President Barack Obama will put job creation at the centre of his second-term agenda, laying out a broad vision for robust economic growth and easing the strains on the US’s middle class when he delivers his fifth state of the union address tomorrow.
The president will also warn that the “sequester” – the $1.2 trillion in automatic spending cuts due to kick in on March 1st – poses a grave threat to the slow recovery.
“What I would like to see is a big, balanced, bold [budget] proposal,” Nancy Pelosi, the Democratic leader in the House of Representatives, told Fox News yesterday in a preview of Mr Obama’s state of the union address.
“Short of that, we must do something to avoid the sequester.”
In his address to a joint session of Congress, Mr Obama is expected to renew his call for a wide-reaching budget deal that would cut spending and overhaul taxes to generate more revenue. Republicans object to any increases in revenues, insisting on spending cuts.
Marco Rubio, the Florida senator often mentioned as a 2016 presidential contender, will deliver the Republican response to Mr Obama’s address.
The president’s return to familiar economic themes will stand in contrast to the unabashedly liberal view he presented when he was inaugurated for his second term last month, although the speech will touch on issues including climate change, immigration reform, gun control and education.
Mr Obama will stress the importance of manufacturing, saying he wants to make the US a “magnet for jobs and manufacturing” and make sure that Americans are adequately trained for those jobs. He will also say that he will make sure that “hard work leads to a decent living”, a senior White House official said.
Mr Obama heads to Capitol Hill at a time of mixed economics omens. While the recovery appears to have been gaining steam, the unemployment rate ticked up to 7.9 per cent last month and preliminary gross domestic product data suggested that growth went into reverse in the last quarter of last year.
With the deficit growing and a controversial fiscal deal still to be agreed before March 1st if the US is to avoid the sequester – which would almost certainly tip the US back into recession – the political focus has remained on the economy, even as the president has advanced social issues.
In recent surveys, the Pew Research Center has found that the economy and jobs remain the public’s priorities. The median income for a middle-income, three-person household fell from $72,956 in 2000 to $69,487 in 2010 (in 2011 dollars), Pew reports, with 85 per cent of those in the middle class saying it is more difficult to maintain their standard of living today than it was a decade ago.
The state of the union address comes as Mr Obama considers the final appointments for his cabinet, decisions that will need to take account of demands for gender and ethnic balance.
Penny Pritzker, who led early fundraising efforts for Mr Obama in 2007 and whose family built the Hyatt hotel business, is the leading candidate to head the commerce department.
– (Copyright The Financial Times Limited 2013)
