What Obama Got Wrong in the State of the Union

Rob Kuhlman /

Heritage Foundation experts weighed in on the policies President Barack Obama mentioned in his last State of the Union address. Here is what they had to say after the president’s speech.

Economy

The Economy Is Far From Booming

President Obama boasts America is in the “middle of the longest streak of private-sector job creation in history.” On paper, he is right. But the economy is far from booming.

While the labor market has improved, it remains much weaker than before the recession hit.

Most of the hiring the president touted was simply job creation keeping pace with population growth.

As Obama noted, the unemployment rate has fallen and the economy has added jobs. Unfortunately, much of this improvement comes from Americans dropping out of the labor force. People not looking for work do not count as unemployed.

Yet, they still lack jobs.

The employment rate for 25-54 year olds remains over 2 percentage points below pre-recession levels. Most of the hiring the president touted was simply job creation keeping pace with population growth.

Those Americans who did lose their jobs still have a hard time finding new work. The average unemployed worker has spent over six months jobless. That is longer than any time between the end of World War II and Obama’s inauguration. Workers have good reason to feel anxious about the economy.

– James Sherk, research fellow in labor economics

Obama’s Backwards Thinking on Economic Value of Renewable Energy

President Obama boasted that “On rooftops from Arizona to New York, solar is saving Americans tens of millions of dollars a year on their energy bills and employs more than coal – in jobs that pay better than average.”

Proponents of renewable energy consistently argue that renewables create more jobs per kilowatt hour and thus are a good investment. If that’s the recipe for job creation and economic growth, we can scrap using machinery to pave roads and grow crops.

By Obama’s logic, we can create more jobs by giving people shovels to perform those duties.

By Obama’s logic, we can create more jobs by giving people shovels to perform those duties. That would certainly create jobs, but it would also significantly reduce productivity. If we can produce more energy with less labor, that frees up human resources to be productive elsewhere in the economy.

Importantly, there are several key omissions from Obama’s statement. Heavy-handed regulations devoid of any meaningful environmental benefit are driving out coal as an important, reliable energy source and destroying jobs in the process. Solar benefits from generous taxpayer-funded subsidies and while the costs are coming down, solar still remains one of the priciest ways to generate electricity.

If Obama wants to tip his hat to something, he should point to that fact that market-driven small drilling technologies have put money back into the wallets of families. According to the government’s own Energy Information Administration,

“Wholesale electricity prices at major trading hubs on a monthly average basis for on-peak hours were down 27 percent-37 percent across the nation in 2015 compared with 2014, driven largely by lower natural gas prices.”

As Obama said, “I believe a thriving private sector is the lifeblood of our economy.” The oil and gas boom is but one shining example.

– Nicolas Loris, Herbert and Joyce Morgan Fellow

It’s Obama’s Economy, Not the Robots, Workers Should Fear

The President argued that automation has become uniquely challenging for American workers. It’s a strange problem to highlight, for two reasons. First, economists have found no historical relationship between automation and employment rates. In the past, workers who lost their jobs because of technology always found new work. Automation only seems like a threat because finding new jobs in Obama’s recovery has been historically difficult.

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Second, the rate of automation has slowed sharply since 2003. Employers are finding fewer new ways to automate labor in this decade than they did in the last. Increased automation increases labor productivity; it allows employers to produce their goods with fewer man hours (and more machine hours) than before. But the Bureau of Labor Statistics finds labor productivity has slowed for the past decade. Automation has become a smaller challenger for workers than it was in the past.

The economy faces many challenges. Robots broadly eliminating the need for human labor is not among them.

 – James Sherk, research fellow, labor economics

Government Policies Caused the Financial Crisis and Made the Recession Worse

No, recklessness on Wall Street did not cause the financial crisis, a host of terrible government policies did.

President Bill Clinton’s National Partners in Homeownership set a completely arbitrary goal of increasing home ownership, and it turned out most qualified homebuyers already owned homes. All the additional lending helped to create a housing bubble and increased consumer debt, and the capital requirements that federal regulators imposed on the financial system spread risky loans throughout the markets.

The ever-increasing socialization of losses, by both implicit and explicit government guarantees, added fuel for the fire. The system that gave us the crisis – affordable housing goals, shaky underwriting standards and Fannie and Freddie – remains largely in place.  If we want to prevent another crisis, these policies need to be reversed.

– Norbert Michel, research fellow in financial regulations

We Don’t Need Government ‘Investments’ in Energy

Energy is one of the last sectors of the economy that needs help from the federal government or a centralized plan. The laws of supply and demand work quite well. We have an abundance of resources, and a great deal of suppliers producing energy from a mix of energy sources. The global market for energy is a multi-trillion dollar opportunity.

One energy consulting firm estimated that in 2011, world expenditures for energy totaled more than $6 trillion – 10 percent of global Gross Domestic Product and the second largest expenditure behind health care.

The International Energy Agency projects that that tens of trillions of dollars of energy investment will be necessary to meet global energy demands over the next twenty years. Any company that has a viable technology will not need any help from the taxpayer or a government program. Profits will reward innovative ideas and promising technologies.

– Nicolas Loris, Herbert & Joyce Morgan Fellow

Obama-Era Regulations Cost Taxpayers $80 Billion a Year

President Obama tonight stated that “there are outdated regulations that need to be changed, and there’s red tape that needs to be cut.”

