President Donald Trump delivered his third State of the Union address Tuesday night. The Heritage Foundation’s policy experts weighed in with reaction and analysis.
Economy
Tax Cuts Continue to Boost Jobs and Wages
Thanks to the 2017 tax cuts and other pro-growth economic reforms, like deregulation, the U.S. economy has outstripped expectations. The president touted the economic success of slashing “job-killing regulations” and “enacting historic and record-setting tax cuts.”
He is right, and the proof is in the numbers.
Unemployment is at a 50-year low of 3.5%. Businesses have added jobs for 111 straight months, the longest streak on record, and there are more jobs available than people looking for them.
Wages have also been increasing. Wage growth for the median worker was 4% over the past year. What’s most impressive is that the lowest-income workers in the U.S. have benefited the most from the strong labor market, seeing some of the fastest wage growth of any workers.
Minority and lower-skilled workers have also seen some of the largest drops in unemployment and largest wage gains in recent years. For example, the median black female worker benefited from an 11% wage increase over the last year. Our strong economy is truly benefiting all Americans.
This isn’t happenstance. The 2017 tax cuts made American workers globally competitive again by lowering punitive business taxes to levels similar to most European countries. Coupled with sweeping reforms to outdated and unnecessary regulations, tax cuts have made the U.S. an easier place to do business and hire American workers.
—Adam N. Michel, senior policy analyst, Hermann Center for the Federal Budget
Lifting Americans Off Welfare
The president rightly noted that millions of Americans have risen out of poverty—and have been lifted off welfare—and that 7 million Americans have been lifted off food stamps since the 2016 election.
The best and necessary foundation for reducing poverty: a strong economy, as the president has delivered.
Congress and the president should build on this foundation by reforming welfare programs to promote marriage and work as the key long-term pathways out of poverty. Specifically, Congress should reform the $1.1 trillion spent on the means-tested welfare state by reducing welfare penalties against marriage and requiring able-bodied recipients to work or prepare for work as a condition for receiving assistance.
Additionally, in programs designed to improve behavior, Congress should pay only for outcomes rather than ineffective services—e.g., pay when someone gets and stays off drugs, rather than just paying for treatment that didn’t work.
Finally, Congress should accurately measure benefits. When the government measures poverty, it excludes all welfare benefits. This is unfair to the taxpayer and produces exaggerated, inaccurate figures on poverty in the U.S. Policymakers should fix this by insisting that all welfare benefits are correctly counted when estimating poverty. (For more, see Robert Rector’s paper “Understanding the Hidden 1.1 Trillion Welfare System and How to Reform It.”)
—Marie Fishpaw, director, domestic policy studies
Slashing Regulations
In recounting the strong performance of the economy, the president noted his record of regulatory reform. Indeed, within days of taking office, the president issued Executive Order 13771, which requires federal departments and agencies to take two deregulatory actions for each new regulatory action, as well as to not exceed annual regulatory budgets.
According to the latest status report from the White House, the administration has eliminated $50.9 billion in regulatory costs since 2017. In the coming year, additional savings of $51.6 billion are forecast, including easing automotive fuel economy standards.
Most recently, the White House Council on Environmental Quality issued revised guidelines for the National Environmental Policy Act, which imposes some of the worst regulatory barriers to modern and safer roads, bridges, airports, and railways.
Dozens of regulations have been targeted for elimination, but regulatory reform has been stymied at every turn by lawsuits and other administrative hurdles devised by those who benefit from the status quo.
But there has been a dramatic reduction in the number of new regulations. In the 37 months of the Trump presidency, the administration has issued 73% fewer significant regulations than President Barack Obama (in the same period) and 63% fewer than President George H.W. Bush.
—Diane Katz, senior research fellow, regulatory policy
Paid Parental Leave for Federal Workers
The president applauded Congress for providing federal employees with 12 weeks of paid parental leave and called on lawmakers to provide some form of national benefit for private-sector workers.
The provision of taxpayer-provided parental leave to federal workers makes sense in this case, because the government is the employer. But the addition of this new benefit should have been coupled with more comprehensive federal employee compensation reform.
In addition to receiving significantly higher compensation than their private-sector counterparts, federal employees already had a de facto paid family leave and short-term disability insurance allowance through a very generous sick leave policy. Adding this new benefit on top without reforming the existing (and arguably less efficient) system allows federal employees who are new parents to take at least 20 weeks and up to a full year of paid leave.
