President Obama will address a joint session of Congress tomorrow in his fourth State of the Union address. There is much speculation about what he will say, and what path the President will lay out for the nation.
Everyone has their idea of what an ideal SOTU would include. Before the President gets a chance to deliver his – I will deliver mine:
“My fellow Americans.
Tonight we gather together in an ritual rich in the history and traditions of our country. To reflect on events passed, and to plan boldly for the future. A moment to assess the state of our union and in so doing, to affirm our mutual commitment to its strength and endurance for ourselves and our posterity.
As we gather in this chamber tonight, we must recognize our unique roles as stewards of a historic trust. Such a consequential promise demands not only our best efforts and steadfast commitment, but also a fundamental truth to power. For only if we are honest with ourselves today can we take the decisive actions necessary to guarantee the inheritance of those not yet born.
I have come to speak this truth to power with you tonight.
As we gather here, our nation is at a crossroads amid much tribulation.
In the recent past, our fellow Americans have been pummeled by economic upheaval, resulting in broken trust, lost dreams, and harsh and unexpected realities. Those who were most vulnerable suffered the greatest, while millions who had planned for the future, worked hard and played by the rules saw careers end and homes lost in an economic slide that was for most, not of their doing.
A bad situation was made worse by bailouts that rewarded the very financial institutions that recklessly put our entire economy at risk, but ultimately ignored the citizens and homeowners who suffered the greatest as a result of the banks’ actions. Where the metric of government activism was measured by the volume of dollars, instead of their useful deployment to buffer the pain of recession and create a pathway to recovery.
As our fellow citizens sank deeper into economic crisis, we in Washington invested our energies and attention on important but secondary issues. In a moment demanding bold and committed leadership, we collectively failed the American people.
The result of our conflicting priorities and inattention here in Washington are clear enough to see.
21 million Americans who have lost their homes or are upside down on their mortgages, trapped in a no-win situation. 23 million Americans are on the street, seeking work. A record 46 million Americans in poverty. $5 trillion in new government debt in only four years – a debt that will have to be paid by our children – with continuing, massive debts projected into the future.
For all of the federal dollars expended to promote growth, our economy has only grown at an average of 2 percent in the last four years, hardly enough to make up for the losses in 2008-09. Indeed the gap between what we currently produce and what we are capable of producing if our economy was at full employment is a staggering $1 trillion in GDP.
This is unacceptable, but it continues.
Our middling economic leadership has been made worse by our partisan rivalries. Government action is now held hostage to parochial interests, whether they be on the left or the right. Common ground, once the prized real estate of all politicians, has become the shameful junk yard of broken careers for devoted public servants who put the nation’s interests ahead of their own.
This is unacceptable, but it continues.
Not only has Washington failed to lead wisely and effectively, but our political tribalism is actually making things worse, where short-sighted political brinksmanship contributes to ruinous, longer-term economic uncertainty.
This is unacceptable, but it continues.
My purpose here is not to blame.
Blame is cheap, abundant and bipartisan.
I speak these facts tonight for there can be no solutions until we recognize and admit the problems.
That is what we do as Americans.
From our birth, in a fight against tyranny, to our bloody national struggle to end the stain of slavery, to our defense of freedom and liberty against monarchy, fascism and communism, to our struggles today against terrorism, Americans have always sought to solve the problem.
Together, we conquered polio and put a man on the moon. Our industries created new industries. Our culture has lit the imagination of the world. Our story is one of diverse peoples, proud of their history, committed in their purpose, coming together under shared ideals with the energy, creativity and generosity to build a nation unrivaled in history.
Yet today, amid stagnation and uncertainty, we are plagued by doubt. Doubt that perhaps our best days are behind us. Doubt that our children will not know the prosperity that we ourselves have enjoyed. Doubt that the problems we face are so intractable as to be unsolvable.
But I stand before you today, with the rich and durable history of America at my back, to say that there is no problem of our own creation that is beyond our ability to solve. That while we have been hurt, we are not broken. That while we have wandered in the desert of competing priorities, we can still see the light. That the recent past is not permanent prologue. Indeed, we possess the national raw material to correct our mistakes, to re-align our priorities, and to return America to the path of growth and prosperity, securing the blessings of liberty for ourselves and our posterity.
We need only act on what is common to all of us. That is much clearer than we imagine.
Let us start with our nation’s historic commitments to the elderly, the sick and the infirm.
Amid the accusations and bluster that substitute for meaningful debate, the most important fact goes unmentioned – that there is a broad uniform, bipartisan consensus that these programs must continue. This point is crucial, because it was not always true.
But the programs that ensure the dignity of retirement, in providing for the well being of senior citizens and those who struggle to make ends meet, must not be divorced from the changes in a rich and innovative society that touch everything but the program structures and assumptions that are decades old.
