Washington: President Barack Obama will vow to revive US job growth and tame soaring budget deficits in an address on Wednesday that will recast his agenda after his worst political setback since taking office a year ago.
Obama’s annual State of the Union address to Congress on Thursday follows the loss by his Democratic party of a pivotal US Senate seat in in Massachusetts.
His feistier side is likely to be on display as he emphasizes populist themes like slapping new curbs on Wall Street and offering tax credits to struggling middle-class families.
The speech will also reflect a starkly new political reality for Obama, who promised to bring wholesale change to Washington but now must pick up the pieces of a legislative agenda left in tatters by the Massachusetts loss.
Obama must chart a course for his drive to overhaul the healthcare system, which is imperiled now that Democrats now longer hold a ‘supermajority’ of 60 votes in the Senate that would overcome Republican procedural hurdles.
“The big mystery to me is, what on earth does he say about healthcare?” said Charles Franklin, a political scientist at the University of Wisconsin, Madison. He noted that Obama has sent mixed signals about whether he wanted to try to salvage the sweeping legislation or seek a scaled-back bill.
Another priority, setting caps on carbon emissions to fight climate change, is expected to be pushed aside for now, though Obama will still discuss it in his speech.
The healthcare and climate bills dominated Obama’s domestic agenda for much of last year.
This year, when congressional elections loom in November and many of Obama’s Democratic allies fear losing their seats, he will emphasize on job creation, fiscal restraint and tighter financial regulations.
Obama will highlight economic improvement and try to dispel the idea that the healthcare push shifted his focus. The economy was shedding hundreds of thousands of jobs each month when Obama took office but it has begun to slowly grow again, though unemployment remains stubbornly high at 10%.
Countering Republican efforts to paint him as a big spender, Obama is expected to propose a three-year freeze on many domestic spending programs and outline other measures to rein in the US budget deficit.
The spending freeze will not be applied across the board. For example, education will see a 6.2% increase this year.
Obama will also call for the creation of a bipartisan panel to recommend how to rein in the deficit, which soared to $1.4 trillion in the 2009 fiscal year.
The deficit is forecast at $1.35 trillion in 2010, near its highest levels as a percentage of gross domestic product since World War-II, according to the Congressional Budget Office.
In a symbolic gesture, Obama will also call for freezing salaries of senior White House officials and other political appointees for a savings of $4 million in fiscal 2011, according to a senior administration official.
White House aides have played down the idea of ‘rebooting’ the Obama presidency, but experts said that a course correction is imperative if the president intends to help his party avoid crushing losses in November’s congressional elections.
“It would be political malpractice not to adjust to changing circumstances,” said William Galston, a scholar at the Brookings Institution and a former policy adviser to president Bill Clinton.
“I would expect the president to reboot, not by announcing a lot of new initiatives, but by focusing his agenda more sharply,” Galston said.
Democrats are taking seriously the victory of Massachusetts Republican Scott Brown, who won the US Senate seat long held by the late Edward Kennedy, particularly since it followed Democratic losses in governors races in New Jersey and Virginia late last year.
“It’s obvious that he needs some mid-course corrections and that he recognizes he needs that,” said Larry Sabato, a political science professor at the University of Virginia.
The foreign policy portion of Obama’s speech is not expected to be long and will probably focus on US involvement in the wars in Afghanistan and Iraq.
“He is not going to use this occasion to launch any new foreign policy initiatives,” Galston said adding: “There are already so many out there in various stages of progress or nonprogress.”