State of the Union: Obama seizes his second term by the horns

Gun control was a clear priority in the President's speech.

It is traditional at a State of the Union address for one member of the president’s cabinet, in this case, Stephen Chu, the outgoing Energy Secretary, to watch the address not from the Capitol Building, where the president speaks to a joint session of congress, but from a bunker deep below Washington DC in case the unthinkable happens.

Chu is a scholarly man, an eminent scientist who won a Nobel prize in physics for his work in atomic cooling and trapping, and he is only the second Chinese-American to serve in the cabinet. From his bunker, he watched a State of the Union that was workmanlike and policy-heavy, one that laid down a heavy gauntlet to an often-recalcitrant Republican-dominated congress.

First Obama took a swipe at his opponents in the debt reduction negotiations, damning Republicans for asking “senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and most powerful.” Throughout this John Boehner, Obama’s political opposite, who this morning described the president as a man who "simply did not have what it takes" to get a bipartisan deal on debt reduction, glowered into the middle distance over Obama’s shoulder.

Then Obama did some more Delingpole-baiting, urging congress to pursue “a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on a few years ago.” The president had made a special point of singling out and shaking McCain’s hand on his way onto the capitol floor.

This was a workmanlike, policy-heavy speech. Immigration reform, education reform, sexual equality, cyber warfare, the Middle East and the Afghanistan drawdown were outlined with wonkish detail. No one, not Boehner or Stephen Chu underground awaiting catastrophe, were in any doubt – if any doubt were possible after his brash inaugural address – that this was a President looking to take his second term by the horns.

There were notable absences from the speech, however. Down in the bunker Stephen Chu, a proponent of nuclear power, was probably disappointed that nuclear got no mention as part of the president’s renewable energy plan. And gay rights advocates, flush from an inaugural address that promised real action on gay marriage, will be sorely disappointed that the issue received only the barest of oblique references.

Unlike the inaugural, where gay marriage took the headline role, Obama was yesterday back to what will become his defining topic: gun control. He spoke of Hadiya Pendleton, the young girl who performed at his inauguration and who was tragically shot and killed in Chicago just a week later. Her mother, Cleopatra Pendleton, sat at Michele Obama’s right hand.

“Hadiya's parents, Nate and Cleo, are in this chamber tonight, along with more than two dozen Americans whose lives have been torn apart by gun violence. They deserve a vote,” Obama told congress, and his words and his tone echoed the heartbreaking speech he gave at the memorial service in Newtown, Conecticut. “Gabby Giffords deserves a vote. The families of Newtown deserve a vote. The families of Aurora deserve a vote. The families of Oak Creek, and Tucson, and Blacksburg, and the countless other communities ripped open by gun violence – they deserve a simple vote.”

That vote, on the gun control measures he laid out with Joe Biden earlier this year, is this president’s singular priority. Even Stephen Chu, in his bunker, could see that.

Barack Obama delivering the State of the Union speech. Photograph: Getty Images

Nicky Woolf is reporting for the New Statesman from the US. He tweets @NickyWoolf.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR