David Frum: Obama Needs Moderate Republicans

The Republican base is divided into two main types: old-style and new-style.

Old-style Republicans are your father's Republican: affluent, credentialed, secular.

New-style Republicans are those who have joined the party since the 1960s: less affluent and more religious.

In 2008, Candidate Obama succeeded in winning the first group: college-educated whites outside the South, voters who earned more than $200,000. He gained the support of business leaders like Bill Gates and Warren Buffett—and of more than one immediate family member of past chairs of the Republican National Committee.

But that was then.

In the exit polls after the special election to fill the Massachusetts U.S. Senate seat, Obama's advisers discerned a frightening trend: white working-class voters in this once solid Democratic state have turned massively against the president and his party. The president's support has eroded among old-style Republicans—and collapsed among the new-style ones.

The State of the Union address presents the president with an opportunity to reach out to these two constituencies, and he has a message for each.

For old-style Republicans, concerned with fiscal responsibility, he offers a budget freeze. OK, more like a budget Slushie than a freeze. The freeze goes into effect after one more year of increased spending. It does not apply to defense, interest on the debt, or entitlements: in other words, to 80 percent of the federal budget. And it's not so much a spending cap as it is a resolution to balance further spending increases with offsetting spending caps. It's like committing to a diet that begins a year from now but only after 8 p.m., and then allowing yourself to eat more on Mondays if you pinky-promise to eat less on Tuesdays.

For new-style Republicans, squeezed by recession, debt, and foreclosures, the president will offer a reauthorization of President Bush's child tax credits otherwise scheduled to expire this year. (The president won't mention the Bush name, of course: the measure will be described as if it were an all-new idea.) The president will excoriate banks and generally promise to "fight" for middle-income people—amplifying the themes road-tested in his speech in Elyria, Ohio.

Any prospects for success? Probably not much.

The new-style Republicans are looking for economic results. The high unemployment rate weighs heavily on blue-collar communities. One in five working-age men is out of work. Unemployment now endures for 29 weeks on average, the longest since record keeping began in the 1940s. Obama's stimulus invested less in direct job creation, much more in supporting states to avoid layoffs of government workers. But the state workforce is concentrated in education and health care: white-collar and pink-collar work, not blue-collar.

And Obama's newfound anti-bank rhetoric is glaringly difficult to reconcile with his policies aimed at socializing financial losses and restoring bank profitability. Nor is it remotely clear that the grumbling at financial profits translates into any demand for a political attack on financial institutions, as Democrats since Walter Mondale have painfully learned again and again and again. Bill Clinton was much more successful with blue-collar voters than Barack Obama, and yet it was Clinton who defied the populism of Ross Perot to pass NAFTA and who balanced the budget.

Meanwhile, old-style Republicans are looking at the future with anxiety. It's not just this year's deficit: it's the long-term budget trajectory to a future in which people like them will face higher taxes and lower returns from government.

The Bush tax cuts for them will expire soon. They face the cancellation of their tax deductions for charitable giving—and they have to wonder whether they won't be losing other tax deductions soon. The home-mortgage deduction was capped at the $1 million level in 1987. Many liberal economists have urged lowering the cap to $730,000, the maximum level of a Fannie Mae conforming loan. That could offer a welcome source of revenue for a hard-pressed second Obama administration.

Unless they timed their stock buying very cleverly, America's upper-middle class denizens are probably 30-40 percent poorer than they were two years ago. The stock market has recovered, but their losses on their houses will not soon return. What does the president have to offer them?

The president's core problem is this: what persuadable Republicans want from him is the direct opposite of what his most fervent supporters want. The persuadables want Clinton-style economics; the fervents want share-the-wealth. The persuadables want health-care reforms that protect their medicine and hold the line on costs; the fervents want more generous coverage for the excluded, at the expense of those now getting a good deal. The persuadables want unity and conciliation; the fervents want sharp contrasts.

When confronted with contradictions like these, the greatest Democrat of them all, Franklin Roosevelt, would airily instruct his aides: "Weave them both together." Somehow he did it too.

Could Obama do the same? Well, maybe. To do so he would have to jettison the scapegoat hunting of his recent speeches and rediscover the unity themes of his great 2004 address to the Democratic National Convention. He'd have to remember that he's not the president of the liberals, but of everybody—and that his job is not to identify substitute targets for blame, but solutions to the problems that beset the country as a whole.