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Posted at 6:38 AM ET, 01/24/2011

Wonkbook: Previewing the SOTU; inside the White House's reinvention; will the Senate cut the # of confirmable appointees?

By Ezra Klein


If you're looking for a preview of Tuesday's State of the Union, you can do better than the short video President Obama sent to supporters over the weekend. As John Heilemann noted in his (must-read) look at the White House's effort to reinvent itself, December 6th, Obama gave a little-noticed speech in North Carolina that road-tested the themes the administration is looking to emphasize this week -- and going forward. After talking up the recovery and the need to extend the tax cuts, Obama turned to the future: "We're also going to have to make some serious decisions about our economy in the long run. We’ve got to look ahead –- not just to the next year but to the next 10 years, the next 20 years. We’ve got to ask ourselves where will the new jobs come from? What will it take to get them? And what will it take to keep the American Dream alive for our children and our grandchildren?"

"Some of you know I traveled through Asia several weeks ago. You’ve got a billion people in India who are suddenly plugged into the world economy. You’ve got over a billion people in China who are suddenly plugged into the global economy. And that means competition is going to be much more fierce and the winners of this competition will be the countries that have the most educated workers, a serious commitment to research and technology, and access to quality infrastructure like roads and airports and high-speed rail and high-speed Internet. Those are the seeds of economic growth in the 21st century. Where they are planted, the most jobs and businesses will take root."

"So 50 years later, our generation’s Sputnik moment is back. This is our moment. If the recession has taught us anything, it’s that we cannot go back to an economy that's driven by too much spending, too much borrowing, running up credit cards, taking out a lot of home equity loans, paper profits that are built on financial speculation. We’ve got to rebuild on a new and stronger foundation for economic growth. We need to do what America has always been known for: building, innovating, educating, making things. We don’t want to be a nation that simply buys and consumes products from other countries. We want to create and sell products all over the world that are stamped with three simple words: 'Made In America.' That's our goal."

Top Stories

The White House e-mailed a preview of the State of the Union, which is likely to focus on "competitiveness," to supporters: "'My principal focus, my number one focus, is going be making sure that we are competitive, that we are growing, and we are creating jobs not just now but well into the future.'...The United States is going to have to 'out-innovate,' 'out-compete' and 'out-educate' other nations, Obama said."

Obama will use the "competitiveness" theme to push for increased infrastructure spending, report Shailagh Murray and Lori Montgomery: "Senate Minority Leader Mitch McConnell (R-Ky.) said Sunday that Republicans will do everything in their power to stop the new spending increases that Obama says are necessary in a video preview of his State of the Union address sent to supporters late Saturday. In the video, Obama says he will seek to lower deficits in a 'responsible way' and make government 'leaner and smarter,' but without undermining the vital role Democrats believe the government must play in the economic recovery. Obama wants to spend more on education, research and development, and the nation's infrastructure - areas that many Republicans view as ripe for deep cuts."

He's also being careful to underscore his support for open markets and free trade, as you can see in his weekly address:

Interest groups are jockeying for State of the Union mentions, report Peter Wallsten and Anne Kornblut: "It has been a frenetic few weeks for the country's leading oil industry group: Lobbyists for the American Petroleum Institute have repeatedly phoned the White House, cajoled agency higher-ups, even bought big newspaper ads touting the virtues of oil and natural gas...Each January, industries and interest groups of all kinds badger the White House with requests for a mention in the speech, which sets the political agenda in Washington for the year. Even a brief call-out from the president can be an important advantage in the contest for increasingly scarce federal dollars...This year, with the president far more constricted in what he can realistically promise, pleasant surprises may be especially hard to come by."

Both parties in the Senate may back reforms to the confirmation process in lieu of filibuster reform, reports David Espo: "Senior senators are negotiating to reduce the 1,400 presidential appointments subject to time-consuming Senate confirmation, hoping to streamline a system that has frustrated administrations of both parties, according to officials familiar with the discussions. These officials said 100 posts or more could be dropped from the list if discussions between Sens. Charles E. Schumer (D-N.Y.) and Lamar Alexander (R-Tenn.), result in an agreement that gains the support of the rank and file in both parties. Judicial appointments would not be affected, nor would the most senior positions at Cabinet departments or independent agencies."

