Corporations and the State of the Union
“We do big things.”
This was inspiring rhetoric from President Barack Obama in last night’s State of the Union address.
Many of the president’s broad themes — especially the need to promote innovation, step up public investment, and preserve a vital, affirmative role for government — are important expressions of how the nation can do big things.
But there were many sources of concern in the speech as well. In too many cases, there was a disconnect between positive themes and troubling policy proposals. In these instances, rather than articulating an agenda for doing big things, President Obama devoted energy and time to offering goodies to corporate interests and shackling his government with a self-destructive budgetary freeze.
Nothing could be more important than launching a clean energy revolution. The president placed investment in clean energy atop his innovation agenda, but his remarks don’t suggest anything on the scale of what is needed. It is a great idea to pay for clean energy investment by ending subsidies for Big Oil and fossil fuels, but the president has only proposed cuts worth about $4 billion a year — not nearly enough to fund an energy transformation. And Congress has refused to enact these cuts. Does the president propose investments even if he can’t offset the cost with more oil revenues?
Even worse, Obama described the alternatives to oil as equal to one another. They are not. Though backed by powerful corporate interests, nuclear is far too costly and dangerous to pursue. Using natural gas is no solution to the climate crisis, and future supplies depend significantly on poisonous fracking technologies. Clean coal is imaginary — an industry-invented chimera.
Many of President Obama’s proposals are politically driven efforts to court Big Business, and are downright harmful.
• The president reiterated his support for a NAFTA-style trade deal with Korea. He said the deal would “support” 70,000 jobs, but even the relevant government agency, the International Trade Commission, acknowledges the deal will lead to a net loss of U.S. jobs. We’ve seen the NAFTA movie over and over. Why does the president propose to replay it?
• Although the president insisted he would defend rules to advance important public purposes, he also said that “to reduce barriers to growth and investment, I’ve ordered a review of government regulations.” There is no credible evidence that regulation is a barrier to growth. And, as yesterday’s report from the Financial Crisis Inquiry Commission reminds us, a lack of regulation led directly to the financial crisis and the Great Recession.
• Although the president said he did not want to address budgetary concerns “on the backs of our most vulnerable citizens,” he is ready to look at Republican proposals on “medical malpractice reform.” Unfortunately, those proposals are not about reducing the actual incidence of medical malpractice, which continues at epidemic levels, and they’re not about lowering cost. They are about stripping malpractice victims of the right to go to court for compensation. Medical malpractice lawsuit costs are actually falling, and they do not constitute a significant portion of overall healthcare spending. Limits on patients’ access to justice are nothing more than a gift to health insurance companies and healthcare providers, at the expense of injured patients.
By agreeing to the Republican position that we need aggressive short-term measures to reduce the deficit–even as one in six people seeking full-time work are unable to find it, and as the productive powers of the nation remain massively underutilized — President Obama has hamstrung his ability to undertake bold initiatives.
Even so, there are large revenue sources available. A Wall Street speculation tax could raise $150 billion a year and would be enormously popular. The administration has, so far, refused to consider it seriously. The president pointed to another huge revenue source: closing corporate tax loopholes. However, his pledge to offset increased revenues with a general corporate tax cut makes this nothing more than a wash for the national treasury.
Of course, President Obama has to work with a Republican-controlled House of Representatives, and his remarks were tailored not only to reach out to the opposition party, but to advance an agenda that has some prospect of being adopted. It’s one thing to scale back and find strategic points of convergence. It’s another to support damaging policies.
There have been many worrisome indicators of the president moving to more corporate-friendly positions in the past few months. Yet the White House remains susceptible to public pressure for the public interest. It was notable in the State of the Union address that the president did not indicate support for proposals to cut Social Security benefits, likely the result of an aggressive advocacy campaign by public interest campaigners.
So, we have our work cut out for us in the coming months. We must demand that our president live up to his inspiring rhetoric, where “we measure progress by the success of our people [and] the opportunities for a better life that we pass on to our children.”
Robert Weissman is president of Public Citizen.