telling black people, "i am not the president of black america." >> what the beer summit, in so many ways, further exposed and underscored was that the black president was actually one of the least equipped or positioned persons to facilitate this conversation because his very presence or involvement in one of these issues or one of these flare-ups would only further politicize it. >> usa! usa! >> the beer summit controversy added to the growing anger across america directed at the president. >> president obama lying to the people, deceiving the people. >> a giant step backwards in race relations. >> narrator: over race... >> ...he was more carlton banks than suge knight.

>> narrator: ...over health care reform. >> he rammed it down america's throat. >> narrator: ...over wall street bailouts... and obama himself. >> ...call half the country racist, what's that going to do for your fund-raising? >> nancy pelosi deceiving the people... >> narrator: the discontent sarah palin had first tapped into now exploded. they called it the "tea party summer." >> the economic frustration that was being felt blended with a kind of racial backlash that probably was underestimated. >> afro leninism. >> that period was sort of a nesting house for a number of kind of shared resentments that enacted themselves in great opposition to the president. >> radical communists and socialists! >> you would go to a tea party rally, you would see placards, for instance, of him depicted as an african tribal chief. very racially charged. pictures of obama dressed as hitler. >> obama's face transposed onto that of the comic book villain, the joker. there are the pictures of obama

kind of made out to be ape-like. >> usa! >> you could just see the intensity on the part of people. and just the anger that they were expressing. >> no! don't do this to us! >> a manifestation of this fear that, you know, we've got a president in the white house who we can't trust. >> his church was based on racism! >> anger by '09 had reached a boiling point. >> the tea party rose up. i give glenn beck considerable credit for it, rush limbaugh, sean hannity. these are people who encouraged the grassroots to rise up and say, "enough is enough." >> you want to kill my grandparents, you come through me first! >> the things that obama's doing are the exact things that hitler did. >> there is an ugliness with these fringe people who are comparing the president to hitler. >> narrator: at the white house, they struggled to make sense of what had gone wrong. >> he came into office with a

very naive view of politics, and very quickly was reeducated, right? and i think he would say that probably his biggest misunderstanding about american politics was that it wasn't polarized. it was literally the essential characteristic of american politics. >> by late summer, the president saw the polarization grow to include republicans who were supporting what was now being called "obamacare." >> so how is that hope-y, change-y thing working out for ya? (cheers and applause) >> health care became not just a lightening rod, but a driving force behind this movement. the specifics almost didn't matter at that point, it was just sort of, just the very name obamacare, was enough to generate deep anger, and upset and resentment. >> boom, the summer town halls literally blow up in our faces. the fat really hit the fire when we went home in august for what

usually is a fairly leisurely stroll through the district. >> the surprise is just how out of hand these town hall meetings are getting. >> a town hall here... >> baby killer! abortion is murder! >> a summer parade there, an ice cream social here. no, it was all health care, all the time. and people were-were red hot about it. it was a radioactive issue all summer. >> i never saw town halls like this. normally 50 people would show up. 500 were coming. in places where you would have 200 people, they'd have 1,500 people there. and they were all angry. and they were very aggressive. they were informed. they were educated. they were persuasive and aggressive. which made for perfect television coverage. >> i'm not a lobbyist with all kind of money to stuff in your pocket! >> people who had never been involved in politics before all of a sudden were now speaking up, "hey, wait a minute. i didn't elect this president.

i didn't think that washington should take my health care from me." >> and the rest of your damned cronies up on the hill! >> narrator: they were furious at republicans who had worked with the president, like senator charles grassley. >> thank you senator grassley, my question's about you're working with max baucus on financing this universal healthcare. >> i had people come to my town meeting with sheets of paper that thick off the internet and quoting from the bill. you know, i've never had that happen before. people were up on it, and people didn't like what they were reading. >> democrat or republican or whoever, senator or congressman vote for this bill, we will vote you out! (cheers and applause) >> suddenly, the idea of cutting a deal with president obama no longer looked like it was good politics, no longer looked like it was good policy. >> there's a bill out of the house of representatives put together under speaker pelosi's leadership. i'm-i'm... (crowd booing) i'm-i'm... i would not vote for that. (cheers and applause)

