Obama's State of the Union Take on the Economy: This Time, It's Personal
Obama's speech covered a lot of ground, addressing the need to restore the nation's infrastructure and the need for federally funded preschool, the value of education programs and the cost of marriage, the importance of gun control, and the need to do more to prevent violence against women. Yet, again and again, most of those disparate points came back to one central factor: money.
As he did the recent election campaign, Obama couched the economic in the language of the personal -- especially as it applied to the middle class. This theme emerged early in his speech. "We should ask ourselves three questions as a nation," he said. "How do we attract more jobs to our shores? How do we equip our people with the skills to get those jobs? And how do we make sure that hard work leads to a decent living?"
From this angle, Obama argued, even the question of establishing free, public preschools can be viewed as through the lens of economics and return on investment: "Every dollar we invest in high-quality early education can save more than seven dollars later on." He went on to argue that infrastructure spending translates into employment, stating the CEO of Siemens told him that "if we upgrade our infrastructure, they'll bring even more jobs." In Obama's speech, even the Violence Against Women Act had a financial aspect: "We know our economy is stronger when our wives, mothers, and daughters can live their lives free from discrimination in the workplace, and free from the fear of domestic violence," he said.
It's easy to see why the economy is a fruitful topic for Obama. The economic hopes of the middle class were a large part of what got him elected in 2008 and last year, and he has racked up a series of victories in the post-election economic battles with Congress. Now, he and the nation are once again facing the automatic cuts of the sequester -- a legislative booby trap that he referred to on Tuesday as "a really bad idea." Arrayed against him in his fight to defuse the bomb is a Republican party firmly defending its own platform of upper class tax loopholes, cuts to social programs, and -- in the case of Rand Paul -- an increase to the sequester.
The Plan: End Runs Around the Party of No
Politically and economically, the No. 1 question for the next two years is: Can Obama enact the reforms that he endorsed in his speech?
To a great extent, the answer will be no. Most of the proposals that Obama set forth, including gun reform, tax reform, an increase in the minimum wage, and federally-funded preschool programs would require some support from the Republican-dominated House of Representatives. And, while the GOP seems to be tacking gently toward the center on immigration, the chances that they will loosen the purse strings to pay for expensive new initiatives are slim.
On the other hand, some of the president's proposals -- like an anti-hacking initiative, broad trade talks with Europe, increased accountability for colleges, and an anti-poverty push -- could be partially enacted via executive orders and other tools at his disposal. And, as long as Obama can keep the focus on middle class incomes, middle class jobs, and middle class opportunity, he should be able to keep pressure on Congress. While a $9 minimum wage and federally-funded preschool are probably not on the way, Obama might be able to close the carried interest loophole, and defuse the sequester. And, in this game, even those small power plays could bring a huge economic -- and political -- payoff.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at firstname.lastname@example.org, or follow him on Twitter at @bruce1971.