He is right. But he has said that many times before. And, despite all the talk, his administration has done virtually nothing to reform or repeal the unnecessary red tape. Instead of rooting out outdated rules, he has added on record numbers of new ones.

184 major new rules have been imposed on the American people since Obama took office

Overall, according to our annual “Red Tape Rising” report on federal regulation, 184 major new rules have been imposed on the American people since Obama took office, costing some $80 billion each and every year. The number of such rules pared back: only 17. So much for cutting red tape.

Rather than the careful assessment of new and old rules the president spoke of, in practice his regulatory policy has been a one way ratchet toward ever more rules from Washington governing the lives of Americans.

– James Gattuso, senior research fellow in regulatory policy

Squeezed Earnings Happened Under Obama’s Watch

President Obama talked about long-term economic trends squeezing workers. He should have made it clear this squeeze is a recent phenomenon. Congressional Budget Office data shows that workers at every income level prospered between 1979 and 2007.

During that period non-elderly households in the middle quintile saw their labor market earnings rise by a third. Households in the poorest quintile saw their labor market income rise well over 50 percent. From the Reagan Presidency until the Great Recession, American economic opportunities expanded up and down the income ladder.

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Since the Recession and the slow Obama recovery that has changed. Between 2007 and 2011 (the most recent data available) labor income for non-elderly households in the middle quintile dropped roughly 10 percentage points.

No wonder Americans are down on the economy. But these problems have predominantly occurred on Obama’s watch. That should make Americans skeptical that doubling down on his preferred policies would fix them.

– James Sherk, research fellow, labor economics

No Presidential Leadership on Entitlement Reform

President Obama stated in the State of the Union tonight that “Social Security and Medicare are more important than ever; we shouldn’t weaken them, we should strengthen them.” Beyond catering to his political base, Obama offered no details on how he would strengthen these programs.

Obama failed the nation during his term thus far when it comes to reforming Social Security and Medicare. Despite his 2009 promise that “some of the hard decisions are made under my watch, not someone else,” we’ve seen very little action from the president on accomplishing this feat. Unsustainable, poorly conceived cuts to Medicare from Obamacare and a bailout of Social Security’s disability program can hardly be counted as entitlement reform.

One of every $10 produced by the U.S. economy in fiscal year 2015 was spent on only three federal programs: Social Security, Medicare and Medicaid.

These three programs alone consume more than half of all federal spending and they are growing rapidly. The next president must lead on entitlement reform upon entering office.

– Romina Boccia, deputy director, Thomas A. Roe Institute for Economic Policy Studies and Grover M. Hermann Research Fellow

When Job Training Hurts, Not Helps

The Hippocratic oath enjoins doctors to “first, do no harm.” The president should keep that in mind with his job training proposals. He suggested sending unemployment insurance recipients through federal job training. But evaluations find one of the major federal job training programs makes it harder for workers to get jobs.

The federal government funds “Trade Adjustment Assistance” benefits for workers who lose their job to foreign trade. The program includes generous federal subsidies and free job training. You might expect this to improve displaced workers’ incomes. But when Mathematica evaluated the program, it found participants made $27,000 less than workers outside the program.

What happened? Trade Adjustment Assistance encouraged jobless workers to enroll in federal job training programs instead of looking for new work immediately. But the job training didn’t improve their job prospects. So they wasted over a year they could have spent job hunting in a training program employers didn’t value. Workers never fully recovered from missing those potential job opportunities. Even the federal subsidies only partially made up their losses. The unemployed workers would have made more money skipping the training program, even if it meant forgoing the federal subsidies.

Congress should think carefully before creating another federal job training program. They could easily wind up hurting the workers they want to help.

– James Sherk, research fellow, labor economics

The Same Tired Line on Federal Infrastructure Spending

Once again, President Obama made a cursory mention of infrastructure in his State of the Union, claiming that if only the federal government would spend more taxpayer money (gleaned from higher taxes on fossil fuels), the government can “put tens of thousands of Americans to work building a 21st century transportation system.” But as innocuous as this agenda sounds, it fundamentally misses the mark.

Using government spending to stimulate job creation was a cornerstone of the Obama stimulus plan that ultimately failed to produce the “shovel ready” jobs the president promised. A big problem is that infrastructure projects take a long time to plan and require highly-skilled labor, meaning that spending on these projects is ineffective at creating new jobs for recently unemployed Americans (most of whom lack the necessary job skills). The federal government has a very poor track record as a job creator, and spending on infrastructure is no exception.

Instead, transportation infrastructure should focus scarce resources on enhancing mobility and relieving congestion so that American workers, businesses, and travelers all over the country can get where they need to go. At this, the top-down federal transportation program has been ineffective. The federal gas taxes that were originally intended to maintain the Interstate Highway System – a true national priority – are diverted to various special interests by Congress and federal bureaucrats. Over a quarter of gas taxes are siphoned to projects that are not proper federal priorities, such as local transit and bike-share programs, while a mere six percent goes to the actual construction of major projects.

Due to perennial overspending on transportation projects, the federal Highway Trust Fund has required over $140 billion in bailouts since 2008. And even though the president pledged that we should not “subsidize the past”, the federal government spends millions in subsidies incentivizing cities to build cumbersome and expensive streetcar projects, which last saw their heyday in the early 20th century.

