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The 2015 State of the Union: “middle-class economics” at center stage

January 22, 2015
Washington, D.C. (Chuck Kennedy/MCT)

He may have been bruised by the Democrats’ defeat in the 2014 midterm elections, and may face a Congress that is now fully under Republican control, but US President Barack Obama came out swinging in his seventh address on the State of the Union. With the national economy fully on the mend, growing an astonishing 5% in the third quarter of last year while the deficit shrinks and the unemployment rate heads toward the 5.5% threshold, the President was at last able to claim ownership of the accomplishments of his two administrations. He declared once and for all that though “it has been, and still is, a hard time for many,” America can finally “turn the page” from the crisis years. However, with his room for maneuver progressively diminishing, Obama’s speech sounded more like a farewell, reminiscing on his time in office, than the address to the nation of a president who still has another two years in the White House.

As it is often the case with the State of the Union, Obama’s speech centered largely on domestic policy. Foreign policy issues got only a short mention toward the end of the evening, and the President used much of that time to talk about the recent thaw in US-Cuba relations and to reiterate his cautious approach to international crises. “When we make rash decisions, reacting to the headlines instead of using our heads; when the first response to a challenge is to send in our military – then we risk getting drawn into unnecessary conflicts,” he said. “We lead best when we combine military power with strong diplomacy; when we leverage our power with coalition building.” Obama did state he would veto any new sanctions against Iran, because they “will all but guarantee that diplomacy fails,” and asked Congress to pass a resolution to authorize the use of force against ISIS in Syria.

But for the most part, peppering his remarks with the personal stories of everyday Americans, the President highlighted the successes of what he described as “middle-class economics”, or “the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.” Among the tangible results that have stemmed, in the last six years, from these guiding principles, Obama listed the increasing number of Americans who have health insurance thanks to the healthcare reform; the fact that Wall Street has been made safer by the stricter regulations imposed by financial reform; the US getting one step closer to energy independence because of the shale gas and oil boom as well as advancements in renewables.

Looking back, then, Obama can finally start counting his blessings. But the harsh reality that he must confront going forward, with the Republican opposition bent on preventing him from getting any of the items on his wish list, came into focus in the second part of his address, which is traditionally devoted to announcing a President’s most important policy proposals for the year ahead. Obama presented a number of ideas, from universal childcare to improved infrastructure, from paid sick leave for American workers (the only ones in the developed world who have no legal right to it) to two free years of college for American students, which are unlikely to gain the support of the House and the Senate. Little of consequence will probably come out of this new Congress, with some possible exceptions where there might be some space for the White House and Congressional Republicans to work together: a cyber-security legislation,  an overhaul of the corporate tax code and of trade deals, in particular the Asia-focused Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union. Having already exhausted many of the executive avenues at his disposal, on issues such as immigration and energy efficiency, Obama is therefore left with a powerful bully pulpit but limited leverage in the way of actual policies.

In this light, then, the latter half of Obama’s State of the Union remarks can be viewed as a launching pad for the 2016 campaign season, setting the terms of the political debate until then. He embraced an unabashedly liberal agenda, calling, among other things, to raise taxes on the richest Americans. An agenda which he might no longer be able to carry out himself, at least not in full, but whose baton he hopes to pass, in two years’ time, to a new Democratic president.

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