A STATE OF THE UNION address from a president seeking reelection is always an odd event. Especially in the face of a divided Congress, the president’s proclaimed program stands little chance of enactment. The ambitious agenda of years past gives way to the knowledge, born of painful experience, of how difficult that will be to achieve. Meanwhile, the president’s proposals are made in the context of the race about to be joined, stacked up against the pie-in-the-sky promises of his opponents. The subtext is, inevitably, less a blueprint of the year to come than an explanation of why the president deserves reelection and a sneak preview of a second-term agenda.
In that context, President Obama’s speech Tuesday night combined soaring rhetoric with crowd-pleasing, often small-bore proposals. Mr. Obama spoke movingly about the eroding economic security of much of the middle class. Building on themes he sounded a few months ago in Osawatomie, Kan., the president argued against, as he put it, “settl[ing] for a country where a shrinking number of people do really well, while a growing number of Americans barely get by.” To raise this issue is not, as former Massachusetts governor Mitt Romney (R) asserted even before the president’s speech, “divisive rhetoric from a desperate campaigner in chief.”
The president’s biggest new idea was attaching a number to his previously articulated “Buffett Rule” — billionaire Warren Buffett’s position that he should not pay a smaller share of his income in taxes than his secretary’s; she was in attendance in the first lady’s box. Mr. Obama announced that not only billionaires but all those earning $1 million or more a year should pay at least 30 percent of their income in taxes. Think of this as a new version of the alternative minimum tax.
This position sets up a politically useful contrast between Mr. Obama and Mr. Romney. It is not a fleshed-out proposal that the administration expects, for example, to produce as a line item in the forthcoming budget. Administration officials could not tell us how much revenue such a change would produce. But Mr. Obama is right to take on the unlevel and distorting playing field of a code that taxes ordinary earned income at a much higher rate than investment income.
Mr. Obama has said he wants to make the tax code simpler, but his proposals would further complicate it, adding or reshuffling preferences for manufacturing. This kind of picking and choosing between manufacturing and other businesses, or between different kinds of manufacturers (the president said he wants to double the deduction for high-tech manufacturers), or between towns that have lost factories and towns that haven’t, introduces needless complexity into an already unwieldy code. It also relies on a vision of manufacturing as an engine of jobs that may not be realistic in an age of increasingly automated factories.
Once again Mr. Obama slighted the threat that the federal deficit poses to the growth he said he wants. As with last year’s State of the Union speech, when he relegated the debt to a near-aside late in the speech, Mr. Obama did not go beyond a rhetorical nod to the issue. Indeed, in arguing for increased investment in U.S. infrastructure — a worthy idea — Mr. Obama gave up on the traditional approach of paying with an increase in the gasoline tax or similar user fees. Instead, he relied on the dodge of “paying for” those costs by using some of the savings from winding down operations in Iraq and Afghanistan. The administration is right to be frustrated by congressional unwillingness to consider real pay-fors, but wrong to respond with a measure that would just make the deficit worse.
Mr. Obama’s discussion of foreign policy focused on the two achievements likely to be a major focus of his election campaign, the withdrawal of the last troops from Iraq and the killing of Osama bin Laden. He vowed that America would remain (borrowing President Clinton’s phrase) the one “indispensable” nation, even as he cuts a half-trillion dollars from the military budget. The president did not hint at any significant foreign policy initiatives for the coming year; even on Iraq, he failed to discuss future relations with that strategic oil producer, which has headed toward renewed internal conflict since the last U.S. soldiers pulled out.
Indiana Gov. Mitch Daniels, delivering the Republican rebuttal, had the fiscal question right when he said: “If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category.” But his eloquence is undercut by his party’s refusal, far more doctrinaire than Mr. Obama’s, to entertain responsible proposals to pay for the nation’s needs.