The Text

President Obama’s State of the Union speech.

 

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The Republican Response.

 The Theme

Unity in the face of adversity and the need to act in order to succeed.  President Obama mentions the “courage of our convictions” and we hope that suggests he has the courage of his convictions.

Bad behavior on Wall Street is rewarded while bad behavior on Main St is punished.  The American people hope we will work through our differences and they have not yet received the change for which they voted.  “I have never been more hopeful about America’s future than I have been tonight.”  “We do not give up.  We do not quit…it’s time America gt a government that matches their decency, that embodies their strength.”

America must stand for human freedom.

We’re all created equal.  If you adhere to our common values, you should be treated no differently than anyone else (which is why we’re prosecting civil rights violations).

Economic Rebound

Obama’s argument:

Obama says that we all hated the Wall Street bailout.  He notes that he supported the Wall St. bailout that began under President Bush, claims we stabilized Wall Street and have received most of the money back.  This is true

We cut taxes.  We haven’t raised income taxes by a single dime on a single person.  2 million jobs saved have been the result.  All of this was possible because of the Recovery Act, also known as the stimulus bill.  The economy is growing again.

Analysis

The US is still losing jobs, but the unmistakable trend is that the big drop in job growth that began in late 2007 and bottomed out at the very beginning of the Obama administration has began a steady upward climb.  The US is still losing a relatively small number of jobs each month, but the Obama administration has avoided the cliff that could have lead to a great depression.  Any doubters should to look at the trend lines on this Bureau of Labor Statistics chart.  The economy is growing again as the Bush recession has technically ended.

The Federal Reserve says the economy has strengthened, but in a sign that we still must work our way out of this, it will keep rates low. 

And most economists agree that the Obama stimulus package, albeit a stimulus conservatives in Congress watered-down and shrunk, worked.  USA Today‘s survey of 50 economists revealed that President Obama’s stimulus has saved 1.2 million jobs and that unemployment would now be 10.8% without it.  2/3rds of economists think more stimulus is needed.

Jobs will be Obama’s top focus this year and he called for “a new jobs bill.”  Polling indicates that this is the way to go.  His argument that government can create the conditions for businesses to expand is not one that Republicans can argue againt since they are always arguing that government can create condition unfriendly to business.

The proposal for a small business tax credit, a tax incentive for all large businesses, and other tax cuts are unassailable by Republicans, but how will they be paid for?

Infrastructure is critical to any modern economy and is good policy, but will be attacked as pork.  Doesn’t matter.  People know we need it.  Taxing businesses that move overseas and encouraging those that create jobs at home is key and again a tough thing for Republicans to oppose.

Passing a jobs bill will be critical.  We’ve lost 7 million jobs over the last two years and his emphasis on long term growth has been a consistent theme.  President Obama brought back the audacity of hope when he asked “how long should we wait?”  Our competitors are playing to win and not waiting. 

Our competitors are fighting for those jobs by investing in infrastructure and education.  “I do not accept second place for the United State of America.”

The Freeze

Obama’s Argument

Last decade: 2000 – America budget surplus of over $200 billion.  By the time he took office we had $1 trillion deficit and a projected $8 trillion over the next 10 years (unpaid wars, 2 huge tax cuts) and the effects of recession added $3 trillion hole in our budgetSpending on Medicare, national security, Medicaid, and Social Security will not be effected.

We needed to add another $1 trillion to save the economy.

We’ll extend middle class tax cuts, but can’t afford to continue tax cuts for  oil companies, investment fund managers, and those making over $250k.

The bipartisan fiscal commission will help come up with solutions.

Analysis

The commission won’t help, but those who want to argue for tax breaks for oil companies and hedge fund managers should have at it.  This will be great to attack.

The freeze takes effect next year when the economy is stronger.  To the Republicans: “that’s what we did for eight years” was the line that sticks.  The old ideology of cutting taxes for the rich, ending regulations, and letting people get abused by the insurance companies is gone.  “We face a deficit of trust” is the line the media will run with.

President Bush’s Great Recession has been devastating and Obama has saved the US from another Great Depression through the stimulus and some of the bailouts, but he would be wrong to reject another stimulus package for political reasons and should not foreclose the possibility of more spending if it is necessary to save jobs and get the economy rolling.

