President Barack Obama will use the State of the Union address tonight to vow to stand by his principle domestic priorities, including healthcare reform, while at the same time taking more drastic steps to rein in government spending.
The President will notably call for a three-year freeze on discretionary spending in next year's federal budget, targeting domestic programmes in education and science and various social services. Areas which will not see such restraint will include defence and military spending as well as social security and Medicare.
The White House is reacting in part to the loss of the late Edward Kennedy's Senate seat in Massachusetts to Republican Scott Brown last week. The weakening of support for Mr Obama may stem in part from a perception — skillfully nourished by conservatives — that he is presiding over a government-gone-wild in Washington with ever-ballooning deficits and the national debt.
There was a smidgen of encouraging news yesterday from the Congressional Budget Office, which predicted the budget deficit will come in at $1.3tn in the current fiscal year, down slightly from $1.4tn posted last year.
Perhaps more surprising was fresh consumer confidence data yesterday indicating that Americans feel more optimistic about the economy now than they have for nearly a year and a half.
The huge deficits nonetheless continue to pose a significant political problem for Mr Obama. The Massachusetts debacle brought into sharp focus the backlash which has developed against some of what his administration has already wrought in its first year, including the $787bn stimulus programme and bank bailout.
The proposed freeze is in some ways symbolic, affecting about 8% of the federal budget and likely in the end to save the government only about $250bn. If it succeeds in quelling some criticism of the administration from conservatives, it is likely at the same time to infuriate liberal Democrats who already feel abandoned by Mr Obama.
In a sign of disunity within the Democratic camp, the progressive advocacy group moveon.org yesterday placed a full-page advertisement in USAToday warning the President and Democratic leaders on Capitol Hill against any drift to the centre, under the headline, ‘Fight, Don't Fold’.
Not for the first time, Mr Obama faces a task that some are billing as make-or-break for him politically. Because the party has lost its filibuster-proof, 60-seat majority in the US Senate, the prospects for healthcare reform have dimmed dramatically.
There are some contradictions in the White House stance. Even as Mr Obama presents himself as a deficit disciplinarian, he will not back away from priorities which he thinks will pay off politically in the long-run. They include plans for a $150bn jobs creation bill.