Federal promises of job creation and effective infrastructure investment have floundered. Rather than continuing the one-size-fits all approach out of Washington that has left millions of Americans stuck in traffic, the federal government should get out of the way to empower the states and private sector–who can best gauge local priorities–to truly build a 21st century transportation system.

– Michael Sargent, research associate, Thomas A. Roe Institute for Economic Policy Studies

Presidents Obama vs. President Reagan on Trade

In his final State of the Union Address, President Obama suggested the proposed Trans-Pacific Partnership (TPP) would “open markets, protect workers and the environment, and advance American leadership.”

The key factor for Congress to evaluate will be whether TPP really does promote open markets and economic freedom. If it does, workers and the environment will benefit. The latest rankings of trade freedom around the world in the Heritage Foundation’s forthcoming 2016 Index of Economic Freedom confirm that citizens of countries that embrace free trade are better off than those in countries that do not. The data continue to show a strong correlation between trade freedom and a variety of positive indicators, including economic prosperity, low poverty rates, and clean environments.

Obama missed an opportunity to explain the benefits of trade when he said, “Companies in a global economy can locate anywhere, and face tougher competition. As a result, workers have less leverage for a raise.” In fact, the global economy brings enormous benefits to workers, both through imports used by American manufacturers to compete, and through jobs provided to nearly 6 million workers thanks to foreign investment in the United States.

As President Ronald Reagan observed in his final State of the Union address: “One of the greatest contributions the United States can make to the world is to promote freedom as the key to economic growth. A creative, competitive America is the answer to a changing world, not trade wars that would close doors, create greater barriers, and destroy millions of jobs.”

Bryan Riley, Jay Van Andel senior policy analyst

Education

President’s Preschool Push Entangles Washington in the Care of the Youngest Americans

President Obama’s suggestion that government should become further entangled in the education and care of the youngest Americans would not serve children or taxpayers well.

Washington already has a poor track record engaging in K–12 education, with federal spending more than doubling over the past three decades while academic achievement and attainment has languished, particularly among low-income students.

Further federal intervention in preschool and childcare will crowd out the private provision of care, increase costs for taxpayers, and will fail to create lasting academic benefits for children, as recent evaluations of state and federal programs have demonstrated. A large-scale evaluation of the federal Head Start program found the program had no impact on the academic outcomes, social-emotional well being, health outcomes, or parenting practices of participants.

A recent evaluation of Tennessee’s voluntary pre-K program (TN-VPK) had similarly unimpressive outcomes. Researchers from Vanderbilt found that in Tennessee’s program, which is lauded as a model of state preschool programs by proponents, by second grade,

“the [experiment and control] groups began to diverge with the TN-VPK children scoring lower than the control children on most of the measures. The differences were significant on both achievement composite measures and on the math subtests.“

More federal intervention in preschool and childcare will also fail to address deeper social issues while being largely duplicative of existing efforts, as nearly three-quarters of four-year-olds are already enrolled in some form of preschool.

– Lindsey Burke, Will Skillman Fellow in Education at The Institute for Family, Community, and Opportunity

More Federal Subsidies Will Not Solve the College Cost Problem

The president’s proposal to provide “free” community college is not the solution to the college affordability problem. Students who are low-income already have access to federal student aid such as Pell Grants, which can be used to finance the cost of attending community college. So the proposal will serve as little more than a federal handout to the community college system. Community colleges also face their own challenges, with less than 20 percent of first time students enrolled in community colleges graduating within three years.

America’s $1.2 trillion student loan tab presents a serious problem in our economy. Americans would be better served by policies that actually help to lower higher education costs, making higher education an engine of upward mobility for American who choose to pursue it. That goal requires broad reforms to accreditation, reforms to federal student aid programs, and streamlining and reducing burdensome regulations and requirements that permeate higher education today.

– Mary Clare Reim, research associate in education policy 

Foreign Policy and National Security

No Strategy, Only Spin When It Comes to Fighting ISIS

A few years ago President Obama described ISIS as the “J.V. team.”

Today, the terror group poses more of a threat to the world than ever before. As recent Heritage Foundation research pointed out, in the past two years ISIS has established a presence in 19 countries. Foreign fighters are flocking to the wannabe caliphate in droves.

In Syria and Iraq, ISIS controls territory the size of Maryland and rules over a population equivalent to Virginia’s. Although ISIS was recently kicked out of the Iraqi town of Ramadi, it still occupies Mosul—Iraq’s second largest city of almost 2 million people.

Obama’s remarks tonight reaffirmed what everyone already knew: that there is no strategy to defeat ISIS and he cannot wait to pass the buck to his successor.

Even though the U.S. dropped 22,110 bombs against ISIS in 2015 (by comparison, during the first 30 days alone of the 2003 Iraq invasion the U.S dropped 29,000 munitions) the air campaign has achieved minimal success on the ground. The administration’s program to train and equip so-called ‘moderate’ Syrian rebels has been a complete failure—to the tune of $500 million. More importantly, the U.S. has failed at drumming up more support on the Arab Street to take on ISIS.

Sadly, the next U.S. President will inherit a mess in the region.

