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Michael Fillilove on Barack Obama's presidenc -

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TRACEY BOWDEN, PRESENTER: And the President's first anniversary has been over shadowed by a
stunning political setback with the loss of a crucial Senate seat in the Democratic heartland.

Ironically the seat had been held for more than 40 years by veteran Democrat Ted Kennedy who died
last year.

In today's vote Republican Scott Brown soundly defeated the Democratic candidate; a result with
major national implication.

To discuss the potential blow to the President's agenda I spoke a short time ago to Michael
Fullilove from the Lowy Institute.

Michael Fullilove, how significant is this result in Massachusetts?

MICHAEL FULLILOVE, LOWY INSTITUTE: I think it is significant. It's emotionally bruising for
Democrats to lose the seat that was held by Ted Kennedy for so long, the liberal line of the

It's also very difficult for President Obama because it threatens the Democratic supermajority in
the Congress, which is going to make it harder for him to pass the healthcare bill.

So it may well stall some of President Obama's momentum on the 12-month anniversary of his
inauguration. So it's bad news.

TRACEY BOWDEN: The Democrats do still have control of both houses. So what will the real effect be?

MICHAEL FULLILOVE: I think it's important to get that straight. The Democrats will still hold 59 of
the 100 Senate seats. So it's back to normal if you like. They still control the Senate.

It just means that it's harder for them to overcome filibustering and stalling tactics by the

But that doesn't mean by any stretch of the imagination that they can't get things done.

They only won a supermajority in July last year and President Obama got a number of important
pieces of legislation, including the economic stimulus package, through the Senate before they did

So it's not game over but it is an unexpected blow for the President's party.

TRACEY BOWDEN: In a sense was this a referendum on the President's first year and on his health

MICHAEL FULLILOVE: I think that's not fair. I think that there may be a sense in the electorate,
especially among independents that President Obama has overreached in some ways.

But I think it's also a referendum on a very bad Democratic candidate who really underperformed.
She faced a Republican challenger who was pretty effective in running a populist campaign.

I think there was a sense that the Democrats had taken Massachusetts for granted.

So I think responsibility has to be shared between the President and also between the Democrats in

TRACEY BOWDEN: But you could argue this is something of a reproach for the President?

MICHAEL FULLILOVE: It certainly, look, it's not what he wanted.

I mean you couldn't write the novel about President Obama's life, could you? A black man elected to
the White House. He passes healthcare legislation through the Senate on Christmas Eve last year.
And then on the very eve of his one year anniversary they lose the seat of the line, the seat held
by the liberal line of the Senate.

So look it's, it's, it is something of a reproach.

The real question will be how does President Obama come back from this? Does he take the
opportunity to pause or does he say, no, it's pedal to the metal and let's continue with the reform

TRACEY BOWDEN: The State of the Union address is next week. What impact might this then have on

MICHAEL FULLILOVE: I think it's a big impact. The first question will be whether the Democrats
attempt to get healthcare through even having lost this seat.

There are various parliamentary tactics that they can use to attempt to ram that legislation

And the question will be do they more want to look like they're taking the message for
Massachusetts or is it more important to them that they get this very important piece of
legislation through?

So healthcare is the first thing that we will look for in the State of the Union.

But the broader issue is how will Obama come back? Presidents always have defeats. We remember
President Clinton had a big defeat in his first midterm elections after being elected.

The question will be how does he come back? Is he defensive now? Does he try to tack to the right
or does he press on and try to ram home some liberal reforms?

TRACEY BOWDEN: You were there in Washington a year ago, as was I. And you would remember that
incredible sense of enthusiasm and energy for this new President. Is that still there?

MICHAEL FULLILOVE: Well I think he faces now as many chants as he does cheers.

I think the left, some on the left are disappointed with Obama. They think that he's a Democrat in
name only. They claim that he sold out to Wall Street on the banks; he sold out to the Pentagon on

I think on the Republican side there's a lot of Obama haters who were going to criticise anything
Obama does.

So to some extent he is a victim of the expectations and the high hopes that we experienced on the
National Mall one year ago.

But on the other hand don't underestimate the huge advantages that Obama has. He has all the power
of incumbency. He has the best sound stage in the world in the White House and Air Force One. And
he faces a pretty lacklustre field of Republican candidates who are sizing up the race in 2012.

So this is a difficult night for him but he's still got a lot of strengths on his side.

TRACEY BOWDEN: He came in talking about change. Has there been enough change in this first year?

MICHAEL FULLILOVE: I think there's been pretty significant thing. I think economically he has run,
he has shown a very different sort of governing temperament. He is much calmer, much steadier than
president Bush or Senator McCain was. They were both much more impulsive domestic leaders.

We will see whether healthcare gets up. If he can squeeze healthcare through the Senate in the next
couple of weeks then I think his first year will look like a real change agenda domestically.

I think if you look at foreign policy, I think there's an entirely new tone to US foreign policy.

He has shifted global perceptions of America. We see here in Australia, for example that support
for the US alliance has jumped by 22 points in the last couple of years.

So, and there's new policies on a number of different fronts.

So I think, you know, you never, politicians never live up to all the hopes that we invest in them
but I think he has made America a different country in 12 months.

TRACEY BOWDEN: Would the Obama camp be anxious tonight about that result in Massachusetts?

MICHAEL FULLILOVE: They wouldn't be human if they weren't anxious.

But Obama is a cool cat. We've seen that during, you will remember during the primaries when he
suffered reverses he didn't react immediately.

You'll remember after the Christmas, the attempted Al Qaeda Christmas Day bombing, again he took a
couple of days to react.

So I think there will be panic among some Democrats, especially among Democrats in Congress who
feel they might be at risk in the midterms which are coming up in November.

But if we know, if Obama stays true to form I think he will take a couple of days. He will take the
long view.

And my own opinion is that to panic and to start to reverse and start to tack to the right will
only make him look weak. I think he has to press home his advantage. He has to try to regather his
momentum, rekindle the hopes that we saw 12 months ago and press on with his agenda.

TRACEY BOWDEN: Michael Fullilove, thank you for your time.