In his forthcoming State of the Union address, President Obama has an opportunity to reset his administration and regain the initiative. What follows is the domestic policy portion of a speech he could give if he decides to do that. The alternative is some version of steady-as-you-go. This would reflect a judgment on his part that he’s doing just fine, or at least well enough—the B+ he awarded himself a few weeks ago. Unfortunately for him and for his party, this is a judgment with which an increasing share of the electorate disagrees.

My fellow Americans,

In a ritual hallowed by tradition, I come before you tonight to discuss the state of our union. I wish the news were better. You know as well as I do that the condition of our economy is not good; that millions of Americans are out of work, underemployed, or too discouraged even to look for jobs; that the course of the war in Afghanistan forced me to commit more of our sons and daughters to battle; and that international terrorism continues to threaten our lives and our way of life.

In normal times, I would discuss—as is customary—the full range of issues for which I am responsible. These are not normal times. Accordingly, I will focus my speech—and my presidency—on the two paramount challenges we confront: rebuilding our economy and enhancing our national security.

When I took office, our country was facing a global financial crisis. During the first year of my administration, I did everything I could to avert a rerun of the Great Depression. I know that many of these steps—from bailing out the banks and auto companies to enacting the economic stimulus—were not and are not popular. I understand your frustration that you have not yet seen improvements in jobs, wages, and prospects for small business—and that many of those responsible for the disaster have not been held responsible. I took these steps, not because I thought they would make my ratings rise, but because I was convinced that they were unavoidable and in the national interest.

Similarly, I addressed health reform, not from an abstract desire to do good, but because our dysfunctional health care system was dragging down the private sector, gobbling up wages, and destabilizing public budgets. I know that the legislative process was not pretty and that, understandably, many of you mistrust its results. Nonetheless, my duty to promote the general welfare left me no choice, and I am confident that when you experience the reformed system for yourselves, you will decide that it was worth it.

But the issue before us right now is no longer economic rescue; it is economic growth—the right kind of growth—growth that produces jobs, rising wages, and opportunities for advancement. That will be my administration’s principal domestic focus—for the coming year, and for as long as it takes until every American who wants work can find a job with a future.

During the coming year, that goal means, first, that we must assist states and localities so that they are not forced to fire hundreds of thousands of workers; second, that we must offer the private sector effective incentives to hire new workers; and third, that we must create a national infrastructure bank that will mobilize public and private resources to rebuild our crumbling roads, bridges, and ports . . . and boost investment in the environment and information technology as well.

As we work to raise employment this year, we must look down the road as well. While some deficit spending was necessary to avert catastrophe and remains necessary to jumpstart the economy, we cannot hope to sustain growth in the private sector if the federal government is running trillion dollar deficits as far as the eye can see. To make sure that doesn’t happen, I am announcing my support tonight for a bipartisan fiscal commission that would report its recommendations next December for a mandatory up-or-down vote in Congress early next year.

Fundamental tax reform is a key element of long-term economic health. Our current tax code is outdated in just about every way. Last year, I asked one of our country’s most respected economic leaders—Paul Volcker, the former chairman of the Federal Reserve Board—to lead a bipartisan task force on tax reform. I hope that the Congress will act favorably on its recommendations this year. And if not, I would ask the bipartisan fiscal commission to consider them for inclusion in its report.

Finally, we must make sure that our nation’s largest financial institutions use their power and privilege to help build our country, not to line their own pockets. Congress must overhaul our system of financial regulation—this year—to make sure that what happened in 2007 and 2008 never happens again. And let me be clear: These institutions owe their profitably—and their very existence—to the steps we took that put your taxpayer dollars at risk. If they choose to ignore their responsibilities to you and once again award themselves huge bonuses, I will work with the Congress to ensure that they change course. If they’re not willing to invest their profits in our country’s future, I’ll work to redirect these resources to institutions that are working, not just for themselves, but for you. Holy Scripture and common sense are at one: Greed is not good.

It is said, rightly, that to govern is to choose. I have chosen to focus my domestic agenda on the economy and jobs. Let me be frank with you: that means that many important matters must be postponed until our economy accelerates. I believe in cap-and-trade legislation to reduce the pace of climate change. I believe in a fundamental reform of our immigration laws. There will be a time for both. This year is not that time, because nothing must divert your elected representatives from acting on the measures our economy needs.

When Franklin Roosevelt delivered his first inaugural address to a nation mired in depression, he reminded us that “our common difficulties ... concern, thank God, only material things.” The same is true today. The current recession has not erased our history or undermined our spirit. Our capacity for innovation is unmatched. Our willingness to adjust, to reinvent ourselves, is as strong as ever. You need—and you deserve—policies that empower your strength, and leaders as committed to the future as you have always been. That is what I am offering tonight—not the path of least resistance and business as usual, but one that confronts our problems and rebuilds our country.

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