>> the ground was shifting for republicans to having a very difficult time with their base. and so it became politically toxic for a lot of republicans to be associated in any way with the president. there'd be a political price to pay. >> thank you all very much for coming. >> once they sort of lost grassley, they lost arguably their last chance to really get a bipartisan bill. >> kill the bill! kill the bill! kill the bill! >> narrator: the summer of 2009 had been difficult. for the president and his staff, a new reality was sinking in. >> they were stunned. they were disappointed. they were very, very concerned about the implications of all this in the summer. >> narrator: for the president, there was a clear lesson. >> very quickly, barack obama learns that it's not going to work out the way he thought it was. you could not be powerful, uncompromising liberal champion at the same time you are reach

across aisle and building bridges with conservatives and the center. you can't mix and match these things. >> narrator: but the president was determined to push on. and he hadn't given up on health care reform. he asked his staff if it still had a chance. >> i told him i couldn't guarantee success, i couldn't even tell him how we were going to get from a to z. what i thought it came down to was did he feel lucky? >> and the president walked over to his desk and he looked out the window and he said, "phil, where are we?" and phil says, "we're in the oval office." and the president said, "and what's my name?" and he said, "barack obama." and he said, "well, of course i'm feeling lucky. now, get back to work and figure out how to get this passed." >> the young president prepares to deliver the most important speech of his first term in office. >> narrator: to revive health care, they decided it was time to once again draw on obama's strength as a campaigner and orator. >> president obama gets ready to

take the stage in a high-stakes effort to sell health care reform. >> 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." >> madam speaker, the president of the united states! >> 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 wasn't the public in general, it was the people sitting in that chamber. >> the time for bickering is over. (cheers and applause) 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, you know, bring the debate back to a loftier level. >> if you misrepresent what's in this plan... >> narrator: but the tea party

fury had spread to washington, d.c. >> there are also those who claim that our reform efforts would insure illegal immigrants. this too is false. the reforms... (booing) the reforms i'm proposing would not apply to those who are here illegally. >> you lie! (crowd booing) >> that's not true. >> a lone congressman says, "you lie." >> you lie! >> narrator: it was republican representative joe wilson from south carolina. >> it was shocking when it happened, it was unprecedented when it happened, you could see the look on the president's face. >> obama dealt with it in the obamian way, which is to say he just kept on going. but, again, you have to wonder what he really felt, what he really thought about such a moment. and it was emblematic of a lot of the rage, some of it racial,

some of it ideological, that was being felt all over the country. >> i think that moment was one in which people began to realize that we're dealing with something different than we thought we were going to be dealing with in this administration. and the wilson, you know, "you lie" comment was that exclamation point. >> an outburst that continues to reverberate across the country, two words shouted out... >> narrator: the washington establishment was outraged. >> how did we get to a point where it's okay to yell "you lie" at the president while he's speaking to congress? >> narrator: but to some on the right, congressman wilson had become a hero overnight. >> joe wilson voiced what millions of americans have been saying about barack obama for months. >> joe wilson received a flood of donations, and that was a sign that something was happening. he had crossed a boundary of the kind of civility that used to govern the relationship between congress and the president. joe wilson wasn't punished for it. in fact, he was celebrated for

it. >> that was a blatant lie. and i'm going to tell you something, it's about time somebody said this to obama. >> narrator: it was a lesson other republicans were paying close attention to. >> on the right, going against the president in an extreme way, in a personal way, it became not the worst way to get attention. you could get attention and you could get some political capital, you could get some political stature by going against president obama. >> 52% of the american people disapprove of president obama's handling of... >> there are rising doubts about his approach on domestic issues. >> narrator: obama's efforts to restart bipartisan health care reform had failed. >> we still continued to try to reach out to individual republican senators, individual republican house members. but in terms of being able to have a big agreement that would garner 80 votes, that wasn't possible. >> narrator: the only path forward: to abandon bipartisanship and rely on the democratic majority in congress.

