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Economy to take center stage in Obama speech

US President Barack Obama addresses joint session of Congress.
One year into office, President Obama faces urgent challenges as he addresses lawmakers gathered in the Capitol and a prime-time television audience at home for the constitutionally mandated ritual of U.S. governing. Michael Reynolds / EPA
/ Source: The Associated Press

President Barack Obama will try to pivot past rocky times for the nation and himself Wednesday night in his first State of the Union address, offering a skeptical public repackaged plans to energize the economy, stem a tide of red ink and strengthen anti-terror defenses.

He'll also be trying to revive his own "yes we can" image.

One year into office, Obama faces urgent challenges as he addresses lawmakers gathered in the Capitol and a prime-time television audience at home for the constitutionally mandated ritual of U.S. governing. The country has lost more than 7 million jobs since the recession began two years ago, unemployment is stuck at 10 percent and the government is grappling with a record $1.4 trillion deficit.

Obama's presidency is troubled as well. The percentage of Americans giving a thumbs-up to his performance has fallen precipitously, from 74 percent when he took office to 56 percent now. He hasn't had a breakout legislative or diplomatic victory, and he's failed to break Washington's partisanship as promised. Then last week, an upset Republican victory in a Massachusetts Senate race threw Obama's signature domestic priority, a sweeping health care overhaul, into jeopardy and shined a spotlight on the economic angst now being taken out on him.

Against that backdrop, Obama will be using one of the presidency's largest megaphones to press several themes. They will be fleshed out in greater detail afterward, as the president travels to Florida on Thursday for a post-speech focus on jobs and when he submits his fiscal 2011 budget to Congress on Monday.

Republican Gov. Bob McDonnell of Virginia will deliver a televised response Wednesday night, two months after putting his state in GOP hands in one of the party's major recent election victories.

Among the freshly sharpened messages Obama intends to weave through his remarks: He's a fighter for struggling families and against wealthy special interests; he relates personally to Americans' everyday concerns; he has come far in one year but has made some errors along the way and has much more to do. And he does not intend to fling aside an ambitious agenda on health care, energy, education, immigration and other issues in favor of trimmed-down goals.

In fact, Obama will argue that his sweeping ideas for change are as much a part of putting the economy back on track as more immediate job creation and economic security proposals.

"If we don't get that stuff right, then it's going to be very difficult for us to answer the anxieties that people feel over the long term," Obama said this week in an interview with ABC News. "I am not backing off the need for us to tackle these big problems in a serious way."

What he'll say
Advisers say the president doesn't plan to reshape his agenda as much as better explain and defend it:

  • He'll map a way forward for mired health care legislation, now facing several options for passage, all problematic. Obama will also acknowledge the long, messy debate that has soured many on the idea and try to make a far-reaching overhaul relevant and attractive again to voters. "We have to move forward in a way that recaptures that sense of opening things up more," he told ABC.
  • He'll talk about why he thinks the nation's future economic health also depends on reshaping financial industry regulations to place tighter rules on Wall Street, another immediate domestic priority. White House press secretary Robert Gibbs said Obama will detail "what he would find acceptable on that."
  • He'll renew his call for immigration reform, a volatile issue once considered a first-year priority but lately sent to the back burner. Obama is expected to prod Congress to craft a plan to tighten the border with Mexico, crack down on employers who exploit illegal workers and resolve the status of roughly 12 million people who live in the U.S. illegally.
  • He will give specifics on how he believes Washington's combative, partisan, gridlocked way of doing business can be changed.

On national security, Obama will detail his administration's efforts to combat terrorism around the globe, which have seen some success but have been overshadowed by the attempted airline attack on Christmas Day and political difficulties in Pakistan. He also will address the wars in Afghanistan and Iraq, nuclear disputes with Iran and North Korea, this month's devastating earthquake in Haiti and his larger ambition to restore the U.S. image around the world.

But bread-and-butter issues — lost jobs, difficulties paying for college or retirement, soaring deficits, anger at Wall Street fat cats — will dominate the speech.

"What he'll discuss more than anything is getting our economy moving again," Gibbs said.

The first priority is reversing persistent joblessness, and Obama is expected to push anew for job-creation proposals such as giving tax credits to small businesses to add workers and incentives to families to retrofit homes to make them more energy efficient. Neither proposal made it into a jobs bill passed by the House in December.

He also plans to propose modest new measures to help with the financial struggles of the middle class — money for child care, helping out aging parents, saving for retirement, and paying off college debt, for example.

Aware of increasing voter concern about the government's red ink, Obama also plans to talk about various efforts at what Gibbs called "a slow chipping away" at the deficit. The White House announced Obama would ask Congress to freeze spending on some domestic programs for three years — though the savings would total just $250 billion over 10 years, a tiny fraction of the annual deficit.

Other issues likely to get a mention in Obama's speech, still being crafted on Tuesday.

  • A record $8.8 billion in federal funding in the next fiscal year to help military families with child care, counseling, financial services and other programs, a top priority for first lady Michelle Obama.
  • The president's campaign promise, as yet unfulfilled, to lift the ban on gays serving openly in the military.
  • A new plan for a better and quicker response to bioterrorism threats.