Obama Ushers In Era of Divided Government

Obama Ushers In Era of Divided Government With Appeal for Unity, Progress

By Mike Dorning

U.S. President Barack Obama addresses a Joint Session of Congress while delivering his State of the Union speech. Photographer: Brendan Smialowski/Getty Images

From left to right: U.S. Senate Majority Leader Harry Reid, Senate Majority Whip Richard Durbin and Senator Mark Kirk attend the State of the Union Address on Jan. 25, 2011. Photographer:Pablo Martinez Monsivias/Pool via Bloomberg

Democratic Senator Chuck Schumer stands with Republican Senator Tom Coburn before the State of the Union address in Washington, D.C. Photographer: Brendan Smialowski/Getty Images

Denver residents watch from U.S. President Obama deliver the State of the Union address on Jan. 25, 2011. Photographer: John Moore/Getty Images

U.S. President Barack Obama delivers the State of the Union address on Jan. 25, 2011. Photographer: Joshua Roberts/Bloomberg

President Barack Obama said the U.S. economy is “poised for progress” and called for new engines of growth with investments in education, technology and infrastructure even as he urged a partial freeze on government spending to rein in the deficit.

In a State of the Union address marked by the symbolic comity of Democrats and Republicans sitting next to each other instead of across the aisle of the U.S. Capitol, Obama asked for bipartisan cooperation with the opposition party now in control of the House.

Two years into his presidency, his appeal signaled an effort to reclaim the promise of his historic campaign in 2008, in which he asked Americans to embrace a less-partisan approach to governing that set aside old arguments.

“The challenges we face are bigger than party and bigger than politics,” Obama told Congress and a national television audience. He called the rising economic power of foreign competitors such as China and India “our generation’s Sputnik moment,” referring to the Soviet Union’s 1957 launch of the first man-made satellite that jarred American assumptions of technological superiority.

The political figure who energized stadium-sized audiences by presenting himself as a new leader carrying a message of hope returned to the themes of his election in his speech.

‘Future Is Ours’

After two years of battles over his health-care overhaul and other major initiatives, and the rise of the opposition Tea Party movement, Obama again offered the possibility of greater cooperation. He also shifted his sights from enduring the economic recession to prevailing in global competition.

“The future is ours to win,” Obama said. “But to get there, we can’t just stand still.”

U.S. stock-index futures rose today, indicating the Standard & Poor’s 500 Index may advance for a fourth day.

Even with a 9.4 percent unemployment rate, Obama declared the nation’s outlook is getting brighter. “The stock market has come roaring back,” he said. “Corporate profits are up. The economy is growing again.”

The Standard & Poor’s 500 Index has risen almost 18 percent since Jan. 27, 2010, when Obama gave his first State of the Union address. Corporate profits in the third quarter of 2010 exceeded the 2006 high reached before the recession.

Celebrating the creativity and imagination of “the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook,” he said competition from abroad for jobs “shouldn’t discourage us. It should challenge us.”

Unsustainable Debt

He called for “investments in innovation, education and infrastructure” even as he said the nation’s deficit is “not sustainable” and proposed a five-year freeze on non-defense discretionary spending, which he said would save $400 billion over the next decade. He vowed to veto any spending bill that contained earmarks, or pet projects for lawmakers’ districts.

The five-year freeze is a good start but it’s “not going to be anywhere near enough,” Senator Kent Conrad, chairman of the Budget Committee, said today on CNBC.

“We’re going to have to deal with the entitlements of Social Security, Medicare; we’re going to have to deal with the tax expenditures,” said Conrad, a North Dakota Democrat. “It’s going to be tough. The American people need to know this problem cannot be solved if we’re going to deal with just a small fraction of the budget.”

‘Opening Offer’

Appearing on the same program, Alice Rivlin, former Federal Reserve vice chairman and a former director of the Congressional Budget Office described the freeze as “an opening offer in a very tough negotiation” to reduce the deficit.