>> the choice was to do nothing or to do something with the tools you had and the majority that you had. he chose to do that. >> it was an admission of failure, really, an admission that, in spite of his best efforts, there was no way he could bring the republicans along on something that looked so obvious when it all started. >> narrator: the president would play the washington game, unleashing his hard nosed chief of staff rahm emanuel to pressure democrats to push through the bill. >> i don't think that rahm emanuel ever worried much about bipartisanship. he was focused on winning. >> they just felt they could ram this right through and to heck with republicans, to heck with conservatives. >> narrator: but even winning over some democrats became difficult after special interests, like the insurance and pharmaceutical industries, opposed parts of the bill. >> new, hidden taxes that

congress wants on your health care, hidden health care taxes on medicines, medical devices, and health insurance. hidden health care taxes. >> narrator: millions of dollars went into a tough ad campaign by the chamber of commerce. >> call congress. tell them no hidden health care taxes in a recession. >> narrator: and powerful democrats were listening. >> there were still some-- senator lieberman was one, senator nelson of nebraska was another-- who still said there's merit to what the insurance industry is saying. and those were critical swing votes. >> narrator: the president had promised to transform washington, but now they were doing deals just to win over democrats. they killed a government insurance option, pleasing senator lieberman and others. they lowered proposed taxes for medical device makers for evan bayh. the final hold out was the democrat from nebraska, former

insurance executive ben nelson. >> ben nelson is one of the more conservative members of the democratic caucus in the senate, and they needed his vote. they had to have his vote. >> that meant sitting down and hammering out a deal, really giving him almost what he wanted, anything he wanted. >> the focus at the end on a bill like this is always about how you're going to get those last two or three votes. and compromises are made and thrown at senators' feet in order to get them to vote. >> narrator when nelson complained about a number of provisions, including the cost to states, they added $100 million for nebraska's medicaid expansion. >> to a lot of us, we were very, very upset about it. it was very poorly done. but the only way they could get it through was basically to bribe their members. >> narrator: nelson insisted the money didn't buy his vote, and that other states eventually got help, too. but many in washington and in the media saw it differently. they called it the "cornhusker

kickback." >> prostitution has been legalized in washington, d.c. >> is this deal for ben nelson forever and ever, amen? forever and ever and only for nebraska? >> you've got to compliment ben nelson for playing the price is right. >> it's not a pretty process. there is deal making. that's the way it's been done for a long, long time. but those deals done in your front parlor can be pretty smelly. the public was already up to here with what they were seeing in washington, and i think it just put them over the side. >> that was very sour stuff to most people in this country. they realized that this is not the way to legislate. >> narrator: by christmas eve... >> mr. mcconnell, no. >> narrator: ...the vote. >> mr. menendez? aye. >> the senate convened to send president obama a hard-fought christmas present. >> ms. murkowski, no. ms. murray... >> its first roll call vote on christmas eve since 1895. >> mr. nelson of nebraska. >> aye. >> the ayes are 60, the nays are 39.

hr 3590 is passed. (cheers and applause) >> tonight, the ayes have it. the senate passes an historic health care bill. >> this was a strictly party-line vote, all the democrats voting yes, all the republicans voting no, the final tally 60 to 39. >> on christmas morning, everyone was sitting around thinking that he was an lbj-like genius because it appeared that he was on the verge of accomplishing what no president had for 70 years. >> they were so close. they were inches away from getting this bill. >> they had 60 votes on record in the senate. they had the house bill in hand. the emerald city was right there in the distance. >> narrator: all they needed now was for the house and senate to iron out some details between them. then the unexpected.

before congress could act, there was a special election in the democratic stronghold of massachusetts for the senate seat vacated by the death of ted kennedy. >> the polling numbers are all over the place. >> this could be a breakthrough for the republicans. >> i think the headline in the boston herald this morning says it all-- "mass hysteria." >> narrator: the election was the first test of the power of the tea party and the republican insurgents. >> the tea party people are very active in massachusetts. >> we've been hearing about tea party for months, but it was unclear if it was more than a fringe issue. >> campaign surge, scott brown has caught the democrat establishment off guard. republican scott brown is riding a wave. >> brown's campaign language has the aura of a revolutionary crusade. >> business as usual is not the business we like, and all those backroom deals from nebraska and others-- it's just wrong, and we can do better. (cheers and applause) >> scott brown effectively used that as a way of saying that change has not come to washington. >> narrator: the democrat, martha coakley, was sinking in the polls. for health care reform to

