Previewing Obama’s State of the Union

Republican leaders in Congress want the president to talk about cutting spending.

Next Tuesday, President Barack Obama will deliver his State of the Union address before a joint session of Congress. As the economy remains mired in recession and conservatives in the legislature are demanding deep spending cuts to balance the federal budget, the embattled president will likely focus on job growth and innovation.

With unemployment still over 9 percent and a national debt that is set to topple $14 trillion before the spring, both the president and his party have a tough message to sell: that America should invest many billions more in education and enterprise to continue to compete with economies in East Asia and Europe.

In a video addressed to Democratic campaigners released this week, the president admitted that despite signs of progress, the American economy has anything but recovered. His focus for the next two years, he said, will therefore be on “making sure that we are competitive, that we are growing and we are creating jobs.”

House Majority Leader Eric Cantor of Virginia sympathized with that intention on NBC’s Meet the Press Sunday. But he was wary of calls to stimulate with public funds what should be private-sector advances in engineering and technology. “When we hear invest,” he said, “to me, that means more spending.” On Fox News Sunday, the top Republican in the Senate, Mitch McConnell of Kentucky, agreed. “Any time [Democrats] want to spend,” he said, “they call it investment.”

“One of the reasons the private sector is not doing any better than it is,” according to McConnell, is because of “the excessive government spending of the last two years.”

As a result, government will have to vote to raise the federal debt ceiling soon. If it doesn’t, the country may have to default on its obligations which would likely trigger another global financial crisis. Few analysts expect that Republicans will derail the process and risk instigating such a panic but they should “take advantage” of the situation to demand spending cuts, said McConnell.

Cantor even threatened to vote against raising the debt limit unless Democrats agree to serious spending reductions. “Every dollar should be on the table,” he added, including defense and entitlement expenditures.

Although his administration has vastly expanded regulation, Obama promised a “leaner and smarter” government on Friday; one that is able to meet the challenges of the twenty-first century. Cantor was skeptical. “Is he going to be able to step up and prove that he’s listened and learned to the electorate and that he’s actually going to change into these next two years?” he wondered.

Outgoing Republican senator Kay Bailey Hutchison of Texas was equally cautious to applaud the president for what would appear to be an appraisal of small-government conservatism. On ABC’s This Week, she urged the president to not only speak of reducing regulation but actually cut back on rules that are affecting especially small businessowners across the country.

Hutchison also wondered whether he would agree to “some changes” in the health reform bill which Republicans in the House of Representatives have voted to repeal. In Texas, she said, businesses are “not going to hire people if they are looking at these big fines and big expenses in the health-care bill.”

Since November’s midterm elections, the White House has adopted a more conciliatory tone toward business in general. Whereas he previously lambasted “fat cat” Wall Street bankers, the president this year employed a former JPMorgan Chase executive as his chief of staff and asked General Electric chairman Jeff Immelt to advise him on job creation.

On Fox, McConnell noted that the president had “quit bashing business and is now celebrating business.” It was about time, he added, “because the only way we’re really going to get unemployment down and get out of this economic trough is through private-sector growth and development.”

According to McConnell, the president’s moves in recent weeks were part of an effort to retool his image and “that’s fine,” he said. “He ran as a moderate. I’d like for him to govern as a moderate.” Specifically, he recommended that the administration slash America’s corporate tax rates, which are among the highest in the world, and finalize free-trade agreements with Colombia and Panama.