Obama reiterated his goal of doubling U.S. exports by 2014, and said he would cut corporate tax rates if loopholes and breaks also could be eliminated so that an overhaul wouldn’t add to the deficit.

U.S. Treasuries climbed yesterday, pushing 10-year yields down the most this year, after the White House said Obama would propose the freeze.

Obama set a list of goals for a nation in which he said “we do big things”: 1 million electric cars on the road by 2015; 80 percent of electricity from “clean energy” by 2035; access to high-speed rail for 80 percent of the population within 25 years; next-generation high-speed wireless coverage for 98 percent of the country within five years.

‘Become a Teacher’

He implored young people to become teachers as a patriotic cause. “If you want to make a difference in the life of our nation, if you want to make a difference in the life of a child,” he said, “become a teacher. Your country needs you.”

Obama was assisted in projecting a unifying message by the stagecraft of the moment. After the assassination attempt against Representative Gabrielle Giffords, many lawmakers chose to show solidarity by sitting together with members of the opposite party. That meant the television coverage was interspersed with cutaways to displays of bipartisanship. Republicans also avoided open signs of dissent.

A seat in the House chamber was left empty for Giffords, an Arizona Democrat. Some members wore ribbons to honor her; and her surgeon and an intern credited with helping to save the wounded lawmaker were guests of the first lady.

‘Working-Class Kid’

Extolling the American Dream, Obama gave equal billing to Democratic Vice President Joe Biden, “a working-class kid from Scranton,” and Republican House Speaker John Boehner of Ohio, “who began by sweeping the floors of his father’s Cincinnati bar.”

The address culminates a return by Obama to a sense of optimism and common purpose that initially attracted many political independents to him, said Jeffrey Alexander, a sociology professor at Yale University in New Haven, Connecticut.

It began with the deal Obama forged with congressional Republicans last month on taxes and continued with his overtures to business leaders and call for a more civil discourse in the wake of the mass shootings in Tucson, Alexander said.

“This is the first time people have seen inside the presidency the persona they elected,” said Alexander, who is also author of “The Performance of Politics,” an analysis of the Obama campaign.

‘American Exceptionalism’

Obama, who as a candidate initially declined to wear a flag pin on his lapel, has now “planted himself firmly in American exceptionalism” in a speech that celebrated the uniqueness of the country and “the American idea,” Alexander said.

The speech also moves Obama’s focus to external adversaries from domestic ones.

In many of the legislative debates of his first two years, the most visible opponents have been U.S. businesses, said Jonathan Cowan, president of Third Way, a Washington-based policy group that describes itself as moderate. On health care, it was insurance companies; in the financial-regulatory overhaul, it was Wall Street; on energy policy, it was oil companies; on student loan rules, it was banks.

“This is going to be a major shift from the foil being business to the foil being international competitors,” Cowan said.

A ‘Shellacking’

Since what Obama acknowledged as a “shellacking” his Democratic Party sustained in midterm congressional elections in November, he has made an effort to reach out to business leaders. They have included an extension of Bush-era tax cuts, a trade deal with South Korea, hiring former JPMorgan Chase & Co. executive William Daley as his chief of staff and appointing General Electric Co. Chief Executive Officer Jeffrey Immelt to head a group of outside advisers on jobs and competitiveness.

The speech sets the stage for strengthening Obama’s appeal to political independents, a critical constituency that Obama won in 2008 and Democrats lost in 2010, Cowan said. Among independents, 52 percent supported Obama in 2008 versus 37 percent who backed Democratic House candidates in 2010.

Bipartisanship, deficit-cutting and a cordial relationship with American business all appeal to independent voters, Cowan said.

The focus on jobs and meeting the economic challenge from overseas should have broad political appeal, said Mark McKinnon, vice chairman of Public Strategies Inc., a political consulting firm, and a former media adviser to George W. Bush.

“Global economic competitiveness is the elixir that satisfies all political stripes,” McKinnon said.