What Obama Got Right and Wrong in the State of the Union
The Problem With Obama’s Shrinking Deficit Talking Point
President Obama touted shrinking deficits in today’s State of the Union address. This is about the only time in the foreseeable future the president will get to say that. The average annual deficit over the next decade is projected at $950 billion, just shy of a trillion. Starting this year and looking out as far as projections go, the deficit–absent further policy changes–is only heading in one direction: Up. Why address chronic and rising deficits confronting the nation, when you can enjoy a talking point while it lasts?
— Romina Boccia
The Real Story on Obama’s Sensible Regulations
President Obama claims credit for crafting “sensible regulations” that will prevent another financial crisis as well as a new government “watchdog” to protect consumers. But the massive Dodd-Frank regulation statute actually entrenches the concept of “too-big-to-fail,” the very concept upon which bailouts are based. And the new “watchdog,” the Consumer Financial Protection Bureau, has exploited its unconstrained regulatory powers over virtually every aspect of consumer finances, including banking services, mortgages and credit cards—none of which had any connection to the financial crisis. The result has been higher costs for financial services and fewer options, which actually has inhibited the economic recovery and consumer welfare. — Diane Katz
President Obama Disappoints on Business Tax Reform
President Obama and his staff rolled out his plan to raise taxes on the rich and give targeted tax cuts to some middle class families this weekend. Surprisingly, he made little specific mention of this plan in tonight’s speech.
He mentioned a significant increase of the child care credit, which only benefits families that choose to pay for care outside the home.
Then he made vague reference to closing loopholes in the tax code, but gave little indication of which he’d like to see closed. He did make clear, of course, that he wants these undefined loopholes closed to raise taxes to pay for infrastructure spending. If loopholes are to be closed, tax rates should be lowered so as not to cause a tax hike.
He did mention that he wants to see loopholes closed that allow businesses to keep foreign income offshore. This could mean many things, but is most likely ending deferral, which allows businesses to avoid paying the highest-in-the-world corporate tax rate until they bring their foreign income back to the U.S. We need to reform how we treat businesses’ foreign income, but Obama’s plan goes in the wrong direction. We need to move to a territorial system that does not tax foreign income, just like almost all other developed nations use.
Lastly, he talked about raising taxes on wealthy heirs, which really means he wants to raise capital gains taxes on the rich. Far from soaking just the rich, higher capital gains taxes will hurt middle class and low-income families because it will slow economic growth.
The big disappointment tonight is that Obama did not commit to lead on business tax reform. This vital policy improvement is necessary to spur economic growth, but it will only happen if the president leads the charge. His failure to take the reins likely means business tax reform will have to wait yet another year. — Curtis Dubay
Obama’s Export Subsidies Favor Only the Few
The president notes the economic benefits of exports, and recognizes that “today, our businesses export more than ever.” Why, then, is he pressing for a long-term reauthorization of the Export-Import Bank, which puts American businesses at a disadvantage by subsidizing their foreign competitors? Ex-Im’s taxpayer-backed financing largely benefits some of America’s biggest, most successful multinational corporations. With privately financed exports reaching record levels, there is no justification for continuing this cronyism. — Diane Katz
Obama Is Wrong on Internet Regulation
In his address tonight, President Obama called for a “free and open Internet.” That is a worthy goal, but the policies he has called for would actually make the Internet less free and less open. He has called for regulators at the Federal Communications Commission to impose heavy new regulations on the Internet providers. These regulations would treat the companies that provide Internet access as public utilities, under rules written telephone companies over a hundred years ago. Applying such 19th century restrictions to the Internet of the 21st century makes no sense. The predictable consequences of such regulation would leave competition reduced, Internet users worse off and the Internet less free. The FCC and Congress should reject this dangerous regulatory scheme on consumers. Instead, the Internet marketplace should be allowed to function unimpeded, policed by competition and the same competition laws that apply to other industries. (For more information, see here.) — James Gattuso
Once Again with the War on Women
Well, well. It seems like President Obama needs one lesson in history and one in statistics. According to the president “this Congress still needs to pass a law that makes sure a woman is paid the same as a man for doing the same work. Really. It’s 2015. It’s time.” Actually, Congress did pass such a law in 1963 and President John F. Kennedy signed it. It is called the Equal Pay Act and the country is 52 years into it. Now on to statistics. Based on previous remarks by the president, the gender wage gap is the basis for the president’s claim that women do not receive the same pay for the same work as men. Yet even that claim has little basis in reality. The president’s very own Labor Department concluded that “the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.” No thank you, Obama, we’re doing more than fine making our own choices without your misguided labor policies—they only promise to do more harm than good. — Romina Boccia
Free Trade Is Fair Trade
In his State of the Union Address, President Obama said: “We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.” The goal of trade agreements should not be to “level the playing field” or to promote “fair” trade. It should be to promote prosperity by bringing down trade barriers, in the United States and abroad. Data in the Index of Economic Freedom, an annual guide published by The Wall Street Journal and The Heritage Foundation, consistently show that countries with low trade barriers are more prosperous than countries that restrict trade. That’s why trade promotion authority should be carefully crafted to generate trade agreements that promote economic freedom. Progress in trade is not about writing rules. It’s about opening up new opportunities for Americans to buy and sell freely with people around the world. Americans need opportunity, not protection. — Bryan Riley
Government Policies Caused the Financial Crisis and Made the Recession Worse
The root cause of the financial crisis, and the recession, was a set of government policies. President Bill Clinton’s National Partners in Homeownership set a completely arbitrary goal of increasing home ownership, and it turned out most qualified homebuyers already owned homes. All the additional lending helped to create a housing bubble and increase consumer debt, and the capital requirements that federal regulators imposed on the financial system spread risky loans throughout the markets. The system that gave us the crisis – affordable housing goals, shaky underwriting standards and Fannie and Freddie – remains largely in place. If we want to prevent another crisis, these policies need to be reversed. — Norbert Michel
Paid Sick Leave
Policymakers cannot have it both ways. Tonight President Obama (rightly) lamented slow wage growth during the recovery. Just a few breaths earlier he suggested requiring seven days of paid sick leave for all employees. However, his proposal would cut workers’ pay by seven days a year.
