Here it is Thursday and at least some of us are still discussing the President’s big speech from Tuesday night. Talk about staying power!
Subsequent events could easily prove me wrong, but I’ll bet you that for all the criticism of how the shrunken President has been forced into the small ball of executive orders, the impact of this speech will stick around, longer, in fact, than previous SOTUs. The reason is that the President has pivoted from an abstract and deeply misunderstood problem—debt and deficits—to a concrete and acutely felt set of problems around incomes, earnings, jobs, opportunity, and mobility.
Let me explain (and I’m riffing a bit off of Greg Sargent’s incisive analysis as well here).
A confluence of events have pushed the national economics debate away from debt and deficits and towards the more pressing economic challenges noted above:
–One thing I haven’t seen much of in the reporting on the surfacing of this debate: the fact that the budget deficit has fallen from 10% of GDP in 2009 to 4% in 2013, the largest four-year decline since 1950. That’s making it a lot harder to sustain fiery hair of fiscal rectitude and it’s created some space in the debate for discussing more immediately germane issues.
–The President’s inequality speech in December set the table. His follow-on points Tuesday night were a lot less focused on inequality itself than on its impact. As I and others have stressed, this is the more effective framing of the issue.
–The data! As I show here, it’s clear that the benefits of the growth we’ve seen thus far in this expansion have flowed to profits, not wages.
When the debate is on the deficit turf, it’s a debate about cutting spending or raising taxes, one that demonstrably leads to the black hole of the grand bargain: R’s won’t countenance tax increases and D’s won’t agree to cuts in entitlements that compromise the security of economically vulnerable households. In the meantime, that debate elevates deficit reduction uber alles, and even absent the elusive grand bargain, that in turn has led to a deep spending cuts in the non-defense discretionary side of the budget (defense has taken some hits too), where, paradoxically, many of the programs designed to promote upward mobility reside.
Conversely, when the debate instead turns to sticky poverty rates, more jobs at better wages, and an “opportunity agenda,” it is on a turf that has the potential to lead somewhere. One is tempted to argue that this turf favors Democrats, as the recent Republican policy consensus reduces to trickle-down tax cuts and repealing stuff the President supported.
In this regard, it was interesting to hear the official Republican response to the SOTU, by Kathy McMorris Rodgers. Amazingly, I found neither the words “deficit” nor “debt” in her response. She did, however, talk about “opportunity inequality” but didn’t have much to say about what to do about it, beyond “we have plans!”
But before you conclude that R’s are stuck with an agenda that offers no more than tax cuts for the rich and shutters for the EPA, consider this piece from today’s WaPo. It notes Sen. Rubio’s advocacy of an expanded EITC for childless adults, Rep. Ryan’s support for job training, expanding the child tax credit, and more:
Other conservative policy analysts are focused on historically high levels of long-term unemployment. Some have even committed the conservative heresy of advocating more government spending to help out-of-work Americans, for example by using taxpayer dollars to subsidize salaries, provide relocation assistance or directly create jobs.
OK, now before you revoke my credibility card, I fully recognize, and have written many times in these pages that such ideas are way out of sync with recent Republican budgets, so no question that the threat of bait-and-switch here is real, as is “just say any damn thing to stop sounding so damn out of touch.”
But my argument does not hinge on conservatives necessary figuring out how to thread whatever needles they’ve stuck in themselves. My argument is that not only are we now be having the debate we need to have, but both sides are introducing solutions that are targeted at increasing economic security as opposed to reducing budget deficits.
I thought that was a strong theme with the SOTU and I suspect it will remain so for a while. Like I said, I could be wrong, and if so, I’m sure you’ll tell me.