survive, the white house needed her to win. >> only belatedly does it dawn on the white house what's about to happen. the president's not going to go up there to campaign for her until the friday before the election, when martha coakley calls david axelrod personally, and says, "i need him to come up." >> president barack obama. >> they frantically sent obama up to massachusetts the weekend before. >> he makes very clear to the massachusetts electorate what's at stake here is the obama presidency, and do they want to hand the republicans the power to stop his agenda on health care, on everything else? >> narrator: by election day, the president knew they would lose. >> january 19, 6:30 p.m., about an hour-and-a-half before the polls close in massachusetts, obama calls for pelosi, reid,

biden and rahm emanuel to come to the oval office. >> narrator: at the emergency meeting they considered what to do. >> from the very moment that it was clear that scott brown was going to win that seat, he began thinking through what the next steps would be to be able to right the ship and get health care done. >> narrator: the president asked speaker of the house nancy pelosi if she could get the house to pass the senate bill without any changes. >> pelosi is annoyed and quite adamant that there's no way she can sell that to her house members. almost kind of lecturing, saying, "you don't understand the realities in the house. this won't work." and obama finally snaps, uncharacteristically for him, and he says, "i understand that, nancy. what's yosuggestion?" and there is no suggestion. >> we went from, basically, beginning to plan how and when the president would sign the

bill to if we could even resuscitate the bill. >> scott brown is the winner of the massachusetts united states senate race. >> narrator: it was a victory for the tea party and a sign of what was to come. >> brown's victory shakes up massachusetts, and it shakes up the nation. >> republican taking over the over the seat that ted kennedy held for 46 years. >> here he is, the united states senator from massachusetts, scott brown! (cheers and applause) >> people do not want the trillion-dollar health care plan that is being forced... (booing and cheers) that is being forced on the american people. >> in one election was a composite of all that ill feeling from the grassroots of america. and if it can be expressed in liberal massachusetts, they know it's a lot worse in montana and wyoming. >> if they replace the so-called

kennedy seat with a republican, then my gosh, you'd better wake up. >> narrator: the massachusetts seat gave republicans the crucial vote they needed to block changes on the senate's health bill. even mother nature got into the act-- one of the worst blizzards in history buried washington. >> but getting a health care bill passed now looks more difficult than ever. >> all of the options for health care get very... >> i don't see any way you go forward from here with health care. >> they're shell-shocked. they're going to need a whole new strategy on health care reform. >> narrator: barack obama had to come to terms with what looked like his first significant failure as president. >> this is a complex issue. and the longer it was debated, the more skeptical people became. i take my share of the blame for not explaining it more clearly to the american people. >> the process was messy, and so it turned people off.

it ended up being behind closed doors. it was filled with a lot of partisan wrangling, people yelling at each other across the table. we ended up having a process that represented a lot of what the american people hated about washington. >> the president is in some ways kind of rebalancing himself. the year had been very hard on him. the massachusetts defeat symbolically was terrible, and practically had a devastating effect. >> the president admitted he's made some mistakes in his first year in office, but said he won't quit. >> he's got an uphill fight here. >> by the end of the first year, the promise of january 20, 2009, feels like it's slipping away every day. he was clearly aggravated, frustrated, testy sometimes with his aides, not happy that he couldn't get through things he thought ought to get through, not happy that his message didn't seem to get through. >> and he is dispirited. and he says to his senior staff,

"i've lost my narrative. i have no narrative." which for a guy like barack obama, is like saying, "i've lost my way. i've lost my identity. i'm not having a conversation with the american people any more." >> narrator: the president decided to reclaim the narrative. he hit the road, got out of washington, fired up the base to pressure the democratic lawmakers in the house to pass the senate 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! >> this is the end of prosperity in america forever if this bill passes. >> it is clearly a constitutional crisis. >> narrator: after an entire year spent on health care reform, their last hope was now with the house democrats.

>> i'm leaving the country. i'll go to costa rica. >> ...down to the wire on health care reform. the house votes just hours from now. >> after months of rancor in the streets... >> the president's assistant called and said, the president wants everybody to come back to the white house and watch it together, and that means everybody from the most junior staff person who worked on it to the vice president. and so, everyone was together and watched the vote. >> members will record their votes by electronic device. >> sitting in the roosevelt room, the president, the vice president, we sat... there was a small bit of anxiety as we watched the votes tick up. >> it is a 15-minute vote. >> we've had victory snatched from us before. >> on this vote, the ayes are 219, the nays are 212. the motion is adopted. (cheers and applause) >> when the 216th vote comes over, a big cheer erupts. >> it's 219 to 212. no votes from republicans. all democrats, no republicans.