Employers take the cost of mandatory benefits out of their workers’ wages. They care about the total cost of hiring a worker, not how they divide pay between wages and benefits. So when the government requires a new benefit employers provide it – and cut wages by an offsetting amount. Economists across the political spectrum understand this. As Obamacare architect Jonathan Gruber wrote summarizing his research on the topic: “I find substantial shifting of the costs of these mandates to the wages of the targeted group.” Paid sick leave means lower pay. — James Sherk
Fewer Hours Worked The president boasted about the economy’s success this year, but he left out a few crucial details. Employment has indeed recovered – but for many workers hours have not. Employees in the bottom quintile have had saw average weekly hours drop by almost 4 percent in the recession. Unlike workers in higher income groups their hours did not recover. This has cut their pay by an average of $500 a year. And starting this year the employer mandate now penalizes employers who hire low-wage workers full-time. For all that the president talks about improving the economy, his policies have made it worse.
— James Sherk
President Obama proposed boosting wages by expanding overtime. He failed to mention that even economists close to his administration think it won’t work. When the government expands overtime businesses offset that cost with lower base wages. In the end, workers get essentially what they made before. Economists of all political stripes understand this. As Jared Bernstein, former chief economist to Vice President Biden, wrote last year the argument that overtime raises wages: “erroneously assumes that the incidence falls on the employer, not the worker. Labor economists consistently assume otherwise—that the incidence falls on the worker—which in this case means that the wage offer reflects expected overtime hours.” Bernstein supports expanding overtime, but even he recognizes this will do little to help “families make ends meet.” It will effectively convert millions of salaried workers into hourly workers. Overtime eligible workers must log their hours. This makes it very hard for employers to give them workplace flexibility. If employers make a mistake tracking hours worked remotely they risk massive lawsuits. The president’s proposal would hurt many of the workers he wants to help. — James Sherk
On Jobs Added in 2014
President Obama celebrated the fact that the economy created jobs at the fastest pace since 1999 . These figures are far less exciting news when put in context. Americans have suffered through the slowest recovery of the post-war era. The recession started seven years ago. Only in mid-2014 did the economy recover the jobs lost during the downturn. Full-time jobs have still not recovered – the entire net employment gains since 2007 come in part-time positions. Furthermore, the Obama administration’s policies have contributed to this sluggishness. Half of small business owners cite taxes or government regulations as their single greatest problem. A delayed recovery certainly beats the alternative of even slower job growth. But the administration should hardly want credit for such an anemic recovery.
— James Sherk
President Obama touted the fact that unemployment has fallen to 5.6 percent. That’s good news. But he neglected to mention the fact that the proportion of Americans with jobs has changed little over his presidency. The vast majority of the improving unemployment picture comes from Americans dropping out of the labor force and no longer looking for work. In part that has to do with demographics—the ageing of the baby boomers means more retirees and thus fewer workers. But demographics only explain one-quarter of the drop in labor force participation. For many workers the economy offers less opportunity than it did before the recession. The official unemployment figures hide that fact.
— James Sherk
Minimum Wage Hike Cuts Pay and Jobs
The president argues that Americans need a raise. On that pretty much everyone agrees. But he proposes doing it by raising the minimum wage. Getting by on $15,000 a year is tough. This approach doesn’t work. Researchers at UC-San Diego recently released a new study through the National Bureau of Economics Research. They tracked workers for two years after the 2009 federal minimum wage hike. So how did it affect low-wage workers? Their pay dropped. While some indeed saw a pay increase, over a million more either lost or couldn’t find jobs at the new rates. In total the average earnings of low-wage workers dropped by $150 a month. The true minimum wage remains $0.00 an hour. Employers will not pay workers more than their productivity justifies. Trying to force employers to pay more will destroy jobs and hurt the very workers president Obama intends to help. — James Sherk
Minimum Wage and Obamacare
The president called on Congress to raise the minimum wage. He could have mentioned that – from the employers’ perspective – Congress already has. The Obamacare employer penalty has raised the minimum cost of hiring a full-time worker $10.30/hour in 2015. Unfortunately workers will see none of this in their paychecks: the money goes to the government. — James Sherk
What about the Middle-Class Economics the President Omitted?
