Obama Straddles Growth and Deficit Problems
Policy + Politics

Obama Straddles Growth and Deficit Problems

The Associated Press/Getty Images

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.

“Since November, President Obama has taken important steps — including his recent order for a comprehensive regulatory review — signaling that he is ready to change direction and focus on what is necessary to drive a vigorous recovery with job opportunities for American workers,” Business Roundtable President John Engler said in a statement after the speech Republicans responded predictably after the speech, charging that Obama still favored too much government spending at a time when fiscal discipline should be the top priority.

“Unfortunately, even as he talked about the need for fiscal discipline, President Obama called for more `stimulus’ spending without making a commitment to the cuts and reforms the American people are demanding,” House Speaker John Boehner said in a statement. “Adding to our debt and pushing us closer to bankruptcy for the sake of more `stimulus’ spending will not make our nation more competitive.”

Yet Obama seemingly co-opted some Republicans’ pet proposals by calling for a bipartisan approach to long-term deficit reduction, pledging to cut defense spending and vowing to push hard to win ratification of a trade agreement with South Korea.

Moreover, at a time when the nation and Congress has tempered its partisan rhetoric following the tragic shootings in Tucson, the president urged the two parties to come together to try to resolve some of the nation’s toughest economic and social programs.

That effort is likely to go nowhere in the coming months as partisans engage in bruising warfare over spending cuts and budget numbers. The president’s proposals last night set out his wish list, but his ideas come up against the fact that Congress — not the executive — controls the budget process. And his initiatives will be considered in a dramatically-reshaped political arena in which Republicans control the gavels in the House and have made inroads in the Senate after the Democrats took a “shellacking” in last November’s midterm elections.

As if to underscore the change in that political landscape, Republicans in the House, just hours before Obama took to the podium, passed a resolution directing committees to cut government funding for the remainder of the fiscal year to the level it was before Obama-backed stimulus legislation passed in 2009.

In praising that vote, Boehner, in a statement, foreshadowed the inevitable upcoming battles that will be waged between the parties over which side is more serious about attacking the deficit. “At a time when the Treasury Secretary is begging Congress to raise the debt limit, a `freeze’ is simply inadequate,” Boehner said. “Rather than lock in the consequences of Washington Democrats’ job-destroying spending binge, we pledged to cut spending to pre-`stimulus,’ pre-bailout, levels and impose real spending caps.”

Democrats countered that Republicans were long on sound bites but short on specifics as shown by their failure to provide numbers. Rep. Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee, issued a statement that mocked the lack of specificity, saying that the House Republicans brought to the floor “for the first time ever — a budget plan without a single number … It's no secret that the Republican leadership has resisted providing the American people with many policy or spending cut specifics, but this takes the cake.”

Meanwhile, the tone for the debate on the Senate side was set by GOP Senate leader Mitch McConnell, R-Ky., Tuesday morning, as he questioned whether the president’s moderate rhetoric would match the reality of his proposals. And later in the day, McConnell questioned the impact of Obama’s proposed freeze on spending.

“I would remind you that in the speech last year there was a recommendation for a three-year freeze,” he told reporters. “And the problem with that is, it freezes in place an extraordinary increase in spending that's occurred over the last two years. So it strikes most of us that the effort by the House of Representatives to get us back to 2008 spending levels would be the direction to go if we really wanted to have an impact on our annual deficit problem.”

Despite the brickbats from Republicans, Obama could take some solace in his rising poll numbers that came in the wake of steps he has taken in recent weeks to reassure the business community that his administration is reaching out to listen to their ideas to jumpstart the economy.

Still if the president is hoping to get a big upswing in his poll numbers from his speech, he is running against historical currents in which State of the Union addresses have had little impact.

“Do they change people’s evaluation of the president in a consistent way? Absolutely not,” said Mark Mellman, a Democratic strategist. “In fact if you look at the Gallup data, on about half the occasions since the 1970s, on average, the State of the Union bounce has been zero — it averaged zero. In fact, half the time, it has been negative.”

Related Links:
Obama Says U.S. Acts Together or Not at All (Los Angeles Times)
Did Obama Get His Message Across? (CNN)
State of the Union’s unions (Washington Post)