John Heilemann goes deep inside Pete Rouse's plans, and Barack Obama's intentions, to reinvent the White House: "For Obama, retooling on this scale does not come naturally or happily. Among the hallmarks of his political career has been constancy: a tight and basically static cadre of close advisers and a stubborn resistance to calls for midcourse corrections. Yet in a series of interviews in early January with senior White House officials and many of Obama’s closest confidants outside the building, a picture emerged of a president engaged in a searching, clear-eyed, and sometimes painful process of self-scrutiny, and now determined to implement a plan to fix what has ailed his enterprise—and himself. To put behind his White House the frenetic, transactional, shambolic style of former chief of staff Rahm Emanuel. To break out of the suffocating cocoon in which he and his team had swaddled themselves. To establish the kind of compelling narrative about where his administration intends to take the country and how it plans to do so that has been lacking since day one."

DC indie interlude: The Dismemberment Plan plays "The City" on Late Night with Jimmy Fallon.

Got tips, additions, or comments? E-mail me.

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Still to come: The Fed is set to stay the course on monetary policy; a Senate vote on health care could be coming up; government workers are getting more unionized; energy and environmental groups are jockeying for a place in the State of the Union; and an elephant paints a picture.


The Fed will stay the course on quantitative easing, reports Sewell Chan: "The Federal Reserve will use its first policy meeting of 2011 this week to revisit its economic projections amid a climate of modest but increasing confidence about the recovery. The statement it will issue on Wednesday, according to people familiar with the private deliberations of Fed officials, is likely to reflect a guarded optimism about the economy, while also maintaining the Fed strategy announced last November to accelerate the recovery by pumping $600 billion into the banking system. Recent comments by Fed officials who had been particularly skeptical of the $600 billion bond-buying plan suggest that the criticism has moderated somewhat. Noisy and harsh dissents now seem less likely."

Senate leaders are resistant to packaging budget cuts with a debt ceiling increase, reports Amy Merrick: "Sen. Dick Durbin, a member of President Barack Obama's deficit-reduction commission, said federal lawmakers should wait until the U.S. is clearly out of recession before making significant spending cuts to reduce the deficit. In a speech Friday morning at the Union League Club in Chicago, Mr. Durbin (D., Ill.) also said he is begging Republican legislators not to use 'the debt ceiling as a bargaining chip.' Some lawmakers have threatened to refuse to increase the amount of debt the U.S. may hold, as a way of forcing steeper spending cuts through Congress...If China or other creditors lose faith in the U.S. dollar, 'it could be devastating,' Mr. Durbin said. 'I think it's a doomsday scenario.'"

House Republicans are spreading their $100 billion cuts pledge over this and next year's budgets:

Consumer advocates want a financial protection nominee, reports Ben Protess: "Six months after Congress created the Consumer Financial Protection Bureau, top consumer advocates praised the 'significant progress' made by the watchdog bureau, while calling on President Obama to appoint a director of the agency. Americans for Financial Reform, a collection of consumer advocates, also warned in a report on Friday of 'major challenges' facing the agency, including attacks from Congressional Republicans and Wall Street. In September, Mr. Obama tapped Elizabeth Warren, the Harvard University law professor, to set up the bureau. But he stopped short of nominating Ms. Warren to be the bureau’s first director, instead opting to make her a Treasury Department official and a special adviser to the president."

State bankruptcy is a bad idea, writes E.J. McMahon:

Congress shouldn't raise the debt ceiling, writes Tim Pawlenty: "Americans have credit cards, and many have run up too much debt on them. But when individuals reach their credit limit, the bank doesn't just raise it. Congress, unfortunately, does. When I was elected governor in 2002, Minnesota faced a historic budget deficit. Recognizing that taxes were too high already, we used priority budgeting to cut spending. From 1960 to 2002, state spending in Minnesota had increased by an average of 21 percent every two years. During my two terms in office, we lowered the growth of spending to about 1.5 percent per year. It wasn't easy. We had government shutdowns, special legislative sessions, numerous lawsuits and one of the longest transit strikes in American history. It was a battle, but we changed the state's spending pattern dramatically. Setting aside the false threat of defaulting on our debt payments, the upcoming debate over raising the debt limit is a similar moment for Washington."

Talking about national "competitiveness" makes no sense, writes Paul Krugman: "isn’t it at least somewhat useful to think of our nation as if it were America Inc., competing in the global marketplace? No. Consider: A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that’s more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success? Still, you might say that talk of competitiveness helps Mr. Obama quiet claims that he’s anti-business. That’s fine, as long as he realizes that the interests of nominally 'American' corporations and the interests of the nation, which were never the same, are now less aligned than ever before."

