Now that President Obama has (presumably) dispatched the questions about his birthplace, the White House may have more time to focus on graver threats to his reelection.

Like this paradox: Many of the groups that Obama needs to turn out most enthusiastically in 2012—particularly young people, African-Americans, and Latinos—are still suffering the most as the economy crawls back from the Great Recession. That dynamic looms like a crack in the foundation for Obama’s reelection, which relies on those groups surging to the polls in 2012 after their participation sagged even more than usual in the 2010 midterms.

The continued strain on the groups at the core of Obama’s coalition underscores the political stakes in his recent turn toward deficit reduction. Obama’s pledge to reduce the deficit by about $4 trillion over the next 12 years has allowed him to shift the debate from whether to reduce the deficit to how. That’s much stronger terrain for Obama and Democrats—as demonstrated by the sharp backlash many congressional Republicans faced in town halls this week over the GOP’s proposal to convert Medicare into a voucher (or premium support) system.

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But many liberal strategists fear that Obama could win this battle and lose the war in 2012. These critics argue that the tactical benefits of embracing greater deficit reduction come at a high cost: By agreeing that Washington must tighten its belt, the president has essentially precluded additional large-scale government efforts to stimulate growth and create jobs. “You are really conceding whatever the growth we have is the growth you are going to run with—and maybe even a little less, because you are going to start cutting spending,” says veteran liberal activist Robert Borosage, codirector of the Campaign for America’s Future.

To Borosage and like-minded critics, that means Obama is consigning himself to relatively high levels of unemployment in 2012. The risk is especially great among the groups that Obama most needs to mobilize. In the latest federal figures, unemployment stood at 15.5 percent among African–Americans, 13.4 percent among young people, and 11.9 percent among Latinos. In each case, those figures are down since January but still higher than when Obama took office—and considerably higher than among whites (8.3 percent).

Belt-tightening precludes additional government stimulus efforts.

The Economic Policy Institute, a left-leaning think tank, recently analyzed the trends in greater detail. Its findings should chill the White House. Unemployment among workers younger than 25 with only a high school diploma averaged almost 23 percent in 2010—nearly double the level in 2007. Even among workers that age with a college degree, unemployment has averaged nearly 10 percent over the past year. There are enough Latinos in 15 states for the Bureau of Labor Statistics to track their job status; in 12 of them (including such battlegrounds as Colorado, Florida, and Nevada), the Latino unemployment rate exceeded 10 percent last year. In all 23 states in which there are enough African Americans to reliably measure unemployment, the average rate last year exceeded 10 percent; in 17 of them, it exceeded 15 percent.

The pain in these communities extends beyond unemployment to a historic liquidation of wealth. Census figures, for instance, show that homeownership rates have declined significantly faster among both African-Americans and Latinos than whites.

In 2008, Obama won three-fifths of voters under 30, two-thirds of Latinos, and 95 percent of African-Americans. With his support among older and blue-collar whites eroding, he needs big showings among all those groups again in 2012.

There’s no sign of wavering in Obama’s black support. But in 2010, exit polls found that the Democratic vote in House elections dipped among both young people (to 55 percent) and Latinos (to 60 percent). In Gallup’s weekly averages of its tracking poll, Obama’s approval rating has reached 60 percent among Latinos only once since January—and has never been that high among young people. His ratings among both groups have fallen below 50 percent over the past two weeks; among Latinos, he’s at his lowest level ever.

Against those warning signs, the White House is betting that these young and minority voters will mostly look forward, not back, as they choose in 2012. Recent Gallup polling shows that while young people and minorities are more negative than older whites about their current economic circumstances, they are also more optimistic about their financial future. One senior White House official argues that such optimism suggests a residual faith in Obama. The president will also benefit, the official maintained, from drawing contrasts with a GOP nominee likely to be tugged toward conservative positions on issues ranging from immigration reform to retrenching student loans. Previewing a likely Obama case, the official argued: “These are also the people who will be hurt most by the policies of our opponents.”

Those are plausible arguments. But second-term presidential elections almost always unfold less as a choice than as a referendum on the incumbent. And that means Obama has placed a huge wager by embracing a fiscal strategy that denies him many tools to directly address the continuing struggles of African-Americans, Latinos, and young people. They may be at the margin of the economy, but they’re at the center of his electoral coalition. 

This article appeared in the Saturday, April 30, 2011 edition of National Journal.

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