>> this is a huge victory for this president. >> for decades, they've been trying to do it. it has now been done. >> he invited everybody up to the truman balcony to celebrate, and this is about 1:00 in the morning. and as the crowd started to weed out, and the president was so happy that night, he was just totally joyful and in a great mood, i asked him, i said, "how does this night compare to election night?" and he looked at me and said, "valerie, there's just no comparison. election night was just about getting us to a night like this." >> good evening, everybody. this legislation will not fix everything that ails our health care system, but it moves us decisively in the right direction. this is what change looks like. >> narrator: it was an historic piece of legislation, but neither the president nor his staff could foresee what the consequences would be. >> it was obviously a big moment of success for president obama getting it passed, but it sowed

the seeds for years of division and really leaves open the question as to whether or when the country might finally come to accept what he's done. >> narrator: obama had failed to convince a single republican in the house or senate to vote for the bill. >> it's 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. and it's very telling that not a single republican in the house or the senate ultimately voted for the health care bill. >> ♪ we aren't going away. >> every single republican senator votes consistently against government-run health care should be a clear indication. >> narrator: the vote would fuel the continuing rise of the tea party. >> this is the most brazen assault on a fundamental aspect

of our republic ever. >> narrator: it all came down to one word: obamacare. >> lies, damn lies, that's what obamacare was all about. >> what happened after it was passed, and because of the way it was passed, it became the symbol of the divide, and the reality of it in many ways. and i don't think obama was expecting that. >> welcome back to yonation's capitol. (crowd cheering) the pelosi-led congress is about to get a crash course in the consent of the governed. >> the affordable care act became sort of a turning point for the tea party movement, where they were just upset now with both parties and they wanted to come to washington and change everything that was happening in washington, d.c. >> do you love your freedom? (cheers and applause) >> narrator: sarah palin was back, now as a prominent voice of the tea party. >> we'll keep clinging to our constitution, and our guns and

religion, and you can keep the change. >> now you had social media just entering, you actually had a way for people to organize, a way for them to talk to each other. now that you had talk radio fully developed, you had a mouthpiece. and the combination of those two, and the frustration from the grassroots, all came together to create this incredible movement. >> because the voters are coming! >> narrator: some republican leaders believed they could harness that energy. >> america is at a crossroads, and washington remains out of touch. >> there is a better way, and a new team is ready to bring america back-- eric cantor, kevin mccarthy, paul ryan, joined by common sense conservative candidates from across the country. >> narrator: they aimed at taking back control of the congress. >> together, they are the young guns. >> narrator: and they decided to

target the mid-term elections. >> there were a lot of angry citizens across america. and i think it was much in response to this health care bill. they saw that the democratic majority, along with the president, were going in a direction where i don't think people thought they would go. >> they're seeing something at the grassroots of the republican party that says to them, "we can have a big election in 2010. as down as we were after 2008, we can come back." >> the republicans were crushed at that point. and the first signs of life, if you will, came from the tea party movement. and there was an initial sense that we need to figure out how we can harness this movement and take advantage of it. >> narrator: cantor and the other young guns set out to recruit candidates who could help them win back the house. >> we need people who want to come, not to be a part of divvying out the goodies here in

washington, but people who are here intent on reforming our government. the way you do that is you recruit like-minded people to come and join you so you can succeed. >> as they saw all this grassroots fervor for smaller government and the tea party movement, cantor saw an opportunity to build his own power base by building the party's power base by recruiting young conservatives, tea party people around the country. >> he finds conservatives who are fed up with washington, who are fed up with obama, and who frankly think that the republicans are not standing up to obama, that they're not standing up to the democrats. >> narrator: and the young guns helped put together a platform for their candidates-- they called it a pledge to america. >> i always go back to the pledge to americwhich was put together by paul ryan, kevin mccarthy and eric cantor. >> we will stop out of control spending, repeal and replace the government takeover of health care, make congress more open and transparent, and... >> they're the one ones that

