January 23, 2011

Obama refocuses on centrist agenda

By Stephanie Kirchgaessner in Washington
Published: January 22 2011 22:13 | Last updated: January 23 2011 19:53
President Barack Obama will seek to cast himself as a transformed leader in his State of the Union address on Tuesday – a president who has been tempered by last year’s mid-term election loss and is willing to lock arms with Big Business to hasten job creation.
Mr Obama said this weekend that taking on the challenge of America’s competitiveness – while also making government “leaner” and “smarter” – would be the principal focus of his presidency and the main topic of Tuesday’s address.
“We’re going to have to out-innovate, we’re going to have to outbuild, we’re going to have to out-compete, we’re going to have to out-educate other countries,” Mr Obama said in a video to campaign supporters.
Mr Obama is expected to set out a centrist agenda embracing two ideas: the government should make targeted investments in areas such as clean energy technology, infrastructure and education, and Washington must come to grips with debt and deficit “in a responsible way”.
Tuesday’s address may include a call by Mr Obama for corporate tax reform that would lower overall rates but eliminate special deductions and tax breaks.
The address will also mark Mr Obama’s first unofficial campaign speech for re-election.
He is seeking to shed his reputation as a “big government liberal” who believes that the US can only solve its economic problems via government intervention.
He is trying to lift confidence in the US economy and send the message that Washington is pro-business – crucial messages, if he is to improve the nation’s employment figures and win re-election, according to Charlie Cook, a non-partisan pollster. Mr Cook says he believes unemployment, now 9.4 per cent, will have to be in the low 8 range for Mr Obama to win again in 2012.
“I hate to be melodramatic and say it is a race against the clock,” Mr Cook says. “But it kind of is.”
His recent appointment of Jeff Immelt, the General Electric chief executive, to head a new presidential panel on jobs and competitiveness, and choosing William Daley, a former commerce secretary and senior executive at JP Morgan Chase, as White House chief of staff, have sent encouraging signs to business that Mr Obama is looking to work more closely with the private sector. His deal to extend Bush-era tax cuts for the wealthy during last year’s “lame duck” session of Congress also indicated he was willing to make a break from the liberal wing of the Democratic party.
So far, the changes are resonating with American voters. A Wall Street Journal poll showed Mr Obama’s approval rating at 53 per cent this week, an 8 percentage point leap from December. But Republican leaders in the Congress were sceptical that Mr Obama was truly making a shift to the centre.
Eric Cantor, Republican majority leader in the House, said his party was espousing a “cut and grow” agenda and that any call for greater “investments” was a ruse.
“When we hear the word ‘invest’ from anyone in Washington, we hear ‘spending’. The investment needs to occur in the government sector,” Mr Cantor said on Meet the Press.
In an interview with the FT Mark Warner, a Democratic senator from Virginia, told the FT he hoped Mr Obama would begin a real dialogue on deficit reduction. “It’s not going to come without... shared sacrifice, but...this effort is going to make America much, much stronger.

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