U.S. Federal Government Update: Didn’t catch the State of the Union speech last night? Not a problem. We watched for you. Here’s what you need to know.

by Manatt, Phelps & Phillips, LLP
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The Elevator Speech Overview

On Tuesday evening, President Obama went from “Yes, We Can” to “Yes, I can” and from bold to bite size policy initiatives in his sixth State of the Union (SOTU) address. Focusing primarily on the middle class, Obama vowed to make progress through executive action if Congress would not act on important issues. Narrowing his agenda, President Obama moved away from previous high-profile issues such as gun control and sweeping policy changes such as the Affordable Care Act (or Obamacare) and instead emphasized smaller policy changes to help promote economic mobility. With this goal in mind, he outlined several specific executive actions he will take in the coming months. Although the SOTU paid homage to bipartisan compromise, the speech’s major initiatives were aimed squarely at the Democratic base – immigration reform, women in the workplace, and a commitment to returning servicemen.

The GOP Response

In the formal GOP response, House Republican Conference Chairwoman Cathy McMorris Rodgers (WA-5) addressed the need to close the opportunity gap through traditional Republican principles such as lower taxes and less red tape. House Speaker John Boehner (R-OH-8) also reacted by warning the President against overreaching his constitutional authority in Executive Action, a concern shared by other congressional Republicans. In what could develop into a pattern in future years, the official response was joined by a chorus of other responses aimed at specific constituencies – Tea Party, main stream, and even minority populations with the delivery of one response in Spanish.

2014: A Year of (Executive) Action

The central theme of President Obama’s sixth SOTU address is unilateral, Executive action. Calling for “a year of action”, the President declared, “wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.” What this means is that in instances where Congress has proven to be recalcitrant or unable to find compromise to produce legislation, he intends to use Executive Orders, regulatory action, convening of industry or interest meetings, and the White House’s Presidential cajoling powers to take action on his own.

With a more narrow agenda than in past years, President Obama barely touched on some previous high-profile issues from previous speeches, such as gun control and did not even address other major issues such as the healthcare.gov rollout, budget sequestration, and entitlement reform. Emphasizing policies designed to benefit the middle class, the President seeks to broaden support for Democratic policies and rally his base ahead of the 2014 mid-term elections.

Issues slated for executive action or executive-led initiatives include:

  • Minimum wage – Announced an upcoming executive order that will require federal contractors to pay their federally-funded employees a minimum wage of $10.10 per hour.
  • New retirement savings account – Directed the Treasury Department to create a new way for Americans to start their own retirement savings called a MyRA.
  • High-Tech Manufacturing Hubs – Announced the launch of six more hubs in 2014, in which the Administration connects business to research universities and thus promotes technological advancement.
  • Energy and Conservation – Plans to use executive authority to strengthen conservation of federal lands while creating new fuel standards for trucks and carbon pollution standards for power plants.
  • Jobs Training Reform – Asked Vice President Joe Biden to lead reform efforts to better train and match skills with demand in labor market, create apprenticeship programs, and facilitate business involvement in designing educational curriculums.
  • Universal pre-K – Plans to create a coalition of elected officials, business leaders, and philanthropists to help expand access.

Despite the President’s vow to act unilaterally, President Obama still has a significant wish list for Congress. He calls on Congress to pass:

  • An increase in the minimum wage.
  • Immigration reform.
  • Tax reform – He calls for the elimination of corporate loopholes that would then enable lower overall corporate tax rates that will attract business to the U.S., and credits to promote renewable fuels.
  • Transportation and waterway bills – To help attract and create jobs in addition to improving infrastructure.
  • Patent reform bills – To reduce or eliminate costly litigation.
  • Appropriations – Acting partially through unilateral action the President also asks for additional funding for his policy priorities, such as increased spending on federally-funded research and pre-K education.
  • Trade Promotion Authority – He called on Congress to grant this authority so as to facilitate the expansion of free trade agreements such as the pending Trans Pacific Partnership (TPP), increase exports and help create jobs.
  • Policies promoting pay equity and better family leave.
  • Extension of unemployment insurance.
  • Legislation to allow every American access to an automatic IRA on the job.
  • Reform and strengthen the Earned Income Tax Credit (EITC).
  • Legislation that will lift remaining restrictions on detainee transfers and close Guantanamo Bay.
  • Reform of the NSA surveillance programs in coordination with the White House.