DC will suffer if Wall Street usurps Fannie and Freddie's roles, writes Steven Pearlstein:

Obama should pursue deficit-neutral stimulus, writes Robert Reich: "For starters, he should propose to expand the Earned Income Tax Credit (essentially, a wage subsidy) all the way up through the middle class. And he should suggest making the tax system more progressive: The rate on the $50,000 to $90,000 income bracket should be cut to 10 percent; on the $90,000 to $150,000 bracket, to 20 percent; on the $150,000 to $250,000 bracket, to 30 percent. Make up the revenue by increasing taxes on the $250,000 to $500,000 bracket, to 40 percent; from $500,000 to $5 million, to 50 percent; and anything over $5 million, to 60 percent. Tax capital gains the same as ordinary income."

Animal art interlude: Taj, America's oldest elephant, who died this past week, paints a picture.

Health Care

Parties in the Senate are fighting over a potential health care vote, reports Edward Wyatt: "Speaking on 'Fox News Sunday,' the Senate Republican leader, Mitch McConnell of Kentucky, repeated his promise to bring the repeal measure up for a vote. He first made the pledge on Wednesday after the House voted 245 to 189 to repeal the law. Senator Charles E. Schumer of New York, the third-ranking Democrat in the Senate, acknowledged on 'Face the Nation' on CBS that Republicans could bring the issue to the floor as an amendment to another bill. But, he added, 'we will require them to vote on the individual protections in the bill that are very popular and that even some of the new Republican House members have said they support.'"

Arizona's Medicaid cuts are going to HHS secretary Kathleen Sebelius to approve or reject:

Replacements for the individual mandate should be considered now, writes Richard Thaler: "In 1984, President Ronald Reagan signed a bill encouraging all states to adopt a minimum drinking age of 21. To nudge states into going along, the plan said that any state that didn’t join would have its highway funds cut by a certain percentage...The Supreme Court ruled 7 to 2 that the law was constitutional. Here is how the Reagan plan could apply to health care: Adopt a new bill that says that if a state doesn’t want to accept a mandate -- or some alternative like the one described above -- it may opt out of health care reform. But a state that chooses this course would lose a percentage -- or perhaps all -- of the federal funds that the health care bill would funnel to state governments."

Conservative reforms can build upon Obama's health reforms, writes Ross Douthat: "Many conservatives are loath to send President Obama anything that he might actually sign, lest he use the cover of bipartisanship to evade responsibility for health care reform’s unpopularity. But in the unlikely event that the president did embrace a reform of the reform, conservatives would have an opportunity to transform Obamacare from within. With the right changes, the new health care law could expand access to insurance in a more cost-effective, less coercive and more market-oriented way. Which is to say, it could become the kind of reform that conservatives claim to have been looking for all along."

Domestic Policy

Union density is still growing within government, report Conor Dougherty and Kris Maher: "Even as organized labor's share of America's public and private work force continued to slide last year, unions appeared to be growing in one place, among government managers and high-paid workers. In Seattle, prosecutors and supervisors at the city's electric utility both have formed collective bargaining units in the past year, while in central Minnesota, managers at a regional library system have created its first union of any kind...The moves come as union membership as a whole continues to slide in the U.S., both in the public and private sectors. Union members accounted for only 11.9% of the work force in 2010, the Labor Department reported Friday, down from 12.3% in 2009 and far below the peak of 28.3% hit in 1954."

A provision of just-passed food safety legislation is causing major changes in the food industry:

Federal conditions on the Comcast-NBC merger are designed to promote online video, reports Rob Pegoraro: "The most important non-abuse provisions limit Comcast's ability to keep its and NBC's video content - including regional sports networks, cable channels such as MSNBC and the Universal Pictures movie library - from other services. Comcast can no longer withhold selected programming...The company can't retaliate against other networks when they seek carriage on its own cable systems, although no binding dispute-resolution system will settle the inevitable dust-ups. Comcast is also pledging to follow the basic net-neutrality rules enacted by the FCC - though any company in its position would say the same."