—Rachel Greszler research fellow, Grover M. Hermann Center for the Federal Budget at The Heritage Foundation
A New Federal Paid Family Leave Entitlement
The president is right that providing paid parental leave is a model for the rest of the country, but it is a model to be implemented by companies as they are able and on their own terms. It is not a model the federal government should impose through a new national paid parental or paid family leave entitlement.
Instead of a federal program, the president should promote more of the rapid growth that’s already occurring among employer-provided paid family leave programs across the U.S. Employer-provided policies can be flexible and accommodating (and are usually more generous), but one-size-fits-all government policies are rigid, burdensome, and impersonal.
Government programs also have higher costs and consequences, and they are extremely regressive, taxing everyone while primarily only benefitting middle- and upper-income earners.
While most Americans support a national paid family leave program, their support drops precipitously when asked about the costs and trade-offs. Democrats support a program they say would only cost “a cup of coffee a week,” but without government rationing, a national program would cost about seven times as much—closer to a tank of gas instead.
Even at the modest “cup of coffee a week” cost, support for a national program drops below 50%. And only 29% of workers support a national program if it were to mean lower benefits for them or fewer promotions for women. But that has been the consequence with government paid leave programs abroad.
And despite the argument that paid family leave increases women’s labor force attachment and earnings, California’s program was found to have the opposite effect, reducing the employment, earnings, and even fertility rates of new mothers who used the program.
Although access to paid family leave is valuable (and employers are responding by increasingly offering it), there are many other things that are more important to working families. When asked which of six factors would best allow workers to balance work and family, 34% said “more flexible work schedules” and 25% said “ability to work remotely/telecommuting,” while only 6% said “more paid maternity or paternity leave.”
The Working Families Flexibility Act would give lower-wage workers the option to accumulate paid time off. Universal savings accounts would help families save for all kinds of life events, and fewer regulations would free up business resources to help employers provide paid family leave. And none of these would create another unfunded middle-class entitlement.
—Rachel Greszler, research fellow, Grover M. Hermann Center for the Federal Budget
Failure to Mention America’s Spending-Driven Debt Problem
One issue that the president failed to address Tuesday night is the nation’s looming spending-driven debt crisis.
Last week, the Congressional Budget Office released its budget and economic projections for the next 10 years. The budget office estimates that the national debt held by the public will increase to nearly 100% of gross domestic product by 2030, driven by entitlement spending and growing interest payments on the national debt.
Moreover, these projections could be optimistic, assuming that lower interest rates slow the growth of interest payments on the debt and that Congress approves no major disaster and emergency spending.
The good news is there is still time to change course and avert a debt crisis, but the president must take the lead in this effort.
The first opportunity to initiate reforms is the release of the president’s fiscal year 2021 budget next week. The president’s first three budgets pledged to cut spending and fundamentally reform the role of the federal government.
President Donald Trump must continue to push for bolder reforms that focus the responsibilities of national government back to its constitutional roots. Current and future generations cannot afford for Washington’s reckless pattern of spending to continue.
—Justin Bogie, senior policy analyst in fiscal affairs, Grover M. Hermann Center for the Federal Budget, Institute for Economic Freedom and Opportunity
Warning Against Socialism
President Donald Trump declared, “Socialism destroys nations. But always remember, freedom unifies the soul.”
Today’s progressive politicians are calling for expanded government control in a myriad of sectors in addition to health care, such as energy, utilities, housing, and education. This would transform the United States economy into something reflective of many nations across Europe where the government spending as a percentage of GDP is far higher.
Ordinary taxpayers bear the brunt of this burden. For instance, payroll taxes in France top 50%. Consumers pay national sales tax (value added tax) of up to 27%. Overall, a typical $40,000 a year worker pays $6,000 more in taxes compared to the same worker in the U.S.
Even if every dollar of income is taxed from those earning more than $200,000 per year, this doesn’t come close to paying for the $48-$92 trillion in spending proposed by progressive politicians over 10 years.
Many Americans—especially the younger generation—are unfamiliar with the Cold War, the misery endured by hundreds of millions under communist regimes across Eastern Europe, the USSR, Southeast Asia, and even parts of Latin America.
