In a forceful speech to Congress this evening, President Obama accomplished two key tasks. First, he unveiled an impressive stimulus proposal, which includes $450 billion worth of spending aimed at jumpstarting the stagnant recovery. Second, and perhaps more importantly, he articulated a clear vision for the role of government in American life – a much-needed alternative narrative to the go-it-alone message from Republicans.
Let’s start with the substance. (The President himself requested that we focus on substance over politics, beginning his speech with a wrist-slap to the media for an obsessive focus on politics over policy.) Many of the President’s proposals are, in many ways, a commitment to doing what we should have been doing all along. A failure to extend the payroll tax cut and the unemployment benefits extension would have dragged the economy down, endangering a sputtering-out from stall-speed. Our nation’s crumbling roads and bridges, our congested airways, and our crowded schools are all testament to the underfunding of American infrastructure, and the President’s proposed investments in infrastructure (including a version of the Infrastructure Bank, a bi-partisan idea that’s been floated for ages and is long-overdue for implementation) are a long-needed down-payment on America’s future, with the added benefit of creating jobs in the process.
Other proposals, however, represent real, bold policy innovation. Perhaps most notably, the President introduced the idea of a tax credit for hiring the long-term unemployed workers. While not included in his speech, the details of his proposed bill include other innovations targeted specifically at the unemployed, and a much-needed emphasis on the long-term unemployed. With a price tag of $450 billion, the policy proposals introduced here have the potential to make a real dent in the nation’s economic woes – respected economists have argued that a stimulus investment (and that’s what it is – an investment, not simply “spending”) of over $400 billion is necessary to jump-start growth and repair the American economy. The President has offered a policy package with enough oomph to get the country’s motor running.
As important as the nuts-and-bolts policy details are (and they are important, as they will serve as the starting point for negotiations in Congress), the bigger take-away from the President’s speech is the on the style side. Tonight, Obama reclaimed space in the debate for a progressive vision of government. He anchored the speech early on with a tacit acknowledgement that the Great Recession occurred at a time when many middle-class families were already struggling, and when the American “compact” of success in exchange for hard work and loyalty has eroded. The goal of recovery, then, should not just be about getting us back to where we were before the recession hit. Rather, the goal of recovery should be to reclaim American greatness. The speech’s strongest points were those where the President spelled out his vision of American “greatness,” one that combined American rugged individualism and can-do spirit with the understanding that there are certain things that require nation-wide cooperation, government investment. That harkening back to the “belief that we are all connected, and that there are some things we can only do together, as a nation,” is strong medicine for a fractured country.
Obama also infused his speech with much-needed urgency. At times, that language of urgency came off clunky and awkward – the speech repeated the “pass this bill now” refrain too many times to be counted as one of Obama’s oratory masterpieces. But the message here is clear, and delivers a real challenge to Republican Congressional adversaries. In essence: I have a plan, and a dare you to not act. In this speech, Obama laid a framework for forcing a choice between a moderate, reasonable, mature President and an extreme, obstructionist opponent. If one takes the speech from the perspective of electoral politics and views it as the opening shot in his gambit for re-election, this is a reasonable strategy.
The President’s speech was not perfect. Indeed, a too-lengthy diversion on the deficit Super Committee’s task was a mis-step that took focus away from an otherwise powerful speech. But it was a powerful speech nonetheless, infused with urgency and speaking to the concerns of an American public who face near-historic levels of uncertainty and hardship. After a summer in the message woods, Obama seems to be wandering out of the forest with powerful plan in hand.
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.