Moderate gun control legislation has a chance of passage, write Jon Cowan and Jim Kessler:

The House of Representatives should have many more members, write Dalton Conley and Jacqueline Stevens: "The average House member speaks for about 700,000 Americans. In contrast, in 1913 he represented roughly 200,000, a ratio that today would mean a House with 1,500 members -- or 5,000 if we match the ratio the founders awarded themselves. This disparity increases the influence of lobbyists and special interests: the more constituents one has, the easier it is for money to outshine individual voices. And it means that representatives have a harder time connecting with the people back in their districts. What’s needed, then, is a significant increase in the size of the House by expanding the number, and shrinking the size, of districts. Doing so would make campaigns cheaper, the political value of donations lower and the importance of local mobilizing much greater."

Exponential mashup interlude: Girl Talk mashed up with Girl Talk.


Both sides are pressing Obama to comment on energy in the State of the Union, report Darren Samuelsohn and Darren Goode: "On the left, the president faces pressure to confront Republicans and the handful of moderate Democrats who want to strip the Environmental Protection Agency of its powers to regulate greenhouse gases and some conventional air pollutants. 'The Clean Air Act is not in the Constitution but ought to be treated with almost equal respect,' said Rep. Jay Inslee (D-Wash.), echoing the views of nearly two dozen green groups, including Greenpeace, the Sierra Club and the World Wildlife Fund, which wrote the president on Thursday, saying his speech 'offers a perfect opportunity' to back EPA. The president’s political opponents say they are trying to get a better understanding of where exactly he is on the EPA issue."

Obama should launch a conversation on energy, writes Andrew Revkin: "Mr. Obama’s first step should not be to announce a predetermined list of policies to transform our energy system, but to use his State of the Union address to commence a yearlong American conversation on the merits and shape of such an effort...The result, by the next January address, would be an action plan endorsed by business and by some of the dozens of Nobelists who have been lobbying the White House to renew American investment in relevant areas of science after decades of bipartisan neglect. Parts of the plan could well be supported by the array of liberals and libertarians seeking an end to market-distorting energy subsidies, perhaps even by some of the conservatives seeing the patriotic merits in a revenue-neutral gasoline tax."

A Canada to Texas oil pipeline has sparked a lobbying battle, reports Juliet Eilperin: "A massive feat of engineering by any measure, the Keystone pipeline expansion project would transport crude oil close to 1,700 miles from "oil sands" in the icy reaches of Hardisty, Alberta, down through the Great Plains to the refineries of Port Arthur, Tex...But the decision on whether to issue a permit to the project, opposed by environmental groups, rests with the State Department, which has little expertise in engineering or environmental matters. And reflecting the chaos of U.S. energy and environmental policy, the proposed pipeline is pitting Montana landowners against pipe fitters in Nebraska and creating unlikely allies of Nebraska ranchers and chieftains from Alberta's indigenous communities."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: White HOuse.

By Ezra Klein  | January 24, 2011; 6:38 AM ET
Categories:  Wonkbook  
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Next: GOP looks to make Affordable Care Act less fiscally responsible


"Made in America" should be Obama's motto and theme going forward.

He should inform all Americans how free trade has caused us to destroy trade protections and has caused us to lose millions of jobs and entire industries to other countries like China, India, Japan and SK that instead erect protections. Alas, Obama is a devotee to free trade, me thinks.

Posted by: lauren2010 | January 24, 2011 8:11 AM | Report abuse

Why has "filibuster" reform gone from a top news story just a few weeks ago to something that no longer is in the news? And why does your mention of a possible deal on some nominations seem to indicate, without futher comment, that such a deal could end up substituting for filibuster reform?

Posted by: paul65 | January 24, 2011 8:33 AM | Report abuse

If there's even a tiny chance that a vote against the debt ceiling will force us to cease our wars, I am all for it.

Oddly, I am in union with the GOP on the need for drastic cuts to the budget (not much else though).

First, I think we have become too corrupt a nation to effectively spend money for any purpose (even stimulative purposes). Katrina, and the two wars, and the wallstreet bailouts, and the recent tax deal proved this, and when the details come forward, I suspect we will find lots of Obama's stimulus was also stolen.

Second, forcing major cuts will eventually force us to abandon our ill-advised wars.

I'm not for the status quo, i.e. the idea that we can only prosper with a growth based, service-oriented economy. This is what the GOP (and too many Dems, including Obama) most fervantly desires. But again, oddly, progressives are fighting to maintain the status quo by wanting to spend billions on old ideas and patterns (in order to win elections); and the GOP mistakenly believes that a period of austerity will bring us new prosperity and growth.

