Obama Should Go Big And Bold For State Of Union

Jan. 20 (Bloomberg) — The news media won’t learn what’s in President Barack Obama’s State of the Union address until a few hours before he delivers it Tuesday night. But we know one thing: If the president doesn’t give us specific ideas of what he wants to do in a second term, he’ll have a harder time winning one.

Obama articulated new themes for his domestic presidency in an important speech on Dec. 6 in Osawatomie, Kansas, where former President Theodore Roosevelt, a Republican, had unveiled his “New Nationalism” in 1910. Obama described the struggle to “restore growth and prosperity, restore balance, restore fairness” as “the defining issue of our time” and called this “a make-or-break moment for the middle class.”

But the Kansas speech contained almost no proposals for how to “make” the moment. The State of the Union is where the president must actually explain how he would reduce income inequality, revive the middle class and restore faith in our battered democratic institutions. Trashing Mitt Romney (or Newt Gingrich) all year won’t be enough to get Obama over the finish line in November.

Last year, Obama used the State of the Union to explain that the U.S. could “win the future” if we worked to “out- innovate, out-educate, out-build” the rest of the world. The mantra of innovation, education and infrastructure is smart and effective, and he’ll probably repeat it. But because he spoke at the high tide of concern about the deficit, he didn’t dare propose anything bold to make that vision a reality.

This year, nobody expects anything serious to pass Congress, so Obama should use the moment to lay out a four-year agenda: a wish list that might inspire at least part of the country and remind us that we elected him to be “transformational.”

We know Obama will reiterate old arguments, including the need for the jobs and infrastructure bill rejected by Republicans (who forget that their party was founded in 1856 in part on support for “internal improvements”), comprehensive immigration reform and the $4 trillion in 10-year deficit reduction that the president and House Speaker John Boehner almost agreed to last summer (without any specifics, of course). We’ll hear about new energy exploration that didn’t get the publicity of the Keystone XL pipeline, protection of Medicare and Social Security, and another promise that all of the administration’s programs will be paid for.

But a speech that merely summarizes the ideas of a mean and disillusioning year will land like a thud. Instead, we need to know Obama’s investment strategy should he retain any of the political capital that tends to dissipate quickly in a second term.

The most pressing of those investments is in jobs. He should implement a creative growth policy that combines yet more incentives for new businesses (it’s new, not just small, businesses that create jobs) and fresh thinking like vouchers for veterans to use for employment with nonprofits.

In the longer term, the most important investments are in education. Obama will probably highlight the stark philosophical differences between the two parties here. He wants to fund early childhood education, hold schools and teachers accountable for performance, act to reduce dropout rates, and expand Pell grants for college. By contrast, the budget plan put forward by House Budget Committee chairman Paul Ryan, approved last year by all but four of his fellow Republicans, proposes sharp cuts in discretionary spending that are likely to severely curtail the federal role in education.

The speech should introduce Americans to a first-tier issue that somehow never gets talked about in presidential debates — the now-acute skills gap that makes it much harder for the U.S. to compete internationally. In the president’s hometown of Chicago, for instance, unemployment is at nearly 10 percent while local businesses are posting 100,000 job vacancies. Obama’s old chief of staff, Rahm Emanuel, now mayor of Chicago, has responded by blowing up the community college system, which has a pathetic 7 percent average graduation rate. Under Emanuel’s plan, industries (e.g. health care, IT, hospitality) will adopt a college, design the curriculum and train students.

Obama will surely repeat his support for “the Buffett Rule,” whereby those making over a million dollars a year would no longer be able to pay taxes at a lower rate than the middle class. But the president should go further and embrace fundamental tax reform that flattens rates and kills unfair deductions and loopholes. If he really wants to be bold he would propose replacing the payroll tax with a value-added tax (popular with Republicans) and a carbon tax (popular with Democrats). It’s much smarter to tax consumption and pollution than jobs.

Finally, Obama needs to become a champion of political reform. He has been weak on money in politics, opting out of public financing and rarely discussing in public what Teddy Roosevelt called “corrupt campaign practices.” He should use the State of the Union to build support for reforming the primary process (the root of polarization) along the lines of California’s new “top-two” nonpartisan primary and amending the Constitution in the wake of Buckley v. Valeo (1976) and Citizens United (2010) so that money no longer equals speech. With today’s disgust over super-PACs, the time is right.

No president can singlehandedly restore democracy or reverse structural economic inequality, which is caused largely by globalization, technology and forces beyond any leader’s control. But reform ideas and long-term investments in human capital might ease the problem at the margins, which in turn can soften political edges and help restore the sense of common purpose essential to continued American greatness.

(Jonathan Alter is a Bloomberg View columnist and the author of “The Promise: President Obama, Year One.” The opinions expressed are his own.)

Copyright 2012 Bloomberg


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