President Obama talks about “bread and butter issues” for families around American that he calls “middle class economics,” but failed to mention one of the biggest issues American families will face this year – proposed regulations from the Obama administration’s EPA that aim to cut 30 percent of carbon dioxide emissions (from 2005 levels). These regulations will increase electricity prices and threaten reliability, but make no dent in global temperatures. The U.S. Energy Information Administration and North American Electric Reliability Corporation outlined what another cold winter would look like with high demand and reduced electricity supply. The result is that electricity reserves are shrunk to a mere fraction of a normal winter – that’s not enough room to go on hope alone. A key ingredient in supplying affordable, reliable energy is coal, which only a few years ago supplied some 40 percent of the nation’s electricity and of which the U.S. has hundreds of years’ worth in the ground. But the EPA’s regulations capping carbon dioxide essentially preclude the use of this valuable resource and limit America’s reliable energy options to natural gas, nuclear and hydropower (assuming the infrastructure is already in place). Obama is notably not making any promises that “if you like your current electricity bill, you can keep it.” Threatening America’s grid reliability for generations to come – now that’s a bread and butter issue. — Katie Tubb
The Middle-Class What?
What the heck is “middle-class economics”? No text book describes any such a thing. The president wants us to believe that he (as government) can actually control the entire economy in ways that will specifically advantage one class of citizens. But America’s economy, the world’s largest, with a GDP approaching $16 trillion, is not just another program that bureaucrats and technocrats can manipulate at will. It is nothing less than arrogance to claim the ability to control such a vast, ever-changing entity. But we do know what inhibits that economy … the very policies to which the president prescribes—a bloated government that consumes earnings, excessive regulations that shift resources away from innovation and job creation, and thousands upon thousands of petty rules that erode citizens’ freedoms. None of those things are good for the middle class, nor all of America. — Diane Katz
A theme in President Obama’s address is the idea of “middle-class economics,” which apparently denotes the usual raft of progressive government-first economic policies. Central to his argument that his policies have worked is the idea that 2014 was “a breakthrough year for America.” Indeed, the economic recovery did finally arrive in 2014, or maybe even 2013. But why should policies put in place back in 2009 and 2010 get credit for the most delayed economic recovery since the Depression? Compared to economists’ best guess of the United States’ economic potential, the recovery has barely narrowed the “output gap” since 2009. After previous recessions, the economy quickly got back on track. This recession and the policies undertaken during the delayed recovery seem to have done more permanent damage.
— Salim Furth
Wage Growth President Obama summarized his economic agenda as “helping hardworking families make ends meet.” But instead of adding more top-down economic control, the government can promote real wage growth by removing regulations and taxes that keep prices high. In the government-dominated sectors of education and health care, prices have risen much faster than wages over the past generation. Electricity and fuel are made more expensive by the Environmental Protection Agency’s “war on coal.” The Dodd-Frank financial reform raises prices by making it more difficult for small banks to comply with all the new rules. And land-use regulation and permitting processes make rent for families and businesses much higher than it could be. Instead of mandating higher wages (and fewer jobs), Obama could raise real wages by taking the lead in reducing costly regulations.
— Salim Furth
Obama’s Vague Gift of Transportation Goodies
President Obama speaks of federally-funded infrastructure projects (ports, bridges, high-speed trains, etc.) as if they were candy from Willy Wonka’s Federal Chocolate Factory: “We gave our citizens schools and college, infrastructure and the internet—tools they needed to go as far as their effort will take them.” It’s a statement that smells of the Keynesian economic policy of federal economic stimulus that has proved wrong repeatedly, most recently with Obama’s 2009 stimulus bill.
And the president borrows from past State of the Union addresses by talking plenty of transportation infrastructure wants, but dancing over the specifics such as spending priorities, and how and who will realistically pay for the increased spending on infrastructure. No new ideas surfaced during his remarks.
One suggestion—to pay for a multi-year infrastructure bill with revenue from corporate tax reform—is completely misguided. First, any revenue from corporate tax reform should go toward lower marginal tax rates, not new government spending. Over-spending is what has mainly gotten Washington’s Highway Trust Fund into trouble in the first place. Second, tying corporate tax reform to infrastructure project funding and financing would violate the user pays, user benefits system that has injected transparency and market forces into transportation policy over the years. To remove that—meaning road, port, bridge and other users don’t pay for want they get—is to remove accountability. Then after that is gone, any federal funding pot for infrastructure will become slush fund money, and politics, not the transportation priorities, will dictate how it gets spent.