– Luke Coffey, director of Douglas and Sarah Allison Center for Foreign Policy

A Delusional National Security Review

When it came to national security issues, President Obama’s State of the Union address veered from delusional to dishonest. He presented the American people with a series of false choices, straw arguments and inaccurate assessments regarding his track record.

When it came to national security issues, President Obama’s State of the Union address veered from delusional to dishonest.

Regarding Islamic State (ISIS, or ISIL), Obama tried to downplay the existential threat they posed. The president has past form on this. It was, after all, his complacency towards the gathering strength of the group in 2013/14 (when he referred to them as a “jayvee team”) that helped ISIS grow into the threat it now truly is. Rather than learning this lesson, he instead focused his ire on those who “build [ISIL] up”.

Obama went on to provide a list of initiatives that the U.S. was spearheading in the war against the group, which included efforts to “cut off ISIL’s financing, disrupt their plots, stop the flow of terrorist fighters, and stamp out their vicious ideology.” These were unusual examples to cite, because on every count, these efforts have failed. ISIS is stocked with foreign fighters, its ideology has spread across the globe, it has launched attacks in mainland Europe and it remains financially strong.

Obama also dismissed the idea that theology could be at the heart of ISIS’s appeal, dubbing them simply “killers and fanatics”. Yet a refusal to acknowledge the religious component to ISIS’s activities is counter-productive. It is only by understanding the group’s appeal and its beliefs that we can subsequently cut off the sources of its recruitment.

Obama constructed another straw man by claiming that “the lesson of Vietnam, of Iraq” was that the U.S. cannot “try to take over and rebuild every country that falls into crisis”. This was particularly absurd. No one seriously believes that the U.S. could or should take on such a role. It also ignores the fact that what Obama claims to be his “smarter” approach has led to disasters in Libya, Syria and Yemen, to name but three. Attempting to argue that his “patient and disciplined” strategy meant the U.S. was “leading international efforts to help that broken society pursue a lasting peace” in Syria was a particularly deluded attempt at recasting the situation there as anything other than an utter disaster.

– Robin Simcox, Margaret Thatcher Fellow

US Lacks a Grand Strategy to Deal With Russian Aggression

Almost seven years later, the so-called Russian ‘reset’ policy is now a Russian regret. Russia still occupies 20 percent of Georgia’s territory. Moscow’s imperialism has resulted in the illegal occupation and annexation of Crimea and a Russian invasion of eastern Ukraine. Russia is testing NATO in the Baltics, rebuilding its military bases in the Arctic, and has intervened in the Syrian Civil War with no regard to the consequences.

Since taking office President Obama and many of those around him have assumed that Vladimir Putin is someone you can do business with, that Europe is no longer important, and that military power no longer buys the same influence on the world stage as it once did. These assumptions have led to bad policy decisions (such as the removal of 10,000 U.S. troops from Europe and drastic cuts to the U.S. military) by this White House that has emboldened Russian aggression and tested the transatlantic alliance to its limits.

During the State of the Union address Obama glossed over Russia’s aggression. Astoundingly, the upcoming NATO Summit in July 2016, Obama’s last, did not even get a mention in the Commander in Chief’s 5,438 word long speech. In fact, the word NATO was not said at all.  

Just because a problem is ignored does not mean it will go away. As Heritage Foundation experts have pointed out, the U.S. needs a comprehensive grand strategy to deal with Russia. Unfortunately, it looks like America and her allies will have to wait for 2017 because this becomes a possibility. No doubt Putin will be taking advantage of the situation during the meantime.

– Luke Coffey, director of Douglas and Sarah Allison Center for Foreign Policy

A Disconnect on Middle East Policy

President Obama remained in denial about the disastrous nature of his Middle East policy throughout the small parts of his state of the union speech that dealt with foreign policy.

He said that: “Priority number one is protecting the American people and going after terrorist networks.” That certainly was not the case in his last state of the union speech, which was the first that did not mention al-Qaeda since George W. Bush’s 2002 speech. He glossed over the uneven results of his half-hearted, slow-motion incremental response to the rise of ISIS and fumbling responses to the deepening crisis in Syria, where his administration has been consistently behind the curve.

His optimism on defeating these two terrorist networks would be reassuring if he wasn’t the same misinformed person who told Americans that the war in Iraq had ended, that ISIS was a “J.V. team” and that ISIS was contained the day before it launched the Paris terrorist attacks that killed 130 people.

He also made no mention of Iran’s terrorist network, which is sure to be boosted when Tehran collects up to $100 billion in sanctions relief under his risky nuclear deal.

He also made no mention of Iran’s terrorist network, which is sure to be boosted when Tehran collects up to $100 billion in sanctions relief under his risky nuclear deal. But perhaps he believes that Iran’s theocratic dictatorship will swayed by his optimism that “the unarmed truth and unconditional love will have the final word.”

– James Phillips, senior research fellow for middle eastern affairs

Yet Another ‘Close GITMO’ Promise

Once again, President Obama used his State of the Union speech to urge Congress to work with him to close the terrorist detention facility at Naval Station Guantanamo Bay, Cuba (GITMO). But it is worth reminding everyone that GITMO is open for one reason and one reason only: because Obama failed to close the facility when the stage was set for him to do so.

