Obama Fifth SOTU A Mix of Old and New

In his fifth State of the Union Address last night, President Obama delivered a call for action on many fronts to attack the deficit, accelerate the economy, increase opportunity and deal with pressing social problems.  Rather than soaring rhetoric, the address to Congress and a national audience constituted a workmanlike blueprint of effective policies backed by research or a history of what works.  Many of the proposals offer innovative ideas that look promising.  The principal exception to the President's businesslike delivery was a heartfelt and emotional appeal near the end of the speech for tighter gun control restrictions, which received excited support from many in the House Chamber.   In a preview of the politics, the Address was interrupted 26 times by sustained applause.  Of these, 15 times the legislators showed enthusiasm on both sides of the aisle, while on the other 11 only the Democrats rose.  That indicates there is a good chance a fair number of things may well be enacted in some form.  Here is what I consider most interesting in the Address.

On the deficit, the President's most interesting point to me was that two and a half trillion of the four trillion dollars sought over ten years for deficit reduction in the quest for a "grand bargain" has now already been agreed to.  About one-third of that comes from higher tax rates on the well-to-do and two-thirds from cuts negotiated in previous deals.  As always, President Obama staked out his position for a balance between new revenues and careful additional cuts to accomplish the rest.  The coming "sequester" cuts would be completely irresponsible and would drag the economy back into recession because of all the layoffs they would produce.  That's according to the White House and Congress' own economists.  He made the case again that items like off shoring and outsourcing tax breaks and special write offs that benefit only the wealthy or a few should be eliminated before any cuts to middle and working class benefits like medicare and college loan programs.  This is familiar ground.  They key is to realize that with 62% of the original job done, the remainder may not seem so unreachable.  The projected deficit for the current year is some $600 billion less than three years ago. 

The President moved next into economic growth and jobs.  I considered it highly important he made the point that deficit reduction does little to improve the economy or create jobs.  Republicans continually conflate the two as though they are the same problem, and in order to win public opinion he cannot let them get away with that mischaracterization.  He called for action on renewable energy (wind power has provided 50% of the new energy in recent years), and promised executive action if climate mitigation legislation was not forthcoming.  He supported continuing an "all of the above" energy development strategy that has cut imports to a 40-year low and wants a program to insulate and otherwise cut energy wastage by 50%.

He wants a fix-it-now initiative to repair 10,000 bridges along with the power grid, and other infrastructure to provide jobs now, perform needed maintenance and serve business development needs.  He pointed to housing recovery including a 50% gain in home purchases and called for expediting a bill currently in the hopper that would help people save $3,000 in refinancing at today's low interest rates.  "Take a vote!  Send me that bill!  This is not partisan.  I will sign it right away," he exhorted.  

One of the most surprising, not to mention beneficial, economic ideas was to raise the federal minimum wage from $7.25 to $9.00 an hour and index it to inflation.  He would also like to rebuild the 20 hardest recession-hit communities, provide tax incentives for business to hire and remove incentives to outsource.  Bad environments with few job prospects are breeding grounds for gangs, crime and hopelessness.

Another extremely intriguing idea are negotiations he will initiate to pursue a Transatlantic trade pact, perhaps a fre-trade zone.  The U.S. and European Union combined are more than half the global economy.  He's initiating negotiation on a Transpacific accord too.  Yet dangers exist.  He pointed to increasing cyber warfare threats and electronic penetration of  manufacturing and banking systems.  He wants congress to pass authorization for "greater capacity" to deal with this.  I have read that our intelligence services believe a great deal of this activity is coming from China. 

On education a striking proposal was to increase preschool availability from the current 30% to 100% of children.  He said research shows every dollar so spent returns $7 over time to the economy, through higher graduation rates, lower crime and unwed pregnancy, and better earning power.  He touted the example of P-Tech in Brooklyn which has program to earn not only a high school diploma but a community college Associate's Degree in computers or engineering upon graduation.  He suggested a German model for vocational ed wherein students not on the college prep track come out of high school with a trade certificate.  That sounds like an excellent idea to me.

Obama got nearly unanimous applause from the full house when he praised the bipartisan work done so far on comprehensive immigration reform and made the plea for passage in the next few months.  This should, he made clear, include a reform of the legal immigration policy as well. 

It was gratifying to see, given the egregious voter suppression efforts made in Republican-governed states in the recent election, he will be forming a nonpartisan commission on voting rights. 

The conclusion, calling for sensible gun registration and restrictions, pointing to survivors and victims from Newtown, Aurora, Detroit, Milwaukee and Tucson including Gabby Giffords, brought down the house.  It was a good finishing note and now the President will head out across the country to try to build support for his entire agenda.