By Dan Balz
Washington Post Staff Writer
Saturday, January 29, 2011; 6:07 PM
The outlines of the domestic side of the 2012 election debate came into sharper focus this past week. President Obama called on America to win the future and made government a principal instrument of that effort. Republicans countered by pointing at Washington and its appetite for spending as the single biggest threat to a secure future.
Obama sees global economic competition as a major threat to America's long-term prosperity and issued a rallying cry to the country to meet that challenge. Republicans see debt and deficits as a major obstacle to unleashing the entrepreneurial forces that have long been one of the country's strong suits and called on Americans to rise to the challenge of checking spending.
Obama's vision barely hinted at the hard fiscal choices that many see ahead. Given the outcome of the midterm elections, he was obliged to talk about the deficits, but he showed little enthusiasm for leading the effort to deal with them. Republicans made those fiscal challenges the centerpiece of their vision and promised action, couching the problems in almost apocalyptic terms.
Republicans won this debate in 2010 and have made reductions in government spending their highest priority as a party. Their midterm successes were aided, however, by the widespread dissatisfaction over the economy and a persistently high unemployment rate well above 9 percent.
Obama and his team believe that federal deficits and alarm over the size and scope of government had far less to do with the outcome than the economy-induced sour mood. Counting on some easing of unemployment and even modestly higher growth rates, he hopes that his vision will trump the Republicans in 2012.
Though he continues to pay lip service to the deficit, his State of the Union address suggests that he has concluded that lack of serious attention to the deficit on his part will not cost him politically. He is happy for now to let Republicans lead on that difficult issue.
In focusing on winning the future, Obama has identified an issue of rising concern to the American people. About a third of all Americans see global economic instability as a threat to world stability, according to the latest Washington Post-ABC News poll.
That is far more than the percentage that sees either international terrorism or the wars in Afghanistan or Iraq as the principal threat to global stability. (The poll was conducted before the uprisings in Egypt that are now a major source of concern and a threat to stability in the Middle East.)
Globalization is viewed in increasingly negative terms. A decade ago, three in five Americans said the trend toward a global economy was a good thing. Today, according to the Post-ABC poll, just 36 percent agree with that positive assessment. A plurality (42 percent) sees globalization as a bad thing, almost twice as many as a decade ago.
Democrats were the most positive about the trend toward a global economy - despite the fact that Democrats in Congress and key party constituencies have strongly opposed many of the trade agreements of past and present. Almost half of Democrats, but only about a quarter of Republicans, said the shift to a global economy has been a good thing.
Obama's State of the Union caught the public mood in other ways. His focus on reinvigorating America's manufacturing base and on fixing schools, two broad themes in his State of the Union address, tracked with the findings of a recent NBC News-Wall Street Journal poll that asked people what worries them most about the country's future. The flight of manufacturing jobs overseas was the most-cited worry about the country's future (33 percent) and the poor quality of public schools was second (25 percent).
What gives Americans confidence about the future? Some basic American beliefs are still the key. In the NBC-Wall Street Journal survey, the three most-cited factors were: the opportunity to work hard and get ahead; creativity and innovation (a major theme of the president's address); and the free enterprise system.
Obama's decision to relegate the deficit to the back end of his discussion about the country's economic future might have been calculated. The two pillars of the Republican response to Obama's speech - the record deficits and a warning that the size and scope of government threaten economic prosperity and individual freedom - fell farther down the list of worries in the NBC-Wall Street Journal survey. A fifth of respondents cited the deficit, and only 14 percent named the role of government.
Still, Republicans know their loyalists. Republicans are far more likely than Democrats to cite the deficit, the role of government or a decline in moral and religious values as factors that make them worry about the country's future - in numbers equal to or slightly greater than those who name the flight of manufacturing jobs overseas. Highlighting the gap between the parties, just 3 percent of Democrats see the increasing role of government as a threat.
That would seem to put Obama on more solid ground politically, playing the optimist to the GOP's eat-your-spinach message about the deficit and the debt. That, at least, is what the Democrats are counting on, that optimism trumps pessimism every time.
But there is a counter-narrative at work in the country right now that could test all that. In the states, the so-called truth tellers are on the rise. Whether it is New Jersey Gov. Chris Christie (R) or Indiana Gov. Mitch Daniels (R) or New York Gov. Andrew Cuomo (D), state executives recommending tough steps to control spending are earning praise from their constituents.
Unlike the federal government, states must balance their budgets. Governors and state legislators have been forced to enact cuts in the past several years, with more coming. Washington has avoided doing so because it can. The Republicans say the country can't afford to wait any longer. Obama does not exactly disagree in principle with that assessment, but he has yet to show any initiative on that front - not even after his debt and deficit commission showed him the way.
Obama may be making the politically safe choice - assuming a modest turnaround in the economy and the absence of a calamity from the accumulated debt he and others have helped to build up.
Republicans are making a different bet, assuming that they are serious about fulfilling their campaign pledges. They are gambling that Americans are ready for what GOP leaders in Washington and the states call a grown-up conversation about deficits and the size of government.
That will be the heart of the domestic policy debate that will play out over the next two years, a debate that could well decide the outcome of the presidential election in 2012.