In 2009-2010, Obama’s own party held a 59-41 majority in the Senate, and a 257-178 advantage in the House of Representatives. If the president needed any legislation to close Guantanamo—a debatable point—or simply the political backing of the majorities in both houses of Congress, the stars were aligned for him to do so.

But instead of working with Congress to close GITMO in 2009-2010, the administration engaged in a series of controversial moves that caused a bi-partisan uproar, resulting in the Democrat-controlled congress passing legislation that each year since 2009 has made it more difficult to close GITMO.

Failing to lead has serious consequences. The window to close GITMO has come and gone.

Today, the threats from al-Qaeda, the Afghan Taliban, ISIS and associated forces are very real. Transferring some of the 103 remaining detainees and moving the rest to the United States – in direct violation of a congressional statute passed with Democratic support – is not prudent.

Changing the zip code of where we keep terrorist detainees will not alter the terrorists’ hatred for and attempted attacks against the United States one bit.

– Cully Stimson, manager, national security law program and senior legal fellow

Obama’s Failed Cuba Policy

The facts clearly demonstrate the ineffectiveness of President Obama’s radical new Cuba policy. Diplomatic recognition and increased commercial opportunities to the Castro regime have emboldened the military dictatorship. This has directly resulted in historic levels of repression against the anti-Castro opposition.

It’s also resulted in a continuation of hostility against U.S. national security interests.

Despite a year chock full of unilateral concessions, Havana continues undermining the U.S. and our interests. Dissidents have suffered historic levels of repression, even during Pope Francis’s visit to the island.

Recently, it was discovered the regime has been in possession for over a year of an inert U.S. Hellfire Missile, which was shipped from Spain to the island. The administration has not been able to answer how it got there, or if other hostile countries have obtained sensitive defense technology from it.

We must also keep in mind that it was only two summers ago when the Cuban government violated U.N. Security Council sanctions by clandestinely shipping weapons to North Korea.

It was incredibly shameful for the president to laude his overtures to Havana as a “success.”

– Ana Quintana, policy analyst, Latin America and the Western Hemisphere

A Presidential Lecture

Perhaps one of the most petulant presidents in modern history, lectured the country during the State of the Union not to assume that people who disagree with them act with malice. And this same president, known for a slew of controversial executive actions on such important issues as immigration and the right to bear arms, grumbled that he could not act alone, but needed Congress.

Yes, just three months after pouring invective on governors and congressmen who disagreed with him on refugees as not simply leaders with whom he disagreed; they were “un-American” and “shameful,” President Barack Obama said in the State of the Union message that “democracy does require basic bonds of trust between its citizens. It doesn’t work if we think the people who disagree with us are all motivated by malice, or that our political opponents are unpatriotic.”

Obama appeared close to coming to grips with the fact that his peevish, sullen approach to politics has made things worse in Washington. “It’s one of the few regrets of my presidency – that the rancor and suspicion between the parties has gotten worse instead of better. There’s no doubt a president with the gifts of Lincoln or Roosevelt might have better bridged the divide,” said Obama.

But then, Obama added, “But, my fellow Americans, this cannot be my task – or any president’s – alone.” Tell that to a Congress that keeps complaining that Obama does go alone whenever he doesn’t get his way on Capitol Hill.

– Mike Gonzalez, senior fellow, The Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy

Obama Tries to Downplay ISIS Threat (Again)

First President Obama called the Islamic State a “J.V. Team,” then he said they were “contained,” just before an ISIS inspired terrorist attack. Now Obama has characterized ISIS as “masses of fighters on the back of pickup trucks” during the State of the Union address.

The president’s most recent characterization of ISIS again tries to downplay the terrorist group’s capabilities, suggesting it is something far less formidable than it actually is.

ISIS is, however, armed to the teeth with tanks, Humvees, surface-to-air missiles, and artillery. It fields a conventional force that has routed a far-larger Iraqi military that was trained and equipped by the United States. It still controls swathes of territory in Iraq and Syria, and millions live under its subjugation. It is carving out a presence in Libya, and making a push to control that country’s lucrative oil fields.

ISIS lost approximately 14 percent of its territory in 2015, but it is far from defeated. It is certainly not a ragtag band of second-tier terrorists, which is how Obama too frequently portrays the group. During the State of the Union, the President decried the mistrust between Republicans and Democrats. Frequently mischaracterizing the ISIS danger that is obvious to most Americans is precisely the sort of thing that breeds the very suspicion the president laments.

– Joshua Meservey, policy analyst, Africa and the Middle East

A False Foreign Policy Alternative 

President Obama offered his usual false alternative between occupying and rebuilding “every country that falls into crisis” (an option that literally no one is proposing), or agreeing with his foreign policy. Putting it that way is a cheat, not a choice.

But let’s take the president at his word, which is that he wants the U.S. to “help remake” the international system that the U.S. built after 1945.

Even he doesn’t seem sure about this, because a few lines later, he suggests instead that we should be seeking to strengthen that order, not remake it. And a president more grounded in history might wonder if it’s wise to want to remake the order: from 1815 to 1918 to 1945 to 1991, the system has been at its most flexible after the world has been exhausted by a major war, which isn’t what any of us want.

