Obama's Uphill Battle on Healthcare, Economy

It has not been a good summer for President Obama. He's losing momentum from earlier in the year, partly because many Americans are confused about what his healthcare plan is all about and how it would affect them. So for many Obama supporters, his prime-time speech to Congress this week comes none too soon. Aides say he will try to inject new life into his healthcare agenda by urging Americans to rally around his goals and will finally draw some "lines in the sand" to clarify what he will and won't accept in healthcare legislation.

The president's job-approval ratings have dipped 20 points to about 50 percent in some polls. More broadly, doubts are growing about his vast federal spending and policy choices, including overhauling healthcare and bailing out key industries such as banking and automaking. On a personal level, Obama's aides say he got only a partial break from the pressures of the White House during his weeklong vacation at Martha's Vineyard, Mass., in late August. The death of Ted Kennedy prompted him to interrupt his holiday to give the eulogy at the Massachusetts senator's funeral. Obama also took time out to announce that he will reappoint Ben Bernanke as head of the Federal Reserve Board. And his focus was suddenly diverted from the beach and his family to the decision by Attorney General Eric Holder to appoint a special prosecutor to investigate the Central Intelligence Agency for possible abuse of suspected terrorists during George W. Bush's administration. This caused a firestorm of criticism by former Vice President Dick Cheney and others who say that Obama's administration is obsessed with the past and isn't tough enough to adequately protect national security.

As the furor over the harsh interrogations showed, Obama's problems aren't only domestic, even though healthcare has dominated the headlines. U.S. casualties are rising in Afghanistan, and the latest assessment from the military is gloomy. Gen. Stanley McChrystal, the top U.S. commander in Afghanistan, says a new strategy is needed to shield the population from the Taliban, and he is expected to request more troops soon. Meanwhile, 51 percent of Americans think that the war in Afghanistan is not worth fighting, up from 45 percent in July, according to a recent ABC News/Washington Post poll. Liberal Democrats are increasingly worried that Obama is blundering into a Vietnam-like morass, and even conservative commentator George Will called last week for the start of a U.S. withdrawal. "Obama shouldn't be sending in more troops," says a former foreign policy adviser to a Republican president. "It's like we're fighting ghosts over there."

One upbeat note came last week when the long-stalled Mideast peace process seemed to gain a bit of momentum. Cabinet-level discussions on economic cooperation resumed between Israel and the Palestinians as the United States pushed for full-scale peace talks.

But domestic issues are Americans' major concern right now, and the news hasn't been very encouraging on that front. Unemployment increased from 9.4 percent in July to 9.7 percent in August, a 26-year high. Consumer confidence remains shaky. And a new government projection says that federal deficits will grow to a total of $9 trillion over the next decade, up from an estimate of $7.1 trillion.

Congress seems as balky as ever. On energy, there is still strong resistance in the Senate to the cap-and-trade legislation favored by Obama and passed by the House. It would allow businesses to buy and sell pollution waivers in order to cap harmful emissions, but there are fears that, if the bill becomes law, consumers will pay much more for energy.

And then there is healthcare, Obama's signature initiative. The public is increasingly worried that his proposals would be too costly, would impose too much government interference, and would worsen coverage for millions, according to the polls. And the political battle is growing more ferocious by the day. The Democratic National Committee is organizing activists around the country in support of Obama's agenda, while the Republican National Committee continues to mobilize opposition. Each side complains of misinformation and outright lies from its adversaries.

In recent weeks, the advantage seems to have gone to the GOP. Angry anti-Obama protests at Democratic town hall meetings on healthcare have gained extensive media coverage, raising wider doubts among voters, especially independents, about the president's ideas. Those protests will continue, and in the next few weeks conservative activists hope to present Congress with petitions containing more than a million signatures of Americans opposed to Obama's healthcare plan.

Of course, White House officials have a different take. They predict that things will look a lot rosier later this month, after Congress returns from its summer break and as the president begins his final sales pitch. "There's a score-card mentality in politics" in which the media and partisan insiders declare winners and losers prematurely, says White House Press Secretary Robert Gibbs. The American people aren't interested in snap judgments and will give the president more time to achieve success, Gibbs adds.

"While there continues to be a debate over the details, there is little debate that there should be healthcare reform," says another Obama adviser. He notes that members of Congress and interest groups agree on many fundamentals, such as the need to make sure that healthcare coverage continues when people change jobs or have pre-existing medical conditions. So there is a firm foundation for constructing a final bill, the adviser argues.

Administration officials say that a victory on healthcare legislation is vital for Obama's presidency. White House Chief of Staff Rahm Emanuel has been telling congressional allies, for example, that victory would breed more wins on other issues and that defeat would lead to more defeats. If Obama makes progress on healthcare, Emanuel argues, the president will gain momentum and it will be easier for him to pass legislation on energy, climate change, and immigration because his power will be enhanced and his opponents will be afraid of defying him.

Where the White House has failed so far, however, is in clarity. Sixty percent of Americans say Obama hasn't adequately explained his plans to overhaul the healthcare system, leaving them badly confused, according to the latest CBS News poll.

White House strategists say the president aims to start changing that dynamic with his address this week. At least they hope so, because if his persuasive powers fail, they will have few options left.

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