Finally, Obama revisits the worn out calls for a “bipartisan infrastructure plan” that will allegedly create thousands of jobs. As Heritage has written, such calls for more spending (and higher taxes to pay for the spending) “misunderstand the nature of infrastructure construction work…[which is]…capital intensive, not labor intensive.” Construction of a road or a bridge does not require teems of workers, but rather a small amount of skilled workers operating advanced machinery. In fact, the 300,000 Americans who work to construct highways, streets or bridges don’t even reach the population of Wichita, Kansas.
Mr. President, let’s inject some new ideas into the transportation debate. How about giving states more control over their transportation spending and funding decisions? How about refocusing the federal role in transportation, by rededicating federal gas tax dollars to the Interstate Highway System, and not local bicycle and nature trails, ferry boats and streetcars? How about we get back to the heart of transportation: allowing people and goods to move from point A to point B as efficiently and safely as possible. — Emily Goff
What About Entitlement Reform, Mr. President?
While the President proposed billions of dollars in new spending and taxes in his State of the Union address, he almost completely ignored one of the most enduring challenges faced in Washington: Entitlement spending. Spending on Social Security, Medicare and Medicaid takes up almost 50 percent of the federal budget and, along with net interest, is on pace to consume 100 percent of all tax revenue in only 15 years.
The president stated: “It’s now up to us to choose who we want to be over the next fifteen years, and for decades to come.” It appears that the president has chosen that we will be a nation perpetually in debt. As the president praised the establishment of “Social Security, Medicare and Medicaid to protect ourselves from the harshest adversity,” he failed to address their unsustainable spending growth—a threat to their very viability.
But the problem is not limited to the distant future. Noticeably absent from the president’s speech tonight was any mention of the impending exhaustion of the Social Security Disability Insurance trust fund and how the president intends to address it. Beneficiaries face a 19 percent indiscriminate benefit cut if the Congress and president fail to act soon. The president and Congress should adopt needed reforms to strengthen Social Security for vulnerable seniors and the disabled, and do so in 2015. — Romina Boccia and Michael Sargent
Gas Price Relief? Thanks. Gas Tax Increase? Not a Chance.
Recent plummeting of gas prices at the pump has meant financial relief for Americans across the country. They have more money in their wallets to save, or spend on other priorities for their families. President Obama acknowledged “the typical family this year should save $750 at the pumps,” though some of that savings is attributed to harmful, costly fuel standards.
So while Americans are finally getting a break, some lawmakers and special interest groups in Washington are calling for an increase in the federal gas tax. They want to spend more on pet projects and concentrate transportation decision-making in Washington. Some gas tax hike proponents even say that Americans may hardly even notice an increase.
That just goes to show how astonishingly out of touch Washington can be. Mr. President, reject these irresponsible calls for increasing the gas tax, and start telling Congress to live within the Highway Trust Fund’s means. — Emily Goff
You didn’t build that, President Obama. Thank American ingenuity for low gas prices, high-paying jobs and increased manufacturing. Obama highlighted the fact that America is now the no. 1 oil and gas producer and Americans are saving a ton of money. He mentioned that manufacturing jobs are coming back to the U.S.
He’s right and it’s all great news. But it’s not because of the administration’s policies; it’s in spite of them. The price at the pump nationally is almost down to $2 per gallon. In fact, 25 states are now enjoying sub $2 gas. Households could spend less on gas this year than in the past eleven years. Along with consistently low natural gas prices, the energy boom occurring predominantly on state and private lands is putting money back into the pocketbooks of American families and lowering the costs of doing business. Not only is the domestic oil and gas industry far outpacing overall job growth, low energy prices are encouraging energy-intensive firms to flock to the U.S. Natural gas and natural gas liquids are important raw materials for many industrial processes, including manufacturing fertilizer and chemicals.
We’re seeing this all because of the ingenuity of the private sector. In fact, Obama noted one of the major roadblocks the federal government imposes when it comes to American energy production: the growing federal estate. He boasts that he set aside more public lands and waters than any other administration in history. And that’s a good thing? In doing so, it may sound as if he’s protecting our environment. But the truth of the matter is he’s taking control away from state governments as well as private individuals. Those are the people who are closest to the situation, have the local knowledge of the region and have the strongest incentive to protect the environment and grow the economy. Currently, less than 3 (that’s right, 3) percent of America’s federal lands and waters are available for lease. Let’s open up the large swaths of land that aren’t national parks or wildlife refuges and hand the management over to the state regulators who have effectively proven that environmental protection and energy production are not mutually exclusive. — Nick Loris
Energy: One Sector that Provided Opportunity for Americans, No Federal Help Needed
According to data from the U.S. Energy Information Administration and the Bureau of Labor Statistics, job creation in the oil and gas industry bucked the slow economic recovery and grew by 40 percent from 2007 to 2012. The rest of the private sector employment grew 1 percent over the same period. That didn’t happen from any government job training program and has occurred in spite of leadership from Obama attempting to discredit conventional fuels like oil and gas from an “all of the above” energy plan. For all the encouraging stories President Obama mentioned in his speech, he failed to mention ones that don’t fit his storyline. What about families and small businesses who were hurt by the Obama administration’s defeat-by-delay and stonewalling in the Gulf Coast? Or the Sacketts, who famously had to go all the way to the Supreme Court just to earn the right for a court to review the EPA’s unexplained designation of their home as a wetland? — Katie Tubb
Was 2014 Really the Warmest Year On Record?
