“I think that if you look at the drivers of productivity over the long term and you look at the things that will position our economy but also our workforce to compete for the jobs of the future, they dovetail with the priorities the president has set,” Deese said.
Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities and a former administration adviser, said Obama’s plans, if fully realized, would strengthen the middle class. But it would take time.
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“It would be incremental,” he said. “You’re not going to reverse decades of bad market outcomes for most of the population in a few years.”
Lawrence Summers, a Harvard professor and another former Obama adviser, said the nation’s economic success could come sooner than many anticipate.
“There’s a real prospect that as the economy recovers, that given what the United States has been able to do with information technology, given the resources that are becoming available in the energy sector, given that we’ve started to see greater results in terms of education, then I think people may be surprised by the progress that we see,” he said.
In his remarks, Obama did not explicitly mention the nation’s unemployment rate — currently at 7.8 percent. Many economists say reducing that must remain the top goal.
“There needs to be more done in the short run to make progress on the unemployment rate,” said Lawrence Katz, a Harvard economist. “His whole agenda would be much more likely to have medium-term impact if we got short-run benefits to the economy. Those are the things that don’t seem to be going anywhere with Congress.”
Obama has long pushed for additional spending on roads, bridges, railways and other construction projects as an elixir for multiple economic problems. He is expected to continue to push for such spending in coming months, with the president viewing it as a way both to find jobs for out-of-work Americans and to make the country more competitive.
“It has the right combination of supporting short-term demand but also helping with long-term challenges of increasing productivity and competitiveness,” Deese said.
It is a tall order, however. Obama was able to secure tens of billions of dollars in infrastructure spending in his 2009 stimulus bill, but Congress never took up his later proposals to direct more taxpayer dollars toward this aim. Republicans rejected the idea in the recent negotiations over avoiding the tax hikes and spending cuts known as the “fiscal cliff.”
Beyond taking short-term steps to boost economic growth, Obama plans to continue to pursue deficit reduction talks with Republicans. Negotiations in 2011 and 2012 produced a package of spending cuts and tax hikes that will begin to stabilize federal borrowing.
Obama is advocating a rewriting of the nation’s tax code to raise more revenue by limiting deductions for the wealthy and closing corporate loopholes, and he also says he wants modest changes to entitlement programs such as Medicare and Social Security to save money. While Republicans also want to see the tax code reformed, they say they are finished raising new tax revenue and instead want deep cuts to entitlement spending.
Congress must act in coming weeks to avoid deep automatic cuts in spending set to take place in early March. Later in the spring, Congress must raise the limit on federal borrowing or risk a government default.
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