Thankfully, Nordic countries have been moving away from the “democratic socialist” economic model after growing tired of the economic stagnation which it created. But across swaths of Western Europe, “democratic socialism” continues to yield high taxes—including on the middle class, slow economic growth, high unemployment, and lower wages.
—Joel Griffith, research fellow, financial regulations
Defense & Foreign Policy
Progress in Rebuilding Military
The president declared that “our military is completely rebuilt.”
The last three years have indeed been good for the U.S. military, and much of the lost readiness that had dwindled over the years has been restored. Army readiness, for example, is up 55%.
But despite favorable budgets, the military is not yet fully rebuilt. Years of budget cuts and years of over-use have strained the military, postponed necessary equipment refresh, and caused the military to shrink in size.
While there are unmistakable signs of progress, there is still work to be done to fully restore the military. Additional investment and attention will still be needed.
As noted by the president, the creation of the Space Force is a true step forward for the United States. It will allow our country to better focus its efforts in this critical domain.
The United States depends on space, and other countries are seeking to deny those capabilities. The Space Force will put America in a much stronger position, as our experts explain.
—Thomas Spoehr, director, Center for National Defense
Clear Message on the Middle East
The Middle East was prominently featured in Trump’s State of the Union speech. The president noted that his administration had made a priority of “combating radical Islamic terrorism” and briefly described his Israeli-Palestinian peace initiative, which calls for the disarming of Hamas and other Islamic terrorists, as part of that effort.
He spent much more time in recounting the progress his administration has made in defeating ISIS terrorists in Iraq and Syria. He noted the death of ISIS leader Al-Baghdadi in a U.S. military operation last year and received one of the longest standing ovations of the night.
He also introduced the parents of Kayla Mueller, an American aid worker who was kidnapped in Syria, tortured and enslaved by ISIS, and kept as a prisoner by Al-Baghdadi, before being murdered. He revealed that the U.S. Special Operations forces that eliminated Al-Baghdadi had named their mission “Task Force 8-14” after Kayla’s Aug. 14 birthday.
Trump also introduced the family of Army Staff Sgt. Christopher Hake, who was killed in Iraq by a roadside bomb. He noted that the leader of the Iranian Revolutionary Guard force that provided the bomb was Gen. Qassim Suleimani, who was killed in a U.S. military operation in Iraq last month.
Trump warned: “Our message to the terrorists is clear: You will never escape American justice. If you attack our citizens, you forfeit your life.”
Trump ended the Middle East portion of his speech by drawing a distinction between Iran’s long-suffering people and Iran’s oppressive regime. He called on Tehran to end its nuclear weapon ambitions and support for terrorism, while stressing that he remains open to a diplomatic resolution of these issues:
Because of our powerful sanctions, the Iranian economy is doing very poorly. We can help them make it very good in a short period of time, but perhaps they are too proud or too foolish to ask for that help. We are here. Let’s see which road they choose. It is totally up to them.
—Jim Phillips, senior research fellow, Middle Eastern affairs
Health Care
Empowering States to Reduce Health Costs
President Donald Trump is right to call on Congress to lower health costs, protect people with preexisting conditions, and protect American families’ ability to choose the private coverage that is right for them.
He’s made progress toward this goal already—delivering reforms to lower the cost of care by providing consumers and small businesses with new, more affordable health insurance options and by giving states more latitude to provide relief from high premiums for individual coverage.
One reform alone—allowing states to obtain waivers to deviate from some of Obamacare’s cost-increasing mandates—has led to lower costs while better protecting people with preexisting conditions. Seven states that obtained waivers saw premiums fall a median of 7.48%, while premiums in the other 44 states and the District of Columbia rose by a median of 3.09%.
Congress should build on this progress and adopt the Health Care Choices Proposal, endorsed by over 100 conservatives across the country, that can lower premiums by as much as a third, while increasing private coverage and focusing resources on vulnerable people with preexisting conditions.
Many laws today work against families being able to choose the plan and doctor that is right for them. This proposal would address these laws and empower people—not government bureaucrats or insurance companies—to make the best decisions for their families, a goal shared by 94% of Americans.
Rejecting Ideas That Would Make Existing Problems Worse
The left’s ideas—as the president rightly warns against—would make current problems facing American families worse, not better.
