Because the State of the Union address typically amounts to little more than some well-intentioned suggestions, it is constructive to take a broad view of President Barack Obama’s delivery last week rather than drill into the details of his proposals.
We could examine a proposed increase to the child care tax credit. And a proposed $500 tax credit for working couples. And an increase to the capital-gains tax accompanied by a closing of some loopholes in the inheritance tax in order to pay for those boosts to the middle class — making the proposals budget neutral. The details are important, and yet they are unimportant, because the odds of the individual proposals being embraced by a Republican-controlled Congress reside somewhere between slim and none. Even before Tuesday’s speech, a spokesman for Speaker of the House John Boehner, R-Ohio, said, “More Washington tax hikes and spending is the same old top-down approach we’ve come to expect from President Obama that hasn’t worked.”
No, the details of Obama’s proposals are relatively meaningless. But the tone of the message is crucial because, as the president told the American people, “It’s now up to us to choose who we want to be over the next 15 years, and for decades to come.”
Make no mistake, much of the State of the Union address was designed to position Democrats for the 2016 election. With two years remaining in his presidency and with Democrats wielding little power in Washington, D.C., the fear is that the next 22 months will be filled with more political posturing than actual governing. But the theme of Obama’s address was one of rebuilding the middle class in this country, and that task is too important to ignore until the next election.
As The Washington Post reported in December, using data from the Economic Policy Institute, American workers are more efficient than ever before but, “Increased productivity … has gone to increased profits instead of increased wages.” As the Pew Research Center determined in October, “For most U.S. workers, real wages — that is, after inflation is taken into account — have been flat or even falling for decades, regardless of whether the economy has been adding or subtracting jobs.”
That stagnation of wages has been true during the economic recovery of the past couple years. While job growth has been intermittently robust in the aftermath of the Great Recession, studies have shown that an unsustainable percentage of those jobs have been of the low-wage variety.
Republicans in Congress are prone to insisting that this is not a problem. They remain reluctant to raise taxes on wealthy Americans, the so-called “job creators” who purportedly drive economic growth. “Raising taxes on people that are successful is not going to make people that are struggling more successful,” Sen. Marco Rubio, R-Fla., said last week.
While that can serve as the foundation for endless debate, Obama is correct to address the current state of the middle class. The middle class that flourished in the wake of World War II was essential to turning the United States into the world’s economic superpower. “Will we accept an economy where only a few of us do spectacularly well?,” Obama asked Tuesday. “Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”
That is the overriding message from last week’s State of the Union speech. It is a philosophical query in which the answers will linger for generations.