Obama parroted back a headline from last week that’s dangerously lacking in context. What Obama and the NASA press release last week said was 2014 was the hottest year in recorded history. What was missing, to say the least: (Depending on what data you use) 2014 was the hottest year (by 0.02 degrees Celsius) in recorded history (since records were kept, starting 135 years ago). The reality is, the alleged record isn’t even outside of the margin of error NASA assumes, nor does it suggest we’re on our way to catastrophic global warming. The difference between actual data and what climate models project has only grown more disparate since temperatures have plateaued since the end of the 20th century. Yet governments around the world are building policies and regulations that directly impact people for the worse on the faulty conclusions of these faulty models. The EPA’s proposed regulations would have almost zero impact on global temperatures but will certainly impact Americans now and for future generations. — Katie Tubb
5 Quick Responses to President Obama’s Remarks on Climate Change
1. There are plenty of greater threats to future generations than climate change. How about getting energy access to the billions of people without affordable and reliable electricity?
2. Satellite data shows that 2014 wasn’t the warmest year on record. NASA and National Oceanic and Atmospheric Administration did report that 2014 was the warmest on record but with low confidence. Berkley Earth, certainly not your climate deniers, said it was impossible to conclude whether 2014, 2010 or 2005 was the hottest year. Importantly, Berkley Earth’s bottom line is that “That is, of course, an indication that the Earth’s average temperature for the last decade has changed very little.
3. One year doesn’t make a trend, President Obama says. And he calls attention to 14 of the warmest 15 years on record being in this century. Here’s what he fails to mention. There has been no increase in global surface temperatures over the past 15 plus years, even as global carbon dioxide emissions increased and climate models projected there would be increases in warming during this timeframe. Climate models continue to stray further from climate realities.
4. Obama says he refuses to allow Congress to turn back the clocks on the administration’s climate regulations. But it’s the president who’s turning the clocks back on economic growth and job creation with regulations on energy that will drive prices higher for no meaningful climate benefit. Using a climate calculator and model developed by the Environmental Protection Agency, climatologists Paul Knappenberger and Pat Michaels project that the EPA’s climate regulations will mitigate 0.02 of a degree Celsius warming by the end of the century. These are not regulations that are helping future generations but instead giving them a less prosperous world to look forward to.
5. Obama calls his climate deal with China “an historic agreement.” In his commitment to reduce carbon emissions 26 percent to 28 percent below 2005 levels, the president is committing Americans to higher energy prices, a weaker economy and a lost competitive advantage. China, a rapidly growing country that has shown no intent on tackling its real environmental challenges, gets to make a promise to cut emissions beginning 15 years from now. Pure and simple, it’s a raw deal for America. — Nick Loris
Taxpayer-Funded Federal Preschool Will Be an Expensive Subsidy for Middle- and Upper-Income Families More than three-quarters of four-year-old children are already enrolled in some form of early education or care. Low-income families have access to subsidized programs, so the president’s call for universal preschool would, in large part, be a subsidy for middle- and upper-income families who already pay for preschool on their own. Policymakers at every level of government should be aware that the evidence from existing preschool programs raises doubts about their efficacy — not to mention the significant costs to taxpayers. The type of large-scale government preschool program the Obama administration seeks is more likely to resemble the failed Head Start program than high-quality early-education programs. — Lindsey Burke
Free Community College Will Burden Taxpayers, Provide No New Benefit to Low-Income Students
The president’s call tonight to make community college “free” will serve as little more than a federal handout to the community college system. Low-income students already have access to federal Pell Grants, which can be used to finance their tuition obligations at a community college.
And it’s a system in which just 20 percent of students who begin at a two-year community college complete their program within 3 years, according to the U.S. Department of Education. And only 20 percent transfer to four-year institutions.