That’s because the left’s proposals would drastically expand the role of government in our health care sector. Some bills in Congress would immediately outlaw private coverage and put us all on a new government program. Others would move toward the same goal on the installment plan, using so-called public options that ostensibly would have the government compete with private plans, but in reality would put in place the infrastructure and produce the same outcomes.
The left likes to claim that people are better off under this approach. In reality, Heritage Foundation estimates show that ideas like “Medicare for All” would cost some working families more than their budget for electricity; others, their gasoline budget; and others, even more than their food budget.
As a result, roughly three-quarters of Americans will have less money in their pockets under Medicare for All. That’s because fully funding Medicare for All requires a new, additional tax of 21.2 cents on every dollar Americans earn—meaning the government will take roughly half of your paycheck. (To learn how several sample families would be impacted, see “In Charts, How Medicare for All Would Make Most Families Poorer.”)
Ending Surprise Medical Billing
The president rightly called on Congress to address concerns families face today when dealing with the health care system, such as surprise medical billing—an unfair practice that is hurting patients. This occurs when patients who try to follow insurance company rules are hit with surprise bills through no fault of their own.
Heritage’s solution would eliminate surprise bills, ensuring patients get honest information before they receive care.
Lowering Prescription Drug Costs
The president also is right to call on Congress to address high prescription drug costs. Government policy created this problem through flawed regulations and subsidies that drive up costs.
Policymakers must reject heavy-handed solutions, such as those proposed by House Speaker Nancy Pelosi, because they would limit access to lifesaving medicines and impede access to new cures.
Congress should instead consider Heritage’s roadmap, which addresses the flawed government policies behind high costs and would provide relief for patients and taxpayers. Specifically, Congress should reform Medicare’s prescription drug programs and ban practices that prevent affordable generic medicines from coming to market.
—Marie Fishpaw, director, domestic policy studies
Education
Federal Tax Credit Scholarships
More than half of all U.S. states offer eligible K-12 students a private learning option in addition to the child’s assigned district school. A new federal tax credit scholarship program would further complicate the already complex federal tax code.
Furthermore, the new program would eclipse state authority over K-12 education. And because it would be dollar-for-dollar and most state tax credit scholarships are not, it would encourage donors to preference the federal program, draining donations to state scholarships.
We offered more detail on the negative tax implications and other problems that would stem from a federal school choice program here.
Another paramount concern is that a new federal program would give future administrations—that may be less friendly to school choice—a toehold to regulate participating private schools, damaging school choice in the long run. What requirements might a left-leaning administration place on schools that accept students paying tuition through the federal tax credit program?
The administration’s support of parent choice in education is welcome, but Washington should stop there. Taxpayers and students do not need carve-outs in the tax code, but for federal officials to set an example for future administrations: Allow—encourage, even—state lawmakers to create more public and private learning options in the form of scholarships, education savings accounts, magnet schools, and charter schools to offer new opportunities for students from all walks of life.
The goal of conservative policymakers should be to significantly narrow, rather than broaden, Washington’s reach in education policy. Unfortunately, this proposal goes in the wrong direction.
—Lindsey Burke, director, Center for Education Policy
Energy
Unleashing American Energy
Affordable energy is fundamentally important for a healthy and vibrant economy.
Tonight, President Donald Trump mentioned how his administration has helped grow such an economy, in part by permitting access to our country’s vast oil and gas supply. We are now a net energy exporter, and access to this energy has not only made us less dependent on foreign oil, but has also resulted in greater job opportunities, lower electricity prices, and more income for all Americans all across the country.
—Kevin Dayaratna, senior statistician and research programmer, Center for Data Analysis
Life
Cherishing the Value of Life
Tonight, President Donald Trump recognized 2-year-old Ellie Schneider, a special guest at the State of the Union address. Ellie was born when she was just 21 weeks and 6 days old and weighed less than a pound at the time of her birth. One of the youngest premature infants to ever survive, Ellie is now happy, healthy, and thriving.
Trump lauded the medical advancements that allow an increasing number of premature babies to survive and thrive, and called on Congress to commit additional resources to fund neonatal research.
He also called on Congress to pass the Pain-Capable Unborn Child Protection Act, which would protect women and unborn children from gruesome late-term abortions performed after 20 weeks.
