SOTU 2014: Reaction to President Obama’s State of the Union

In recent days, as President Obama’s aides previewed the 2014 State of the Union address, they made it clear that the central thrust would be “action,” in contrast to the legislative gridlock that characterized the disappointing first year of his second term.  Still, as the president took center-stage to deliver his speech, he had three large questions to answer:

First, how would he define the economic challenges that preoccupy the country?  Would he stress the populist theme of inequality, which raises the divisive issue of redistribution, or would he emphasize instead the more unifying theme of opportunity and upward mobility?

Second, in response to these challenges, what balance would he strike between a traditional legislative agenda and the alternative—much discussed in recent days—of executive actions he could take without congressional approval?

And finally, would his speech emphasize governance, or would it tilt toward rallying his party’s base supporters for what may be a very difficult midterm election, with control of the Senate at stake?

The president’s answer to the first question was unmistakable.  He invoked the classic American belief in “opportunity for all – the notion that if you work hard and take responsibility, you can get ahead.”  Indeed, he argued, “Opportunity is who we are.  And the defining project of our generation is to restore that promise.” 

This will not be easy, he acknowledged.  Our current economic ills have been long in the making and reflect forces beyond the agendas of either political party.  “Over more than three decades,” he said, “even before the Great Recession hit, massive shifts in technology and global competition had eliminated a lot of good, middle-class jobs, and weakened the economic foundations that families depend on.”  And while the president mentioned the widening inequality between those at the top and everyone else, he focused on stagnating wages, stalled mobility, and the millions of working Americans struggling to get by, let alone ahead, along with the millions who aren’t working at all.  Our job, he said, is to “reverse these tides”—by speeding up growth, strengthening the middle class, and building new ladders of opportunity into the middle class.

As for the balance between legislative and executive action, Mr. Obama put it this way:  “America does not stand still – and neither will I.  So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”  In that vein, he announced more than twenty executive orders and other actions, including an increase in the minimum wage for federal contract workers, establishing four new manufacturing institutes, convening a meeting of CEOs to encourage hiring the long-term unemployed, and forging a public-private partnership to connect public school students to 21^st century information technology.  Seven of the executive actions dealt with energy and the environment, including the development of shale gas, alternative energy sources, advanced vehicle technologies, and fuel efficiency standards for trucks.  He insisted bluntly on the reality of climate change, which he characterized as our responsibility to future generations.  

At the same time, the president laid out a multi-pronged legislative agenda.  On the economy, as anticipated, he proposed raising the minimum wage for all workers, extending emergency unemployment insurance, expanding the Earned Income Tax Credit, and pairing corporate tax reform with increased infrastructure investment.  He renewed his call for pro-growth public investments and endorsed Trade Promotion Authority to facilitate agreements with Asian countries and the European Union.  While advocating comprehensive immigration reform along the lines of the bill the Senate enacted last year, he recognized multiple paths the House of Representatives could take and pledged to work with all parties to make reform a reality.       

Contrary to the predictions of many pundits, Mr. Obama’s State of the Union address was decidedly traditional in tone and substance.  The president offered a laundry list of ideas, only some of which pertained to the core economic issues he identified.  (Notably, he had almost nothing to say about issues many Americans regard as critical—namely, achieving fiscal balance and securing Medicare and Social Security for the long term.)  His language was mostly devoid of overt partisan provocation.  On policy, he gave little ground to the Republicans, but he did little to confront them either.  He made a fervent appeal for women’s economic equality, but without repeating Democratic charges that Republicans were waging a “war on women.”  While he strongly defended the Affordable Care Act, it would have been far more surprising had he not done so. 

At the end of the day, the question is whether President Obama’s agenda responds adequately to his own diagnosis of the problem.  If we are in the grip of decades-old shifts toward globalization and the substitution of technology for labor, as he insists, it is not clear that all his proposals taken together would do much to change the basic equation for working families.  The president is betting that a steady- as- you-go strategy with modest incremental adjustments will be enough to restore rising wages and opportunity for all.  In the judgment of the American people, the results of this strategy so far have been far from adequate.  If the rest of the world cooperates, the next few years may be better.  If not, the calls for more far-reaching changes will intensify.