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The Honolulu Advertiser
Posted on: Friday, January 29, 2010

Obama mixes policy with tough politics

By Jules Witcover

Hawaii news photo - The Honolulu Advertiser

In his State of the Union address Thursday, President Obama showed an understanding of Washington politics and a readinesss to adjust his priorities.

CHARLES DHARAPAK | Associated Press

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The Barack Obama who faces the second year of his presidency has revealed himself, in his first State of the Union address, as a man who understands the political realities shaped in the first year and is adjusting to them.

The principal reality is the unacceptable 10 percent unemployment rate that has fired public impatience and anger. In his speech, Obama accordingly elevated job creation as his top second-year priority, replacing the drive for health care reform that dominated his first year.

In doing so, the president has acknowledged that Main Street America has grown much more concerned about meeting basic family needs through a regular paycheck than about the strain placed on families without any or adequate health care.

At the same time, Obama said he is not quitting on his first-year priority now stalled by his loss of a filibuster-proof Senate, inviting congressional Republicans to come to him with their ideas. It's likely, however, to prove to be no more than a rhetorical device to underscore their adamant stonewalling.

The second reality the president has accepted is that Main Street remains boiling mad from that vantage point at his first-term imperative to solve the dilemma of Wall Street, even in the face of a second round of those obnoxious executive bonuses.

Obama reiterated his plan to take $30 billion returned by major recipient banks of last year's huge bailouts and send it to community banks to facilitate loans to Main Street small businesses.

"Now, I know Wall Street isn't keen on this idea," he said, "but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need." While this scheme may irritate Wall Street, it embraces the orthodox Republican gospel about effective job creation.

This latter proposal was only one of several gestures that may be designed more to highlight Republican recalcitrance than to bring about actual bipartisanship. Obama also offered nods to the building of new "safe" nuclear power plants, new small-business tax credits, and elimination of capital gains taxes on small-business investments all items in the standard GOP playbook.

A year ago, Republicans in the House chamber stolidly sat on their hands throughout most of the new president's earlier speech to Congress. Their most conspicuous reaction was the shout of "You lie!" from Rep. Joe Wilson of South Carolina, who subsequently was flooded with campaign funds from GOP faithful. This time, some of Obama's mild proposals friendly to Republican ears drew applause from both sides of the aisle.

Elsewhere in his address, however, he demonstrated a clenched fist in his velvet glove of offers. While saying at one point he was "not interested in re-litigating the past," he noted that "we can't afford another so-called economic 'expansion' like the one from the last decade what some call the 'lost decade.' "

He also mentioned again that the Republicans in 2000 had been handed "a budget surplus of over $200 billion" and "by the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this," he reminded, "was the result of not paying for two wars, two tax cuts and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget. All this was before I walked in the door ... just stating the facts."

And still later, he observed that "some on the right" argue "that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that's what we did for eight years. It's what helped lead to these deficits. We can't do it again."

Thus, even as Obama was urging an end to partisan carping, he did not resist the opportunity to remind Congress and the national television audience of the hole the previous Republican administration had dug for him. In that sense it was, you might say, politics as usual.