On the international front, President Obama committed: to complete the mission in Afghanistan in 2014; to support the Syrian opposition that rejects a terrorist agenda; and to continue the Administration’s commitment to its pivot to Asia. Additionally, President Obama emphatically issued a veto threat on any new Iran sanctions bills that Congress tries to pass. If you care to read the detailed print, the complete text of the President’s SOTU address can be found here.

The Official Republican Response

The official Republican response to the State of the Union address was delivered by Rep. Cathy McMorris Rodgers (WA-5), Chairwoman of the Republican Conference and the highest-ranking woman in House GOP leadership. However, multiple other high profile responses were also made by Sens. Mike Lee (Utah) and Rand Paul (Kentucky) and Rep. Ileana Ros-Lehtinen (Fla.) who delivered a response in Spanish. In the official response, McMorris Rodgers emphasized the need to close America’s “opportunity gap” and repurposed the President’s theme, calling on Obama to join Congress in “a year of real action.” McMorris Rogers adhered closely to traditional GOP themes of free markets, hard work, low taxes, and less bureaucracy; she also asserted that Republicans are “working on a step by step solution to immigration reform.” Her remarks were filled with autobiographical details (i.e. being the first in her family to graduate college and raising a child with Down Syndrome) and characterized America as “every bit as compassionate as it is exceptional.” Overall, McMorris Rodgers’ message was upbeat but lacked concrete or specific policy alternatives to the policies and initiatives promoted by the President. The full text of her remarks can be found here.

Although not part of the formal response, House Speaker John Boehner also joined in the response and reacted to the President’s promise to act with or without Congress, warning “we’re not just going to sit here and let the President trample over us.” Other Republicans have had similarly adverse or wary reactions, worrying about the potential for constitutional overreach.

Public Opinion

According to a WSJ/NBC News poll conducted January 22-25:

Which one or two words would you say best describes the state of our nation today?

  • 37% - Divided
  • 23% - Troubled
  • 21% - Deteriorating
  • 19% - Recovering
  • 14% - Broken
  • 13% - Hopeful
  • 3% - Strong

How do you feel about how Barack Obama will do the rest of his term?

January 2013

  • 27% - Pessimistic and worried
  • 21% - Uncertain and wondering
  • 1% - Not sure
  • 27% - Satisfied and hopeful
  • 24% - Optimistic and confident

January 2014

  • 33% - Pessimistic and worried [NET CHANGE = +6%]
  • 26% - Uncertain and wondering [NET CHANGE = +5%]
  • 1% - Not sure [NET CHANGE = 0]
  • 24% - Satisfied and hopeful [NET CHANGE = -3%]
  • 16% - Optimistic and confident [NET CHANGE = -8%]

According to a PSRA/Pew Research Center poll conducted January 13-15:

Do you approve or disapprove of the way Barack Obama is handling his job as President?

January 9-13, 2013

  • - 52% - Approve
  • - 40% - Disapprove

January 13-15, 2014

  • - 7% - Deficit/National Debt
  • - 43% - Approve [NET CHANGE -9%]
  • - 49% - Disapprove [NET CHANGE =+9%]

What do you think is the most important problem facing the country today?*

  • 20% - Unemployment/Lack of jobs
  • 16% - Economy (general)
  • 11% - Healthcare/Obamacare
  • 8% - Dissatisfaction with government
  • 7% - Deficit/National Debt
  • 4% - Partisanship/Gridlock
  • 4% - Education
  • 4% - Poverty

*NOTE: Multiple responses permitted. All other responses ( 4%) are available on p.14 of the complete poll.

Which statement comes closer to your own views?

  • 49% - I like elected officials who make compromises with people they disagree with
  • 48% - I like elected officials who stick to their positions

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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