American politics

Where to now?

A ticklish week for Barack Obama

THE president’s annual state-of-the-union speech, despite the fuss and standing ovations in Congress, is often a forgettable laundry list of priorities. But Barack Obama’s first proper go at the address to Congress on Wednesday January 27th as mandated by the constitution (his inaugural speech last year did not count as a state-of-the-union talk) will be watched with unusual interest, and not only because he is a far better speaker than his predecessor, George Bush. After the recent stinging loss of a Massachusetts Senate seat to the Republicans, the president’s domestic agenda is imperilled. He needs to present a clear idea of what he plans to do next.

Health care is still foremost in many minds despite the arguments surrounding Mr Obama's continuing efforts to rein in America's bankers. The Massachusetts vote means that Republicans, now with 41 of 100 seats, have denied the Democrats a super-majority and so can use a filibuster to talk out almost any bill. Scott Brown, the new senator for Massachusetts, has promised to do just that. How the Democrats respond will matter greatly, both for the prospects of the bill and the performance of the two main political parties at mid-term elections in November year. Some Democrats want to push the Senate version of the health bill through the House of Representatives without amendment, which would mean not putting it back through the Senate. But that would appear to ignore the voters' wishes in Massachusetts, risking a big voter backlash later in the year.

Mr Obama has instead hinted that he would like to build support for a bill “around those elements of the package that people agree on.” But if this means only the populist bits, this looks like bad policy. For example, both Democratic bills would make it illegal for insurance companies to deny coverage to customers because of a pre-existing condition. This would make premiums more expensive, by putting more unhealthy people in the system, as Mr Obama himself has conceded. It is not clear what other elements the president believes could be agreed on.

A bolder option Mr Obama might pursue is to make the bill bigger not smaller. Last year, he talked of bringing America’s famously plaintiff-friendly medical malpractice litigation under control. This helped to win the support of the American Medical Association. But none of this proposal made it into either the House or Senate bill. Offering this, the thing the Republicans say they want most out of health-care reform, could put Republicans on the spot. If they obstruct the bill, they would look like they have no interest but bringing Mr Obama down. But adding tort reform could lose Democrats, who are closer to trial lawyers.

Mr Obama may instead want to move away from health care and to talk instead about the economy overall. One reason for the punishment in Massachusetts might have been voter anger that politicians are paying too little attention to joblessness and the recession. Mr Obama has claimed that the same anger that brought Mr Brown’s victory in Massachusetts carried Mr Obama himself to office. But the president can pose as an outsider only for so long. He needs to develop some of the empathy that Bill Clinton famously showed when he adopted and made famous the phrase “I feel your pain”. Mr Obama might try: “I feel your anger.”

This could mean even more of Mr Obama's bank-bashing populism. His latest plans, unveiled on Thursday, will restrict the size and range of activities of American banks. They come a week after he announced plans to make the banks pay back, through special taxes, the bail-out money they received during the financial crisis. The latest rules to curb America's banks were inspired by the thinking of Paul Volcker, a former Federal Reserve chairman and Obama adviser. If this has made Ben Bernanke, current Fed boss, a little nervous, the wavering last last week of some Senate Democrats over backing his confirmation for a second term will not have improved his composure. Mr Obama's team spent the weekend shoring up support for Mr Bernanke.

Other domestic agenda-items, such as cap-and-trade legislation on greenhouse gases, will be wrapped up in the language of energy security, job-creation and boosting American competitiveness, rather than by talking about the climate changing, about which voters appear relatively unconcerned.

Most attention will be on domestic issues, but in foreign policy, too, the president has daunting challenges. He has won Republican support (and Democratic grousing) for his decision to boost troop numbers temporarily in Afghanistan. His vice-president, Joe Biden, has been deployed to hold hands in Iraq, where a de-Baathification commission has banned a large number of Sunni Arabs from the forthcoming elections, stoking fears of renewed sectarian war. And Iran remains a conundrum, with Mr Obama still committed to offering negotiations over nuclear matters, while gradually stepping up criticism of the regime’s violent handling of opposition protests. It would not surprise to hear Mr Obama offer his most ringing condemnation of Iran yet.