State of the Union Predictions

Well, it's that time of year again. The time of year when pundits across the land helpfully (oh, so helpfully) offer the president advice on what he should say in his "State Of The Union" speech tomorrow. While I've engaged in this sort of thing before, this year I'd like to make predictions of what President Obama will say tomorrow night (as opposed to what I would like him to say). Which means I'm not endorsing any of this personally, merely attempting to predict what will be in tomorrow night's speech in advance.

The overarching theme of tomorrow's speech (which I'm going to call the "SOTU" because it is much easier to type) will be jobs and the economy. Obama himself previewed this over the weekend, so this is a pretty safe guess. The president will be putting this emphasis on jobs into a framework he tested out last month -- the "Sputnik moment" speech he gave in North Carolina at the beginning of December.

Back then, I wrote:

President Obama gave a speech today in Winston-Salem, North Carolina. Billed as a speech on the economy, it may provide an early forecast of what is likely to be the overarching theme of Obama's State Of The Union speech next month. While this speech has not gotten a whole lot of attention so far, one phrase of it is garnering some mild interest: the idea that America is experiencing a "Sputnik moment." What remains to be seen is whether this talking point is going to catch on and become an actual Democratic narrative next year. It certainly is worth mentioning, due to the almost complete lack of any Democratic narrative these days. Whether it inspires the public's imagination, though, is an even tougher row to hoe.

I also cautioned (after reviewing why Sputnik represented an enormous military threat at the time it was launched) that this may not be all that popular a move, politically:

Instead of a military threat, today we have economic threats to the future dominance of America on the planet. And technological threats. Which simply don't give rise to the same fearful outpouring of emotion by the public. Which is why calling now a "Sputnik moment" risks falling flat -- because while it may be true on a certain level, it just doesn't provoke the same public response.

The American public still firmly believes that "We're Number One, In Everything, All The Time, And We Will Be Forever, So There." No amount of proof that this just isn't true anymore will shake this belief, either. You can list how we're number this or number that (numbers much higher than "one" in most cases) in this category or that one -- but the American public is simply not interested in hearing such things. Americans are much more comfortable chanting the mantra "We're Number One" than they are facing the reality of the twenty-first century world. Most Americans never travel beyond the borders of their country, and so it's not an everyday occurrence for them to see how other countries are leapfrogging past us in key areas.

We used to have the biggest and best of everything. We don't anymore. It's been years since the tallest building in the world was American. China just tested a train that travels at 300 miles per hour -- a new world record. We haven't even come close. The largest banks in the world used to all be American. They are not, any more. In measure after measure, we are falling behind.

But, again, the Chinese train gets maybe fifteen seconds on television, on a slow news day, and then is quickly forgotten. Which is why President Obama deciding to point it out carries a lot of risk. Americans, to be blunt, do not want to hear that they are not "Number One." And they don't usually gravitate towards politicians who point it out, which is why most of them never do.

President Obama, from insider accounts, is going to use this theme as a launching point to call for new "investments" (the word "spending" will likely be absent from the entire speech, as will "stimulus," even if they're all talking about roughly the same thing) in key areas such as education and research. These will likely be uplifting parts of Obama's SOTU, but we shouldn't fool ourselves into thinking that any of it will actually happen any time soon.

The increased Republican presence in Congress is going to severely limit what Obama will be calling for tomorrow night. Obama is not going to propose enormous agenda items which he knows will have no chance of passage -- unless it is to score a few political points. For instance, he will probably give some lip service to the idea of passing "comprehensive immigration reform," even though he knows full well that not even the limited DREAM Act is going to make it through a Republican House in the next two years. But other than such obvious Democratic applause-lines, Obama's speech will likely focus on the things he thinks he might have a chance of actually accomplishing, given the makeup of the Congress he's going to have to work with. More on that in a moment.

Obama will likely provide a lighthearted moment during the speech in reference to the seating arrangement -- it's good fodder for a political joke, so I look for Obama to capitalize on it. He will then pivot immediately to a more serious tone about "changing the Washington culture" and toning down the rhetoric, and then he'll segue smoothly into introducing one of the heroes of the Tucson shooting, Daniel Hernandez. This is another easy prediction, because the tragedy happened so close to when the SOTU speech was scheduled (as the original "SOTU hero moment" did, under President Reagan, after the 14th Street Bridge airline crash happened).

At some point during the speech -- likely early on -- Obama will make an attempt at trumpeting his own successes from the past year. First on this list will likely be saving the American auto industry, which turned around into profitability faster than just about anyone predicted at the time. I would hope Obama would also point out that TARP is now slated to be largely repaid, meaning the taxpayers didn't pay for a "$700 billion bailout," but instead may even wind up making money on the whole deal (or, at the very least, only be on the hook for a few tens of billions of dollars -- still a lot of money, but nowhere near the dire predictions of Republicans at the time, and since).

Obama, if he's smart, will tie these two together into the framework of "I never wanted government to 'take over' these companies, but I thought it best for the American people to do so, and now we are well on our way to getting government back out of these businesses and let them stand on their own." This is important, because it shows that Obama (and Bush, for that matter, with TARP) wound up making the right gamble -- something the public at large hasn't really heard about.

