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Obama's Plan to Win Reelection

The word from the White House: No more Mr. Nice Guy. For real this time.

In early September, Obama unveiled the jobs plan during a speech to Congress that picked up where his anti-Ryan address had left off. Perhaps the most powerful moment came when Obama asked: "Should we keep tax loopholes for oil companies? Or should we use that money to give small-business owners a tax credit when they hire new workers? Because we can't afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? This isn't political grandstanding. This isn't class warfare. This is simple math."

"There was no pot of gold at the end of the adult-in-the-room rainbow," says one former top administration official, "and there were only so many times Lucy could pull away the football."

Obama was dishing out, as could be expected with him, a calm sort of populism: There's a rational choice to be made, and there's only so much money. But he was also delivering a strong defense of government—a perspective that had been overwhelmed by the tea party's starve-the-beast message. "We no longer had a gun to our head," a senior administration official recalls. Following the debt ceiling mess, the president had concluded that he could no longer work the inside game with Republicans held captive by the extreme ranks of their own party.

Obama was done being the above-the-fray president, the reasonable fellow who would ease the bickerers of Capitol Hill into compromise. He and his aides had once believed that image was critical to winning over independent voters. Now they had concluded that if Obama pursued substantive compromises but failed (because House Speaker John Boehner could neither control nor defy his tea party wing), he would appear ineffectual. "There was no pot of gold at the end of the adult-in-the-room rainbow," says one former top administration official, "and there were only so many times Lucy could pull away the football."

Republicans said no, no, and no to the president's jobs package, but this time Obama didn't throttle back. He plugged away at event after event—mostly in 2012 swing states—offering various either/ors. The nation could invest more in infrastructure and compete with the Chinese, or tax cuts could be preserved for the wealthy. America could protect Medicare or tax breaks for corporations. He would still tick off liberals (killing tighter smog regulations; allowing restrictions on the morning-after pill), but on the economy, he was finally doing what some of his allies had long urged.

In early December, Obama flew to Osawatomie, Kansas. In this small town in 1910, President Teddy Roosevelt, by then out of office but still deeply involved in politics, delivered a rip-roaring speech defining a "New Nationalism." Perhaps the most radical address ever given by a US president, it declared that the "citizens of the United States must effectively control the mighty commercial forces" and called for a "square deal" for workers, including rigorous government regulation of the workplace and Big Finance. It was denounced at the time as "communistic," "socialistic," and "anarchistic."

Obama didn't go nearly as far as T.R. But he did talk about the "raging debate over the best way to restore growth and prosperity, restore balance, restore fairness." He said this was "a make-or-break moment for the middle class and for all of those who are fighting to get into the middle class."

Noting that the United States had become a nation of greater economic inequality—Obama and his aides had been watching Occupy Wall Street's message catch on—he returned to the vision he had presented in his 2011 State of the Union. To revive a strong middle class, Americans must join together, through government, to educate, innovate, and build.

"This isn't about class warfare," he said. "This is about the nation's welfare." Afterward, Jim Messina, Obama's campaign chief, sent out an email to supporters proclaiming that this approach "will inform every discussion we have with undecided voters over the next year."

Two weeks later, the House Republicans helped make Obama's point for him: They refused to go along with a bipartisan Senate compromise to extend unemployment benefits and the payroll tax cut for two months. But Obama now felt emboldened to confront GOP obstructionism, and the Republican leadership blinked; Boehner ended up embarrassingly losing this game of chicken. Soon afterward, the president would issue a recess appointment for Richard Cordray to head the new Consumer Financial Protection Bureau—in defiance of Senate GOP filibusters. And in a feisty State of the Union speech in January, he laid out the choice: "We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot." At stake, he added, was nothing less than "American values."

Obama's new tack did seem to yield political dividends. By late 2011, he scored better than Republicans when poll respondents were asked whom they trusted to handle the economy and even the deficit. Plouffe could barely believe it—he told people it was as if the Republicans were ahead on the issue of children's health care. A core GOP strength had been neutralized.

Yet as they looked to 2012, Obama and his advisers had one key number in mind: No president since FDR has ever won reelection with unemployment greater than 7.2 percent. If the election evolved mainly into a referendum on Obama's economic policies, he would be in deep trouble. But if he and his team could shape it as a choice between two sharply distinguished sets of values, he would have a fighting chance.

The first year of Obama's face-off with the tea-party-controlled House had been ugly. The president had not achieved his main policy objectives. But as he and his inner circle saw it, he had managed to lay the foundation for the decisive campaign to come—and had found his fighting groove. In the face of unremitting opposition, perhaps because of it, Obama realized much of his strategic plan. He could only hope the same would happen in 2012.

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