I DO NOT want growth as we had in the past. Instead, I want stability and sustainability and a return to old fashioned manufacturing. The GOP's ideas will unintentionally lead to that, though they mistakenly believe their ideas will lead to quick and massive economic growth via a service-oriented society. Not gonna happen.

I want manufacturing brought back to this country, and support of GOP's mantra of free trade won't do that. Instead, as we go through austerity, a real debate will begin about the causes and solutions of our deepening problems, and people will start to realize we need to do whatever it takes to bring back our jobs. Right now we look at free trade as a kind of religion. Anything said against free trade on any newspaper or TV channel is treated as blasphemy. This will soon change as we suffer through GOP induced austerity while watching the Chinese and Europeans with their good jobs and high speed rails and clean/sustainable energy.

This doesn't mean I'll vote for Republicans though. Instead I'll work to transform the Dem party.

Posted by: lauren2010 | January 24, 2011 8:44 AM | Report abuse

lauren2010 Are you an SEIU plant? Or a union thug of another ilk? Free trade is what Clinton inaugurated with NAFTA and Obama is continuing. Good on them. Sadly, the unions have done more to suppress the efficiency of the American marketplace than any trade pacts.

As for the agitpreppies on the left, looks like the JournoList crowd still is alive and well and now poised to proclaim and promote a "corrective movement"---ala Saddam Hussein and other totalitarian dictatorships----that puts the blame on Rahm-bo and leaves his Serene Highness Obummer on the commanding heights of irrelevance---Obama's got two years to reverse a lot of the silliness of his first two. The Left is reverting to its old pro-Stalinist 'wrecker' mentality. The DNA of the Democrats is faulty and always makes them repeat the mistakes every totalitarian wannabe movement makes.

Posted by: djman1141 | January 24, 2011 10:33 AM | Report abuse

Kinda slow, getting with the program, eh, Obama?
Is this where you actually tell the Unions:
"You've held us back, now we're
Uncompetitive not only in Manufacturing but also in Education"
If Obama's going to compare our country with China, Asia, you also have to compare the workforce, and I doubt very much they have Union labor there!

Posted by: ohioan | January 24, 2011 11:43 AM | Report abuse

Nafta was envisioned by Reagan, wrote and signed by BushSr, and ratified by Clinton with GOP congressional support over objections to a majority of congressional Dems. Check out the vote tallies if you don't believe me.

As I said, it is a travesty many (not all) Dems are devotees to the GOP free trade fiasco.

Unions do indeed abuse things at times, but they are not the cause of the Great Recession. I never cease to laugh at all the GOP pundits who espouse ideas that we ought not get paid well nor retire nor have good health care.

Manfacturing left this country because we unilaterally destroyed all trade protections whilst our foreign trade partners are erecting their own.

You need to read Alexander Hamilton's ideas about how to create and PROTECT an industrial society and how Reagan's ideas of free trade (as practiced by Reagan, the Bushes, Clinton and Obama) dismantled America's industries.

Under a free trade system as currently practiced, America will not again prosper until all labor and environmental standards are equalized with our major trading partners. And that means lower pay and benefits for all Americans and a dirtier environment, just like in China and India. I.e. we continue to decline until things equalize. It doesn't have to be that way though--but alas, those transnational corporations and oil sheiks and Chinese communist capitalists, and their GOP sponsors, don't want this kind of change and will invest in US elections via Citizen's United to ensure our continued decline as they all grow wealthier.

Posted by: lauren2010 | January 24, 2011 11:48 AM | Report abuse

If you want to be In the game, you've got to be manufacturing, and preferably completely vertically integrated. That's how the ideas for new inventions, new products, new materials, new applications occur.
And anyone who has experience in manufacturing knows damn well that the Unions kill innovation, they kill spontaneity, they kill flexibility, they kill competitiveness.
We cannot expect to compete with other countries if we have to deal with Union Contracts from the 1960's.

Posted by: ohioan | January 24, 2011 12:32 PM | Report abuse

If you want to be In the game, you've got to be manufacturing, and preferably completely vertically integrated. That's how the ideas for new inventions, new products, new materials, new applications occur.
And anyone who has experience in manufacturing knows damn well that the Unions kill innovation, they kill spontaneity, they kill flexibility, they kill competitiveness.
We cannot expect to compete with other countries if we have to deal with Union Contracts from the 1960's.

Posted by: ohioan | January 24, 2011 12:34 PM | Report abuse

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