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As the pundits finish digesting and reviewing the President’s Oval Office address from last night, the Lexington columnist over at The Economist argues that the American voter will be largely judging congressional Democrats (as the proxy for the President) on issues other than the administration’s response to the situation in the Gulf of Mexico.

Instead, the magazine (yeah, yeah, yeah, I know newspaper is the prefered term) argues that the 2010 election will be determined by how the American voter views responds the Administration’s three signature policies: the stimulus, Afghanistan and healthcare reform.

Indeed, The Economist argues…”He will decide the fate of his presidency. You could in fact argue that he has decided it already, by placing three huge and deliberate bets during his first year and a half in office. What he is mainly doing now is waiting to see whether they come good or not.”

Of the three issues, The Economist believes healthcare may be the most troublesome.  And the administration knows this.

This [healthcare] has already been inscribed in White House lore as a magnificent victory, snatched in the spring of this year from the mouth of defeat by a combination of presidential fortitude and congressional ingenuity (or stubbornness and rule-bending, as Republicans see it). Posterity may indeed one day thank the president for taking America a giant step closer to entrenching the principle of universal health coverage that other rich countries take for granted. But posterity has no vote. And as November’s mid-terms approach, polls suggest that most Americans will not be thanking the president for health reform when they go into the voting booth.

Far from delivering a gain, health reform could well turn out to be a negative, at least for the mid-terms. When the Democrats won a victory last month by holding a white working-class district in a special election in western Pennsylvania, their own candidate felt obliged to assure angry voters that he for one would have opposed Obamacare if he had been in Congress at the time.

By the president’s own account, health reform is his proudest achievement, one that would justify his election on its own. And yet it has attracted criticism from every point of the spectrum. Conservatives denounce a budget-busting government takeover. Many on the left who made a fetish out of the so-called “public option” will not forgive Mr Obama for ditching it. And a lot of voters in the middle have reason to suspect that the Patient Protection and Affordable Care Act, as the legislation is known, is not as affordable as the president claims, especially after so many measures to “bend the cost curve” were left on the cutting-room floor as the measure made its tortuous way through Congress.

Is it far-fetched to argue that having cast his main bets Mr Obama can now do nothing except await their result? Of course. He can, for a start, work harder to explain them. The president did not expect health reform to go down like this. Once it was passed, he predicted in the spring, Americans would wise up to the lies of the Republicans and see that “nobody is pulling the plug on granny”. Now that spring has given way to summer, the White House has embarked on yet another campaign to hasten the voters’ understanding. Mr Obama visited an old folks’ centre in Maryland to spell out the excellence of the forthcoming changes. But voters, not being stupid, are not so sure. This is complex legislation whose full costs and benefits will take years to be seen.

The Economist is not alone in this thinking.  This week, Time ran a story that further outlined how the legislation will may be a political minus for the Democrats in the mid-terms.   As Kate Pickert points out, millions will be spent on this issue trying to affect public opinion.  In the middle, as usual, are conservative and moderate Democrats in swing districts that are key to helping the Democrats retain majorities in both houses.

It will be fasciniating over the next five months or so to see how the both sides play the public relations game.  As both articles note, the Administraton has tried to go on offense on this issue.  This effort will be supported between now and Election Day by several big-dollar interest groups and, despite the recent schism over Arkansas, organized labor and much of the NetRoots.  The Republican and business groups have already started their campaign to make the legislation a political liability with The Wall Street Journal editorial page, The Daily Caller, commentators on Fox News and Fox Business and other members of “the usual suspects” already leading the way.  As the polls show, the oppostition starts out with the advantage.

The Obama administration came into power with experts saying that the Obama campaign had rewritten the rule book on how to conduct a political campaign.  However, as administration staff and their supporters quickly found out, it is much harder to conduct similar campaigns from inside the halls of power.  The question remains, have they learned to adapt?  So far, the answer is largely no.  If they are unable to turn the current situation around, one of the Obama administration’s signature accomplishments may end up being the millstone around the Democratic Party’s political fortune.

Earlier today, Jared Cohen, a member of Secretary of State Hillary Clinton’s Policy and Planning staff, spoke at an Ogilvy Exchange presentation on how the State Department is using social media and other Web 2.0 technologies as part of everything it does, ranging from counter-narcotics in Mexico to crisis response in Haiti to advancing social issues in Russia.  C-SPAN covered the speech and we will post a link to the presentation when it becomes available. 