Nor did the president suggest a single measure that would genuinely re-make the world order: from fighting terrorism to complaining about ungoverned spaces to lecturing Russia to talking about trade deals, his proposals (or rather, his applause lines) were all old hat. But yet, if his goal really is to remake the order, he’s actually doing a good job of it. That order was grounded on U.S. pre-eminence – but from Ukraine, to Syria, to Iran, it’s American weakness, not its strength or its leadership, that’s on display.

A world order without American leadership would indeed be a new one. But it’s not one that most Americans, or most people around the world, would like.

– Theodore R. Bromund, senior research fellow in Anglo-American relations

Climate Change

Reasons You Should Not Feel Lonely If You’re Questioning Whether Climate Change Is a Problem

President Obama said feel free to question the science behind climate change but doing so will leave you “pretty lonely” because “you’ll be debating our military, most of America’s business leaders, the majority of the American people, almost the entire scientific community, and 200 nations around the world who agree it’s a problem and intend to solve it.”

This “problem” of climate change is hardly one at all. Natural variations have altered the climate much more than man has. Proponents of global action on climate change will argue that 97 percent of the climatologists agree on climate change. There is significant agreement among climatologists, even those labeled as skeptics, that the Earth has warmed moderately over the past 60 years and that some portion of that warming may be attributed to manmade carbon dioxide emissions. However, there is no consensus that temperatures are increasing at an accelerating rate and we’ve seen them plateau for nearly two decades now.

Even studies that have attempted to refute the 18-year pause in global warming show that the temperature trend is much less than that projected by climate models. And even though man-made greenhouse gas emissions have increased, the world has not experienced trends in the increased frequency or magnitude of extreme weather events.

Heritage research has shown that the statistical models that the administration relies on to quantify the economic impact of climate change are heavily dependent upon certain assumptions and extremely sensitive to very reasonable tweaks to these assumptions.  In fact, under some assumptions one of the models that the administration relies on suggests that there may even be net benefits to global warming. That’s right: benefits.

The climate data simply does not suggest that man-made global warming should be at the top of the list of public concerns. Most importantly, even if you do believe the planet is heading toward catastrophe, the Obama administration’s climate agenda will drive up energy costs by driving out affordable energy sources for no meaningful climate reduction. We could grind all economic activity to a halt, hold our breaths forever, and cut carbon emissions to zero in the U.S. — and still only wind up lowering average temperatures by no more than 0.2 degrees Celsius by the end of the century.

Politicians might want to start listening to those “lonely” climate voices and have an objective, scientific debate on climate change.

– Nicolas Loris, Herbert and Joyce Morgan Fellow

– Kevin Dayaratna, senior statistician and research programmer

Obama’s Climate Agenda Will Cost the Economy, Not Grow It

When discussing taking action on climate change, President Obama said that it doesn’t really matter if you believe in climate change because “why would we want to pass up the chance for American businesses to produce and sell the energy of the future?” He went on to say, “But the jobs we’ll create, the money we’ll save, and the planet we’ll preserve – that’s the kind of future our kids and grandkids deserve.”

But the reality of a government-forced shift away from carbon-emitting natural resources such as coal, oil and natural gas will be a net cost to the economy – not a net gain. And the math isn’t even close. At a time when 80 percent of America’s energy needs are met by these carbon-emitting energy sources, restricting their use will drive up costs for households and businesses.

Carbon dioxide cutting policies will do nothing but kill jobs and stifle the American economy for years to come. Heritage research has found that the policies associated with these carbon cutting regulations will reduce aggregate gross-domestic product (GDP) by more than $2.5 trillion and kill hundreds upon thousands of jobs over the course of the next decade—all for a negligible impact on global temperatures. Manufacturing employment throughout the country will be hit particularly hard.

Obama’s climate agenda is all pain, no gain.

– Kevin Dayaratna, senior statistician and research programmer

– Nicolas Loris, Herbert & Joyce Morgan Fellow

Agree or Disagree With Catastrophic Global Warming, There Are Serious Problems With Obama’s Approach

President Obama continues to distract from the legitimate disagreements Americans and their representatives in local, state, and federal levels of government have with this administration’s global warming agenda. Obama focused on painting a picture of “lonely” opponents who are anti-science. But even people who believe that global warming is a problem have disagreed with the President on how he has attempted to address it.

Most notably, the cornerstone of Obama’s agenda – a pair of greenhouse gas regulations known as the Clean Power Plan – fail to meet the standards of the American system of government. The Clean Power Plan rules require states to meet carbon dioxide emissions reduction goals for existing power plants and to cap emissions of carbon dioxide from new power plants to levels that are so low as to effectively prevent any coal power plant from running without carbon capture and sequestration technology (technology which has yet to be proven feasible).

Laurence Tribe, a Harvard law professor, put it eloquently in saying that representative government, not the pros and cons of addressing climate change, is at issue:

“At its core, the issue the Clean Power Plan presents is whether EPA is bound by the rule of law and must operate within the framework established by the United States Constitution. … Accordingly, EPA’s gambit would mean citizens surrendering their right to be represented by an accountable and responsive government that accords with the postulates of federalism.”

As Obama said, “Our Founders distributed power between states and branches of government, and expected us to argue, just as they did, over the size and shape of government, over commerce and foreign relations, over the meaning of liberty and the imperatives of security.” But that system breaks down when decisions normally left to states and individuals are centralized in Washington.