Should Americans give up the PDAs for rotary dial phones? Should we give up cable TV for three national networks? Who among us would do that?
But in our commitment to Social Security, Medicare and Medicaid, there are those who see any changes that update the programs as veiled efforts to kill them off. This is both short sighted and destructive.
More than anything else, the last 30 years has created a revolution of choice.
Never before in American history have citizens been so empowered to create the elements of their own happiness in so many facets of their lives. Moreover, the revolution of choice has triggered a similar change in competition, which has put goods and services, previously unimagined, within reach of average Americans.
Why would we not want harness this revolution of choice for tomorrow’s government beneficiaries? Amid a revolution of customization, why do we continue to tolerate one size fits all? Why shouldn’t future beneficiaries have the choice to invest their Social Security taxes? Why shouldn’t future beneficiaries have choice regarding the type of healthcare they want? Why shouldn’t we permit state level experimentation and innovation in Medicaid to provide the very best medical care for those least able to access it?
But beyond the value of personal choice there is the reality of financial necessity.
The Congressional Budget Office (CBO) has stated that without structural changes, within 12 years federal revenue will only be able to finance Social Security, Medicare, Medicaid and interest on the national debt. Every other federal government activity — from national defense and homeland security to transportation and energy — will have to be paid for with borrowed money.
This is patently unacceptable. But it does not have to be self-fulfilling.
Let us use the revolutions of choice and competition, not to eviscerate our social programs, but to strengthen them for generations to come. Not to choose between benefit recipients and fiscal restraint, but to embrace both in the service of our national well being.
The same principle holds true for government writ large.
The debates about expanding government and shrinking it mostly miss the point. The virtue of government cannot be captured by how much it spends, regardless of what side of the fence you sit on. Indeed, today we spend more than at any time in our history, yet citizen skepticism highlights the deep divide between government and governed.
Citizen trust and credibility have become the victims of government’s good intentions.
The truth is that the value of government is not measured by its size, but by its effectiveness. Technology and modern management principles, that directly tie efficiencies in the civil service with the citizens they are paid by and are charged to support, would go a long way to restore the confidence of taxpayers that their hard earned money is being wisely expended.
Even as we apply the lessons choice and competition, no conversation of government’s role in our society can be complete without a discussion regarding the burdens of financing the government. Ideological edges here are sharp, but they needn’t be. Neither side is pure or consistent.
If we are to pay for the government we collectively seek, then my friends on the right must admit the disservice done to working class Americans by the regressive FICA tax. If we are to be committed to a progressive taxation system, FICA must not be excluded. We must un-cap FICA and restructure the tax on a progressive basis that relieves the burden on working class Americans, yet maintains incentives for high earners to keep on earning.
On the other hand, my friends on the left do a disservice to their support of tax fairness when they insist that there be no means-testing for government benefits, specifically for those who possess more wealth. It is as regressive as the FICA tax.
Yes, taken together, these two measures are tantamount to a wealth transfer from the rich to the poor. But in so doing, we would only making transparent the system that already exists today, shrowded by smoke and mirrors. And importantly, we would finally expose the lie that every beneficiary is receiving only the funds deducted from their taxes over a lifetime of work.
Government by truth instead of government by myth.
Facing facts requires that we face the issue of government revenues. My friends on the left are big supporters of additional tax revenue.
So am I.
I want more taxpaying workers.
It is time for the left to admit that no amount of taxation on the rich in America will fix our fiscal problems.
If the government were to tax the richest Americans at 100 percent of their wealth, we would still be in a grand hole. If the goal is an ephemeral social justice, then say so, explicitly noting that such an approach is not an effective or workable economic policy to promote shared and expanded.prosperity.
But for my friends on the right, it is important to recognize that taxes are not, in and of themselves, evil. Alexander Hamilton, our first Treasury Secretary, keenly understood the link between government revenues and a strong, effective government. Reducing the size of government is not the same as destabilizing government by refusing it adequate revenues at the lowest possible level.
The question now is which approach – punitive and arbitrary taxation of the rich, or lower and certain costs on capital – is likely to create the conditions for new jobs that will power our economy, creating the new taxpayers and revenue that will lower our budget deficit and allow us to begin to one day, to pay down our debt..
Today our tax code is out of date, incomprehensible, riddled with exceptions and rigged to favor the wealthiest Americans.
That is unacceptable.
We must start with a completely clean sheet, trading “tax expenditures” (tax loopholes) on a 50-5o basis with rate reduction and deficit reduction. The lowest possible rates. The greatest measure of transparency. The easiest possible process.
This effort necessarily includes reform on corporate taxe rates.
US corporations are holding $2 trillion overseas as the US tax code makes it impractical to repatriate that capital home. Those are dollars that could be invested by private enterprise in new ventures, expanded operations, research and development. We need to make our corporate tax system competitive with others around the globe, and design a system that will allow companies to bring that capital home and put it to work in the service of American jobs.
