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Last chance to conquer the deficits

By David Gergen, CNN Senior Political Analyst
updated 2:48 PM EST, Tue February 12, 2013
First lady Michelle Obama, center, is recognized by the audience and special guests surrounding her before President Barack Obama's 2013 State of the Union speech. Front row, left to right: Marine Sgt. Sheena Adams, Nathaniel and Cleopatra Pendelton, Michelle Obama, Menchu de Luna Sanchez and Jill Biden. Second row, left to right: Oregon Gov. John Kitzhaber, Deb Carey, Apple CEO Tim Cook, Amanda McMillan and Oak Creek Police Lt. Brian Murphy. First lady Michelle Obama, center, is recognized by the audience and special guests surrounding her before President Barack Obama's 2013 State of the Union speech. Front row, left to right: Marine Sgt. Sheena Adams, Nathaniel and Cleopatra Pendelton, Michelle Obama, Menchu de Luna Sanchez and Jill Biden. Second row, left to right: Oregon Gov. John Kitzhaber, Deb Carey, Apple CEO Tim Cook, Amanda McMillan and Oak Creek Police Lt. Brian Murphy.
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Past presidential guests at State of the Union
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STORY HIGHLIGHTS
  • David Gergen: President Obama's State of the Union could be crucial for second term
  • He says if Obama doesn't get GOP to the table, we could see high-stakes budget fight
  • It would be a mistake for Democrats to think they can win by refusing to negotiate, he says
  • He says Obama's shift in tone to more partisan approach is a big mistake

Editor's note: David Gergen is a senior political analyst for CNN and has been an adviser to four presidents. A graduate of Harvard Law School, he is a professor of public service and director of the Center for Public Leadership at Harvard University's Kennedy School of Government. Follow him on Twitter.

(CNN) -- President Barack Obama's State of the Union address Tuesday night is likely to be the most important domestic speech that he gives during the rest of his presidency -- but not for the reasons commonly cited.

Conventional wisdom holds that the address offers the president the biggest platform -- and audience -- he will have to lay out his agenda and priorities for the next four years.

Environmentalists are eagerly awaiting his promises on regulation of existing coal-fired power plants, on the Keystone XL pipeline and on international climate negotiations. The anti-gun community wants to know if he will fight for an assault weapons ban. Latinos want to see how he will advance on immigration. And so on ... and on.

David Gergen
David Gergen

These and other issues are significant and will feature heavily in post-address analysis. But at the end of the day, the transcendent issue -- at least for most Americans right now -- is whether the president will propel the economy forward by breaking the deadlock on the nation's fiscal mess.

Kinzinger: Obama's huge opportunity
CNN Explains: The State of the Union

This State of the Union address is probably the last chance that Obama has to reignite serious negotiations over a "grand bargain." Absent some sort of breakthrough soon, we are heading toward a sequester (lots of automatic spending cuts in domestic and defense programs) in March. That will in turn set off new rounds of squabbling and the likelihood that for months if not years to come, the nation will careen from one mini-crisis to the next, failing to solve underlying problems.

For Obama, economists from Paul Krugman to Larry Summers have argued for some time that jobs and growth would be best served by a two-stage process: new spending on infrastructure and the like in the near term (more stimulus) followed by iron-clad reductions in deficits over the long haul. Instead, Washington is inviting just the opposite: a round of spending cuts in the near followed by weak, inadequate reductions in deficits over the long haul. Both will be a drag on growth and jobs.

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Democrats argue that Republicans are to blame -- and clearly they deserve a great deal of criticism, especially for their obstructionism. But the day after the elections, Republican House Speaker John Boehner offered tax increases, a huge concession, and now it is the Democrats who seem less willing to make tough choices and strike a long-term bargain.

Moreover, Obama is the only leader in Washington elected by all the people, and as president, he has prime responsibility for finding a path forward. What can he do in his State of the Union to achieve a breakthrough? Two suggestions:

First, he should make a forthright new offer to Republicans: In exchange for them calling off the sequester and agreeing to infrastructure investments, he will offer them a set of concrete steps he will support to bring Medicare and Social Security under control. In addition, he will name negotiators to work with Congress, starting this year, on tax and entitlement changes, and additional tax increases and spending cuts to put our house in order. Both sides will have to compromise further than they have so far on cherished commitments.

Obama is ... elected by all the people, and as president, he has prime responsibility for finding a path forward.
David Gergen

Second, the president should commit to working with Republicans to create a new tone for their relationship. Instead of each side looking upon negotiations as "I win; you lose," the goal must be to create a "win-win." It is not necessary that each side like the other, but it is necessary that each side puts country first.

Are these two steps hopelessly idealistic? Probably. If anything, all signs point in exactly the opposite direction. On substance, the president continues to say he would like a grand bargain but mostly on his terms, and he has done virtually nothing to fight for it. Indeed, in his inaugural, he seemed to step back from overhauling entitlements, portraying himself as chief defender of Medicare and Social Security.

As the sequester approaches, he has offered a tactical set of small-bore proposals, not a strategic plan that would break the deadlock. Down deep, has he decided that he doesn't really care whether we solve the deficit mess on his watch -- that he accepts the liberal notion that it's a problem for 2020, not now? One wonders.

On tone, the president has pivoted even more. Instead of the conciliatory Obama of the first term, we have seen a hard-nosed pugilist who paints Republicans as wackos ready to hurt senior citizens and starve children to protect the rich.

It was discouraging to read Monday's lead article in Politico in which correspondent Glenn Thrush, citing Democrats in the White House and on the Hill, reported that Obama in his State of the Union will offer the GOP not an olive branch but a cattle prod. One Obama aide close to the drafting process quoted Sun Tzu: "Build your enemy a golden bridge on which to retreat."

This is a team that wants a win-win negotiation over the deficits?

The suspicion deepens that the Obama folks have secretly adopted a strategy of making Republicans look so extreme that they will be driven from power in 2014 and the president can then govern as he chooses in his final two years in office.

For the country's sake, one hopes this suspicion is wrong. The window for achieving a grand bargain has been closing rapidly and could slam shut Tuesday night.

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The opinions expressed in this commentary are solely those of David Gergen.

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