Regardless of political party or position on climate change or global warming, there are serious problems with the climate agenda that the Obama administration has attempted to push through.

– Katie Tubb, research associate, Thomas A. Roe Institute for Economic Policy Studies

The Energy Investments ‘We’ Made

President Obama boasted during his State of the Union address that “Seven years ago, we made the single biggest investment in clean energy in our history.”

The trouble isn’t investing in alternative technologies like wind and solar; as with other energy resources, these should have the opportunity to compete in a truly free market of energy choices. The problem is who Obama means when he says “we.”

Rather than leaving energy choices to American families and businesses, “we” has consistently meant forcing taxpayers to subsidize politically preferred energy technologies. And here are some of those results:

Instead of defining the rules of the game as the government should do, the president’s vision for “all of the above” energy choices has consistently meant special treatment for his politically preferred energy resources.

– Katie Tubb, research associate, Thomas A. Roe Institute for Economic Policy Studies

Health Care

Less Competition and Less Access to Doctors

President Obama and his allies in Congress said that the Affordable Care Act would increase competition. In fact, there is no evidence that the law has increased the number of carriers in the insurance market. The absence of competition at the county level is stark.

Another Heritage Foundation analysis of health plan participation at the state level shows that in 2013, there were 395 individual market carriers, and in 2015, under the exchange, there were 310, a 21.5 percent reduction.

The president also said that if a person liked their doctor they would be able to keep their doctor. In fact, the law has made that access increasingly difficult. Insurance plan changes, and the loss of previous coverage, often resulted in a loss of physician or health care provider networks. For example, in April 2014, analysts at the Congressional Budget Office (CBO) found that the exchange plans had much narrower networks than they anticipated.

While the narrowing of networks reduced plan costs and thus the cost of the government insurance subsidies, the effect has been to constrict enrollee access to medical providers.

– Robert Moffit, senior fellow, Center for Health Policy Studies

Public Opinion on Obamacare

President Obama claims his health care law is a success. Yet public opinion does not follow. According to the Real Clear Politics average, the health care law has yet to see approval outweigh opposition. In its latest average, from November to January – public support flounders at 43.3 percent while opposition is at 51.7 percent.

– Nina Owcharenko, director of the center for health policy studies

Health Insurance Costs

President Obama and his allies in Congress sold the Affordable Care Act (ACA) as a measure to lower health care costs for individuals, businesses and the federal government. The president even stated, repeatedly, that his version of health reform would lower health insurance premiums for the typical family by $2,500 per year.

The exact opposite of what the president promised has occurred. Beginning in 2014, as Heritage has shown, the first full year of Obamacare, premiums in the individual market sharply increased in most states. In some states, the increases were dramatic; for 50-year-olds alone, there was a premium increase of 50 percent or more in 13 states. The administration likes to emphasize that premium subsidies are available to paper over the premium costs; but no person with an annual income above 400 percent of the federal poverty level (approximately $47,000) is eligible for those subsidies. This is a big hit on the middle class.

In 2015, there was indeed a moderation of premium increases, but insurance deductibles continued to skyrocket: for the “silver” plans in the exchange – the benchmark plans – the average deductible was $2,927 for an individual and $6,100 for a family plan. In comparison, employer-based plans had traditionally low deductibles.

The biggest “rate shock” hit those persons transitioning from employer to exchange coverage. (The average deductible in employer based health insurance – nationwide – is a little over $1,200 for individual coverage). As with premiums, there are also government subsidies to paper over the costs of these high deductibles.

But no person with an annual income above 250 percent of the federal poverty level ($29,425) is eligible for those subsidies, and moreover, that assistance is only available if they enroll in a “silver” exchange plan – not bronze, gold or platinum plans. This is another big hit on the middle class.

– Robert Moffit, senior fellow, Center for Health Policy Studies

Health Plan Enrollment

While the law has increased some insurance coverage, enrollment has fallen well short of the robust official projections. For 2016, the Congressional Budget Office (CBO) projected that there would be 21 million in the exchanges. More recently, the Obama administration conceded that the enrollment would be much less: a little more over 10 million.

Based on previous experience, there is every reason to be skeptical of projections. In the Spring of 2014, the administration claimed that over 8 million persons selected plans on the government website. It later corrected itself and reported that the number of those selecting plans was 7.3 million. Toward the end of 2014, around the time of the Christmas holidays, the Department of Health and Human Services (HHS) said the correct number at 6.7 million.

For 2015, CBO projected 13 million people in the exchanges. But then, HHS said that 11.7 million signed up. HHS later announced that between 9 to 9.9 million were expected to enroll by the end of 2015. About 17 percent of 2014 enrollees, HHS projected, would not renew in 2015.

Enrollment depends on a variety of things: how people felt about their experience, the cost the deductibles, the networks, their satisfaction with their coverage in the exchange, the opportunities to re-enroll in employer-based coverage, and various other factors.

Projections are, of course, a poor substitute for raw data. Examining the final data for 2014 confirmed the ACA’s enrollment pattern due mostly to expansion of coverage through Medicaid, a poorly performing welfare program, where roughly one in three enrollees have trouble finding a doctor to care for them is hardly progress toward an expansion of quality care.

