A Test for Obama’s View of a One-Term Presidency - This is the character test. In some respects, this is 'the 3 a.m. phone call.'

From The New York Times:

It was a year and a half ago when President Obama told Diane Sawyer of ABC News in an interview that he would rather be a good one-term president than a mediocre two-term president.

Now, coming off one of his worst weeks since taking office, Mr. Obama is nearing a decision on whether he really meant that. Is he willing to try to administer the disagreeable medicine that could help the economy mend over the long term, even if that means damaging his chances for re-election?

The Federal Reserve’s finding on Tuesday that there is little prospect for rapid economic growth over the next two years was the latest in a summer of bad economic news. One administration official called the atmosphere around the president’s economic team “angry and morose.”

There was no word on the mood of the president’s political team, but it was unlikely to be buoyed by the Fed’s assertion that the economy would still be faltering well past Mr. Obama’s second inauguration, should he win another term.

“The problem for Obama is that right now, the United States is either at a precipice or has fallen off it,” said David Rothkopf, a Commerce Department official in the Clinton administration. “If he is true to his commitment to rather be a good one-term president, then this is the character test. In some respects, this is the 3 a.m. phone call.”

Mr. Obama, Mr. Rothkopf argues, has to focus in the next 18 months on getting the economy back on track for the long haul, even if that means pushing for politically unpalatable budget cuts, including real — but hugely unpopular — reductions in Social Security, other entitlement programs and the military.

A longtime Republican strategist echoed Mr. Rothkopf. Charlie Black, a senior adviser to Senator John McCain when he ran for president, said Mr. Obama “has got two big problems” — the unemployment rate and the budget deficit.

“Frankly, there’s not a whole lot he can do about jobs now,” Mr. Black said. “But it would help if we got the deficit under control, and to do that, you’ve got to reform entitlements.”

For instance, he argued, Mr. Obama should tackle Social Security, leaving the system in place for those 55 and older but establishing means tests to determine benefits for those under 55. If Mr. Obama did that, Mr. Black said, “he could be a hero like Bill Clinton was when he negotiated with Trent Lott and Newt Gingrich” on the 1997 budget.

If Mr. Black’s take is correct and there is little the president can do about jobs, that is more bad news. In a New York Times/CBS News poll released last week, 62 percent of those responding said that creating jobs was the No. 1 priority, while only 29 percent said cutting the deficit should be the top goal.

But whether Mr. Obama focuses on a short-term stimulus like job creation or long-range steps like deficit reduction, he will still have to beg, exhort and threaten Congress to take action in a meaningful way.

“No matter what we do, it still takes two to tango,” said Dan Pfeiffer, White House director of communications. “And the Republican Party to date has been entirely unwilling to compromise in any way, shape or form to actually do the things it takes to tackle the big problems.”

According to a traditional story line, Mr. Obama’s hopes for a second term could be undercut as he is forced to defend politically unpopular proposals in an election year — and end up stonewalled by Republicans in the end.

Some of Mr. Obama’s political allies try to spin the story the other way, criticizing him for not coming out yet with public plans to both cut the deficit and stimulate the economy. They argue that the boldness of such steps could actually help him win a second term — or at least burnish his place in history. One Democratic adviser to the president, speaking on the ground of anonymity because he did not want to criticize Mr. Obama publicly, said, “He’s got to be willing to let the chips fall where they may.”

So far, White House officials said Tuesday, Mr. Obama has repeatedly been putting country over campaign, including canceling several Democratic fund-raisers in July when the debt ceiling negotiations were dragging on. And, they say, he is not shying from politically unpalatable choices, demonstrating his willingness during the debt ceiling negotiations to make cuts in entitlements and programs dear to the hearts of Democrats.

On Monday night, he did attend two fund-raisers in Washington (casting his re-election as an “unfinished project” at one) while on Thursday he will head to Michigan to make the case that his bailout program helped save the auto industry.

On Tuesday afternoon, the White House announced that Mr. Obama would be taking an “economic bus tour” in the Midwest next week, with stops in Illinois, Iowa and Minnesota. “The president knows we must do everything we can to promote economic growth, restore confidence in our nation’s future and restore the sense of optimism for future generations,” the statement said.

Though the trip is not a campaign event, it could help shape voters’ perceptions of whether Mr. Obama is more concerned about being remembered for that one good term or whether he wants another four years in the Oval Office no matter what.