Grading Obama's State of the Union Address

January 29, 2010


President Obama's first State of the Union address on Wednesday focused on the economy, jobs, and education. Obama proposed a new jobs initiative, called for a freeze on non-defense-related discretionary spending, outlined plans to increase child-care tax credits, and introduced other relief to middle-class families and students. Cato Institute scholars live-blogged the address, offering real-time commentary of Obama's proposals.

During Obama's speech, Cato Budget Analyst Tad DeHaven noticed striking similarities between Obama's address and Bush's rhetoric. DeHaven dug up Bush's speeches and found surprising similarities between the two presidents. Cato also produced a short video that cut through the rhetoric and explained what the president really meant. Here are a few overall impressions from Cato experts:

Gene Healy: Overall, this speech was a major climb down. The president who was going to stop the oceans’ rise is now going to settle for "nearly doubling" the child-care tax credit. But in a way, that's progress.

Andrew Coulson: On education, this really was indicative of a third Bush term: more spending, more federal intrusion, a disregard for evidence proving the failure of federal programs. Americans looking for hope and change in education must turn to their state legislatures.

Tad DeHaven: There is a lesson to be learned this evening, and one that the burgeoning Tea Party movement in particular should heed. President Obama didn’t suddenly wake up last January with the awesome power to shape every facet of our lives: how we educate our children, get medical care, or purchase a car or house. It was the actions of his Democratic and Republican predecessors that enable him to wield such power today. The preceding Bush administration illustrates how power exercised by one administration is inherited by the next. In particular, the massive increase in federal spending, deficits, and debt that President Obama is rightly being criticized for are a continuation of the Bush legacy. Sure they differ on the details and some of the issues, but at the end of the day both men have demonstrated through their actions that they believe our individual liberties should be subjugated to the almighty state.




Cato Scholars Fact Check the Speech
Cato experts put some of President Obama’s core State of the Union claims to the test. Here’s what they found.

The Stimulus

Obama’s claim: “The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That’s right — the Recovery Act, also known as the Stimulus Bill. Economists on the left and the right say that this bill has helped saved jobs and avert disaster.”

Back in reality: At the outset of the economic downturn, Cato ran an ad in the nation’s largest newspapers in which more than 300 economists (Nobel laureates among them) signed a statement saying a massive government spending package was among the worst available options. Since then, Cato economists have published dozens of op-eds in major news outlets poking holes in big-government solutions to both the financial system crisis and the flagging economy.

Spending Freeze

Obama’s claim: “Starting in 2011, we are prepared to freeze government spending for three years.”

Back in reality: Edwards: “The president’s proposed spending freeze covers just 13 percent of the total federal budget, and indeed doesn’t limit the fastest growing components such as Medicare.

“A better idea is to cap growth in the entire federal budget including entitlement programs, which was essentially the idea behind the 1980s bipartisan Gramm-Rudman-Hollings law. The freeze also doesn’t cover the massive spending under the stimulus bill, most of which hasn’t occurred yet. Now that the economy is returning to growth, the president should both freeze spending and rescind the remainder of the planned stimulus.”

Plus, here’s why these promised freezes have never worked in the past and a chart illustrating the fallacy of Obama’s spending claims.

Job Creation

Obama’s claim: “Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year.”

Back in reality: Cato Policy Analyst Tad DeHaven: “Actually, the U.S. economy has lost 2.7 million jobs since the stimulus passed and 3.4 million total since Obama was elected. How he attributes any jobs gains to the stimulus is the fuzziest of fuzzy math. ‘Nuff said.”




Cato Quick Hits
Had enough of long speeches? Here’s a quick, ten-point libertarian State of the Union address.

Why the health care takeover failed.

A libertarian review of ‘Avatar’: “At its core, the movie is about defending property rights.”

How unions will get a sweetheart deal if the health care overhaul passes — and everyone else the shaft.




MULTIMEDIA



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Email Chris Moody, cmoody@cato.org