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Obama summons Americans to responsibility

There was a paradox at the heart of President Obama's speech Tuesday night: the tough-minded Americans, so willing to take responsibility, were the same people he chastized for utter irresponsibility.
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In addressing a joint session of Congress and the nation, a president can take different roles.

In 2002, President Bush was a sentinel warning of danger, calling out the “axis of evil” and sounding the alarm over North Korea, Iran and Iraq getting nuclear weapons.

Many times during his presidency, Franklin Delano Roosevelt was a captain calling for courage in the face of daunting news.

And in 1965, as a legislative task master, Lyndon Johnson called on Congress to enact civil rights laws.

On Tuesday night, President Barack Obama chose to combine all three of these roles.

Praise for Americans' character
His aim was to rally the nation by extolling the extraordinary character of the American people.

“Even in the most trying times, amid the most difficult circumstances, there is a generosity, a resilience, a decency, and a determination that perseveres; a willingness to take responsibility for our future and for posterity,” he said.

The tasks of cutting federal spending, resuscitating the nation’s banking system, and reviving the moribund auto industry would be daunting, he acknowledged.

“None of this will come without cost, nor will it be easy. But this is America. We don't do what's easy,” he declared.

Yet there was a paradox at the heart of his speech.

These tough-minded Americans, so willing to take responsibility, the people who “don’t do what’s easy” were also the same people he blamed early in the speech for being guilty of utter irresponsibility.

An inventory of irresponsibility
“Short-term gains were prized over long-term prosperity… we failed to look beyond the next payment, the next quarter, or the next election… difficult decisions were put off for some other time on some other day,” he declared.

Obama carefully used the word “we” not “they” in his indictment of Americans' irresponsibility.

The unanswered question in the speech was: Are such people now capable of exercising the responsibility that the president says is needed?

And the applause from the members of Congress in the House chamber was selective in its judgments. It came for Obama’s denunciation of Congress using the budget surplus of 1999-2000 “to transfer wealth to the wealthy.” It also came in his rhetorical attack on those who fly on private jets. But the applause was noticeably absent when the president lamented, not once but twice, that some Americans “bought homes they knew they couldn't afford.”

In some of its passages, Obama’s was a very traditional speech for a Democratic leader to make: Democrats believe that the federal government has a necessary role in finding productive activities in which to invest, or on which to spend, taxpayer dollars.

Obama placed himself squarely in this tradition: “Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down,” he told Congress.

Where to spend, where to cut
Obama was offering a formula for both increasing and cutting federal spending at the same time: Spend more on energy, medicine, and education, but simultaneously spend less on other needs.

But how to spend less on Afghanistan, nuclear submarines, and medical care for the elderly will be left for the president’s budget blueprint and his closed-door bargaining with members of Congress.

While being very Democratic in much of his message, he offered a boosterish line or two that could have come from his immediate predecessor, George W. Bush, or from any Republican speechmaker.

“The answers to our problems don't lie beyond our reach.” He said they would be found partly “in the imaginations of our entrepreneurs.”

And he included a stylistic homage to one of his Republican predecessors by invoking Ronald Reagan’s’ durable trope of “waste, fraud and abuse.”

“We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier,” he declared.

Obama’s speech was not the occasion for pinpointing what percentage of Medicare’s $390 billion in spending last year was “waste, fraud and abuse,” and what percentage was vitally necessary to save the lives of millions of elderly people.

Even if waste were as large as one-fifth of the total, that would still solve only a minuscule part of the long-term fiscal shortfall.

A warning about unfunded liabilities
As David Walker, the former comptroller general of the United States, reminded Obama at Monday’s fiscal summit at the White House, the president is the CEO of an enterprise which faces $45 trillion in unfunded obligations, mostly in promises made to future retirees.

Obama consciously evoked the era of John F. Kennedy with a phrase from Kennedy’s first inaugural address — “a long twilight struggle,” — saying “a twilight struggle for freedom (in the 1950s and 1960s) led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.”

But Kennedy presided over a smaller government than Obama does: only 18 percent of GDP, compared to more than 25 percent of GDP today.

And in Kennedy’s era, 52 percent of all spending went to the military, instead of 20 percent today.

Obama’s major fiscal challenge remains the one identified by Walker: the future costs of entitlement programs.

What was missing
Conspicuous by its absence in Obama’s speech was any mention of Iran or North Korea.

And China was praised, not criticized.

According the UN International Atomic Energy Agency, Iran now has enough uranium to build a nuclear weapon.

And while Obama did briefly mention nuclear proliferation, foreign commitments accounted for a very small portion of his speech.

The president mentioned China only in passing as an exemplar of energy efficiency. Yet China will have much to do with the success of Obama’s fiscal plans.

China’s government is now by far the largest creditor of the United States, according to Council on Foreign Relations economist Brad Setser.

“Never before has the United States relied on a single country’s government for so much financing,” Setser said in a report last month.

It’s a reminder that Americans’ fiscal future is not theirs alone to determine, no matter how resilient their character.