The proposal is likely to produce a six-year high school system by removing responsibility from high schools to prepare students to graduate by 12th grade, knowing a “grade 13″ and a “grade 14″–paid for by taxpayers–await students. In fact, the president said as much: “I want to spread that idea all across America, so that two years of college becomes as free and universal in America as high school is today. ”
The president’s proposal is another step toward the White House’s goal of a “cradle-to-career” education system, starting with free preschool and now free community college. But the proposal most certainly won’t be “free” for taxpayers, and will continue to further drive-up the cost of higher education. — Lindsey Burke
Obama Is Right That We Need to Reform the Criminal Justice System
Toward the end of his speech, after referencing the events in Ferguson and New York City, President Obama said, “Surely we can agree it’s a good thing that for the first time in 40 years, the crime rate and the incarceration rate have come down together, and use that as a starting point for Democrats and Republicans, community leaders and law enforcement, to reform America’s criminal justice system so that it protects and serves us all.” The president is right that this does present an opportunity, and Republican and Democratic governors have been leading that reform effort in red, blue and purple states throughout the country, where incarceration rates and crime rates have continued to fall because of innovative approaches to our criminal justice system. Congress will have the opportunity to consider bipartisan proposals such as the Smarter Sentencing Act, the Recidivism Reduction and Public Safety Enhancement Act, as well as much-needed mens rea (criminal intent) reform, all designed to make our criminal justice system more fair and more effective for all Americans. These proposals warrant serious consideration. — John Malcolm and Paul Larkin
The Problems with Obama’s Voting, Civil Rights Claims
President Obama said tonight that he wanted “this chamber, this city, to reflect the truth.” And yet he made voting and civil rights claims that reflect anything but the truth but instead simply reflect false political talking points used by his political party.
For example, the president claimed that “Congress stills needs to pass a law that makes sure a woman is paid the same as a man for doing the same work.” But Obama failed to mention that federal laws, including Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963, already require that a woman be paid the same as a man for doing the same work. In fact, the Civil Rights Act of 1991 makes employers liable not only for compensatory damages if they intentionally engage in discriminatory conduct, but also for attorneys’ fees and even punitive damages. The claim that another federal law is needed is just part of the supposed “War on Women” political narrative used to condemn anyone who is against passing an unneeded additional law to make illegal what is already illegal.
The president also said that “surely we can agree that the right to vote is sacred [and] that it’s being denied to too many on this 50th anniversary of…the passage of the Voting Rights Act.” The president is certainly correct that all Americans agree that the right to vote is sacred, but the claim that many Americans are still being denied the right to vote today is totally false. In fact, the Voting Rights Act is probably one of the most successful congressional acts in history, having achieved its purpose of enfranchising Americans and stopping racial discrimination in voting. There is no credible evidence that Americans are being denied their right to vote. When it happens, it is a rare event that is almost invariably remedied by the courts. Once again, this claim is part of the Obama administration’s war on election integrity that has been waged by the Justice Department. It is part and parcel of the false narrative that voter ID laws, which are overwhelmingly supported by the American people, are keeping folks from voting. Nothing could be further from the truth. — Hans von Spakovsky
The president said tonight, “I intend to protect a free and open Internet, extend its reach to every classroom, and every community, and help folks build the fastest networks, so that the next generation of digital innovators and entrepreneurs have the platform to keep reshaping our world.” That is an extravagant promise, and can only be realized if we continue to ensure that the Internet remains free from intrusive regulation. If the president truly supports a free and open Internet, he should urge the Federal Communications Commission not to interfere with freedom of contract among Internet service providers and users of the Internet, through so-called “net neutrality” rules. The existing system has bestowed enormous economic benefits and fostered innovation in America. Regulatory interference should not be allowed to undermine the success of our Internet and the economic benefits it has engendered. — Alden Abbott
Obama’s Brief Mention of Obamacare
The president only gives but a passing mention to Obamacare, his signature legislative achievement. However, the coverage gains touted by the president mainly reflect the expansion of the Medicaid program which has a long history of lower quality and limited access to care when compared to the private insurance and would still leave millions without coverage. Moreover, as shown by Heritage expert Ed Haislmaier, the vast majority of Obamacare’s coverage increase in 2014 was offset by the loss of coverage for those with employer-sponsored insurance.
The conservative alternatives to Obamacare would not take away health coverage but instead would empower and enable consumers to purchase coverage that fit their needs in a competitive insurance market. This is opposite approach of Obamacare, which enables the government to force Americans to purchase government-approved insurance. — Alyene Senger
President Obama remarked tonight: “We still may not agree on a woman’s right to choose, but surely we can agree it’s a good thing that teen pregnancies and abortions are nearing all-time lows.” Indeed, the national abortion rate has plummeted over the past few decades and is now at its lowest level since the Supreme Court’s 1973 decision in Roe v. Wade that invented a constitutional right to abortion. That’s certainly something that both sides of the abortion debate should be able to cheer. While the causes for the decline in abortion rates are varied, commonsense laws over the past few decades that protect both women and children from abortion have certainly contributed. If the president truly believes that declining abortion rates are a good trend, then he should support legislation that would better protect the health of women and lives of unborn children, especially from dangerous and gruesome late-term abortions.
Yet, just today, the president threatened to veto legislation that would limit abortion procedures after 20 weeks. That’s five months, or halfway through pregnancy, when children can feel pain and women are at increased risk for the negative effects of abortion. The vast majority of Americans, including 60 percent of women, agree with limiting late-term abortion. Today, the U.S. is one of only seven countries – among them North Korea and China – in which elective abortion after 20 weeks is allowed. Towards the end of his remarks tonight, the president expressed a desire that future generations see that “we are a people who value the dignity and worth of every citizen.” What better way to begin achieving that goal than to better protect the lives and health of women and ensure the right to life for the youngest and most vulnerable children in our society? — Sarah Torre
Obama Failed to Address the Greatest Driver of Economic Inequality: the Collapse of Marriage
Tonight President Obama discussed various policies that he believes will address the growing economic divide in our country. However, he continued his track record of failing to mention one of the greatest factors standing in the way of opportunity: the growing marriage divide. In a recent study, Dr. Brad Wilcox and Dr. Robert Lerman report that 32 percent of income inequality since 1979 can be linked to the decline of marriage.