Obama will also likely highlight some of the Wall Street reform efforts, such as the new Consumer Financial Protection Bureau and the reforms on credit cards which benefited all Americans. The C.F.P.B. thing is an important one, because Republicans have declared their intent to either get rid of this new agency or strangle it of any funding -- meaning Obama should use the prominence of the SOTU speech to get a jump on defending the agency.

President Obama will also have to mention health care reform. The way he'll likely do so is to lean heavily on the provisions within the new law that are already taking effect, and the ones which are most popular -- no more pre-existing condition denials, no more lifetime or annual caps on coverage, allowing kids to stay on their parents' policy until age 26, and filling the "donut hole" in seniors' prescription drug benefits.

Obama may (although I wouldn't bet the farm on it) issue explicit veto threats during his speech tomorrow night. It's kind of confrontational, so he may decide to skip this in the speech, but it is also going to be his strongest tool when it comes to dealing with a Republican House for the next two years. Obama can say "I will veto X, Y, and Z" and then if Republicans persist in pushing these issues, the public will see it as nothing more than playing political games. This is a risky and (as mentioned) a confrontational strategy, and therefore I'd say the odds of Obama using the word "veto" (or even the concept) are only about even during tomorrow's speech.

Instead, Obama is likely to lean more heavily on "reaching out" to Republicans in Congress. He knows full well that if anything legislative is going to get done in the next two years, Republicans are going to have to be on board. This is incredibly limiting, because it means large chunks of the Democratic agenda (or Obama's own political agenda) are not even going to be up for consideration.

What will be left are the areas where Obama thinks he may actually persuade Republicans to get on board. There are a few issues, such as free trade agreements, where this is actually a possibility. Education reform (at least, the stuff that doesn't cost any federal money) may also be an area where Obama and the Republicans may work together.

So far, the betting is currently that Obama will not explicitly support major changes to Social Security and Medicare, but my guess is that while he may not come out and say "I'd go along with raising the retirement age" or anything that specific, the president is going to bring the subject of entitlements up and then give some sort of vague "let's put everything on the table and come up with a bipartisan solution" type of statement. There's a reason why Social Security was the original "third rail of American politics" (in other words, you touch it and you die), and neither party wants to go first in proposing any pain for seniors.

The big push -- and the "big headline moment" -- from the speech tomorrow is (in my estimation) going to be for "revamping the tax code." This was a central idea to come out of the deficit commission last month, and because the tax code is so enormously complicated is likely a good idea. However, the devil (as always) will be in the details on this one. Republicans are simply not going to support anything that could conceivably (by them, of course) be called a "tax hike." But even with that constraint, it is remotely conceivable that Republicans and Democrats could hash something out to make income taxes a little simpler -- but only after months of haggling and debate.

Obama is also likely to speak of deficit reduction in nebulous terms, but Republicans simply aren't going to buy any of it. Paul Ryan's response speech is going to center on this subject, and Obama should let the Republicans take the lead on this, because (as with entitlements) any cuts in federal spending large enough to make a real difference to the deficit are likely to be very unpopular, depending on which group takes it on the chin. So watch for Obama to support the idea in abstract, and wait for Republicans to come up with specifics.

Overall, though, the motif of Obama's speech is going to be jobs, jobs, jobs. Look for him to couch as many subjects as he can in talk of how many jobs it could create or destroy. Obama will, at some point, highlight the fact that 1.3 million private sector jobs were created last year (a fact most of the public isn't all that aware of), and then state that "it's not enough" but that "at least we're moving in the right direction" on the jobs front.

Obama's goal in tomorrow's speech is to position himself as the reasonable adult in Washington who is focused above all else on jobs and the economy, in contrast to radical Republicans who seem to have no other agenda than to dismantle everything that happened in the past two years. This will be an easy contrast for the president to make. If Republicans had led off their legislative session with a "Job Creation Act" then President Obama wouldn't be able to make this contrast so easily. But the Republicans missed this opportunity, and Obama will likely position himself as most concerned about jobs and the future, unlike Republicans.

As for the public's reaction to the speech, Obama is in pretty good shape already. He is riding a wave of poll numbers which are better than anything he's seen since his last SOTU speech, but this wave may well already include everyone who would normally have given him a "SOTU bump" in the polls. Obama will do quite well, however, to consolidate his recent gains and not sink back in February. In other words, it's more important that he stabilize his job approval rating at the current levels (CNN just released a poll with 55 percent job approval for Obama) than it would be to get a transitory bump of a few points which then immediately falls back. All told, though, it is a lot nicer to already be riding a wave of approval heading into the speech than it is to hope for such a bump afterward.

Obama's speech is going to have lots of things in it for everyone to hate and love. It likely will disappoint some of his supporters, and will also likely be received well by some of his former detractors. And one final prediction that is another no-brainer: Obama's delivery of the speech will be fantastic. Because, love him or hate him, pretty much everyone agrees that Obama is one of the best politicians at giving such important speeches that we've ever seen.


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