Assurance to the Nation: Obama Delivers First Address to Congress

With an unflinching speech, Barack Obama wagered his presidency on his ability to move an ambitious agenda through the Congress while stabilizing the economy and reducing the budget deficit. Perhaps responding to the criticism he has received in recent days, he tilted away from dire descriptions of the country’s problems and toward confidence in their resolution. And recognizing the growing populist ire against bankers, the auto industry, and defaulting homeowners, he staunchly defended bailouts as beneficial to the people as a whole.

No one can accuse the president of inconsistency. To a remarkable degree, he turned the rhetoric of campaigning into the template for governing. The themes that emerged during his nearly two years on the stump became the core of his program. Nor can he be accused of timidity. Rejecting pundits’ advice to postpone expensive and politically challenging items such as universal health insurance and cap-and-trade legislation, he insisted on what he called during the campaign the “fierce urgency of now.” By elevating expectations on so many fronts, he went for broke, betting that his popularity and the people’s desire for firm and purposeful leadership would overcome entrenched obstacles to progress.

The speech was not only ambitious, but straightforwardly liberal. The president talked little about the private and voluntary sectors, or even state and local government. His emphasis was on what the national government can and must do to restart the engine of economic growth and achieve goals ranging from energy diversification and emission reductions to health care and education reform. “I reject,” he declared, “the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.” And he invoked the history of successful action at the national level: transcontinental railroads, the GI Bill, the interstate highway and space programs, and defense-related investments that spawned innovations such as computers and the internet.

Although President Obama led off his long-term agenda with energy, in many ways health care emerged as the single most pivotal item. The defects of the current system, he argued, were responsible for ills ranging from individual bankruptcy and job loss to long-term budget deficits. And he suggested, as has his OMB director, that the path to reining in Medicare costs runs through comprehensive health care reform, not the other way around. This means that the “entitlement reforms” pushed by advocates of fiscal restraint will take a back seat to universal access and savings produced by lower costs rather than fewer services.

As he has in recent days, the president promised to cut this year’s budget deficit in half during the next four years. Some listeners may have come away skeptical of that pledge: the speech was more forceful about additional spending than about fiscal restraint. Some experts share their doubts. A recent analysis by Brookings's William Gale and University of California’s Alan Auerbach concluded that both the CBO and the administration were too optimistic about the fiscal future and that the deficit will average at least $1 trillion per year for the next decade – even if the economy returns to full employment and the spending in the stimulus package is entirely temporary. A question lingers: does the program add up? Thursday’s budget submission will address these doubts but may not allay them.

President Obama did not use the occasion to add detail on burning short-term issues such as the home mortgage relief, banking rescue, or auto industry bailout. As a result, the markets may not respond favorably. But the president was evidently interested in the people’s response more than the market’s. If the speech built public trust, he will go forward with the wind in his sails. In the short term, public reaction is likely to be favorable. But if the people later conclude that the president’s reach exceeded his grasp, his bolds words may end up producing as much doubt as hope.