Today two-thirds of children born to mothers with less than a high school education and more than half of children born to mothers with just a high school diploma are born outside of marriage. In contrast, 90 percent of children born to college-educated women are born to married parents. This trend is creating a “two-caste” society “with marriage and education as the dividing line.” Marriage not only protects against poverty–children in single-parent households are roughly five times as likely to be poor–but it also protects children against several risk factors including child abuse, dropping out of high school, drug and alcohol abuse and becoming an unwed parent.
America is in serious need of a pro-marriage message. Yet, time and time again Obama has failed to clearly address this issue. Tonight, the president once again neglected to utilize his unique leadership position to call for a restoration of marriage in American communities.– Rachel Sheffield
Obama Tax Policies Increase Marriage Penalties and Discriminate Against Stay-at-Home Parents
President Obama’s new tax plan, which he discussed in part tonight, lays out new proposals that he claims would help low- and middle-income families. These included a new tax credit program for dual-earner families and an expansion of the Earned Income Tax Credit (EITC) program for single, childless adults. He also proposed a substantial increase to the child care tax credit.
Unfortunately, Obama’s proposed policies do not deal with fraud, which is rampant in refundable EITC. Nor do his proposals address the problem of refundable tax credits (which are really cash welfare) to able-bodied individuals who perform little work. The president’s refundable tax credit for two-earner families and his proposed expansion of the EITC to workers without children and to absent fathers would make both problems worse.
The Obama policies would also increase anti-marriage incentives in the welfare system. While the two-earner credit would reduce marriage penalties in some cases, the expanded EITC for non-parents and for absent fathers is larger than the two-earner credit and is blatantly anti-marriage. Absent fathers and other males would receive this new EITC credit only as long as they were not married. When they marry, the new credit would be removed. Overall the Obama policies increase rather than decrease penalties against marriage in welfare. Policy should seek to reduce marriage penalties, rather than take another strike against it.
Obama also proposed to expand the Child and Dependent Care Tax Credit, tripling the maximum benefit amount. Since the proposed child care credit appears to be non-refundable, it would primarily benefit families with incomes between $40,000 and $100,000 who use paid daycare. As such, the policy discriminates against married-couple families who make a financial sacrifice so that one parent can care for infant and pre-school children in the home. Tax policy should not unfairly discriminate between families using daycare and families making a financial sacrifice to provide parental care to their children. — Robert Rector and Rachel Sheffield
Obama’s Remarks on Cuba
One thing we know for sure in Obama’s State of the Union address is that the era when American presidents stood up for human dignity abroad is over, at least for these eight dark years. In the few sentences he devoted to his new position on Cuba, he cast aspersions on what ten of his predecessors did in standing up to the Castro dictatorship. Not a word was spent by President Obama in asking the dictators in Havana to loosen their grip. Clearly, no “Mr. Gorbachev, tear down this wall!” in his remaining two years. — Mike Gonzalez
Obama and Africa
Ebola in West Africa was Mr. President’s only mention of Africa in the State of the Union. He boldly claimed the U.S. was rolling back Ebola. There’s a different story on the ground in region, particularly in Liberia. The Washington Post ran a story over the weekend highlighting that despite U.S. efforts to combat Ebola in West Africa, infection rates declined significantly before any of the U.S. built treatment centers opened, indicating other factors were also at play in curbing Ebola. President Obama cannot take all the credit for this story. While Obama is right to applaud U.S. efforts, ultimately Liberian, Sierra Leonean and Guinean healthcare workers in West Africa deserve much more of the credit. They were forced to endure the epidemic after their national governments, the World Health Organization and the international community mismanaged or ignored the deadliest Ebola outbreak in history. Sadly, much of the damage done by Ebola (health, economic and political) occurred well before the international community paid very much attention to the crisis. The first case was in December 2013 and Obama did not announce a humanitarian operation until September 2014. While the outlook and epidemic projections for the current Ebola epidemic in West Africa was bleak at the end of the summer and fear prompted the massive U.S. humanitarian response, education about the disease and behavioral and cultural changes played a pivotal role in lowering the infection rate to allow for better disease management control. — Charlotte Florance
Obama’s Rhetoric on Cuba
The president’s rhetoric on Cuba doesn’t match up with his policy. He talks about commitment to freedom then terminates a pro-human rights policy to appease socialist regimes. — Ana Quintana
Why Didn’t Obama Mention Arab Spring?
By not mentioning Arab Spring at all in tonight’s speech, President Obama missed a huge opportunity to advance the cause of freedom.