However, in the interim, Jason Miller of Federal News Radio (WFED-AM in Washington) attended the speech and presented a long report on this afternoon’s DorobekInsider program.  The segment runs about 10 minutes.

Again some recent items from the week past…

U.S. News‘ “Washington Whispers” notes that the Government Accountability Office (GAO) has found that the Pentagon’s Iraq PR campaign to reach out to former military officials “did not violate the publicity or propaganda prohibition.”  The GAO report, which was released back on July 21, received minimal media attention.  A Google News search only found articles from the Associated Press and The Hill, along with pieces in some smaller trade publications.

In regard to the program, U.S. News further reports,

The GAO report, signed by Acting General Counsel Daniel Gordon, was requested by House and Senate Democrats who were concerned that the Pentagon was violating a law that prohibits using appropriations for propaganda. The GAO said that, unlike propaganda, the retired officers program was about helping pundits tell the straight story about the wars. “Federal agencies have a responsibility to inform the public about their activities and programs, explain their policies, and disseminate information in defense of those policies or an administration’s point of view,” the report said.

That said, the GAO did make one recommendation…

While DOD understandably values its ties with retired military officers, we believe that, before undertaking anything along the lines of the now-terminated program at issue in this decision, DOD should consider whether it needs to have additional policies and procedures in place to protect the integrity of, and public confidence in, its public affairs efforts and to ensure the transparency of its public relations activities.

The program created a huge brouhaha when David Barstow of The New York Times originally reported it in April 2008 and the reporting won a Pulitzer Prize.  I have to admit that I am cynical by nature, but I have to admit was I underwhelmed by the story (its follow-up that focused on Gen. Barry McCaffrey’s business dealings, which was also addressed in the GAO report, was much more interesting).  As one whose firm does government public relations work and as one who has a government client, I’ve always felt that much of the criticism of the government’s use of traditional public relations tactics and public relations firms was misplaced.  Sure, there have been times when the line between public relations and propaganda has been crossed, but in vast majority of cases I find it sour grapes when groups complain that the government uses traditional public relations tactics or firms to make its case.

As I mentioned on my earlier Twitter post, it will be interesting to see how Congress reacts to this report.  According to The Hill, Sen. Russ Feingold’s office had no immediate statement on it and, as of this morning, no statement appears on the Senator’s home page.

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The Times had a fascinating front pager yesterday in regard to the apparent cease fire between Fox News Channel’s Bill O’Reilly and MSNBC’s Keith Olbermann.  The hosts’ bosses at  General Electric and News Corporation agreed to have the hosts of their respective 8 PM cable news shows stop taking swipes at each other (or, in the case of O’Reilly, General Electric).

For those who have not been following the feud, here is a short recap.  Olbermann, the ratings underdog, began by regularly challenging statements that O’Reilly made on his program.  O’Reilly then retaliated by going after NBC News’ objectivity and, more importantly, General Electric’s business practices (although not usually referring to Olbermann by name).  This led to a scene earlier this year when MSNBC critics (with an O’Reilly producer present) brought up many of O’Reilly’s complaints at a General Electric stock holders’ meeting.  Those questions stopped when General Electric turned off the microphones.

I think first and foremost, the thing to remember is the the key word here is “apparent.”  As Olbermann told the Times, he was not a party to the deal.  Moreover, should a deal exist, it has not stopped other Fox hosts going after NBC and General Electric and other MSNBC hosts from going after Fox hosts, such as Glen Beck.  Nor should they.

Moreover, the deal doesn’t seem to cover other corporate entities — the New York Post recently went after MSNBC’s David Shuster over an alleged tantrum.   In short, both networks have had their share of cringe inducing moments and even if they aren’t brought up between 8-9 PM ET, they get coverage elsewhere.

In the end, I don’t see many of the big journalistic crises that others, such as Aaron Barnhart of the Kansas City Star, Salon’s Glen Greenwald and the team at Mediaite (run by MSNBC contributor Dan Abrams), do.

Would I like to have seen the feud continue.? Not really.  It has long since become tiresome, especially on Olbermann’s part.

