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Obama Returns From Asia to New Domestic Reality

Obama Returns From Asia to New Domestic Reality

By Scott Conroy - November 15, 2010

Returning to Washington on Sunday after a 10-day Asia trip that was marked by a pair of key setbacks on international economic issues, President Obama said that even though the U.S. has gone through a tough two-year period, America's preeminent position on the world economic stage has not been forgotten.

"I think everywhere in Asia, what I heard from leaders and people is that we are still central, and they want us there," Obama told reporters aboard Air Force One.

Obama added that his second big takeaway from the trip was that the U.S. would need to revamp its efforts to compete with the Asian countries economically.

"All of them recognize how competitive things are and that they are thinking each and every day about how to educate their workforce, rebuild their infrastructure, enter into new markets," Obama said. "And we should feel confident about our ability to compete, but we are going to have to step up our game."

After the beginning of his trip coincided with positive news -- the announcement of new trade deals between India and American corporations and an expansion of U.S. exports -- Obama was forced to push back against a growing narrative that his four-nation tour had been overshadowed by disappointments that came with his visit to South Korea.

Obama and South Korea President Lee Myung-bak were unable to announce a free trade agreement that was widely expected to be finalized, and the White House was rebuffed on its condemnation of China's currency devaluation at the G-20 summit.

Obama will have little opportunity to rest and reflect on his trip as he returns to the fallout from the midterm elections that saw congressional Democrats suffer a string of defeats and lose control of the House. On Thursday, Obama will meet with congressional leaders from both parties, including Republican Rep. John Boehner, the likely next House speaker, and Senate Minority Leader Mitch McConnell.

Asked about his mindset in approaching the meeting, Obama said that while Republicans were "still flush with victory," Americans expected constructive engagement between the two parties, rather than gridlock.

"There are going to be some disagreements," Obama said. "There may be some need for compromise, but we should be able at least to get through the lame duck, making sure that taxes don't go up for middle class families starting January 1st, that some of the key business provisions that can assure economic growth get done. And then we're going to have a whole bunch of time next year for some serious philosophical debates."

Obama also pushed back on the suggestion that he had settled on compromising with Republicans on extending the Bush tax cuts for everyone but continued to indicate that he was open to such an outcome.

"I believe it is a mistake for us to borrow $700 billion to make tax cuts permanent for millionaires and billionaires -- it won't significantly boost the economy, and it's hugely expensive, so we can't afford it," Obama said. "Now I know this is something that, during the campaign at least, the Republicans expressed some strong feelings about. I want to hear from them how strongly they feel about it, particularly given that they're also saying they want to control the deficit and debt. And if they feel very strongly about it, then I want to get a sense of how they intend to spend -- how they intend to pay for it."

After his meeting with congressional leaders on Thursday, Obama will head out of the country once again as he departs for a NATO summit in Lisbon, Portugal. The two-day Portugal trip will be another opportunity for the president to demonstrate that his foreign clout has not been weakened in spite of his party's political defeats back home.

Along with addressing the progress of its mission in Afghanistan, NATO leaders will discuss the alliance's evolving relationship with Russia, and Russian President Dmitri Medvedev will attend meetings personally.

Obama previewed the Lisbon summit in a preliminary meeting with Medvedev in South Korea, calling passage of the START nuclear weapons reduction treaty, which has been lagging in the Senate for months, a "top priority."

Obama said that he felt "reasonably good" about the prospects of the Senate passing the treaty during the impending lame duck session, noting that it had bipartisan committee support.

"My hope and expectation is that, given this is a good treaty, given it has the support of previous Republican senior government officials, that we should be able to get it done," Obama said.

Scott Conroy is a national political reporter for RealClearPolitics. He can be reached at sconroy@realclearpolitics.com. Follow him on Twitter @RealClearScott.

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