Obama Refocuses on the Economy
By Dan Balz
President Obama returned to job one this morning, adopting the tone of both professor and preacher to refocus on the economy. Claiming progress, he explained that there are still hard times ahead. That is the balancing act he must manage now and in the months ahead -- instilling confidence while lowering expectations.
In the face of a recession that has yet to run its course, Obama hopes to talk up the economy while preventing his own poll numbers from sagging. Failure in either endeavor could jeopardize the ambitious agenda of health care, energy and education that will dominate the next phase of his presidency.
For two weeks, the Obama presidency has been about foreign policy and national security -- the G-20, NATO, Turkey, Iraq and then on Sunday the dramatic rescue of Capt. Richard Phillips after Navy snipers killed the three pirates holding him hostage in a lifeboat. In the meantime, the markets staged a rally, two big banks reported first quarter profits and the president declared there were "glimmers of hope" after months of unrelenting bad economic news.
Today was a time to reframe and restate the central domestic narrative of Obama's presidency -- or at least the script he hopes to write: a flurry of actions -- many of them controversial -- to stimulate the economy; tough new policies to prevent the excesses that led to the current downfall; and bold action on multiple fronts to put in place a structure that will assure sustained prosperity in the future.
The speech was a textbook example of the Obama technique, in which refutation of his critics becomes a central part of the message. This was Professor Obama in action. In the campaign, he used this approach to rebut criticisms from Hillary Rodham Clinton and John McCain. Now his critics come in many forms.
Is the stimulus package an example of irresponsible, big government spending, as his Republican critics have charged? No, he argued. Economists on the left and right agree that in a recession, government needs to stimulate demand. Families and businesses have cut spending; government needs to step in.
Should government just let banks fail rather than bailout bad behavior, as many ordinary Americans believe? No, he argued, nations that have failed to act aggressively to get credit flowing in similar situations have only seen the problems persist longer.
Has the government been too timid, as some on the left have argued? No, he argued, government takeovers could cost the taxpayers even more money and undermine confidence. "We will do whatever is necessary to get credit flowing again but we will do so in ways that minimize risks to taxpayers and the broader economy," he said.
Lest people begin to believe that all these actions that have marked his first three months in office were random actions plugging one hole after another in the hull of the sinking economy, Obama tried to offer reassurance. The actions, from the bailouts to the stimulus to his in-the-works auto policy are "necessary pieces of the recovery puzzle" and are beginning to produce "signs of economic progress."
Preacher Obama turned to the Sermon on the Mount for his metaphor of the economic future he envisions -- an economy built not on sand but upon a rock. To do otherwise risks a return to the "bubble and bust" economy that brought the current crisis. "We must lay a new foundation for growth and prosperity," he said.
The pillars underpinning this new economic house include a new financial regulatory structure, new spending on education, a plan to reduce dependence on foreign oil and fund alternative sources of energy, a reformed health care system that expands coverage and cuts costs. And lastly, an attack on the federal deficits that threaten to grow dramatically under his presidency.
Obama has long argued that these initiatives cannot be delayed in the face of the current crisis, despite their budgetary implications and the strain they will put on the legislative process. But he faces a major fight on virtually every one of those proposals, particularly health care and energy.
Already it's doubtful that he can win passage for his ambitious cap-and-trade proposal. Health care talks are progressing but the key will be whether Obama can win support from some of the major business constituencies, thereby neutralizing an important part of the coalition that sank Bill Clinton's health plan. And yes, he also wants to reform Medicare, Medicaid and Social Security.
There was no news in Obama's major speech on Tuesday, just a well-articulated status report on his first 12 weeks of dealing with the worst recession since the Great Depression. The very fact that he felt obliged to give it underscores the belief inside the White House that he must remain visible and active in explaining his policies -- and confronting critics -- in order to maintain public confidence.
The economic road ahead remains difficult. The political road is equally fraught with problems for the new administration. The power of persuasion may help Obama maintain public support for his policies -- as long as those glimmers of hope in the economy burn brighter over time. It's likely this won't be the last time Obama attempts to explain why he has chosen to embrace such an ambitious agenda under such difficult conditions.
April 14, 2009; 1:10 PM ET
Categories: Dan Balz's Take
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