President Barack Obama will call for a "responsible" effort to shrink the deficit but won't offer detailed plans on spending and taxes in a State of the Union address Tuesday that will presage the broad themes for political debate through the 2012 election.
The president is expected to call for "shared sacrifice" from both parties, and to reach out to the GOP with a nod to possibly lowering the nation's corporate income-tax rate as part of an overhaul of the corporate-tax code, according to people familiar with speech preparations.
The speech and the Republican response are likely to frame contrasting philosophies that will drive political discourse for the next two years. Mr. Obama has chosen "competitiveness" and "investment" as terms to guide discussion over how to create jobs, daring Republicans to resist his push for new spending in areas that he will call vital to the nation's future. He will seek to wall off education, infrastructure, science and energy from cuts, in effect making them the ground on which the 2012 campaign is to be fought.
Republicans have chosen House Budget Committee Chairman Paul Ryan of Wisconsin to deliver the State of the Union response. Mr. Ryan has outlined a vision of smaller, less-intrusive government, extending to popular programs such as Medicare, which he would turn increasingly over to the private sector.
Since what Mr. Obama described as his party's "shellacking" in November, he has tried to appeal to the political center by moving right. He struck a deal with Republicans on taxes and has been remaking the White House with deal makers from Bill Clinton's White House schooled in bipartisan outreach. He also has reached out to business with pledges to pare regulations and consult more closely on trade, taxes and "competitiveness."
The moves appear to be yielding political results. A slew of new polls have put the president's approval ratings at levels not seen since the pitched partisan battles over Mr. Obama's health-care overhaul began in August 2009.
In his address Tuesday, the president is expected to appeal for national unity and a bipartisan effort to grapple with festering problems, especially job creation and the deficit. He will point to the tax deal and other recent bipartisan successes, and say that momentum from last month's lame-duck session of Congress must not be squandered, officials familiar with the speech say.
The president will try to keep the deficit conversation in broad terms, fearing that detailed proposals would put Republicans, Democrats and Washington interest groups into a defensive crouch before real negotiations can take place, according to those officials. White House officials, for instance, have assured Democratic lawmakers that the president will not explicitly call for cuts in Social Security benefits, though he will say changes are needed to put the program on a solid fiscal footing.
At the same time, Mr. Obama will call on both parties to be prepared to put everything on the table. That means Democrats have to be ready to look at changes to Social Security, and Republicans to consider tax-code changes to increase revenue.
Both the White House and House Republicans are making the budget deficit central to their economic programs.
Republicans want immediate, dramatic cuts to domestic programs in Congress's annual spending bills. "We have to shrink government. We have to cut spending. And we need to really look to the private sector to grow jobs," said House Majority Leader Eric Cantor (R., Va.) Sunday on NBC's "Meet the Press."
The White House and a bipartisan group of senators are focusing on restructuring the tax code and entitlement programs such as Social Security, which could have more dramatic impacts on the deficit in the long run but would do little in the short term. White House officials say Republican calls for $100 billion in spending cuts this year would choke off the economic recovery while doing little in the long run to tame the deficit.
"The American people say, don't touch Social Security, don't touch Medicare, don't cut defense. That's 84% of the federal budget," Senate Budget Committee Chairman Kent Conrad (D., N.D.). who is retiring when his term ends in 2012, said Sunday on ABC's "This Week." "If you can't touch 84% of the federal budget...you're down to 16% of the budget at a time we're borrowing 40 cents of every dollar we spend."
An administration official said late last week that a tax overhaul was expected to get at least a mention in the address, in the context of improving U.S. competitiveness. The U.S. currently has one of the highest corporate tax rates in the industrialized world, and is one of the few major economies that tax companies' overseas profits when they're brought back home. Mr. Obama and his top economic advisers have expressed interest in cutting rates to improve U.S. investment and exports.
On Friday, Jason Furman, principal deputy director of the National Economic Council, said reducing rates on corporations "could have meaningful benefits, especially in an increasingly global economy where business activity responds to tax rates." He also suggested that the White House will focus on longer-term proposals to redesign the tax system's basic architecture.
Such overtures and a renewed focus on fiscal matters have sparked hope that a comprehensive deal can be reached to reshape the government's finances.
"The president knows full well that we're going to have to cut discretionary spending right away, and Republicans know we've got to focus on structural changes to entitlements," Rep. Jeff Flake (R., Ariz.) said Sunday.
But such an agreement won't be easy. Republicans are on edge over news that Mr. Obama will call for increased "investment" in areas he believes are necessary to keep the nation competitive internationally, such as education, infrastructure, scientific research and renewable energy.
White House officials see no contradiction on spending more in some areas while pursuing some short-term spending cuts and trying to reach a broad deal on taxes and entitlements. Republican plans to immediately cut spending, especially on programs funded by the stimulus law of 2009, would kill programs that have men in hard hats right now, they say.
4 comments:
President's Obama speech today will tell us if he is ready to listen to the other half of America and move rightward. Will he be ready to downsize his government in order to cut the budget or will he be asking everyone else to cut?
This address will no doubt be another of the presidents recent pushes to seem bipartisan, perhaps for a 2012 presidential bid?
Although not cited, this article speaks of nothing but "shared sacrifice" and expects the president to "keep the conversation in broad terms"
I guess in less than 5 minutes we will see what will come of this address.
Obama says he will help shrink the deficit but he can't back it up with details? Yeah, typical. When it said he would try to keep the conversation of the deficit in broad terms to keep from upsetting both parties, he's scared of the action he'll take since it's either going to upset either one of the parties. But hey it's politics your not always going to be well liked. Right? Obama just needs to buckle down tell everyone what's what and wait for the action to take effect. Oh, and the cutting of U.S. Investment and exports sounds like a good plan to me, instead of seeing nothing but a blank canvas and just nothing but words.
Regardless of what your opinion on Obama's policies is, he at least deserves credit for the sincere efforts he has made toward reform. the whole "race" theme was a smart move; it brought back memories of how the U.S. was able to pull through back then and it emphasized the need for unity in the search for progress. while it is clear that his policies still don't sit well with many republicans, Obama is at least reaching out to several different factions rather than simply defending his own. republicans want to shrink government, and while it may be a valid argument, i don't think the american people would ultimately be satisfied with the GOP proposals, especially in light of the success that so many other countries around the world have had in response to more socialist policies.
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