Posted on Thursday, January 27, 2011
At more than 6,000 words, there was a lot in tonight's State of the Union. The bulk of it was a vision of what American economic policy should be pointed towards in the years to come: A country that has a better educated workforce, a more sophisticated infrastructure, and a more innovative economy than any other. A country where the public sector has an acknowledged and crucial role in supporting the private sector.
But vision is there to support policy. And though there were a lot of policy proposals in the speech, there weren't enough specifics to really know where the president is going.
For all the talk of investment, it was presented more as a philosophy than a proposal. The president expressed his intention to invest in "biomedical research, information technology, and especially clean energy technology," but no dollar amounts were discussed. He set a goal of producing 80 percent of America's energy from renewables by 2035, which has impressed many in the clean energy community as being laudably ambitious. But whether that goal will have sufficient research funding or serious enforcement mechanisms behind it remains to be seen.
Infrastructure investment also got some goals -- giving 80% of Americans access to high-speed rail, and 98 percent of Americans access to high-speed internet -- but no numbers. And so too for education, where the president extolled the 'Race to the Top' program as the future of education reform, but offered few specifics for what that meant. Twice as much money? The same amount of money?
In contrast, the proposals for deficit reduction were relatively specific. The president proposed to "freeze annual domestic spending for the next five years," which "would reduce the deficit by more than $400 billion over the next decade." He also called for the expiration of the Bush tax cuts for income over $250,000. The president could've been similarly specific on the other side of the ledger. He could've said, for instance, that for every three dollars we cut, one will be invested in our future. Or that following the recommendations of the CEO-led Council on Energy Innovation, we should invest $16 billion annually in clean energy research. But he didn't.
The White House says more numbers will be forthcoming in their 2012 budget. That's undoubtedly true. But until then, it's hard to say what the president really means when he talks about investment, because we don't know how much investment he's proposing that we do -- nor where the money will come from.
What follows is the text of the president's speech, edited down to the specific positions, proposals and requests, and sorted by issue area:
Research and Development:
Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.
I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.
Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.
Race to the Top is the most meaningful reform of our public schools in a generation. For less than one percent of what we spend on education each year, it has led over 40 states to raise their standards for teaching and learning. These standards were developed, not by Washington, but by Republican and Democratic governors throughout the country. And Race to the Top should be the approach we follow this year as we replace No Child Left Behind with a law that is more flexible and focused on what’s best for our kids.[...]
Of course, the education race doesn’t end with a high school diploma. To compete, higher education must be within reach of every American. That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit – worth $10,000 for four years of college.[...]
One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.
Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let’s agree to make that effort. And let’s stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.
Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I’m proposing that we redouble these efforts.
We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what’s best for the economy, not politicians.
Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down. As we speak, routes in California and the Midwest are already underway.
Within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans. This isn’t just about a faster internet and fewer dropped calls. It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.
Now, I’ve heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.
What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition. I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I’m not willing to tell Jim Houser, a small business owner from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage. So instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.
Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.
So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit.[...]
The best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.
Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs. That’s what we did with Korea, and that’s what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks.
So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.
This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.[...]
Now, most of the cuts and savings I’ve proposed only address annual domestic spending, which represents a little more than 12% of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won’t.
The bipartisan Fiscal Commission I created last year made this crystal clear. I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.
This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.
To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.
And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break.
To reduce barriers to growth and investment, I’ve ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That’s what we’ve done in this country for more than a century. It’s why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It’s why we have speed limits and child labor laws. It’s why last year, we put in place consumer protections against hidden fees and penalties by credit card companies, and new rules to prevent another financial crisis. And it’s why we passed reform that finally prevents the health insurance industry from exploiting patients.[...]
In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote – and we will push to get it passed.
In the coming year, we will also work to rebuild people’s faith in the institution of government. Because you deserve to know exactly how and where your tax dollars are being spent, you will be able to go to a website and get that information for the very first time in history. Because you deserve to know when your elected officials are meeting with lobbyists, I ask Congress to do what the White House has already done: put that information online. And because the American people deserve to know that special interests aren’t larding up legislation with pet projects, both parties in Congress should know this: if a bill comes to my desk with earmarks inside, I will veto it.
Thanks to our heroic troops and civilians, fewer Afghans are under the control of the insurgency. There will be tough fighting ahead, and the Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them. This year, we will work with nearly 50 countries to begin a transition to an Afghan lead. And this July, we will begin to bring our troops home.
Tonight, let us speak with one voice in reaffirming that our nation is united in support of our troops and their families. Let us serve them as well as they have served us – by giving them the equipment they need; by providing them with the care and benefits they have earned; and by enlisting our veterans in the great task of building our own nation.
Our troops come from every corner of this country – they are black, white, Latino, Asian and Native American. They are Christian and Hindu, Jewish and Muslim. And, yes, we know that some of them are gay. Starting this year, no American will be forbidden from serving the country they love because of who they love. And with that change, I call on all of our college campuses to open their doors to our military recruiters and the ROTC. It is time to leave behind the divisive battles of the past. It is time to move forward as one nation.
By Ezra Klein, THE WASHINGTON POST