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Obama's State of the Union the Best Chance to Sway Public: Axelrod

President Obama's State of the Union Address tonight represents his largest single opportunity to sway the public and Congress behind his goal for "balanced" deficit reduction, according to his longtime strategist David Axelrod.

"We have a standoff on these fiscal issues and the impending sequester deadline," Axelrod in an interview at the new Institute of Politics he has founded at the University of Chicago. "This is probably the largest audience he's going to have throughout that debate. The goal is to move public opinion because that's what moves Congress."

(Read More: State of the Union May Well Set Tone for Budget Talks)

Axelrod sees signs that the November election has created new openings, at least temporarily, for resolving issues on which Washington has been gridlocked. That's partly because Republicans feel pressure to improve their electoral performance with key constituencies, such as Hispanics.

"One of the reasons we now see some movement on issues like immigration reform, for example, has to do less with what the president said and more with what the American people have said" in the election, Axelrod explained.

"The first instinct of politicians is survival," he said. "The election result has cause some introspection on the part of different players ... particularly in the Congress. You see Eric Cantor and others trying to redefine the Republican brand a little in the last few weeks.

He added: "I think obstructionism has lost its appeal to many. So, I think this is a feeling-out time."

(Read More: With Apple CEO in Attendance, Obama to Talk Jobs in Address)

The election has plainly affected the president's attitude, increasing his confidence and willingness to bluntly challenge Republican opposition — including in his inaugural address last month.

"I don't think that the array of challenges that he wakes up to every day allows for cockiness," Axelrod said. "But certainly there's a confidence that comes with the affirmation of the American people. There's no denying that. But I also think a wise president doesn't overreact to that. He understands that these are tough problems and the politics are still difficult."

Some leaders in the business community have faulted Axelrod for encouraging a mood of anti-business populism for political reasons during Obama's first term. Axelrod pointed right back at Wall Street excesses.

"I don't think I was responsible for that," he said. "What was responsible for that was irresponsible behavior that helped bring about the greatest financial crisis since the Great Depression. I don't think anybody was, as a strategy, demonizing the business community. We were too busy trying to save the country from the impacts of some irresponsible decisions that a handful of people on Wall Street made.

"There are times when we could've chosen words more carefully. But I know a lot of the leaders of the financial community," Axelrod said. "They seem like tough resilient people. I don't think we should be focusing on a word here and a word there. Let's focus on constructive ways to move the country forward."

Looking forward at politics beyond Obama, the first African-American president, Axelrod said Hillary Clinton or some other female candidate would soon break that glass ceiling, as well.

"A glass ceiling is hard until you break it," he said. "Hillary certainly has the capacity to do that if she runs. There are others."

Axelrod added: "You see these things inexorably shifting. And I'm confident, if not in 2016, then down the line that barrier will fall, and others will.

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