President Obama's State of the Union speech was in some ways typical of him — in rhetoric and sometimes in substance appearing centrist and unifying, but in other ways divisive and statist.
First the centrist stuff. Perhaps the most memorable passage of the speech was this laugh line: "I've ordered every federal agency to eliminate rules that don't make sense…We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill – because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk. I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder."
The speech began and ended with praise of American soldiers: "When you put on that uniform, it doesn't matter if you're black or white; Asian or Latino; conservative or liberal; rich or poor; gay or straight."
And Mr. Obama said he was "directing my Administration to open more than 75 percent of our potential offshore oil and gas resources." He didn't quite say "drill baby drill," but that was the message. On ABC News, Peggy Noonan wondered after the speech, "where's this guy been," in other words, why didn't he do that in the first few months of his administration rather than waiting three years in.
Mr. Obama also echoed the call we've been making here for a reform of the unemployment benefits system. He said, "It's time to turn our unemployment system into a reemployment system that puts people to work."
Then, the divisive, statist stuff. A defense of the auto bailout combined with a promise/threat to expand it to other industries, in what had to be the most tone-deaf line of the speech: "What's happening in Detroit can happen in other industries." Lord help us. Does that mean he's going to seize the other industries from the secured creditors or owners who would otherwise control them and give them away to his union pals while closing factories and dealerships and launching regulatory smear campaigns against foreign competitors (like Toyota)?
Mr. Obama seemed to confuse himself with the nation, and to fail to understand that capital is best allocated and invested by markets rather than presidents: "I will not cede the wind or solar or battery industry to China or Germany."
There was an attempted assault on the First Amendment rights of free speech, assembly, and petition, with the president proposing a bill to "make sure people who bundle contributions for members of Congress can't lobby Congress, and vice versa." No mention of whether this rule would apply to lobbying the executive branch; naturally, it wouldn't, for fear of cutting into Mr. Obama's re-election fundraising. What a hypocrite.
And when it came to taxes, the president's "it doesn't matter if you're rich or poor" attitude went right out the window: "Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes….On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up." Warren Buffett's secretary sat in Michelle Obama's box as an invited guest to watch the speech.
And, of course, there was the merely banal, such as this clumsy echo of JFK: "Ask yourselves what you can do to bring jobs back to your country."
The Republican response, by the governor of Indiana, Mitch Daniels, criticized President Obama for high unemployment, "economic stagnation and indebtedness." It called for replacing Mr. Obama's "pro-poverty policy" with a "pro-growth" policy that would include tax simplification with fewer loopholes and lower rates along with an effort to "save the safety net" by repairing Social Security and Medicare. Mr. Daniels said government is "meant to serve the people rather than supervise them," contrasting it with the Democratic view that "unless they stop us, we might pick the wrong light bulb." He didn't mention that the ban on old-fashioned light bulbs was the result of a George W. Bush-era law.
One possible area of agreement between Mr. Daniels and Mr. Obama came on means-testing entitlements such as Social Security and Medicare. Mr. Obama said, "my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires." And Mr. Daniels advised, "stop sending the wealthy benefits they do not need."
Critics of such a means-testing approach include Steve Forbes, who has called it "immoral, a breach of trust" and warned of confusing income and assets in defining the "means" to be tested, and Andrew Biggs, who has said, "the reason means tests have been unpopular in the past remains true today: they penalize people who work and save. Some may perceive this as unfair; fair or unfair, means tests have negative effects on incentives to work and save."
Update: Please see also my later post on another of the president's State of the Union proposals: "tonight, I call on every State to require that all students stay in high school until they graduate or turn eighteen." It turns out to be a big payoff to the teachers unions.
