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State of the Union -

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TRACY BOWDEN, PRESENTER: It's not just Australians pondering the state of their nation today; in
the United States, President Barack Obama delivered a highly-anticipated State of the Union

After the recent shooting of a Democratic congresswoman in Arizona, the President stressed the need
for national unity, but the main focus was on the struggling economy.

BARACK OBAMA, US PRESIDENT: Sustaining the American dream has never been about standing pat. It has
required each generation to sacrifice and struggle and meet the demands of a new age. And now it's
our turn. We know what it takes to compete for the jobs and industries of our time. We need to
out-innovate, out-educate and out-build the rest of the world.

(Congress applauds).

TRACY BOWDEN: James Fallows is national correspondent for The Atlantic magazine and chair in US
Media for the United States Centre at the University of Sydney, and I spoke to him earlier from New

James Fallows, how important is this speech at the midway point of the President's term and do you
think he's delivered? Was it a success?

JAMES FALLOWS, NATIONAL CORRESPONDENT, THE ATLANTIC: State of the Union addresses: there is a
formulaic, almost Kabuki quality to them. As speeches, they are almost always somewhat leaden, they
are quite long, because the President has to include all the various things he wants to cover in
the next year of his administration. So, as acts of rhetoric, they never are that important, but as
performances, they often can be quite important, at least for a while, in sort of reasserting the
President's presence and how he's gonna deal with the Congress, and especially in these
circumstances where he has a new Republican-controlled, very strongly Republican-controlled House
to deal with, it was important from the President's point of view that he be able to say, "I'm
back, I'm going to be able to deal on these new terms, here's what I have in mind." And I think in
terms of setting the tone that President Obama wanted to do, I think it actually was effective. He
was able to present his very sweeping defeat in the mid-term election as if it had been part of his
master plan, saying, "We did all these things in the first two years, and now we're ready to work
on the various corrections that you all have in mind." So I think from the administration's point
of view, I think they will see it as a success.

TRACY BOWDEN: Very early on in the speech, almost straightaway, he talked about the Tucson
shooting, he talked about bipartisanship and working together. That's obviously a theme he wants to

JAMES FALLOWS: Yes. And I thought that there was - he referred at the beginning to the new speaker
behind him, Speaker Boehner, but also empty seat in the chamber belonging to representative
Giffords. I think everybody in the US and his audience recognise that a week or so earlier in his
memorial speech at Tucson, President Obama had been very effective - again, from his
administration's point of view - of trying to make a bipartisan national unity speech. And so he
returned to those themes and wove them through much of the address. There were a couple of times
when he made partisan points, saying, "Here is where the Democrats will draw the line," but he
tried beginning, middle and end to say, "We need to find ways together to deal with the sources of
America's long-term either opportunity or difficulty."

TRACY BOWDEN: There wasn't a lot of policy detail, but the focus was clearly on the economy and on

JAMES FALLOWS: Yes. And the first three quarters of the speech - three quarters of a very long
speech was a chain of logic which was actually fairly complex, by the standards of these
presentations for why the President thought that in order to produce more jobs, which everybody
agrees is the main both substantive and political issue for the administration and the country, he
said the following things had to be to happen. There had to be more innovation, which required
better schooling, which required better funding, etc. So there was a quite long theoretical or
conceptual argument about how he would like things to evolve, but without too much, as you say,
drawing the line of here, here and here. By contrast, the foreign policy part, which has to be to
some extent in these speeches, was quite abbreviated and just sort of touching the bases he needed
to touch about Iraq, Afghanistan and so on.

TRACY BOWDEN: The Republicans, who of course now have control of the House of Representatives
again, are opposed to his views on spending. How do you think he's gonna go at being able to do the
things he's saying need to be done?

JAMES FALLOWS: The President recognised that the Republican argument would be there have to be deep
cuts, etc., and I think that he was trying to make them face a contradiction that makes it easier
to run against deficits, as the Republicans did, than to govern that way. Because, simultaneously,
the American public is in favour of lower deficits, but also wants lower taxes and wants to have
its benefits protected. And as will be obvious, all those things can't be true at once. So I think
the President was trying to say, "Here is my sense." He was proposing a five-year freeze on
discretionary federal spending, which is not much of the budget, which is - and other measures to
reduce the cost of government. And I think trying to put the onus on them to say, "If you want to
cut more, let's see exactly where you want to cut more. Do you want to raise taxes? Do you want to
cut popular programs like social security or medical care?" So I think he's trying to engage them
on the specifics where he thinks their logic will run to more difficulties than the general
anti-deficit appeal held.

TRACY BOWDEN: When he was talking about innovation, he referred to India and China and the
competition coming from there.

JAMES FALLOWS: Yes. And I think that it is a staple of American life and has been, at least over
the last 55 years or so, since the rise of the Soviet Union, to motivate national investment
efforts by raising a foreign challenge. Certainly in the Cold War era, it was the Soviet Union; 25
years ago it was Japan; in the last few years, it's been China in particular, India to a lesser
degree. And I think that the President was trying to do both a sophisticated and a low-road version
of that argument.

The sophisticated version would be we see in the hi-tech industries of the future, whether it's
clean tech or medical tech or whatever, that other countries around the world are being able to
find ways to invest, to move ahead here. The United States needs to do something to keep up. The
low-road version of that argument is, "We don't wanna fall behind, we want the jobs to be here, not
someplace else."

So I think that the President has actually been artful in his two years in office in trying to use
this challenge in the right way.

TRACY BOWDEN: In a sense is this speech the start of campaigning by Barack Obama to win a second
term in office?

JAMES FALLOWS: Very much so. And I think that campaign probably began just about midnight on
November 2nd becoming November 3rd, as the mid-term elections came in. And I think there are two -
there are probably three factors which count in the president's favour as he looks this way.
Nothing is predictable, but these will be the three things he has on his side. One is his natural
register and tone is towards the middle. Now some of his critics on the right don't believe that,
but his first appearance in the public eye at the Democratic convention in 2004, he had his famous
line about there're not red states or blue states, but the United States of America. He's tried to
have this sort of conciliatory tone. That's one factor.

A second factor is one expects that the business cycle will be improving a year and a half from
now, compared to what it is now. If that's not the case, then we really have more severe problems
than his re-election. But the unemployment cycle should be in his favour.

And finally, the Republicans at the moment don't seem to have an obvious, strong, centrist person
to run against him. So, anything can change. If we talk six months from now, things could look
different. But as he plans the re-election positioning, those are things where the wind is with him
rather than against them.

TRACY BOWDEN: James Fallows, thanks for that analysis.

JAMES FALLOWS: My pleasure. Thankyou.