Reading Obama

With a forward-looking speech that laid out his vision for America beyond this coming legislative year, President Barack Obama used his State of the Union address to issue a call for the nation to rise and face, boldly, the new challenges of today’s fast-changing world.

By pushing for new investments in innovation, education and infrastructure, while also outlining a plan – although vague – for reigning in government spending and reducing the ballooning budget deficit, Obama tried to wrestle control of the political agenda away from the Republicans, and also aimed at the center, trying to appeal to those independent voters that supported him in 2008 but abandoned him in the 2010 midterms.

He acknowledged the ideological differences and the fierce debate that have divided Republicans and Democrats over the past two years, calling them “what a robust democracy demands,” and then moved to seek a higher ground and spoke directly to the American people. In doing so, Obama embraced the less acrimonious atmosphere that followed the January 8th Tucson shooting, which left six people dead and 13 others wounded (among them, Representative Gabrielle Giffords of Arizona).

With Democrat and Republican Senators and Congressmen sitting side-by-side for the first time (normally parties are seated separately), the overall mood for the evening was largely courteous; no one shouted “You Lie” at the President this time around.

Obama gave a rather upbeat assessment of the state of the recovering economy, “We are poised for progress,” he said. “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.”

But problems loom ahead, unless the United States takes bold steps to position itself once again as the leader of a new interconnected world where, in the President’s words, “rules have changed” and “the competition for jobs is real.”

Calling this “our generation’s Sputnik moment,” – a reminder that, after the Soviet Union managed to put the first satellite in space, it was thanks to greater and smarter government investment that America was able to come up on top again – the President pointed to three critical areas which can help restore American competitiveness in the global economy and spark job creation: clean energy, biomedical research and information technology; quality and affordable education; and updated infrastructure, like high-speed rail and high-speed Internet.

Obama set a few ambitious goals: to make sure that, by 2015, there are 1 million electric vehicles on American roads, and that, by 2035, 80% of America’s electricity comes from clean energy sources. “To help pay for it,” Obama said triggering the applause of only the Democrats, “I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies.”

As for education, the President set equally ambitious objectives, “by the end of the decade, America will once again have the highest proportion of college graduates in the world.”

Of the three main pillars outlined by the President, innovation, education and infrastructure, the latter will certainly be the harder for Congress to coalesce around. Many Republicans view public investment in infrastructure as something the country can ill-afford in the middle of an economic crisis. Nevertheless, Obama outlined a plan that would, within the next five years, bring the next generation of high-speed wireless coverage to 98% of Americans and, within the next 25 years, ensure that at least 80% have access to high-speed rail.

After laying out his philosophy of an active federal government – which stands in stark contrast to Republican ideals – the President made an overture to the opposition and received standing ovations in return. He acknowledged the need for an overhaul of the corporate tax code, pointing out that it is too burdensome and outdated. “I’m asking Democrats and Republicans to simplify the system,” said Obama. “Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit.”

In order to help businesses and fuel exports, Obama also promised a review of government regulations. “When we find rules that put an unnecessary burden on businesses, we will fix them,” the President said. “But I will not hesitate to create or enforce commonsense safeguards to protect the American people.”

Finally, the President discussed the urgent need to tackle a budget deficit now out of control. Obama announced a freeze of annual domestic spending for the next five years, which, he claimed, would reduce the deficit by about $400 billion over the next decade. This action will affect a range of departments, including cuts to military spending already volunteered by Defense Secretary Robert Gates.

The President appeared willing to discuss further cuts, even to popular programs like Medicare and Medicaid – sacred to most Democrats – although he remained vague on specifics. Overall, Obama said, any cut needs to be carefully weighed. “Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine,” the President said. “It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.”

While reaching out to the Republicans on issues like the tax code overhaul and deficit reduction, Obama largely stood his ground on the agenda pursued in the last two years. “I’ve heard rumors that a few of you have some concerns about the new health care law,” the President said amidst laughter from both parties. He expressed his willingness to work with the opposition to improve the current law, but made it clear that he has no intention of starting from scratch. “Instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward,” said the President.

Obama’s unexpected call for restructuring the federal government, which left many Republicans puzzled, best exemplifies the President’s attempt to strike a balance between a conciliatory tone toward the opposition and the desire to control the agenda for the year ahead. He promised to put forward a proposal, within the next few months, “to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America.” By doing so, Obama took an issue dear to the Republicans – that the federal government is bloated and ineffective – and made it his own.

Only a few months after the “shellacking” suffered by the Democratic Party in the 2010 midterm elections, Obama, whose approval ratings are now starting to recover, appeared re-energized. “We do big things,” he said. “From the earliest days of our founding, America has been the story of ordinary people who dare to dream.”

Aware that, with a Republican-controlled House, it will be hard to achieve any significant legislative progress in the next two years, the President attempted to set aside partisanship and the nitty-gritty of everyday politics to present his grand vision. Whether this call for unity and focus on long-term goals will yield any practical results in the short-term depends on what happens starting today.