That is the reason the budget freeze is a disasterous idea.  We need the flexibility to fight a resurgence of recessionary trends and should not limit our own ability to do it. Nobel Prize winning economist Paul Krugman has called Obama’s budget freeze “appalling on every level” for depressing demand while there is still mass unemployment, bad long-run fiscal policy, and a betrayal of everything Obama’s base thought it voted for.

Berkeley Professor of Public Policy Robert Reich has also voiced his opposition.

 

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Economist James Galbraith of the University of Texas has called the plan a gimmick with no economic or budgetary upside and a lot of downside if we need government to act.

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Health Care

Obama’s argument

Families are (even with insurance) are one illness away from financial ruin.  We are close and can stop the worst practices of the industry.  If you have insurance, you can keep it.  The CBO says “our approach” will bring down the deficit by $1 trillion over the next two decades. 

The President says he should’ve explained it better, but this problem is not going away.  Millions will lose their health insurance, the deficit will grow, and we should not “walk away from these Americans.”  If anyone has a better approach that will bring down premiums, reduce the deficit,cover the uninsured, etc…let me know. 

Don’t walk away to reform.  “Let’s get it done.”

Health care reform will reduce the deficit, but it’s not enough.

Analysis

Excellent. The President was brilliant.

No one thinks the Democrats can give up on health care reform at this point.  They’ve invested too much, will be attacked for trying it regardless of whether they pass it, and once it is passed, some of the myths will fall by the wayside and people will see some immediate benefits (on pre-existing conditions and keeping kids on their parents’ policies longer, for example).  And the party’s base, which is also its conscience, wants to see tens of millions more people covered.

A report from earlier today confirms that the Democrats are going to pass a bill.

Wall St. Reform

Obama’s Argument

The lobbyists are trying to kill reform that would protect investors and prevent excessive risk to the entire economy.  Pass the House bill.

Analysis

Paul Volcker is back and the rule that carries his name will restrict banks from “making speculative investments that do not benefit their customers.”  Such limitations would have prevented much of the fincancial industry collapse of 2008 (and the bailouts of 2008-2009).

The second huge element of any plan that can work is Elizabeth Warren’s consumer protection agency for the financial industry.  The abuses of investment banks and credit card companies lost a lot of money for ordinary Americans and should not be repeated.

The third element is the bank fee to recoup bailout money from those firms that took bailout money without paying it back, even as they pay executives huge salaries and, in some cases, bonuses.

Employee Free Choice Act

Obama’s Lack of an Argument

Obama’s silence on this speaks volumes.  There was no mention of this and it can be presumed that he does not expect this to go forward nor does Obama expect to lead on this.  This will come as a big disappointment.

It’s a huge issue for workers’ who want to stop union busting.  The key is that it gives workers’ the right to choose whether they want to form a union by signing cards (and gives them protections to do it) or by a secret ballot election (subject to the delays and abuses to which huge corporate employers have subjected workers).

If the Democrats fail on this, they can expect a lot of the ground troops from 2008 to sit home in 2010 and 2012.  If they pass it, they win a huge victory for workers and can expect huge support on the ground.

Cap & Trade/Climate Change/Energy

Obama’s Argument

Clean energy jobs will help the economy, put us on a path to economic success (long term).  We need new oil & gas development, safe nuclear power, clean coal advancement, biofuels, and passing a comprehensive clean energy climate bill.

“I know that there are those who disagree with the overwhelming science on climate change…The nation that leads the clean energy economy will be the nation that leads the global economy and America must be that nation.”

Analysis

Cap and trade was not mentioned and that does not bode well for his faith in the bill.  We will double our exports?  Not with China artificially manipulating exhange rates.

Nuclear power?  Can’t be made safe.  That’s the reason nuclear plants can’t get insurance and Congress passed legislation years ago to subsidize the industry.

Clean Coal?  A joke.  No such thing.

Education

Obama’s Argument

We only embrace success and reform “…the best anti-poverty program around is a world class education.”   

Analysis

I’m not convinced that people have confidence in the community college system and will support funding, but increasing Pell grants, forgiving debt for choosing public service, and making college affordable, while encouraging colleges to cut their own costs are all winners (albeit there is little chance for the last one).

A backbench issue at the moment, but we won’t compete against China, India and Mexico by undercutting the cost of their labor forces.  We must be more productive and that means the best education system in the world.  We don’t have it now and Obama made it an early signature issue early-on.

Iraq

Obama’s Argument

All combat troops out by the end of August.  This war is ending and all of our troops are coming home.

