Obama sets the tone

United States President Barack Obama has spent the last few days touring Republican heartland states selling his message that everyone should stand to gain from an economy that has all but recovered from years in the doldrums.

As the Federal Reserve ends its huge asset-buying programme, Mr Obama has some good news to talk about.

The number of Americans filing new claims for unemployment benefits fell last week from a seven-month high, pointing to continued improvement in labour market conditions. Also, Mr Obama can point to falling deficits and the slowing of the growth of healthcare costs.

Released from the political constraints of a sagging economy, overseas wars and elections, Mr Obama declared in his sixth State of the Union address ''the shadow of crisis has passed'', and he vowed to use his final two years in office fighting for programmes that had taken a back seat.

He called on Congress to make community college free for most students, enhance tax credits for education and child care, and impose new taxes and fees on high-income earners and large financial institutions.

It was a defiant speech given the Republicans now control the two chambers of the US Congress. And not surprisingly, the speech was met by strident opposition from his Republican opponents.

Mr Obama, a Democrat, threatened to veto Republican efforts to overturn key decisions such as his signature healthcare law, the loosening of immigration policy and the Administration's opposition to the planned Keystone XL oil pipeline.

The threat of the latest vetoes reflects Mr Obama's eagerness to confront conservative ideology.

Republicans called for the president to be more humble, given they took control of both chambers of Congress this month after winning the mid-term elections easily.

But Mr Obama is taking the long-term view. By setting the agenda for his last two years in office, he likely believes he can secure the White House for another Democrat president, return at least one of the chambers to Democrat control and leave a lasting legacy - something which so far has eluded him.

Mr Obama was in danger of becoming an invisible president, unlike former presidents George Bush, his son George W. Bush and Bill Clinton who continue to make the news wherever and whatever they do.

One area where Mr Obama may win Republican support is on trade. He called in his speech for Congress to give him so-called fast-track authority to complete major trade pacts like the Trans-Pacific Partnership deal currently being negotiated with Asia-Pacific nations. He warned China will be the winner if the deal falters.

Where New Zealand ends up in the TPP negotiations is anyone's guess right now, but Prime Minister John Key has a warm relationship with Mr Obama and is also keen to progress the TPP deal which is said to be a major turning point for this country's trade - despite opposition from sceptics.

Mr Obama may find his push for major free-trade deals runs into stiff opposition from his own party, however. Many Democrats believe the TPP deal will siphon away US manufacturing jobs, much in the way they say the 21-year-old North American Free Trade Agreement did.

With major financial stimulus soon to be introduced into Europe, New Zealand's growing economy can benefit from the sorts of reforms Mr Obama continues to talk about.

He called on Congress to approve a business tax deal and a major initiative to repair crumbling roads and bridges. Lower company taxes can mean higher profits, giving New Zealand exporters a chance of higher sales through the TPP.

Other major parts of the president's speech included calls for the lifting of the trade embargo on Cuba and passing legislation authorising the fight against Islamic State.

In his address, Mr Obama sought to cement an economic legacy that seemed improbable in his first term when the country was in near-economic collapse.

The speech aimed to live beyond his presidency by helping to starkly define the differences between Democrats and Republicans ahead of the 2016 presidential election.


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