The U.S. is one of only seven countries in the world that allows elective abortion past 20 weeks (five months), at which point scientific evidence suggests that the baby is capable of feeling excruciating pain during an abortion procedure.
At the state level, over a dozen states across the country have enacted 20-week bills. Regardless of party affiliation, Americans support significant abortion restrictions by a large margin. In fact, 70% of Americans support limiting abortion to, at most, the first trimester.
Congress should ensure that public policy respects the rights of the most vulnerable and innocent among us—including the right to life, our most basic and fundamental freedom. Enacting legislation to protect unborn children who are capable of feeling pain would be a meaningful step to build a culture that cherishes human life.
—Melanie Israel, research associate, Richard and Helen DeVos Center for Religion & Civil Society
Law
Remaking the Federal Judiciary
The president highlighted that he has (so far) appointed 187 judges, including Justices Neil Gorsuch and Brett Kavanaugh, and he promised that there are many more “in the pipeline.” As the Judicial Appointment Tracker shows, only President Bill Clinton appointed more at this point, but just one more.
Quantity is just one side of the coin, however. Quality is the other. Trump’s judicial appointment record goes beyond the number of judges he appoints, because the real impact on the country will come from the kind of judges he appoints.
Trump uses the shorthand of judges who will “uphold the Constitution as written.” That means they will take the Constitution (or statutes or regulations) and figure out what the Constitution meant when it was written. That’s what it is supposed to mean today, so that judges follow the Constitution instead of controlling it.
Trump has been more consistent than any president in history in appointing judges who take this traditional, defined approach to deciding cases.
The other part of the story is that Trump is making such a profound change in the judiciary in the face of a campaign of resistance and obstruction that no president has ever faced. The pattern documented in The Heritage Foundation’s report on the 115th Congress only got worse in 2019.
Democrats have radically changed more than 200 years of confirmation history by making opposition to Trump’s judicial nominations the rule rather than the exception. In just three years, Trump’s judges have received more than three times as many votes against confirmation as all the judges confirmed in the 20th century combined.
Federal judges serve for an average of more than 20 years, long after the president who appoints them is gone. Trump’s judges, and the move away from a political judiciary, may well end up being his most important legacy.
—Thomas Jipping, deputy director, Meese Center for Legal & Judicial Studies
Passing Criminal Justice Reform
Trump highlighted the First Step Act and praised Congress for coming together to pass the law that gave people a “second chance at life.” As the president said, “Everybody said that criminal justice reform could not be done, but I got it done, and the people in this room got it done.”
He is right about that.
The First Step Act was a landmark bipartisan law that ushered in what Heritage Foundation scholars described as much-needed reforms.
Among other things, the act gave hope to prisoners convicted of some drug trafficking crimes where they are not the type of hard-core criminals or major drug traffickers that deserve long-term incapacitation, and it promises to provide them some of the skills they need to reduce the risk that they will recidivate and maximize the likelihood that they will become law-abiding, productive citizens when they are released and return to our communities.
Trump’s reference to second chances called attention to his plans for additional legislation that would ease employment barriers for formerly incarcerated people like Tony Rankins, who attended the State of the Union as one of Trump’s special guests.
Rankins served in the Army in Afghanistan, but lost his job and family to drug addiction, which led him to crime and incarceration. He now has a stable job and has reunited with his family.
Trump is working to pass additional legislation that would make it easier for other former prisoners to do the same.
It is doubtless the case that there are other people like Rankins. The criminal law should not throw them away. There should always be room in the law to recognize the frailties of human character where someone does not make crime a career, does not pillage the community, and does not end a life before nature takes its course.
As Heritage scholars have observed, criminal justice reform needs to address more than just prison conditions and sentences. It needs to tackle the criminal code itself and rein in the authority of executive agencies to create crimes.
For too long, Congress has allowed administrative agencies to define crimes in ways that the average person would not know to be criminal. That is a serious flaw in the criminal law. Congress should revisit the authority given to agencies to define terms that can lead to criminal liability, and Congress should revise the criminal code so that no one is at risk of innocently crossing the line between legal and illegal.
Mens rea (Latin for “guilty mind”) reform remains a crucial issue, too. Before he retired, Sen. Orrin Hatch, R-Utah, was a champion of mens rea reform. Without a champion in Congress, the time is ripe for Trump to take up that cause.
Heritage scholars have provided a roadmap for how Trump can use his executive authority to further mens rea reform while also encouraging Congress to work on the issue. We urge the president to do so.
—John G. Malcolm, vice president, Institute for Constitutional Government; Paul Larkin, Jr., senior legal research fellow, Meese Center for Legal and Judicial Studies; and GianCarlo Canaparo, legal fellow, Meese Center
Protecting the Second Amendment
President Donald Trump told the nation, “Just as we believe in the First Amendment, we also believe in another constitutional right that is under siege all across our country. So long as I am president I will always protect your Second Amendment right to keep and bear arms.”
The president is right—lawmakers across the country and at all levels of government have spent the last several years taking aim at the Second Amendment. More importantly, he is right to insist on protecting this important safeguard of liberty.
We all want a safe nation. We all want to know that our loved ones are protected against those who would do them harm. We all grieve with the communities whose peace has been shattered by horrific acts of evil. But we do ourselves and our communities no favors by caving to emotionally laden appeals to “just do something” about gun violence—especially when that “something” often means imposing severe restrictions on the constitutional rights of law-abiding citizens.
We do not need to “just do something.” We need to do the right thing. And the right thing is to ensure that the American people are never deprived of their greatest check against the tyrannical impulses of government.
The right thing is to disarm dangerous criminals without inhibiting the ability of law-abiding Americans to protect their lives and livelihoods.
The right thing is to defend the Second Amendment just as ardently as we defend the rest of the Bill of Rights.
—Amy Swearer, senior legal policy analyst, Meese Center for Legal and Judicial Studies
Infrastructure
Wrong Approach to Infrastructure
The State of the Union contained a brief mention of infrastructure. Unfortunately, the president used this time to promote a further expansion of federal activity.
The Senate infrastructure bill is badly flawed, increasing spending and creating questionable new programs despite the Highway Trust Fund’s chronic deficits. The federal role should be heavily devolved to states and the private sector.
While nationwide high-speed internet would be a wonderful thing, this should not be accomplished through billions of dollars in federal subsidies, as seen in the proposal recently introduced by House Democrats. The administration should continue its focus on deregulation to ensure that private investments such as infrastructure expansion are as easy as possible.
—David Ditch, research associate, Hermann Center for the Federal Budget
Immigration
Protecting the Border and Fighting Sanctuary Cities
President Donald Trump criticized the over 130 members of Congress who “endorsed legislation that would bankrupt our nation by providing free taxpayer-funded health care to millions of illegal aliens, forcing taxpayers to subsidize free care for anyone in the world who unlawfully crosses our borders.”
Trump said this “would raid the Medicare benefits our seniors depend on, while acting as a powerful lure for illegal immigration.” He is right about that. Providing government benefits to aliens who are in this country illegally is financially foolish and will in the long run make the illegal immigration problem even worse.
Trump also engaged Congress on the issue of sanctuary jurisdictions. This is the reckless policy of cities and states obstructing federal immigration enforcement and releasing dangerous criminal illegal aliens who’ve been arrested for local crimes back into local communities to “prey upon the public,” as Trump said, rather than turning them over to federal authorities so they can be removed from the country.
This has resulted in literally hundreds of thousands of crimes that could have been prevented and the victimization of countless Americans.
Trump described some of those victims, including Rocky Jones, who was murdered by an illegal alien with prior convictions for robbery and assault. The alien was released by California authorities under that state’s sanctuary policy rather than turned over to federal authorities.
The president voiced his support for a bill that would allow victims and their families like Jones’ wife to sue sanctuary jurisdictions (Jones’ brother was in the Senate Gallery). As the president told members of Congress and the public, “The United States of America should be a sanctuary for law-abiding Americans—not criminal aliens.”
Trump talked about the wall being built along the southern border, his ending the catch-and-release policy of prior administrations, and the new agreements he has negotiated with several countries, including Mexico and El Salvador. He can rightly claim credit for those (and other) policies, having reduced illegal border crossings 75% since May.
And the president promoted his new approach to legal immigration by replacing “our outdated and randomized immigration system with one based on merit.”
That is a serious proposal that should be considered by Congress. As the president said, “We should welcome those who follow the rules, contribute to our economy, and uphold our values.” The vast majority of Americans agree.
—Hans von Spakovsky, senior legal fellow, Meese Center for Legal and Judicial Studies