Analysis

This is hard to believe and depends on the meaning of “combat troops.”  Believe it when I see it.

The public has turned away from Iraq as of late, but whether we pull out and to what extent will have huge implications on military policy, budgetary policies and (of course) tens of thousands of American and Iraqi families.

Afghanistan

Obama’s Argument

We are supporting the rights of all Afghans and are training Afghans for transition.

Analysis

There has been some reason for optimism regarding the Obama escalation, but it’s too early to know if it will work and there is a huge danger of an unending commitment.

Housing

The President touched on it and will help people with mortgages.

Nuclear Security

Obama’s Argument

We are focusing more on those who want to attack us and are filling gaps.  We’ve captured or killed far more terrorists than in 2008.  We’re isolating Iran and working on a comprehensive nuclear weapons treaty.  There are consequences for Iran’s irresponsiblity. 

Analysis

Broad strokes, but nothing objectionable.

Good Government

Obama’s Argument

The recent Supreme Court decision will open the floodgates for special interest to spend witout limis in our elections (including foreign corporations).  Help correct some of these problems! 

We need more transparency.  (He covered it).  If you need a super-majority to do anything, it’s not good leadership.  He’ll begin monthly meetngs with both parties.  “I know you can’t wait.”

Don’t obstruct every bill because you can.  He said he was speaking to both parties.

Analysis

Of course, he’s talking to Republicans.

In the ’60s, the filibuster was used to obstruct about 7% of bills.  In the 1980′s, it increased to between 20% and 30%.  When Democrats took back the Senate in 2007, Republicans started using it 70%.  Now, Dems have a huge majority, but the Republicans are using it on every piece of legislation, thwarting the change voters voted for in 2008.  This must end and Obama the conciliator had better turn into Obama the fighter or lose his base (and maybe re-election).

Here’s one vote for bipartisanship: both parties should agree to end the filibuster by a majority vote in the Senate at the beginning of the new Congress in 2011 (no matter who wins the 2010 elections). 

We saw the beginning of the argument that if Republicans will obstruct everything, they bear responsibility for nothing getting done. 

Hopefully, this will be the beginning of the end of the filibuster but that’s hard to imagine at this point.

Equal Rights

Obama’s Argument

We’re enforcing civil rights laws, will fight to end “don’t ask, don’t tell” and are fighting for equal pay laws. 

Doubts in American Institutions

Obama’s Argument

We cannot lose faith.  People are disappointed and cynical.  “Change we can believe in.”  Many people wonder now whether we can, but he never suggested it’d be easy or that he could do it alone.  Big changes stirs controversey.  We can respond by playing it safe or pointing fingers.  Do what we need to do to keep the poll numbers high.  But if people had done that years ago, we would have failed.

People kept the dream alive when it was tough.  But the fundamental decency and optimism of the American people lives on.  See the spirit in Haiti, working people, and us. 

“A new year has come…We don’t quit.  I don’t quit…”

* A brilliant ending!

The Republican Response

Bob McDonnell – VA Republican Governor…started with a sports center comment, appealing to people who think that’s the big issue.  He knew enough to talk about creating jobs, using “good government” to “spur economic growth”.  That is not a position that all Republicans will support.

McDonnell makes the foolish argument that the stimulus didn’t work, but that’s simply not the case according to the non-partisan CBO or 50 economists surveyed by USA Today.

He claims we have the “best medical system in the world” and attacks lawsuits (tiny fraction of a fraction) and wants to allow people to buy insurance across state lines (which means that the state that allows the most abuses by insurers will sell cut rate insurance that will fraudulently deny coverage). 

No solution on climate change – empty rhetoric.  He likes education, but has no ideas.  He likes a strong national defense and applauded his daughter’s service (cute move, but no substance). 

On Afghanistan, he was supportive.  He tried to argue that the underwear bomber shouldn’t have lawyers or rights, but it is doubtful his father would’ve turned him in if he’d thought that was our policy.

He makes a general claim for free markets and state government, again with no detail.  The Bible is quoted for the idea that to whom much is given, much is required, but is ideology does not require anything of those who have been given much.

He makes a similar claim for opportunity for all, but doesn’t say anything about fighting discrimination.

McDonnell finished with a general claim that we should all work together to make government better. 

Overall, an empty suit with an empty response to Obama, but we’ve seen worse.