In addition, the vitality of our economy will not only respond to how it is taxed, but also how it is powered.
We are in the midst of an energy revolution in the US where, in our lifetime, the US can become energy independent, if only we have the wisdom to put in place the policies to encourage that independence. Moreover, with the predominance of natural gas, the US can look forward to both abundant supply as well as cleaner sources of energy.
We have deep divisions on the issue of global warming. But our energy revolution makes the debate less relevant. New, cleaner sources of energy, coupled with market tested improvements in energy efficiency will naturally reduce the GHG footprint for the US without penalizing American energy workers or energy consumers.
And finally, to create the conditions of a robust economy, we must not only be powered adequately and taxed sparingly but have the workers necessary to peform the range of jobs that fuel success. To do so, we must reform our immigration system.
My friends on the left will say that keeping 11 million illegal aliens in our country is a form of legal limbo that is morally unjust for people who came to America seeking only to make a better life for themselves and their families. My friends on the right will say that legalizing the presence of those 11 million illegals will only reward law breaking, abbetting additional waves of illegals seeking the new protections. That does not include fundementa unfairness that such a legalization would have on those who have followed the legal immigration process and played by the rules.
Both are right.
Hard truths for my friends on both sides of the aisle.
On the right, mass deportation of illegals is not an option, ethically or practically. But for my friends on the left, neither is a process that legalizes the presence of illegals while doing nothing to secure our borders – permanently.
We require a middle ground. A sequencing that will cut the flow of illegal immigrants into our nation. Strong and enforcable employer ID requirements that root out illegals. At that point, we can provide Green Card status for illegals who do not have criminal records, bringing new workers and taxpayers out of the shadows.
At the same time, we must completely revamp our immigration laws and the practical processing. If we are to compete globally, we must welcome those with high level skills that wish to come to America. We must also find a way to clear out the back log of cases at the INS that take years to sort out and process, and make the legal immigration process so user friendly that it is the preferred option to illegal activities.
For the formerly illegal Green Card holders, we cannot indefinately mandate second class status. America must never be that kind of nation again.
We must eventually offer a path to citizenship to those who wish to take it. As this move would be unprecedented in our history, Congress would be well within its power to decide on the terms that such citizenship would require, including what penalties would be assessed for having emigrated illegally, and what naturalization measures would be mandated.
Instead of expending billions hunting down illegals, we can begin to integrate an energetic cohort into the fabric of our society; new, dynamic hard-working – taxpayers.
Those are the ingredients for success, my fellow Americans.
Modernize and reform entitlements for the next generation of Americans through the choice revolution. Create transparency and end regressivity in entitlements by uncapping FICA and means-testing benefits. Put these programs on a genuine, paying basis.
Restrain government by modernizing it. Restore trust in government by ensuring that government workers are the best in the world at what they do, responsive to their clients and paymasters – the American taxpayer.
Throw out the tax code and replace it with one that eliminates special interest tax breaks, lowers rates, and helps pay down the deficit. Reform our corporate tax system to incentivize American companies to bring home their foreign profits so that they can invest them here. Create long term certainty in the tax regime so that businesses and individuals can invest for the future.
Employ restrained and smart regulation to ensure the private sector powered energy revolution continues and expands, creating new jobs and industries, while providing cleaner, cheaper forms of energy for American business and consumers, making America as a whole, more competitive.
And finally, to reform our immigration laws, recongizing the hard realities, but seizing on the opportunity to revitalize our workforce, expand our tax base and attract the very best talent in the world.
Taken together, these elements will catalyze a great American economic expansion. Perhaps greater than any in the past. An expansion that will create new wealth and opportunities for Americans to achieve their dreams. An expansion that will reduce our budget and trade deficits, and restore the confidence of a nation, while preserving dignity for all Americans.
Some will ask about other issues of importance. Social issues as varied and heartfelt as gun control, abortion and marriage equality.
Each issue is worthy of equal consideration but not equal priority. Only if we get the basics done correctly do we have the luxury of dealing with other clear and present challenges.
I end tonight with a quote from a great American president. He too faced difficult times, but always knew that the American people were up to the challenge if there was bold leadership to guide it.
“The greatness of America doesn’t begin in Washington; it begins with each of you—in the mighty spirit of free people under God, in the bedrock values you live by each day in your families, neighborhoods, and work-places. Each of you is an individual worthy of respect, unique and important to the success of America. And only by trusting you, giving you opportunities to climb high and reach for the stars, can we preserve the golden dream of America as the champion of peace and freedom among the nations of the world.”
The message is as timeless as the American Experiment – and as true. Ronald Reagan understood that, and it was the core of his success as president, and our success as a nation.
Let us agree tonight that with the sun’s rise tomorrow, we will get to work.
Thank you, God bless you, and God bless the United States of America…”