With 2012 looming, Obama focuses on economy

Less than three months since his party's major election losses, President Obama has presided over a West Wing makeover designed to help him keep a sharp focus on economic issues heading into his 2012 reelection campaign, while drawing clear lines of distinction with newly empowered Republicans.

The full rollout of Obama 2.0 began last week with a State of the Union address that called for more spending to spur jobs and keep up with global competitors, followed by a string of key staffing changes in the senior ranks of a White House that has been criticized as too insular and slow to grasp the economic anxiety being felt by many Americans.

Several Democrats who have advised the administration in recent weeks said Obama appears to have embraced the idea that his White House needs a more focused domestic policy mission after two years spent battling over health care and reacting to crises such as the financial system collapse and the gulf oil spill.

Moreover, White House allies said over the weekend that Obama's handling of the protests in Egypt - in which he has pressured President Hosni Mubarak to enact immediate reforms - reinforces the idea that Obama is a more commanding presence now than he was as he struggled to find his footing in 2010.

White House leaders "tended to bounce around from issue to issue without having a powerful story to back it all up," said Simon Rosenberg, president of the Democratic think tank NDN, who has been advising lawmakers and administration officials for months to present themselves as problem-solvers for complex economic times.

"Now, the State of the Union laid out a powerful story, which is the rest of the world is raising its game and we have to raise ours," Rosenberg added. "And based on his approval ratings, it's certainly working. He's a resurgent president."

Still, Obama's domestic political challenge is clear from new polling numbers.

His overall approval rating has recovered in recent weeks - to 54 percent in a Washington Post-ABC News poll this month - after a series of legislative victories in the lame-duck session last month following the midterms and after his well-received memorial service speech in Tucson.

But just four in 10 independents in that same survey approved of Obama's handling of the economy. And a new Post poll published Friday found 55 percent of Americans express just some or no confidence in the president's ability to make the right decisions about the country's economic future - a weak showing made more palatable only by the fact that congressional Republicans did worse.

The new approach in the White House is evident in the nature of the staff changes, which were more far-reaching than many Democratic strategists had expected.

The additions of William Daley as chief of staff and longtime Daley aide David Lane, as well as the ascension of new press secretary Jay Carney, suggest increased openness to voices outside the campaign inner circle that has dominated the senior staff until now.

Obama will also be losing two of his closest confidants, press secretary Robert Gibbs and senior adviser David Axelrod, though both are expected to remain in close touch. And the arrival of former campaign manager David Plouffe as a White House adviser means the old inner circle is not entirely broken.

Still, White House officials acknowledge that the senior staff needed to be retooled to fit a drastically changed political landscape. Before, with Obama seeking to push an ambitious legislative agenda through a largely friendly Congress, the staff was stocked with Capitol Hill veterans such as former chief of staff Rahm Emanuel, who left in the fall to run for mayor of Chicago, and his deputy, Jim Messina, who is moving to Chicago to manage the reelection campaign.

Now, the Republicans' House majority is gearing up for an assault on Obama's agenda, planning months of hearings to pick apart the president's signature health-care law and examining ways to roll back agency regulations that GOP officials say hurt business and squelch job creation.

Republicans are betting that, in the long run, Americans will reject any economic agenda that leads to greater government spending rather than fiscal belt-tightening.

"If there's a lesson to be learned from the last election, it's that voters want the federal government to tighten its belt just like they have done," said GOP pollster Neil Newhouse. "Yet, based on his speech the other night, that doesn't seem to have been the message that President Obama heard."

White House communications director Dan Pfeiffer said the changes in tone and substance were more a "return to first principles" for Obama, who delivered a little-noticed speech at Knox College in 2005 that closely resembled Tuesday's State of the Union address - complete with the declaration that, thanks to the rise of India and China, the economic "rules have changed."

But Pfeiffer said the White House has adjusted to address the GOP's new clout.

"Everyone rightfully acknowledges that there will be less congressional action on the president's agenda," he said.

As part of an increased deployment of administration officials, Obama is scheduled to appear Wednesday in State College, Pa., for another speech on clean-energy jobs. Last week, he toured an energy manufacturing plant in Wisconsin, which, like Pennsylvania, is shaping up to be a 2012 election battleground.

"In the coming days," Obama said in his weekly Saturday YouTube address, taped at the factory in Manitowoc, Wis., "I'll be shining a spotlight on innovators across America who are relying on new technologies to create new jobs and opportunities in new industries."

One Democrat with close ties to the White House, former policy adviser Neera Tanden, now with the Center for American Progress, said the president and his team "have been much more disciplined in talking about the economy almost every day."

Some in Obama's party remain skeptical that the president has turned a corner, particularly as he faces unavoidably bruising legislative battles in the coming weeks. One senior Senate aide, for instance, said a "significant number" of Democratic senators are likely to side with Republicans in refusing to raise the legal limit on federal borrowing unless it is paired with spending cuts - a debate expected to heat up in March as the federal debt nears the $14.29 trillion ceiling. The White House has yet to suggest a compromise plan.

"Politically, that's good news for Republicans, and should concern Democrats and the White House," the aide said.

Meanwhile, liberals in the president's base are growing more vocal in their criticisms of administration efforts to woo business leaders and find areas for compromise with Republicans. Obama is planning to deliver a speech next month to the U.S. Chamber of Commerce, which last year spent an estimated $50 million to help elect Republicans but now is working arm-in-arm with the White House to lobby for passage of a new free trade pact with Korea.

The liberal group MoveOn.org distributed a fundraising e-mail last week criticizing Obama for sending "mixed messages" in his State of the Union speech by supporting government spending for research and infrastructure while also proposing a five-year domestic spending freeze. "So, we're in trouble," the e-mail said in bold letters.

Party strategists, though, see the speech as far more Democratic than bipartisan and say it served as a marker for voters looking to distinguish between the two parties: one that wants to spend more money to stimulate the economy and one that believes in painful austerity.

"We'll invest in biomedical research, information technology, and especially clean-energy technology - an investment that will strengthen our security, protect our planet, and create countless new jobs for our people," Obama said.

The official Republican response, from House Budget Committee Chairman Paul Ryan (Wis.), set up the clear counterpoint. He warned of "crushing debt" that was pushing the country to a "tipping point."

"Whether sold as 'stimulus' or repackaged as 'investment,' [Democrats'] actions show they want a federal government that controls too much, taxes too much and spends too much in order to do too much," he said.

Rosenberg, the Democratic strategist, said: "There couldn't be a brighter line between the two approaches that the two parties are taking now."

Polling director Jon Cohen contributed to this report.

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