For example, Tunisia, the birthplace of the populist uprising for greater freedom in the Arab world in 2011 and the gateway to North Africa, does matter to America. Tunisia’s ongoing journey to greater openness and transparency has resulted from the quest for the fundamental freedoms of property rights, trade and entrepreneurship that have driven the country’s bottom-up democratic transition.
The United States cannot afford to appear indifferent to the fate of liberty that so many Tunisians others in the region have pushed for with determination and courage. Merely conveying promise after promise for greater support, without real action, is no way to secure America’s vital interests in the region, not to mention looking indifferent. — Anthony Kim
Missing From the State of the Union: al-Qaeda
Noticeably missing from President Obama’s state of the union speech was any mention of al-Qaeda, the first time that terrorist network went unmentioned since George Bush’s 2002 speech. The president did mention ISIL (the Islamic State of Iraq and the Levant) — an al-Qaeda offshoot — in passing, but ignored the continuing threat posed by its al-Qaeda parent organization.
Instead he spoke as if al-Qaeda had been defeated:
“We are fifteen years into this new century. Fifteen years that dawned with terror touching our shores; that unfolded with a new generation fighting two long and costly wars; that saw a vicious recession spread across our nation and the world. It has been, and still is, a hard time for many.
But tonight, we turn the page.”
This is a curious approach to take when al-Qaeda has in recent years established a stronger presence in Egypt, Iraq, Libya, Mali, Syria, Turkey and Yemen on the president’s watch and is poised to make a comeback in Afghanistan, if he follows through on current plans to withdraw all U.S. troops.
It is also disquieting to remember that Obama also declared that he had “turned the page” on the Iraq war back in 2010. In 2014, the Iraq war came back with a vengeance, and Obama was forced to order the return of U.S. troops there.
How long before al-Qaeda also returns to strike the U.S. homeland? — Jim Phillips
Information Sharing: President Obama’s Cyber Proposals
Last week, President Obama highlighted increasing information sharing between the public and private sector. Though further details will need to be hashed out concerning the specifics of his policies, the White House should be commended on taking the initiative to complement existing cyber security.
In his State of the Union address, the president noted, “We are making sure our government integrates intelligence to combat cyber threats, just as we have done to combat terrorism. And tonight, I urge this Congress to finally pass the legislation we need to better meet the evolving threat of cyber-attacks.”
Obama first introduced his cyber policies last week while touring the Federal Trade Commission and National Cybersecurity and Communications Integration Center. While experts have long advocated for increased information sharing, past proposals often lacked adequate measures for protecting companies from legal liability.
Information sharing is a key measure to increased cyber security. The sharing of cyber threat information from a company that has come under cyber attack, or from federal agencies that perceive a growing cyber threat, helps other companies prepare for and mitigate such threats. Yet companies have voiced concerns over information sharing, as the information shared may contain information that could become detrimental to a companies’ future if abused by outside parties or by government regulators.
A balance between the time it takes to share, and quality of information shared, will need to be addressed in order to expand the rate at which information is shared, but there’s no guarantee all non-pertinent information may be removed by companies before sharing. That is why liability safeguards for information sharing should be implemented for companies, and information for the sake of increased cyber security shouldn’t be used by regulatory agencies or company competitors. Obama mentions a targeted liability system, and though details still have yet to be released, this seems to fall short of the strong liability protection businesses will need to share information without fear.
Cybersecurity will be of big concern this year with recent attacks on Sony, CentCom’s Twitter account, and the slew of attacks on retail businesses last year. The president should keep U.S. companies’ interests’ in mind when he announces the details of his cyber policies, and remember that the private sector is part of the solution in cybersecurity, so long as they are treated as a real partner and not just another thing to regulate. — Riley Walters
Bluster Is Not the Way to Lead
President Obama tonight displayed an almost touching faith in the power of quiet diplomacy to solve problems in a dangerous, complex world. If only it were so well. The president’s speech contained several references to diplomacy. He described America as leading “with consistent and strong resolve.” For most observers of Obama’s U.S. foreign policy, that description that is almost unrecognizable.
Obama talked about smarter U.S. leadership and stronger diplomacy, about not talking rash decisions, about war as the choice of last resort. Rejecting the idea of sending troops into war zones like Iraq and Syria, he said he intend to “stand on that wisdom” of not putting boots on the ground. The president also said he considered climate change to be the greatest challenge and national security threat for future generations. For those who follow the news from the Middle East and the unraveling of terrorist cells in Europe, climate change is an almost quaint choice. The speech spent all of two paragraph on terrorism and did not mention al-Qaeda.
If you believed Obama, ISIS is being pushed back, Russia is reeling and Iran is being disarmed — all because of American leadership, coalition building and diplomacy. Unfortunately, reality is almost the exact opposite. The Obama administration insists on running U.S. foreign policy from the White House. As a consequence, politics take primacy, rather than statecraft and national interest. That was the case again in the president’s speech tonight. — Helle Dale