promised we could repeal obamacare. those are the ones that promised we'd pass the new tax code. >> in order to win elections in 2010, republicans were promising their constituents that they would stop obamacare. and obamacare was already the law of the land and republicans didn't have a majority in both houses. but they were promising their constituents if you just send me to washington, i will get rid of obamacare. >> polls open across the country. >> it's going to be a fierce battle for control in the house and the senate. >> one of the most closely watched mid-term elections in years. >> narrator: on election night, the strategy of the young guns and eric cantor paid off. >> cnn is now ready to make a major projection. the republicans will take control of the house of representatives. >> a historic election for the republicans. >> a whole new political world for the president. >> now what i saw, the republican election in 2010, i saw that as a move on the part of the electorate to say, "hey, hey, hey, wait a minute. obama's gone too far. we need a check and balance on

this president." and that's why the republicans, i believe, we were elected into majority in 2010. >> narrator: 87 new republicans were elected. they were called the "tea party class." >> you all are the salt of the united states of america. you all are the light that will shine in the united states of america. >> i credit young guns with so much of what happened in 2010. because they took that mood out there, attached candidates that best fit the mood, found candidates who were really good communicators, that could speak to that anger. and they didn't sound like politicians because they weren't politicians. >> house democrats of every stripe were voted out of office last night. >> more losses in the white house have expected... >> narrator: for barack obama, the 2010 mid-term elections would become a humbling and bitter turning point. >> tuesday's election was a game-changer. >> that loss in the fall of 2010 was so massively consequential,

because after just two years, it essentially ended the hopes of getting anything big done on anything else because they lost the house. >> as repudiation of the president and his policies. >> no sense in sugar coating last night's election results. >> voters send a message to barack obama. >> and that, i think, came as a surprise to this person who thought that people, you know, pretty much loved him. >> the gop gaining at least 58 seats. >> they won, democrats lost, and we're still paying the price. >> the president of the united states took their eye off the ball. >> that was more than a shellacking. this was an embarrassing collapse of the democratic agenda in congress. >> a president trying to figure out what he does with this... >> one democrat called last night a blood bath. >> i can tell you that, you know, some election nights are more fun than others. some are exhilarating, some are humbling. >> he felt bad for a lot of the people who lost, because he knew that in some ways it was on his shoulders, that he had pushed

them to take a very tough vote on the health care bill. and people had done that and it had cost them their seats. >> narrator: and the president knew, that many of the new republican legislators had won their elections on a promise of stopping him. >> it's clearly one of the most critical moments in the obama presidency because it says we're now solidifying and accelerating this polarization, this division between the parties. we're now throwing out this idea that washington should be about finding bipartisan compromises. and instead it should be about fighting for principle until the last breath. >> the tea party movement has given life to the republican party, and hope to the nation that we can start to reverse course. >> narrator: that election was the beginning of a political revolution, one that would not only transform barack obama's presidency, but would also dramatically change the

republican party. tomorrow night: part two of "divided states of america." >> a whole new day in washington... >> next time, the rise of the republican insurgency. >> you can't understand what happened with this divide without understanding the 2010 elections. >> a brand-new congress... >> all 87 came here with the idea to change washington. >> they came into office with the concerns of the tea party, the reaction to obama's massive overspending. >> donald trump stakes his ground. >> you are not allowed to be a president if you're not born in this country. >> it was a way to talk about race without talking about race. >> the searing events that dre the country further apart... >> the contradiction of this happening in the midst of a black presidency sharpened the irony and intensified the pain. >> and the new president... >> ...make america great again.

>> he was speaking straight to tens of millions of americans who think that they've been betrayed-- not anger, betrayal-- by washington. >> "divided states of america" continues tomorrow night on frontline. >> go to pbs.org/frontline, where you can read extended interviews with eric cantor... >> this was going to be a one-way street. >> ...valerie jarrett... >> now get back to work and figure out how to get this passed. >> ...and many others. then read more about key moments behind the partisan divide. visit it our watch page, where you can stream more than 200 original frontline documentaries. connect to tfrontline community on facebook and twitter. then sign up for our newsletter at pbs.org/frontline. >> frontlinis made possible by contributions to your pbs station from viewers like you. thank you. and by the corporation for public broadcasting.

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