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.