Experts divided on Obama's speech
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U.S. President Barack Obama focused on the U.S. unemployment picture in Wednesday's State of the Union address and proposed a number of remedies for one of the worst job markets in decades.
But while some experts applauded both the policies and politics of his speech, others blasted the address as a mere rehashing of unpopular ideas and said Obama's jobs proposals are fraught with potential pitfalls.
"He hit the ball out of the park," said Sean Gibbons, spokesman at the left-of-center Third Way, who said Obama connected with the middle class and imbued confidence in the nation's trajectory.
"The challenge of the president was to refocus U.S. attention on how we will go forward and I think he successfully did that," he said.
"Obama has had a difficult political year, and he acknowledged that, but he chartered a path forward," he said. "He hit a political home run and a policy home run."
But Alison Fraser, director of the Roe Institute of Economic Policy at the right-of-center Heritage Foundation, said while the speech was an effort to reach out to Americans, the president's key points and proposals were at odds with what Fraser said most Americans want. Those include cap and trade -- a system to curb greenhouse gases that requires companies to pay for the carbon dioxide they emit -- which many Republicans refer to as a jobs killer.
Fraser said the speech took on a populist tone, taking a jab at Wall Street and tapping Americans' anger at the financial sector for its role in sparking the economic downturn. She noted that banks have repaid the funds they received in the 700-billion-dollar bank bailout but the president never asked auto companies to repay the billions of dollars they received to rescue their industry.
In his speech, Obama expressed optimism in spite of a hard road ahead.
"We face big and difficult challenges," he said, adding that most Americans are in the same boat and want "a job that pays the bills. A chance to get ahead. Most of all, the ability to give their children a better life." But Americans are resilient, he said, and able to weather the economic storm.
"It is because of this spirit -- this great decency and great strength -- that I have never been more hopeful about America's future than I am tonight," he said.
The president said employment must be the main focus in 2010 and called for a jobs bill that would allocate 30 billion dollars in credit to small companies, which are strapped for cash and can not easily access lines of credit. The funds would come from repaid money that financial institutions received in the 2008 bank bailout.
He also called for a tax credit for 1 million small businesses that hire new workers or raise wages, elimination of all capital gains taxes on small business investment and proposed slashing tax breaks of firms with overseas operations in a bid to encourage them to hire at home.
While the House has already passed a jobs bill including a number of those steps, Obama urged the Senate to ink its own legislation.
"I want a jobs bill on my desk without delay," he said.
Obama also called for more clean energy jobs, proposing a new generation of nuclear power plants, the development of offshore oil and gas, investment in clean coal technologies and advanced biofuels.
But critics said the proposals are full of potential pitfalls.
The tax break for businesses to hire new workers could prompt some firms to hire employees and fire them once they receive tax credits, critics said.
"That was tried in the (19)70s but was fraught with problems," Fraser said.
And slashing tax breaks for U.S. companies with overseas operations -- virtually all large U.S. businesses -- will likely backfire, she said.
Still, she favors some of Obama's proposals, such as offshore drilling.
Despite criticisms, many praised Obama's initiatives.
Gibbons said while the president's proposal for 30 billion dollars in credit to small businesses may seem like pocket change for large corporations, it is no trivial amount for small companies struggling to stay afloat and a welcome start to addressing their credit woes.
"There's no question that small businesses are critical to the economy," he said. "It's getting easier for big businesses to borrow 1 million dollars than for small businesses to borrow 100, 000 dollars. So anything the government can do to give a leg up to small businesses is a good investment."
Others praised Obama's plan to double U.S. exports over the next five years, which the president said will support 2 million U. S. jobs.
Gibbons applauded Obama's statements on clean energy. "Clean energy will be one of the primary drivers of the U.S. economy over the next two to three decades," he said. "Obama offered a comprehensive vision of the future and this century will be a clean energy century."
Republicans, however, harbor a number of misgivings about clean energy.
