On January 25 – the day after President Obama delivered his State of the Union address before a polarized Congress – Brookings hosted a discussion exploring how the president’s speech could impact critical policy challenges facing the nation during this contentious presidential election year. The first panel, moderated by Senior Fellow Thomas Mann, examined a range of domestic and global issues; participants included Karen Dynan, Martin Indyk, Eswar Prasad and Robert Puentes.
The panelists agreed the president’s speech focused on domestic economic policy, and specifically on proposals to spur sustainable economic growth. Karen Dynan said the speech offered a laundry list of policy options, but that it lacked a clear narrative on how to “address our labor market problems in the short term and our budget deficit in the long term.”
Thomas Mann noted the political challenges of deficit reduction. “Leading with his chin on a broad plan for deficit reduction in the face of Republican tax proposals that would dramatically cut taxes would set him up politically to lose the election,” Mann said.
To achieve the president’s goals on exports, manufacturing, infrastructure and energy, Robert Puentes cited the need to harness energy at the state and metropolitan levels. “We need to go to the heart of the American economy—the states and metros—to capture their innovation and momentum,” said Puentes.
Addressing global economic and trade issues, Eswar Prasad said the president’s speech made very clear the U.S. will not tolerate unfair competition from other countries, with China being the primary competitor. “It’s going to be important to be very tough on China,” said Prasad.
Martin Indyk said President Obama was tough and clear on Iran, but that the United States is in a very tense and dangerous period. “In an extreme scenario, the president could well order a military strike,” Indyk said. “In order to try to prevent that from happening, the president is focused on trying to get the international community behind these very strong, crippling sanctions.”
During the second panel, William Galston, Elisabeth Jacobs and Pietro Nivola put the speech into the context of the 2012 election and examined how growing mistrust of government may shape the presidential campaign.
“The President eloquently invoked the ideology of fairness, solidarity, collective action and common purpose,” said William Galston. “But given the pervasive mistrust of government today, it’s unclear what will happen when these themes run up against the individualist and libertarian values espoused by many independent voters.”
This event was live tweeted using the hashtag #BISOTU.
Professor of the Practice of Economics - Harvard University
Nonresident Senior Fellow - Peterson Institute for International Economics
To subscribe or manage your subscriptions to our top event topic lists, please visit our event topics page.
Sentiment inside the Beltway has turned sharply against China. There are many issues where the two parties sound more or less the same. Trump and others in the administration seem heavily invested in a ‘get very tough with China’ stance. It’s possible that some Democrats might argue that a decoupling strategy borders on lunacy. But if Trump believes this will play well with his core constituencies as his reelection campaign moves into high gear, he will probably decide to stick with it, if the costs and the collateral damage seem manageable. But that’s a very big if, especially if the downsides of a protracted trade war for both American consumers and for American firms become increasingly apparent.