Last night, in his State of the Union, President Barack Obama claimed, “We have to make America the best place on Earth to do business. … That’s how our people will prosper. That’s how we’ll win the future.” This is true. But then he went on to say: “We know what it takes to compete for the jobs and industries of our time.” No. No, he doesn’t. The rest of the President’s speech made it very clear that he has no idea what makes America the best place on earth to do business.
On issue after issue (education, energy, infrastructure), the President identified more government “investment” as the key to “winning the future.” But if centrally planned government spending is the key to America’s future success, then we are in big trouble, because China will beat us in raw bureaucratic efficiency every time. The source of American exceptionalism is not an expansive and powerful central government. As Heritage Foundation B. Kenneth Simon Center for American Studies Director Matthew Spalding has stated, the American creed “is set forth most clearly in the Declaration of Independence … a timeless statement of inherent rights, the proper purposes of government, and the limits on political authority.”
You can read the full reactions of Heritage experts to last night’s State of the Union here. Highlights include:
Spending
The President’s proposed freeze of non-security discretionary spending would essentially lock in the 25 percent expansion these programs have received since 2007. Yet paring back deficits requires actually reducing runaway spending, starting with the House Republican plan to cut this spending back to 2008 or even 2006 levels. … While investment indeed drives economic growth, politicians have proven to be poor investors. Federal K-12 education spending has grown 219 percent faster than inflation over the past decade, yet student test scores have stagnated. Thirty years of federal energy spending has failed to significantly improve the alternative energy market. And massive increases in federal transportation spending have been diverted into earmarks, bike paths, and museums or allocated to budget-busting transit programs that governors do not want. If President Obama truly wants to encourage investment, he should focus on reducing the budget deficit—which is crowding out private investment—and reduce barriers to productive private sector investments.—Brian Riedl
Deficits
On one vital point, the nation has almost without exception reached a consensus when it comes to entitlement spending—current policy is unaffordable and unsustainable. President Obama acknowledged this clearly when he announced the creation of the National Commission on Fiscal Responsibility and Reform and again when he received the commission’s final report. … The President in short has turned his back on his own commission, on his vows of leadership, and on future generations. On these issues it will now be up to Congress to take up the mantle of leadership the President has found too heavy to bear.—J. D. Foster
Education
We agree with the President: No Child Left Behind is broken. Unfortunately, the similarities end there. Although both sides of the aisle agree that No Child Left Behind is broken, the Obama Administration does not believe the federal role in education is fundamentally flawed. They’re still holding onto the hope that after 40 years of failed federal interventions, this time, Washington will get it right. … The President’s speech also lacked any serious discussion of school choice, despite the fact that the highly effective D.C. Opportunity Scholarship Program is on life support in his back yard. By contrast, Speaker John Boehner had parents and children from the D.C. Opportunity Scholarship Program as guests in the Speaker’s Box during the SOTU tonight—a sure sign that he plans to make school choice in the District a priority.—Lindsey Burke
Energy
Last year’s poster children for clean-energy jobs, Solyndra and Evergreen Solar, are this year’s object lessons in the futility of trying to subsidize our way to good, permanent job creation. Mere months after receiving a $535 million government loan (and after a well-publicized presidential photo op), Solyndra withdrew its initial public offering because it got a sub-par review from an independent auditor. And a year after getting their half-billion dollars, Solyndra closed a factory and got rid of nearly 200 jobs. … If a company needs a subsidy to hire a worker, that worker will be out on the street when the subsidy expires. Private enterprise provides energy, creates jobs, and develops innovative technology. It does so because private enterprise succeeds only when the energy, jobs, and technology provide value that exceeds the cost. That’s how we get good, durable jobs.—David Kreutzer
Entrepreneurship
The government programs that led to the Internet, computer chips, and GPS were not programs to develop technologies to meet a commercial demand. They were each the result of defense-related programs that were created to meet national security requirements. … In essence, the federal government invested to develop capabilities that did not exist and were needed for specific government activities. Entrepreneurs gained access to that basic work and commercialized it. This is an entirely different model from what the President is suggesting the United States take to develop new energy technologies. Not only does he want the federal government to choose which energy sources Americans can access, but he believes that the government is best prepared to oversee the entire business development process. He does not want to support research and development, but he wants to drive commercialization and define the market.—Jack Spencer
Progressivism’s infatuation with expert government planning has so blinded President Obama as to the true source of American exceptionalism that he couldn’t help contradicting himself in a matter of mere seconds. Early on last night the President said: “None of us can predict with certainty what the next big industry will be or where the new jobs will come from.” But then just three paragraphs later he said: “We’ll invest in biomedical research, information technology, and especially clean energy technology … and create countless new jobs for our people.”
So which is it, Mr. President? Is the federal government really just a big venture capital firm where Secretary of Energy Steven Chu picks which electric car firms and solar companies are most deserving of taxpayer “investments”? Does the federal government best ensure economic growth by partnering with General Electric CEO Jeffrey Immelt and making him czar of the President’s Council on Jobs and Competitiveness? Or is America exceptional because our Founders recognized—and enshrined in the Constitution—that liberty is best protected when the federal government has clear limits? Our country does desperately need to change course to “win the future.” But President Obama’s Progressive big government plans will only make us losers.
Quick Hits:
- Before receiving President Obama’s State of the Union, the House, including 17 Democrats, approved a resolution to cut spending on domestic appropriations back to 2008 levels.
- Senator Rand Paul (R–KY) introduced legislation Tuesday that seeks to cut $500 billion from government spending in just one year.
- Investors are increasingly concerned about the quality of information that state and local governments are disclosing about their finances.
- A new slide in housing prices has begun in earnest, with averages in major cities across the country falling to their lowest point in many years.
- Watch Majority Leader Eric Cantor speak today at The Heritage Foundation at 11:30 a.m. about How Federal Spending Undercuts Economic Freedom.