It seems likely that Obama will attempt to set the stage for the 2014 midterm election campaign with an address focused squarely on income inequality and lack of upward mobility for those in middle and lower income brackets.
(Read more: Obama, Ryan wrong on upward mobility, study finds)
He's likely to make a renewed push to extend unemployment insurance for the long-term jobless and urge a hike in the federal minimum wage to $10.10 or more. Liberal groups want him to announce that he plans to unilaterally raise the minimum wage for employees of federal contractors.
Expect more talk of public-private partnerships to boost job creation, especially for the 4 million out of work for a year or more.
Obama is also is likely to cite the currently dropping federal deficit as evidence that the move toward budget cuts that he helped engineer in his 2010 State of the Union address has gone too far and that it's time to worry about creating jobs, something he believes entails more federal government spending.
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Much of what the president will tout—including extending jobless benefits and hiking the minimum wage—is politically popular. And thus far, Republicans have not been successful at presenting a unified alternative vision for creating upward mobility and faster job growth through tax relief, school choice and less government regulation, or some combination of those.
But Obama also risks tacking too far left and setting the Democrats up for disappointment in the Senate races they need to win to avoid a nightmare final two years in which the GOP controls both houses of Congress.
(Read more: Don't tear down the rich: Larry Summers)
If Obama casts aside the budget deficit and $17 trillion national debt he will be at odds with the American people. According to Gallup, Americans view the "economy in general" as the nation's biggest problem followed by the "federal budget deficit" and "dissatisfaction with government." Unemployment ranks fourth.
(Read more: Republicans seek own policy cure to replace Obamacare)
And while the near-term deficit picture has improved following the budget cuts and tax hikes of 2011 and 2012 (dropping to 4 percent of GDP from 10 percent in 2009), the longer-term outlook is still incredibly grim. By 2038, the Congressional Budget Office projects federal spending will equal 26 percent of GDP, well above the 20 percent average of the last 40 years. Much of this will be due to federal spending on Social Security, Medicare and Medicaid.
Americans are still very worried about the nation's long-term fiscal future even if the activist left is not and ridicules any Democrat who even mentions budget cutting and entitlement reform.