At the time of passage of the Affordable Care Act, the president  also insisted, routinely, that if persons like their current plan, they would be able to keep their current plan. That also turned out to be untrue. Heritage research showed that for the first three quarters of 2014 while Individual private market coverage in the exchanges grew by over 6.3 million, the number of persons with employment based coverage declined by 4.9 million. So, based on the raw data, concern over a loss of employment based coverage was justified.

– Robert Moffit, senior fellow, Center for Health Policy Studies

Alternatives to Obamacare

While not raised tonight, the president and his allies in Congress repeatedly charge that congressional opponents have no alternative health plans.

This charge is flat out false. Republican Sens. Hatch, R-Utah, and Burr R-N.C., and Rep. Upton, R-Mich., produced a health plan replace blueprint. Rep. Tom Price, R-Ga., and members of the Republican Study Committee have authored comprehensive health plans. Before that Speaker Paul Ryan included major health reforms in his “Road to Prosperity” proposal.

Meanwhile, conservative public policy institutes including the Heritage Foundation, the American Enterprise Institute, the Manhattan Institute, the Goodman Institute, and many others, have outlined comprehensive plans to reform the health care system. All are united on common objectives: the reform of the tax treatment of health insurance, reform of Medicare and Medicaid, the reduction of federal regulation and the creation of open markets driven by consumer choice and competition.

 – Robert Moffit, senior fellow, Center for Health Policy Studies

Taxpayer Costs

President Obama has previously said that no taxpayer making less than $250,000 would face increased taxes. This was also clearly untrue. In fact, as Heritage Foundation analysis has shown, the bulk of the taxes imposed through Obamacare would directly impact middle or low income persons or be passed on to them in higher health care costs. This is particularly true of the tax penalties that accompany the individual and employer mandate, the medical device tax, and the federal health insurance fees. Taxes imposed on companies such as the so-called “Cadillac Tax” on high value health plans, the elimination of the employer deduction for Part D drug subsidy will also directly affect middle income citizens.

– Robert Moffit, senior fellow, Center for Health Policy Studies

Legal

The President is Correct to Support Criminal Justice Reform

At the beginning of his speech, President Obama voiced his support for bipartisan criminal justice reform. The President is correct that this does present an opportunity. Indeed, Republican and Democratic governors have been leading that reform effort throughout the country, as incarceration rates have continued to fall due to innovative approaches to fix our criminal justice system.

Congress will have the opportunity to consider bipartisan proposals such as the Smarter Sentencing Act, the Recidivism Reduction and Public Safety Enhancement Act, as well as much-needed mens rea (criminal intent) reform, all designed to make our criminal justice system more fair and more effective for all Americans. Proposals along these lines merit serious consideration.

– Alden Abbott, Rumpel Senior Legal Fellow and deputy director of the Meese Center for Legal and Judicial Studies

The President has the Wrong Perspective on Campaign Finance

The president stated that “we have to reduce the influence of money in our politics, so that a handful of families and hidden interests can’t bankroll our elections – and if our existing approach to campaign finance can’t pass muster in the courts, we need to work together to find a real solution.” This statement ignores the fact that individuals have a First Amendment right to spend their money to engage in political speech, as the Supreme Court has recognized.

Moreover, the notion that “a handful of families and interests” bankroll our elections is inaccurate and misleading. Put simply, there is no need “to find a real solution” to a supposed campaign finance “problem” that does not exist.

– Alden Abbott, Rumpel Senior Legal Fellow and deputy director of the Meese Center for Legal and Judicial Studies

The President’s Discussion of the Voting System is Misguided

The president stated that “we’ve got to make voting easier, not harder, and modernize it for the way we live now. And over the course of the year, I intend to travel the country to push for reforms that do.” There is simply no credible evidence that voting is unnecessarily hard, nor that undefined “reforms” are needed to “modernize” it.

Rather, to the extent there are problems associated with voting, they arise out of the hundreds of cases of criminal voter fraud that have been documented and published on the Heritage Foundation’s website.

To deal with this problem, election officials should seek to guarantee the sanctity of the ballot box by taking steps to prevent fraud, including in particular cleaning up voter registration rolls and verifying voter IDs.

– Alden Abbott, Rumpel Senior Legal Fellow and deputy director of the Meese Center for Legal and Judicial Studies

Life and Marriage

Expansion of EITC for Single, Childless Adults Would Increase Welfare System’s Marriage Penalties

President Obama talked about fighting poverty by expanding the Earned Income Tax Credit (EITC) for childless adults. It’s a strategy that, as the President noted, has also been promoted by House Speaker Paul Ryan, R-Wisc.

However, increasing EITC for single, childless adults would increase marriage penalties already rampant in the government’s means-tested welfare system. Absent fathers and other single individuals would only be eligible for the expanded tax credit until they married. Marriage is the greatest protection against child poverty.

Children in married-parent homes are 80 percent less likely to be poor compared to their peers in single-parent households. Tragically, more than 40 percent of children are born outside of marriage every year. Rather than increase marriage disincentives in the government’s massive welfare system, policymakers should look for ways to reduce these penalties and strengthen marriage.

– Rachel Sheffield, policy analyst in policy analyst in the DeVos Center for Religion & Civil Society 

 

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