- Associated Press - Sunday, December 25, 2011

Fighting to win over unhappy American voters, President Obama and his Republican challengers are seizing on one of the most potent issues this election season: the struggling middle class and the widening gap between rich and poor.

Highlighted by the Occupy movement and fanned by record profits on Wall Street at a time of stubborn unemployment, economic inequality is now taking center stage in the 2012 presidential campaign, emphasized by Mr. Obama and offering opportunities and risks for him and his GOP opponents as both sides battle for the allegiance of the angst-ridden electorate.

For Mr. Obama, who calls boosting middle-class opportunity “the defining issue of our time,” the question is whether he can bring voters along — while parrying GOP accusations of class warfare — even though he’s failed to solve the country’s economic woes during his first term in office.

For Republicans, Mr. Obama’s potential vulnerability gives them an opening, but they also must battle perceptions that their policies favor the wealthy at a time when voters support Mr. Obama’s call to raise taxes on the very rich. Mitt Romney has already made clear he’ll resist Mr. Obama’s attempts to capitalize on the issue, adopting the language of Occupy Wall Street in an interview with The Washington Post this month during which he called the president “a member of the 1 percent.”

For both sides, the question is how to find political advantage in light of a weak economy with unemployment above 8 percent. Since Mr. Obama is expected to run for re-election with higher unemployment than any recent president, even if the economy continues to show signs of improvement, he must aim to set the terms of the debate in a way that helps him and hurts the GOP — while Republicans will be working just as hard to deny him any advantage.

The president won a year-end victory Friday with the passage of a two-month extension of a payroll-tax cut that had bipartisan support in the Senate.

The measure will keep in place a 2 percentage-point cut in the Social Security payroll tax — worth about $20 a week for a typical worker making $50,000 a year — and prevent almost 2 million unemployed people from losing jobless benefits averaging $300 a week.

House Republicans had unsuccessfully pushed for further negotiations toward a yearlong extension, which allowed Mr. Obama to argue for the two-month extension of the tax cuts and prevention of a pending tax increase. The two sides resume discussions on the payroll-tax cut early next year.

Mr. Obama’s campaign pressed its economic argument Friday in an op-ed by Vice President Joseph R. Biden in the Des Moines Register where Mr. Biden, taking direct aim at Mr. Romney, wrote that the former Massachusetts governor “would actually double down on the policies that caused the greatest economic calamity since the Great Depression and accelerated a decades-long assault on the middle class.”

Mr. Romney, campaigning in New Hampshire, quickly countered that it’s Mr. Obama who is hurting the country and expressed astonishment that Mr. Biden would have the “chutzpah” to write such a piece. “This president and his policies have made it harder on the American people and on the middle class,” Mr. Romney said.

It was a preview of an argument certain to carry through the 2012 race, as the Obama campaign, viewing Mr. Romney as the likely GOP nominee even before any votes have been cast, works vigorously to define him early on, and Mr. Romney does everything he can to resist.

And the dispute taps into a striking reality. After-tax income grew by 275 percent between 1979 and 2007 for the top 1 percent of the population, the nonpartisan Congressional Budget Office found in a report this fall. But for the 20 percent of the population making the least money, income growth over the same period was only 18 percent.

Mr. Obama “is viewed as more likely to help the middle class than is the GOP, so he can capitalize on this by playing on concerns about inequality and contrasting his positions and the GOP’s on issues like tax cuts for the wealthy,” John Sides, political science professor at George Washington University, wrote in an email. “It’s an open question whether that strategy would enable him to overcome a weak economy and win.”

Aides say Mr. Obama has long been concerned with economic inequality given his background in community organizing. But he brought the issue into much sharper focus in a speech in Osawatomie, Kan., earlier this month, where he reprised a populist message delivered in the same town by Theodore Roosevelt decades ago, and decried a growing inequality between chief executives and their workers.

The issue has become a rallying cry of the Occupy movement that has swept the country, with activists proclaiming they are the “99 percent,” as opposed to the “1 percent” at the top. And Obama advisers have identified this sense of inequality as the strongest current running through politics, one they will be focusing on through Election Day.

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