In his State of the Union address
Tuesday night, President Obama emphasized the mantra that will likely
define his next two years in office: create jobs, reduce the deficit,
and make America more competitive. To accomplish these goals, Obama
proposed a slew of solutions that include freezing domestic spending for five
years, simplifying the individual and corporate tax codes, reorganizing
the federal government, allowing the Bush tax cuts for the wealthy to
expire, tackling medical malpractice reform, investing in education,
clean-energy, and high-speed rail and Internet, and signing more free
trade deals like the one the U.S. recently struck with South Korea.
is Obama's strategy for reviving the U.S. economy clearer now than it
before the President ascended to the podium on the House floor?
- What's Obama's Vision? asks
Paul Krugman at The New York Times: "We're going to invest in the
future--but we're also going to freeze domestic spending. So mixed
signals--and although there were no numbers, given the further
assurance that the freeze won't affect anything important, this has to
mean that the investment plans are small change."
- Show Us the Money! demands a Washington Post editorial. Obama didn't specify where he'll get the money for his proposals, the Post claims:
The reality, as Mr. Obama understands, is that the country is headed for fiscal catastrophe unless it does some politically unpopular things: unwind the Bush tax cuts, including for the middle class; reduce projected Social Security benefits for future retirees, exempting the poor and disabled; rein in the cost of health care; limit popular income tax deductions. Mr. Obama knows this, but last night he did little to prepare Americans for any of it.
- Bad News: Markets Will Like Obama's Speech, contends
James Saft at Reuters: "The markets will like that it is vague, that it
is unobjectionable, that it makes a feint at diminishing the deficit
without really cutting hard enough to hurt economic growth, and that it
makes the right kinds of noises about corporate taxation ... The fear
coming out of this State of the Union is that we will get neither the
cuts nor the investment."
- A Deficit Deferred, laments Ross Douthat at The New York Times. Evaluating both Obama's speech and Republican Rep. Paul Ryan's rebuttal,
Douthat concludes, "It's clear that both parties have decided that a
period of divided government twelve months before a presidential
election is the wrong time to make big moves on entitlements and the
deficit ... [and] that it's too risky to even begin building support
for the unpopular cuts or tax increases ahead. The bet, on both sides,
is that there’s still time to work with, and that the other party will
blink, or at least give ground, before the real crunch arrives."
- Obama, The Beleaguered CEO In his speech, the President reminded The Atlantic's Megan McArdle of CEOs on earnings calls who know their business models are
failing but can't admit it, choosing instead to dwell on meaningless
growth initiatives or management reorganizations. "The structural
problems with the government's finances are driving it rapidly towards
an unpleasant denouement," she explains. While Obama knows how to fix
these problems, "he can't make Congress do it before there's an actual
crisis. And saying all of this is all too likely to trigger the
crisis--a crisis he'd much rather would happen during someone else's
presidency. So he tells us what we want to hear: that we need to find a
way to fix social security without, y'know, changing it in any way. And
will you look at those green jobs! I think we're going to have a bumper
- Obama Tried to Contrast His Plan With Republican One, assert Politico's Glenn Thrush and Carrie Budoff Brown: "Obama wants to pick a fight, or at least draw a stark contrast, between his jobs-centric philosophy and the GOP's determination to cut government first and ask questions later. That's why he proposed an ambitious slate of new spending initiatives--he calls them 'investments'--setting up an extraordinary mini-campaign this spring in which Obama and the GOP will put their cases before the American people."