President Obama’s State of the Union address Tuesday predictably covered a wide range of topics, but the president’s fundamental theme was directly on target: The need for fresh energy and focus on the paucity of job growth, and the best ways to mend the job meltdown. That is the core economic problem that now challenges the nation, and it will continue to challenge Americans for most of the coming decade.
Anemic job growth continues to sap the economy and sour the outlook of working Americans. With more than 15 million Americans still looking for new jobs, or better jobs, it would take five years of rapid job growth like the nation had in the 1990s, with several million new jobs a year, to bring unemployment down from around 9.5 percent to around 6 percent. Such a job boom is presently nowhere on the horizon. And with rapidly growing competitors like China and India, with vast pools of cheaper and better educated workers and increasingly sophisticated technology in both manufacturing and white-collar industries — all of which Obama recognized — job growth is likely to be the core issue for the next decade, and beyond.
Much as Republicans like to claim otherwise, Obama cannot fairly be blamed for the terrible job slump that has ravaged the economy in the wake of 2008 financial implosion and the Great Recession that followed. He can, perhaps, be blamed for initially underestimating the depth and duration of the job slump, and for over-promising what his administration and Congress’ stingy approach to stimulus spending could do about it.
But at least Obama seems now to recognize the most likely path out of the economic storm and the obstacles that have simultaneously arisen. Hence his call to invest more intensively in innovation, infrastructure and education on the one hand, while, on the other, working toward a leaner, more effective government that is committed to clearing the obstacles and assembling the strategies to secure job growth.
This work, to be sure, would to be a tough slog even if Washington were agog on genuine bipartisanship. But it’s not, so partisan friction and political jockeying in the run-up to the 2014 elections remains itself an obstacle to righting the economy and spurring job growth and lower deficit spending.
Still, Obama made it clear that he remains dedicated to the education and infrastructure pieces, which are critical to leveling the widening leads in each by Asian and European competitors that already have accumulated a large advantage. He is correct to pursue those goals. Innovation and job creation can’t grow fast unless Americans enter the work-force better prepared, with higher knowledge and better skill sets, and an infrastructure in place to take advantage of those attributes.
Unfortunately, Obama’s agenda doesn’t appear to have much support among many Republicans. His strategy would involve public spending — on infrastructure, technology, energy efficiency, education and research — which Republicans largely oppose in their reckless zeal to cut spending even more deeply than Obama proposes.
Even if the GOP’s House majority could get their cuts past Senate Democrats, the GOP direction would be counter-productive, diminishing investments and capacity that support higher-level jobs and further depressing needed job-growth and tax revenue.
Nevertheless, Obama promised some common directions and significant compromises. He proposed to continue his current freeze on domestic spending and promised to extend it for five year. He offered Republicans a bipartisan effort on tax reform, possible reductions in Social Security and Medicare benefits, a deal on medical malpractice, and a significant cut in corporate taxes if loopholes and special interest deductions can also be cut.
But he also challenged Republicans to quit pretending that budget deficits and bulging national debt can be reduced by slashing just selected domestic programs, which amount to barely 10 percent of the federal budget, while extending the Bush tax cuts for the ultra wealthy.
His appeal for a bipartisan approach showed, as well, that he took the drubbing Democrats received in the November elections seriously. Thankfully, he also showed firm support for health care and immigration reform and tax equity, and a willingness to remain a defender of the working and middle classes of Americans.