Obama’s economic agenda: Boost US competitiveness

Published 10:15 pm Saturday, January 22, 2011

Under pressure to energize the economy, President Barack Obama will put job creation and American competitiveness at the center of his State of the Union address, promoting spending on education and research while pledging to trim the nation’s soaring debt.

Obama hopes this framework will woo Republicans as he searches for success in a divided Congress and will sway a wary private sector to hire and spend money it’s held back. The economy is on firmer footing than when he took office two years ago, and his emphasis on competitiveness signals a shift from policies geared toward short-term stabilization to ones with steady and long-term growth in mind.

Obama will speak to a Congress shaken by the attempted assassination of one of their own. Democratic Rep. Gabrielle Giffords was shot in the head two weeks ago during an event in her district in Tucson, Ariz.

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The president has appealed for more civility in politics, and in a nod to that ideal, some Democrats and Republicans will break with tradition and sit alongside each other in the House chamber Tuesday night during a joint session of Congress.

White House aides have not said much about the specific proposals the president will outline. Obama has offered hints, however.

In a recent speech in North Carolina, Obama said making the U.S. more competitive means being willing to invest in a more educated work force, commit more to research and technology, and improve everything from roads and airports to high-speed Internet.

“Those are the seeds of economic growth in the 21st century. Where they are planted, the most jobs and businesses will take root,” Obama said.

The state of the economy will greatly influence Obama’s re-election prospects in 2012, and White House spokesman Robert Gibbs said the president will devote most of his nationally televised address to his vision for extending the economic recovery.

More than half of those questioned in a new Associated Press-GfK poll disapproved of how he’s handled the economy, and just 35 percent said it’s improved on his watch. Three-quarters of those surveyed did say it’s unrealistic to expect noticeable improvements after two years. They said it will take longer.

Obama’s challenge will be to find the money and political will to spend it, even as he’s pledged to reduce spending and tackle the mountainous debt. Aides say the president is reviewing the recommendations of his bipartisanship fiscal commission and will emphasize cost-cutting measures.

Some House Republicans have promised to cut $100 billion from the budgets of domestic agencies. They plan to vote next week on a resolution setting appropriations for the rest of the year at 2008 levels, in place before Obama took office.

The White House isn’t saying how much lower spending Obama will call for or where the cuts could come. Still, it’s almost certain that his figures won’t reach the level demanded by the GOP lawmakers.

Obama is expected to frame the competitiveness issue in historical and patriotic terms, calling for a new Sputnik moment — a reference to the Soviet Union’s 1957 launch of the first satellite, ahead of the U.S. He intends to say the U.S. is again facing challenges from abroad, this time from fast-growing economies in China, India and throughout Southeast Asia.

In his travels to Asia and during Chinese President Hu Jintao’s recent trip to Washington, Obama has said he’s been struck by the rapid rise of the region and the laser-like focus on competing in the global economy.

“They are thinking each and every day about how to educate their work force, rebuild their infrastructure, enter into new markets,” Obama said in November, after wrapping up a 10-day Asia trip. “We should feel confident about our ability to compete, but we are going to have to step up our game.”

As part of that effort, Obama announced a restructured presidential advisory board Friday that will focus on increasing employment and competitiveness. He named Jeffrey Immelt, the top executive at General Electric, to it.

The White House sees competitiveness as an issue that can win broad support from business, labor and Republicans.

GOP lawmakers traditionally have backed the types of trade deals and research and development efforts that Obama is promoting. Senate Minority Leader Mitch McConnell, R-Ky., appeared to give the president an opening when he said last week in a speech that “my advice to my colleagues is if the president is willing to do what we would do anyway, then we should say yes.“

The White House has tried to court business since Democrats’ defeats in the November elections, and competitiveness is a priority for that sector.

Jay Timmons, president of the National Association of Manufacturers, said concrete action must back up the rhetoric from either party before businesses would commit to stepping up spending and hiring.

“Ultimately the proof of whether this is merely positioning for elections or is a true commitment to long-term growth and competitiveness will be in the details,” he said.