Union leaders reacting last night and today to President Obama’s State of the Union address praised his emphasis on job creation and made it clear that the labor movement will lead a fight for passage of a massive jobs creation bill.
“We must act on a scale that will be meaningful,” AFL-CIO president Richard Trumka said after hearing Obama’s approach to job creation which included tax reductions for employers who create jobs in America and imposition of taxes on employers who ship jobs overseas.
“We need more than 10 million jobs just to get out of the whole we’re in and we want health care fixed,” Trumka declared “We want our leaders to break the stranglehold of Wall Street and the big banks and make them pay to repair the economic damage they created.”
In his speech the president proposed additional taxes on bank stock transactions as a means of curbing speculation and dampening the willingness of financiers to engage in the gambling that he said pushed the country into the current Great Recession.
Obama specifically called on the Senate to immediately pass a jobs bill and tackle longer-term jobs strategy: “Take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need… a new small business tax credit to hire new workers or raise wages…let’s also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.
“We can put Americans to work today building the infrastructure of tomorrow,” the president declared. “We should put more Americans to work building clean energy facilities. It’s time to finally slash the tax breaks for companies that ship jobs overseas.”
Obama noted that the House has passed a jobs bill that includes some of these steps and urged the Senate to do the same. “I want a jobs bill on my desk without delay,” he said to a standing ovation.
The House jobs bill the president referred to was a $154 billion measure passed last December that consisted of funds for infrastructure, aid to states, extension of unemployment benefits and expansion of child care tax credits. The bill the Senate is considering is reportedly only half that size and puts a heavier emphasis on tax breaks for businesses than does the House bill.
Some of labor’s allies, among them Larry Mishel of the Economic Policy Institute and the Nobel prize-winning pro-labor economist, Paul Krugman raised concerns about a portion of the president’s speech that proposed tackling the federal budget deficits by freezing spending on some domestic programs.
“In all likelihood the unemployment rate will be higher in October than it is now, yet somehow the White House thinks it’s appropriate to begin reducing domestic discretionary spending freeze spending next year on domestic programs,” said Mishel. “Reducing overall spending when tens of millions of Americans remain out of work would be a disaster. It will condemn millions to years of avoidable economic hardships. We need the federal government to inject demand into a severely weakened economy in order to create jobs.”
Krugman said this morning that “when people ask me what I think of the Obama administration, I have a stock answer: they’re not stupid and they’re not evil, which represents a vast improvement. I stand by that position. But it’s sad they apparently feel the need to pretend to be stupid.”
Krugman noted that in one part of Obama’s speech, where he said government, like the people, has to “tighten their belts,” the president sounded like he was repeating last year’s Republican arguments against the first stimulus program.
“It was stupid then, and it’s stupid now,” Krugman said, the administration is “well aware that the spending freeze will make no difference to the long-run budget outlook. This is just a sop to public prejudices and /or centrist Democrats in the Senate.”
Obama used his first State of the Union Address to strongly renew his call for health care reform. “Don’t walk away from reform – not now, not when we are so close,” the president told the members of the Senate and the House.
“Say what you will about Barack Obama,” wrote John Nichols in The Nation this morning, “But don’t accuse this president of veering from the course he charted at a point when his popularity ratings were high.”
House Speaker Nancy Pelosi is reportedly backing passage of the Senate bill followed by modifications through the budget reconciliation process. Those changes would meet demands by House Democrats for elimination or reduction of taxes on the so-called “high end” insurance plans some workers now have, demands for more subsidies for low and moderate income people and demands for more funds so states could improve Medicaid.
There is resistance to these changes in the Senate and Senate Majority Leader Harry Reid, D.-Nev., has not yet endorsed the reconciliation approach that would need to be taken to make the changes.
Advocates of strong action to deal with climate change, while they were not pleased with the president’s support for various forms of what they call “dirty energy,” were pleased about his reiteration of support for a comprehensive climate bill.
“The president did not soft-pedal his support for climate action and clean energy jobs, as expected,” said an editorial in Climate Progress. “Quite the reverse. He could have avoided any mention of the science. He could have given climate and clean energy a cursory mention, but he went out of his way to repeat the core message again and again. Indeed he used the phrase ‘clean energy’ ten times.”
The president challenged the big banks and the finance industry and called for strong new regulations on Wall Street. He said he would veto any financial reform bill that he thought was too weak.
A Democracy Corp focus group found, right after the speech, that Obama regained support by standing up to the banks.
“Obama managed to decisively reverse the view that he was too close to Wall Street,” the group reported.
In a Democracy Corp survey from just before the Massachusetts election the group found that a 49 to 41 percent plurality said Obama and the Democrats were more concerned with bailouts for Wall Street than creating jobs for regular Americans. Entering the evening, swing voters in this group agreed with a 48 to 16 percent plurality saying Obama “puts Wall Street ahead of the middle class.” But after the speech, the number disagreeing with that statement jumped a remarkable 50 points, to 66 percent.
The president also won points for refusing to give in to the steady drumbeat of Republican opposition to almost every single one of his programs.
He said it was unacceptable for the opposition party top oppose every single measure and offer absolutely no alternative proposals. “The president was right to call out Republicans for obstructing change and putting politics ahead of progress,” Trumka said, and he was right to point out how the steps his administration has taken have alleviated the economic suffering of working people.” Trumka noted that the American Recovery Act has resulted in 2 million Americans working now who would otherwise be unemployed and that it is on track to add 1.5 million more jobs by the end of this year.
The president noted in his speech that “All of this was done while cutting taxes for working Americans. We cut taxes for 95 percent of working Americans. We cut taxes for small businesses. We cut taxes for first-time home buyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college.”