24 Feb 2009
Feb. 24 (Bloomberg) -- President Barack Obama, who spent the last month warning of the dangers facing the U.S. economy to win support for his recovery plan, is under pressure to begin fostering public optimism.Obama has rolled out three major initiatives -- a $787 billion stimulus bill, a bank-rescue plan, and an effort to limit home foreclosures. Now, as he addresses his first joint session of Congress before a nationwide audience tonight, he must encourage lawmakers and voters to believe the plan can work, political analysts and economists say.
"It's a real balancing act," said Stuart Rothenberg, an independent analyst. "The president's got to walk this fine line between reminding people of the difficult situation we're in and emphasizing the inevitable victory."
‘He needs to flip from complaining about the terrible circumstances he's inherited and give people cause for optimism"
That tension surfaced in Obama's Saturday radio address, during which he touted the benefits of the stimulus measure, such as a tax cut for 95 percent of families and the quick start-up of infrastructure projects nationwide; he also said "the road ahead will be long and full of hazards."
While the White House offered few details on what the president will say in his televised address, spokesman Robert Gibbs said Obama will focus on his economic plan, the surge in foreclosures, his pledge to slash the budget deficit, and the "re-regulation" of financial markets, among other issues.
That's a broader agenda than most new presidents bring before Congress, and Obama, 47, hasn't been the first to use fear as a force in trying to build support for his plans.
During the run-up to the Iraq War, George W. Bush resorted to apocalyptic language, once inveighing against inaction by saying: "We cannot wait for the final proof -- the smoking gun -- that could come in the form of a mushroom cloud."
Tamping Down Hope
Obama, a Democrat who structured his presidential campaign around a message of change and hope, began to tamp down the hope theme after the credit crunch turned into a full-blown financial meltdown in September. Since winning the election and taking office, he has sounded graver still.
"This is not your ordinary run-of-the mill recession," he said during his first prime-time press conference at the White House on Feb. 9. "We are going through the worst economic crisis since the Great Depression."
He said the problems were "accelerating instead of getting better," warning that the federal budget deficit of more than $1 trillion "could turn a crisis into a catastrophe." Obama convened a "fiscal responsibility summit" at the White House yesterday.
Lingering for Years
The specter of enduring economic distress is also spelled out on the White House Web site, which quotes the president as saying the recession could "linger for years" without quick and strong government action.
Such rhetoric has alarmed some people, including former President Bill Clinton. Obama would be mistaken to engage in "inane happy talk and false promises," Clinton said on ABC News' "Good Morning America" on Feb. 20. Still, he said, "I just would like for him to end (his speeches) by saying that he is hopeful and completely convinced we're going to come through this."
Douglas Holtz-Eakin, a former Congressional Budget Office director, said he shares Clinton's concern.
"If you've already got a major slowdown, you certainly don't need to be exacerbating it," said Holtz- Eakin, who advised Republican Senator John McCain during his 2008 presidential bid. Such talk could become "a self- fulfilling prophesy," he said.
"He needs to flip from complaining about the terrible circumstances he's inherited and give people cause for optimism," said Kevin Hassett, director of economic policy studies at American Enterprise Institute and a Bloomberg News columnist.
Pushing Ball Forward
Chuck Shelby, a broker at Risk Management Commodities in Lafayette, Indiana, said it was understandable for Obama to use strong language while trying to highlight the need to act.
"A lot of Americans didn't realize the magnitude of the problem," Shelby said. "But certainly we are at the point where he has to start pushing the ball forward."
Harvard University pollster Robert Blendon said now that Obama has gotten his economic-stimulus legislation, "there's no reason why he should be scaring people to death."
Ken Duberstein, former chief of staff in Ronald Reagan's White House, agreed.
The president "needs to maintain his credibility, so he can't simply be a cheerleader because everybody knows these are tough economic times," said Duberstein, who voted for Obama. "But he has to promise that if, in fact, his measures are enacted, there will be brighter days tomorrow. Now, tomorrow may be a while away. But he has to say ‘things will get better.'"
Understands the Obstacles
White House spokesman Gibbs said Obama knows what he's up against.
"He understands that it's important for him to be confident and hopeful in the path that we're taking, but honest about the many challenges that we face," Gibbs told reporters on Feb. 20.
Obama did that in Denver on Feb. 17 as he signed the stimulus measure. "I don't want to pretend that today marks the end of our economic problems," he said. "But today does mark the beginning of the end."
Ultimately, Obama is likely to be measured not by rhetoric but by hard data, including whether he can keep his pledge to create or save 3.5 million jobs over the next two years. And when he releases his first budget Thursday, the president will vow to cut the federal budget deficit in half, to $533 billion.
"I expect to be judged by results," Obama told a Feb. 10 town hall meeting in Fort Myers, Florida. "I'm not going to make any excuses. If stuff hasn't worked and people don't feel like I've led the country in the right direction, then you'll have a new president."
