Against the backdrop of a stalling economy and worldwide security challenges, President-elect Barack Obama will soon deliver his first State of the Union or budget message to Congress. The annual address represents an early opportunity for the new administration to chart its course in the face of numerous challenges. At an AEI event, the Institute’s scholars will preview foreign and fiscal policy issues that are sure to be central to the president’s address.

Obama seems poised to reformulate the United States’ foreign policy, particularly in the Middle East and Afghanistan. The administration will likely seek to cajole Iran into abandoning its nuclear ambitions, coax Syria into abandoning its revisionist history, and repair America’s image in the Arab world by pushing for a settlement to the Israeli-Palestinian conflict. But how realistic are these endeavors, given recent events in Gaza and estimates that Iran is less than a year away from a nuclear weapon? In addition, old challenges persist as Russia attempts to pull its former satellites back into its sphere of influence and as China’s intentions darken the horizon. 

It is expected that the economy’s slide into a deep recession will make economic policy the centerpiece of the Obama administration. How will the new administration’s approach to the financial crisis differ from the Bush administration’s policies? What will the stimulus package entail? Will it include nontraditional provisions like mortgage-refinancing measures? And how will the deepening recession affect Obama’s ambitious promises for health care reform?  

These and other questions will be the subject of two panel discussions.