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Obama Reassures Democrats (Mostly) in SOTU Address

By outlining new investments and pledging to strengthen Social Security, President Obama mostly reassured Democratic supporters in his speech. Now can he make it happen?

Ari Berman

January 26, 2011

On the eve of President Obama’s State of the Union Address, I queried a number of prominent Democratic political strategists and policy experts and asked them to name the most important issue for the president to focus on in year three of his presidency. The answers included: reduce everything to jobs and put people back to work, reclaim economic populism from the Tea Party, help struggling homeowners, and protect Social Security and Medicare. So how did Obama do on these fronts? Did he address the concerns of Democratic voters and position himself favorably for the next two years? Or did he miss a prime opportunity to tell the nation what he believes in and will fight for?

Let’s review the issues one by one:

Jobs, Jobs, Jobs

“Jobs must be our number-one focus in 2010,” President Obama said in his last State of the Union address. Then he spent much of the year ignoring the issue. This year, the president made it clear he won’t make that same mistake again.At stake is whether new jobs and industries take root in this country, or somewhere else,” he said.

As the core of his speech, Obama outlined a three-part plan to “win the future,” consisting of “Investments in innovation, education, and infrastructure.”If enacted, these investments would amount to Stimulus 2.0. “We need to out-innovate, out-educate and out-build the rest of the world,” Obama said.

Toward that end, Obama called for (1) Investments in biomedical research, information technology and clean energy technology; (2) hiring “100,000 new teachers in the fields of science, technology, engineering, and math” over the next ten years and extending a $10,000 tuition tax credit for students who finish four years of college; and (3) Rebuilding America’s crumbling infrastructure. “America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system,” Obama said. “Over the last two years, we have begun rebuilding for the twenty-first century.… Tonight, I’m proposing that we redouble these efforts.”

These spending proposals will excite Democrats who believe the Obama administration needs to do more to help spur a true economic recovery. At the same time, Obama pledged to “freeze annual domestic spending for the next five years.” So it’s unclear where he’ll find the money to fund all the critical investments he called for. Nonetheless, it was nice to hear Obama emphasize, at least for one night, jobs, jobs, jobs alongside cut, cut, cut.

Reclaiming Economic Populism

After making a JP Morgan exec (Bill Daley) his chief of staff and appointing the chairman of GE (Jeff Immelt) to head of his Council on Jobs and Competitiveness, Obama continued his outreach to the business community in his speech. He noted that “the stock market has come roaring back [and] corporate profits are up,” and pledged “to lower the corporate tax rate for the first time in twenty-five years,” double exports by 2014, finalize a new trade deal with South Korea and review government regulations. “Our free enterprise system is what drives innovation,” said the CEO-in-chief.

But the president also called for an end to corporate tax loopholes and called on Congress “to eliminate the billions in taxpayer dollars we currently give to oil companies.” In addition, he made it clear that he does not want to extend the Bush tax cuts for the wealthiest Americans, which he temporarily renewed in December, beyond the next two years.

Despite the GOP’s unabashed corporate conservatism, many Americans still see Obama as a friend of the banks rather than as an advocate for Main Street Americans. I’m not sure last night’s speech will change that perception.

Protecting Social Security and Medicare

The president praised his bipartisan debt commission, which recently proposed significant changes to Social Security and Medicare. “I don’t agree with all their proposals, but they made important progress,” Obama said. Many progressives were worried that Obama might embrace cuts to these beloved programs, but he chose not to, at least for now. Howard Dean credited a “huge progressive coalition” for convincing the president to stand firm.

“To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations,” Obama said. “And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.”

Obama was less clear when it came to protecting Medicare, speaking vaguely about “reducing healthcare costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit.” He noted that his healthcare reform law will help solve this problem, but sided with Republicans on the need for “medical malpractice reform to rein in frivolous lawsuits.”

Obama mostly played it safe in his remarks on the deficit, but he can shore up his standing among Democrats by simply affirming that cuts to Social Security and Medicare are no longer on the table.

Helping Homeowners

Mike Lux, CEO of Progressive Strategies, calls the foreclosure crisis “the great sleeper issue” in American politics. Well, it’s still a sleeper, since Obama didn’t say a word about housing in his speech, even though a million homes were lost to foreclosure last year. There are only so many topics a president can address in the State of the Union, but chalk this up as a missed opportunity in an otherwise solid, if somewhat bland, speech.

 

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Ari BermanTwitterAri Berman is a former senior contributing writer for The Nation.


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