The State of our Union is…Stagnant!

It can be a bit difficult to keep track of what the president proposed in his SOTU policy-wise, particularly when a president proposes as many daring policies as Obama did. Wonkblog extracted the juicy, policy bits, trimmed the fat and produced this. But, let’s simplify things even further. Here’s a list!

  1.  No tax deductions for outsourcing
  2. Use that money for moving costs when companies decide to bring jobs back to the U.S.
  3. Global minimum tax — if you move jobs and profits to a country with a lower tax rate, then you pay the difference to the Treasury
  4. Tax deductions for…insourcing
  5. Double tax cuts for high-tech firms!!!
  6. Tax incentives to relocate to hard-hit, post-industrial communities
  7. Unspecified reforms to rein in the costs of entitlements (i.e., Medicare, Medicaid, Social Security)
  8. Global minimum 30% tax rate for anyone making over $1 million
  9. Trade enforcement unit to increase safety, authenticity inspections of imported products; and ensure that U.S. manufacturers have equal access to finance and new markets
  10. Vocational training for 2 million Americans + a central website to help them
  11. Ambiguous commitment to reduce regulations on small businesses and lower their taxes
  12. More funding for teachers + incentives for good teachers + more flexibility to replace bad teachers
  13. Every state should require students to stay in school until they are 18 or graduate high school
  14. Extend tuition tax credit for middle-class families
  15. Double the number of work-study jobs
  16. Pass the DREAM act
  17. Open up over 75% of the U.S.’s offshore oil and gas resources
  18. Require all companies that drill for gas on public lands to disclose the chemicals they use
  19. End subsidies to oil/gas companies and refocus them on clean energy start-ups
  20. Development of clean energy on public land to power 3 million homes
  21. Purchase more clean energy for the DOD
  22. Tax credits to help manufacturers increase energy efficiency and eliminate waste
  23. Executive order to clear red tape delaying government-funded construction projects
  24. Use half of the war savings to pay down the debt
  25. Use the other half for infrastructure
  26. Allow homeowners to refinance their mortgages at historically low rates
  27. Fund #26 through a “small fee” on financial institutions
  28. Establish Financial Crime Unit in the DOJ to crack down on financial fraud and prosecute white-collar criminals
  29. Extend the payroll tax cut for a year
  30. End the Bush tax cuts for the wealthiest 2% and extend them for everyone else
  31. Pass the STOCK Act (i.e., ban members of Congress from trading in industries that they impact and oversee)
  32. Stop people who bundle campaign contributions for Congress from lobbying aforementioned Congress
  33. Give all presidential nominations an up-or-down vote within 90 days
  34. Consolidate the federal bureaucracy (meaning mostly the Department of Commerce)
  35. Prevent Iran from gaining a nuclear weapon by any means necessary
  36. Cut military costs and spend more strategically
  37. Strengthen national cyber-security
  38. Reorient our military to focus more strategically on the Pacific theater

So, that’s thirty-eight policies, depending upon how you divide them up. The President can do 11, 17, 18, 23, 28, 35, 36, and 38 on his own (or at least mostly on his own). The rest require some sort of Congressional interaction from a Republican House and lethargic-as-ever Senate. Interestingly, he could probably implement 26 through Fannie and Freddie, as Ezra Klein (and Glen Hubbard of Columbia Business School and the Federal Reserve) argue. He’d just need a friendlier Director of the Federal Housing Finance Authority, who believes that a short-term loss for Fannie and Freddie might engender a quicker and more robust economic recovery. On number 16, the administration has already urged ICE to use greater discretion in prosecuting immigration cases. Consequently, immigration authorities have focused more narrowly on criminal aliens, while giving greater thought (and showing greater leniency) to cases that would be eligible under the DREAM Act, if it ever passes.

Why propose all of these pie-in-the-sky policies? What’s the importance of this speech, which registered a Nielsen rating of only 0.24? And does anyone actually remember anything that came out of last year’s speech, with a slightly higher 0.27 rating?

The president proposed a few measures with bipartisan support. Many of these were already in the works or require little Congressional input. Further, to balance out his spending increases and tax cuts, he’s proposed tax increases and pay-fors elsewhere. But even if the President had proposed only the halves of these ideas that Republicans like, it would not have made enactment or negotiation easier. Given the divided political atmosphere, any attempt at bipartisanship is doomed to be competitive and fragile. In noncompetitive bipartisanship, the two sides work together on legislation that is not controversial or does not clearly fall to one side of the aisle or the other. When bipartisanship becomes competitive, each side competes to have the most influence over the final document. It’s hard to imagine either form in the current atmosphere, and any attempt at competitive bipartisanship could unravel in an instant. Result: stagnation.

In the current session of Congress, members of the House have sponsored 3818 bills, while members of the Senate have sponsored 2033. Of these, 90 have become law. A number of those name post offices and federal buildings, others simply reauthorize older bills, and still others are short-term continuing resolutions – which are similar to pay-day loans for the federal government. In other words, fat chance for the President’s proposals….

But that might be exactly what the President wants. He’s already started running against the do-nothing Congress. The do-nothing Congress that completely ignored his Jobs Speech in September. The do-nothing Congress that has blamed him for the protracted aftershocks of the economic disaster that happened under President Bush, even as there are signs that the economy is actually improving, if only a little. The do-nothing Congress that insists that the stimulus did nothing, but won’t do anything itself, insisting that it’s really regulations that are preventing firms from hiring and not money-hoarding behavior resulting from a credit bubble. If Obama begins taking bold action on the substantial number of proposals that are largely under his control, and Congress does nothing — well, point Obama.

Notably absent from the speech was the healthcare law. Presumably, everything to say about the law has already been said, no one’s budging, and no one’s gasping when each side states its views. Further, the State of the Union may not have been the place to defend the healthcare law. Perhaps more partisan, more heated, more punchy attacks on the campaign trail are a better strategy. This also allows Obama to make a clear contrast between the 111th and 112th Congresses. Obama accomplished a great deal in the first Congress. In all likelihood, he will make the case for his reelection much as Andrew Sullivan did on his behalf. But, at the same time, he can argue that he took bold action to pump money back into the economy, jump-start public works projects, invest in clean energy and education, and begin to alleviate the crushing burden of healthcare costs. But once voters took a chance on Republicans, everything stopped. He’ll argue that the stimulus worked — and, depending upon the economic indicators, many might be predisposed to believe him — and that Republicans essentially cut off life support to a fragile and recovering economy. This would make the case not only for his reelection, but also for returning the House and Senate to Democratic control. But, given the recent trend in redistricting to draw ideologically homogeneous districts, the chances are slim, even if Obama does win the reelection by a wide margin.

Further, by highlighting tax and immigration issues, he is positioning himself strategically to run against Romney, whose obscenely high income combined with his obscenely low tax-rate created a controversy, and whose posturing on immigration drew the ire of Jeb Bush and will likely prove problematic both in Florida and during the general election. It will be the Common Man vs. the Oligarchs, the Progressive vs. the Reactionary. Who knows if anyone will remember this speech or what effect it will have, who knows how the Obama team plans to incorporate this speech into a larger reelection strategy. But there are hints of a strategy. Obama beat Republicans to the punch on shrinking the federal government. He gained the high-ground during the payroll tax debate. He’s pulled the rug out from under his opponents frequently in the past few months. He’s turned their own tactics against them and outmaneuvered them. And there’s plenty of evidence in this speech that he’ll continue to do so, right through the election.

 

About the author

A Criminology major and Philadelphia native, Michael Soyfer hopes to one day escape the city walls and run off to DC to work somewhere in this crazy, labyrinthine government of ours.

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