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State of the Union: 5 key challenges for Biden as he delivers his speech

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President Joe Biden will face no small task on Tuesday night, when he delivers his State of the Union speech after a little more than two years in office.

Biden looks poised to tackle the debt-limit standoff, recession worries and acts of violence at home and abroad in his remarks.

At the same time, American presidents “can’t really alter the political environment fundamentally when they speak,” said Julia Azari, a professor of political science at Marquette University.

“But Biden can signal to his political coalition what his priorities will be,” Azari told MarketWatch in an email.

“The other framing is what issues might Biden think will give him a political advantage over Republican opponents,” she also said.

Below are five challenges that Biden is facing ahead of his primetime address before a joint session of Congress, along with how he could tackle them.

The speech comes as the 46th U.S. commander-in-chief appears set to announce in early spring that he’ll run for president again in 2024.

Debt limit

“The debt limit is certain to be the president’s top issue,” said Jonathan Bydlak, director of the governance program at the R Street Institute, a right-leaning think tank.

Bydlak said he expects Biden in his speech will continue asserting that he won’t negotiate over raising the ceiling for federal borrowing with the Republican-run House of Representatives, where lawmakers want spending cuts in exchange for the hike. The standoff threatens to shake markets
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later this year, if a divided Washington can’t make a deal and prevent a U.S. default.

See: Why the U.S. debt ceiling is already worrying stock and bond investors

Also read: U.S. runs up against its debt limit, so Treasury starts using ‘extraordinary measures’: Here’s what that means

“I would prefer to see the president take the high road and express a willingness to work across the aisle,” the R Street expert added. “The nation’s finances are poor at the moment, after years of escalating spending under both Presidents Biden and Trump, and it could easily be a feather in his cap if he worked to control federal spending after four years of fiscal excess under Trump and the first two years of Biden’s own presidency.”

Kim Wallace, senior managing director at 22V Research, said it’s still early days for this issue, and he expects a resolution later this year. Wallace is among the analysts who think it’s likely that Congress will end up kicking the can down the road, so a key deadline for the debt limit aligns with spending negotiations near the end of the federal government’s fiscal year on Sept. 30.

Speaker Kevin McCarthy speaks with reporters as he walks to the House floor on Jan. 11.


AP

“Democrats get to say, ‘We didn’t negotiate the debt ceiling.’ Republicans can say, ‘We forced the negotiation on spending, and that gave us the comfort to accommodate Treasury’s borrowing.’ I don’t think this is as complicated as people want it to be,” said Wallace, a former Obama Treasury official, in an interview.

On Wednesday, House Speaker Kevin McCarthy said he was optimistic about finding “common ground” with Biden over the debt ceiling after the two met at the White House, but the California Republican refused to reveal specific budget cuts he is seeking.

Recession fears, other economic concerns

Some economists say a recession might be underway or likely to take place quite soon, as rising interest rates orchestrated by the Federal Reserve to tame high inflation have hit growth.

So while the debt limit looks like the No. 1 issue for Biden, the president is “also likely to dedicate significant time to reassuring Americans about the state of the economy more generally,” said R Street’s Bydlak.

“Inflation, while coming down, is still high, and there are fears about the possibility of a recession during the next year,” he told MarketWatch in an email.

“I suspect he will point to figures that paint a rosier picture of the current state of the economy, such as mostly strong job numbers despite recent layoffs in the tech
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and financial
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sectors.”

Read more: Unemployment claims fall to four-month low, as U.S. jobs market remains strong

Another possible speech topic also is tied to helping everyday Americans.

“He’s very likely to point to an administration-wide view that competition policy should be updated to have a different analysis of consumer harm and benefit from what has dominated antitrust agencies this century,” 22V’s Wallace said.

“I don’t think there’s a chance he’s going to conclude his State of the Union remarks without discussing competition policy.”

Related: Biden administration moves to crack down on ‘excessive’ credit-card late fees

Classified documents

Biden is dealing with a Justice Department probe into classified documents found at his Delaware home and at his office at a think tank, with the situation spurring comparisons to former President Donald Trump’s mishandling of top-secret papers.

See: What to know about the Biden classified documents

As Biden’s State of the Union speech gets planned, some in the Biden White House “may want him to confront the issue more directly and take responsibility,” said Marquette’s Azari.

Another possibility is that Biden could “gamble on the possibility of deflection, pointing to the contrast between his handling and Trump’s,” she said. “He tends to like to draw that contrast, and it has worked well politically in the past.”

22V Research’s Wallace and R Street’s Bydlak said Biden probably won’t bring up the documents probe in his address.

“This is not a winning issue for the president, because — rightly or wrongly — it is easy for Republicans to highlight the differences in how the two breaches were handled,” Bydlak said.

Reforms aimed at policing, gun violence

The death last month of Tyre Nichols in Memphis, Tenn., after he was beaten by police officers, has revived calls for policing reform, even as past bipartisan talks in this area haven’t produced a deal.

RowVaughn Wells, mother of Tyre Nichols, a Black 29-year-old who died after being beaten by Memphis police officers, is comforted by Tyre’s stepfather, Rodney Wells, at a news conference in late January.


AP

How to approach policing is one of the most tense issues among Democrats at the moment, Azari said. She pointed out that Biden said in his State of the Union address a year ago that the solution was to “fund the police.”

“How will he approach this issue with Nichols’ family in attendance at the speech?” the Marquette professor said.

Related: Tyre Nichols’ parents to attend Biden’s State of the Union speech 

In addition, as Biden looks for topics that give him an edge over the GOP, he could focus on gun violence, according to Azari. It’s an issue “where majorities support some changes to the status quo,” she said.

R Street’s Bydlak also said Biden is likely to talk about gun violence after last month’s attacks in California. 

See: Suspect in Half Moon Bay massacre was employee with history of violence

Also: Asian Americans felt cultural pride in Monterey Park. Now they say a mass shooting robbed them of its special place in their heritage.

Russia and its war on Ukraine

Biden probably will talk extensively about the war in Ukraine and continue to make a case for U.S. involvement given increasing opposition among Republicans, according to Bydlak.

McCarthy warned in October that the GOP would not write a “blank check” for Ukraine if the party won a majority in the House in November’s midterm elections.

22V Research’s Wallace noted the intelligence community’s annual report in three successive administrations has identified Russia
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and China
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as the most urgent threats to American national security and economic security.

Biden is “highly likely to comment on that and explain, for example, that’s why his Department of Commerce’s export control strategy is important and includes allies like Japan, the Netherlands and South Korea,” he said.

Now read: Why is the U.S. sending Abrams tanks to Ukraine, and why is it significant?

And see: U.S. Treasury Secretary Yellen and China Vice Premier Liu aim to ease tensions in first face-to-face meeting

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