Obama Straddles Growth and Deficit Problems
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Kirk Victor,
The Fiscal Times
January 26, 2011

President Obama’s oratorical and political skills were on full view Tuesday night, as he addressed the nation in turns as the thoughtful academician making the case for more spending and the artful politician calling for long-term deficit reduction.

During his State of the Union address before a joint session of Congress, Obama carefully struck a balance between staying the course on the economic recovery at a time when unemployment remains close to 10 percent while addressing the deficit and looming fiscal crisis that is worrying many Americans.

Appearing for the first time before the Republican-controlled House chamber, Obama enumerated an ambitious program to invest in education, research, roads and bridges, and Internet access, while simultaneously fending off Republican criticism of runaway spending by proposing a five-year freeze on non-defense domestic spending. He vowed to veto spending bills containing earmarks, and called for a bipartisan agreement to begin long-term deficit reduction.

“We know what it takes to compete for the jobs and industries of our time,” said in his nationally televised address. “We have to make America the best place on earth to do business. We need to take responsibility for our deficit and reform our government. That’s how our people will prosper. That’s how we’ll win the future.”

The president spoke to a nation and a Congress shaken by the shootings in Tucson that killed six and gravely wounded Rep. Gabrielle Giffords, D-Ariz., whose seat sat empty during last night’s speech. Many Republican and Democratic House members and senators sat together in a show of partisan unity and civility.

Obama was expansive and aggressive in urging Republicans and Democrats to rally behind his plans for boosting the economy and enhancing the country’s global competiveness. The president compared the severe economic challenges faced by the country today to a period more than 50 years earlier when the United States faced another dire threat. Back then, in 1957, the Soviet Union had launched a satellite known as Sputnik and had beaten the United States into space. But the U.S. ultimately surpassed the Soviets in space, and unleashed a wave of innovation that created new industries and millions of new jobs, Obama said.

“This is our generation’s Sputnik moment,” he declared.

But Obama was far more cautious in discussing the politically explosive topic of debt reduction and entitlement reform, essentially keeping arms length from his fiscal commission which last November recommended tough spending cuts and tax increases. The commission called for cuts in the untouchables — Social Security and Medicare and riled seniors and liberal advocacy groups. The president said he favored a bipartisan solution to strengthen Social Security for future generations, but without “slashing benefits” to future generations or “putting at risk” current retirees.

And as part of his growing effort to shift to the center and triangulate between Republicans and Democrats, he spelled out a handful of proposals that are popular with the business community, moderate Democrats and many Republicans. They included tax reform and cutting corporate taxes, eliminating tax loopholes, streamlining government regulations, revamping the federal bureaucracy and boosting U.S. trade.

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.