On the State of the Union address (and the response)

There’s an argument to be made that President Obama’s State of the Union address last night left nothing off the table. If you’re a Democrat, or even a (left of center) independent, his speech included a veritable grab-bag of initiatives meant to appeal to you and drive the agenda this year and beyond. For the rest of you, depending on your political demeanor, maybe not so much. Whatever your persuasion it cannot be said that there wasn’t a push in new policy directions, and here are the two that surprised me most:

1) Raising the minimum wage to $9.00 an hour by 2015, and indexing future increases to cost of living:

We know our economy is stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, nineteen states have chosen to bump theirs even higher.

Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here’s an idea that Governor Romney and I actually agreed on last year: let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on.

I’ll leave it to others to weigh in on the merits of indexing the minimum wage to traditional cost of living measurements, but the sentiment is appreciated. Adjusted for inflation, the minimum wage is far, far lower than it was in the 1970s and the first half of the ’80s. While the economic literature — specifically, the effects on employment — behind minimum wage increases is hotly contested, I (caveat: being far from being authoritative on the subject) would conjecture that raising it less than two dollars an hour would not have a significant deleterious impact.

*Update — Some (PDF) supporting evidence on the matter of employment effects (h/t ThinkProgress). From the latter (emphasis mine):

We reviewed academic research that examines the effects of minimum wage increases during a recession or stretch of time with high unemployment and found significant evidence that even during hard economic times, raising the minimum wage is likely to have no adverse effect on employment.

 2) Universal Pre-K:

Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than 3 in 10 four year-olds are enrolled in a high-quality preschool program. Most middle-class parents can’t afford a few hundred bucks a week for private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives.

Tonight, I propose working with states to make high-quality preschool available to every child in America. Every dollar we invest in high-quality early education can save more than seven dollars later on – by boosting graduation rates, reducing teen pregnancy, even reducing violent crime. In states that make it a priority to educate our youngest children, like Georgia or Oklahoma, studies show students grow up more likely to read and do math at grade level, graduate high school, hold a job, and form more stable families of their own. So let’s do what works, and make sure none of our children start the race of life already behind. Let’s give our kids that chance.

Admittedly, this is less of a specific policy and more of an initiative, but the push for universal pre-K is significant — especially for those of us concerned with inequality. While the evidence for early childhood education is promising, programs like Head Start have been somewhat disappointing, so I would hope whatever concrete policy might be proposed takes into account what we know versus what we desire.

Of course I’d be remiss without mentioning Marco Rubio’s official Republican response to the SOTU, and no, I don’t mean the water bottle incident. Given my political proclivity, here’s my three biggest disappointments:

1) Government caused the recession:

This idea – that our problems were caused by a government that was too small – it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.

Just what policies he’s referring to I’ll have to guess…the Community Reinvestment Act, or perhaps Fannie and Freddie? No, no, no.

*Update: Also, this Mike Konczal Piece:

  For obvious reasons, this argument is very popular on the right, but there’s precious little to back it up. The core claim can be a bit slippery, but it tends to go something like this: the existence and affordability goals of Fannie Mae and Freddie Mac (the GSEs) and the Community Reinvestment Act (CRA) were a major reason we had a subprime-driven housing bubble and then a crash. The only problem? Pretty much all the evidence on the housing crisis shows that that’s not true.

2) The ‘crowding out’ and ‘uncertainty’ theories:

Every dollar our government borrows is money that isn’t being invested to create jobs. And the uncertainty created by the debt is one reason why many businesses aren’t hiring.

That government debt is crowding out private investment is plain economic garbage, period. Moreover, the uncertainty (I assume regulatory and tax-wise) shtick highlights a broader rhetorical issue for the GOP, beyond being wrong; for all the arguments that claim liberal politicians see every problem as a government solution, it sure seems like conservative politicians see government in every problem.

3) The revival of the Balanced Budget Amendment:

The real cause of our debt is that our government has been spending 1 trillion dollars more than it takes in every year. That’s why we need a balanced budget amendment.

Beyond being an asinine, tautological, observation the proposal for a balanced budget amendment is, as Bruce Bartlett describes, “mind boggling in its insanity.” Also, as Greg Sargent notes, Macroeconomic Advisors contends that it would “quickly destroy millions of jobs while creating enormous economic and social upheaval.”

This doesn’t sound like a forward-thinking party to me. If you were hoping for a more nuanced approach (or abdication of absurd hypothesis on past events) that would signal that the Republican Party is capable of governing then this Rubio speech will disappoint you. These ideas and related rhetoric are steps backwards, not indicative of an organization looking for new policy relevance in a changing world.

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