Monday, January 24, 2011

The Elephant in the Room: Will Obama address the deficit adequately on Tuesday?

According to a video sent to his supporters on Saturday, President Obama will use Tuesday’s State of the Union address to broadly discuss America’s current and future competitiveness. In this video preview, Obama states that his “principle focus is making sure that we are competitive, that we are growing, and that we are creating jobs not just now, but well into the future.” From a purely political perspective, Tuesday’s SOTU address presents a crucial opportunity for Obama. Considering the outcome of the midterm elections and the ever-approaching presidential race in 2012, all signs point toward a move to the center for Obama. He will likely use Tuesday’s SOTU to solidify this move by emphasizing job creation in the private sector, although he is expected to offer a spirited defense of the Patient Protection and Affordable Care Act.

I hope, however, that Obama’s SOTU is not all about right/left/center politics. When it comes to the biggest issue at hand, the deficit, Obama’s address can and should transcend partisanship. Yes, Republicans and Democrats will disagree on how to increase government revenues. Yes, they will disagree on where to cut spending. Nevertheless, there is no question that America's future prosperity is inextricably linked to our ability to immediately address the long-term deficit. Obama has an opportunity to make this case and lay the foundation for a long-term deficit reduction plan. The Simpson/Bowles plan began the deficit discussion, although it has since lost traction to other issues such as health care repeal.

Obama is likely going to outline “five pillars” for ensuring America’s competitiveness and economic growth on Tuesday night: innovation, education, infrastructure, deficit reduction and reforming government. The difficult job, however, will be to intertwine these five pillars into one coherent and workable package. He will have to explain how investments in infrastructure, education, and innovation will pay off in the long-term even if they are expensive in the short-term. He will have to make tough choices at some point about where to reduce spending and he will have to explain these reductions. Most importantly on Tuesday evening, however, he will have to instill a new sense of fiscal responsibility in both our legislators and the American people.

The stage is set for President Obama to deliver a powerful and pivotal speech on Tuesday evening. Republicans and Democrats will be interspersed throughout the audience in a show of bipartisanship, albeit with substantially more Republicans in the House chamber than during Obama’s last SOTU. Obama should take the broad topic of “improving American competitiveness” one step further by addressing the underlying problem and elephant in the room- our irresponsible spending habits and ballooning nation debt.

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