By: Wayne Brown
Much of America was glued to the computer, radio, or television last night to hear President Obama address the joint session of Congress. The buildup to the moment in the media has simply left too many curious as to what was left to be said after we witnessed weeks and weeks of debate over the debt ceiling issue just recently. The President’s actions in the prior weeks to this address also helped to add to the mystery of it all. As they, curiosity killed the cat, and so it was for much of America…curiosity.
The President opened the speech by informing Americans that we are and have been in a crisis situation with our economy and unemployment for some time now. He basically pointed out that it is a dilemma we cannot wait any longer to address. He cited the roughly 25 million Americans who are now out of work, many of whom have been out of work for months now. He cited the need to provide an economic environment in which these Americans can find meaningful employment, have money in their pockets, and inject that money back into the economy to spur it on. In the process, he also decried the selfish, political climate of Washington as the primary factor as to why this problem lingers as it does. He challenged the members of Congress to look beyond the political moment and make some decisions which would get America on the road to recovery. Of course, the thrust of his emphasis was the intent for Congress to get off its butt and pass the bill which he was hawking in the speech.
In some ways, the President touched on some good things in this speech. He recognized that the private sector which be motivated if we are to recover economically. He recognized that small businesses play a significant role in creating the job demand which is necessary to put so many people back to work. In doing so, he stopped short of restating that it was government role to create jobs…a concept the American public is tired of hearing. It was somewhat refreshing to hear the President actually recognize some aspects of what really makes capitalism work in our society.
The President went on to talk about cutting payroll taxes both for the employee and the employer. He talked about tax credits for small business that either hire new employees or give raises to their existing ones. All of this he noted would put money back into the pockets of Americans with jobs and potentially create some job opportunities for those without jobs. The end result would be a surge in consumer spending and more money circulating in the economy eventually stimulating revenue streams back to the government coffers. The President then went on to talk about infrastructure investment in roads, bridges, and transportation systems as well as in the physical facilities of 35,000 schools in America. Again, the focus was on work which would provide jobs for those seeking them.
As all the various points came to light, there was much cheering in the Chambers of Congress as the President again and again challenged his colleagues to “pass this bill”. Each time a new aspect of the bill was announced, the challenge came forth along with the supporting statement that everything in the bill was “paid for”. When the presentation was complete, it was reemphasized how important it was to “pass this bill” as if to say, “hey, the money is already there, all you have to do is appropriate it for the items specified.” Unfortunately, I am afraid that is not the case unless either the President or Congress is willing to complete the tedious task of going through government expenditures line item by line item to uncover waste and fraud to find such funds. Otherwise, this is just more deficit spending which adds bulk to the national debt.
Unfortunately, the President ignored one of the largest speed bumps to recovery which has been there from early on in his administration. The President did address some tax relief at the payroll level and some tax incentives for new employees which was positive. He also indicated that some regulations would be relaxed although he was reluctant to give much detail in this area. This too will help. The one area he stayed away from which shines like a dead armadillo on a moonlit highway was healthcare reform. This is an area which is most certainly an obstacle to economic recovery. Even though it has not been implemented, the effect is already in place.
Small businesses fear the healthcare reform and what comes with it. On that basis, they are reluctant to add employees or expand their business interest for fear they will need to cash reserves to meet the requirements of this legislation. The President offered no relief or alternatives in his plan for this concern. In retrospect, even if the other items in the plan have some positive impact, the real strength of the American economic engine will not fire unless this legislation is addressed. To ignored that fact is to ignore one of the best opportunities available to get America working once again. Unfortunately, the President considers healthcare to be off-limits when he considers everything else to be on the table.
There are those pundits who speculate that this speech was simply a “political gesture” to set the stage for Obama’s second campaign for the Presidency. The plan provides the parameters for the President to run against the failings of Congress to enact his plan thus he does not have to run on the merits of his first-term which is problematic. If indeed the Congress elects to pass some form of this proposed plan, then the President has a platform to claim that he has put in place things to begin moving America back to economic strength. Either way, he has a stronger platform in place as long as the plan does not fail too soon.
I will give the President the benefit of the doubt and hope that he is truly interested in turning the economy around. Much more will come to light when he exposes the details of his plan in the coming days. At the same time, I think the President is making a very big mistake in hanging on to the healthcare reform legislation. Ultimately, I believe it was be a singular component in defeating his attempts to restart the economy. Ultimately, I believe that while America shows curiosity as to what the President is thinking, I believe American business is still looking at a picture that is too unstable for their taste. In the final analysis, I believe the one item which President Obama has protected, healthcare reform, will not be his legacy, it will be his downfall politically and economically.
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