Does it reinforce some of the talking points that Greenwald and others make about “corporate media?”  Yeah.  But there is nothing stopping others, including others at MSNBC, from picking up Olbermann’s mantle (assuming he agrees to the terms of the deal).

Is there a winner here? Yes. Fox. The story makes it seem like General Electric sued for peace which means O’Reilly’s tactic of going after Olbermann’s employer worked.  It also puts Olbermann, MSNBC’s most popular host, in a pickle.  If he abides by the deal, he looks like he was muzzled and it hurts his credibility with his  fan base.  If he doesn’t, then he gives O’Reilly an excuse to go back after General Electric.

FWIW, Barnhart also links to Olbermann’s ratings over the past year click here.  In short, Olbermann is back to about where he was this time last year.

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In his question of the day, Marc Ambinder of The Atlantic asks if the White House can turn around the health case debate in the next three weeks.

With the House having gone home for August recess and the Senate scheduled to do so at the end of the week, look for the war over health care to continue back in the states.  I think the President and the Democrats have a lot of work to do to repair the damage that has been done to their position, as evidenced by the polls.  But I wouldn’t count them out.  Led by Speaker Nancy Pelosi, look for a lot of Democrats to go after insurance companies.

As Politico reported this morning, expect the insurance companies to push back (emphasis in the original)…

EXCLUSIVE — FOOD FIGHT AT THE TABLE — THE HEALTH INSURANCE INDUSTRY, LONELY IN THE LEGISLATIVE CROSSHAIRS, IS STARTING TO PUSH BACK, ACCUSING DEMOCRATS OF USING INSURERS AS A SCAPEGOAT — America’s Health Insurance Plans (AHIP — the national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans) is urging the industry’s hundreds of thousands of employees to GO TO TOWN MEETINGS WITH MEMBERS OF CONGRESS IN AUGUST TO CONFRONT THEM on House Democrats’ top recess message — that health-reform legislation is “health insurance reform to hold insurance companies accountable.” The association’s positive TV ad will continue into this week, but look for the spots to toughen up soon.

AHIP’s director of strategic communications, Robert Zirkelbach, tells Playbook: “The American people want Washington to focus on solutions, not the same old divisive political rhetoric that hasn’t worked in the past. Our industry has offered to completely transform how health insurance is provided today. We have stepped up to do our part to make health-care reform a reality. That’s an INCONVENIENT FACT that some people have chosen to ignore. These attacks are politically motivated, and they ignore the significant commitment that our industry has made to the health-reform process. WE’RE GOING TO BE VERY ACTIVE. We have people on the ground in more than 30 states. There are thousands of industry employees WHO HAVE NOW HAD THEIR INTEGRITY CALLED INTO QUESTION. They want to have their voices heard as part of this.”

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While much of the attention has been paid to how the Democrats fight back on health care, I think the more interesting battle to watch is whether the Democrats start an internal civil war with the liberal wing of the party going after the more centrist wing (not just the House Blue Dogs).  Last week alone, Sen. Tom Harkin suggested that the Senate Democrats vote on committee chairmanships by secret battle, a not not-to-subtle threat to Sen. Max Baucus, who helped broker the Senate Finance Committee’s reported deal.  In the House, Rep. Maxine Waters suggested that the liberal wing of the party run liberal candidates in the upcoming Democratic primaries in an effort to elect candidates who are, well, more liberal.

This threat is not new, although much of the attention was paid in recent elections when conservative Republicans ran a similar campaign against moderate Republicans (see Lincoln Chaffee, Wayne Gilchrest and, most recently, Arlen Specter).  In 2008, the liberal wing of the Democratic party unseated Rep. Al Wynn of Maryland and threatened to go after other Democrats who were not viewed as sufficiently anti-war.  A recent cover story in National Journal noted that the elements in the party were working on a campaign to repeat the Wynn case in 2010 as part of an overall attempt to reduce the influence of the moderate wing of the party (including trying to undercut the legacy of the Clinton administration).

This strategy did not work well for Republicans.  It will be interesting to see if the Democrats follow a similar path.

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The first NFL preseason game is next Sunday night — not a moment too soon.  Yes, I AM ready for some football.

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For daily thoughts that are 140 characters or less, check me out on Twitter @gregstanko