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State of the Union

Obama Vows to Increase Jobs, Cut Debt and Stay Course for Health Care Reform

President Obama focused much of his State of the Union speech Wednesday night on the jobs and economic issues that weigh heavily on the public but vowed to keep up his fight for sweeping health care reform.

Obama also pushed several proposals that could have an impact on older Americans. To chip away at the federal deficit, he called for a freeze on spending programs, which could make some government services harder to come by—though he also backed increased financial help for families caring for elderly relatives.

Looking back from a markedly different political environment, Obama said he took office a year ago “amid two wars, an economy rocked by a severe recession, a financial system on the verge of collapse, and a government deeply in debt. Experts from across the political spectrum warned that if we did not act, we might face a second depression. So we acted–immediately and aggressively. And one year later, the worst of the storm has passed.”

Since his historic election amid soaring rhetoric about changing Washington, Obama has dealt with a bank bailout he called “as popular as a root canal,” a logjam over his ambitious health care reform measure and recent Republican electoral victories that have his fellow Democrats skittish and on the defensive.

Still, Obama pressed lawmakers to consider the millions of Americans who will lose health insurance this year, see their out-of-pocket health expenses go up or be denied care. “I will not walk away from these Americans,” he said, “and neither should the people in this chamber.”

Some lawmakers have backed away from Obama’s health reform program, which would help older Americans pay for prescription drugs, bar insurance companies from turning away consumers with preexisting conditions and require that people have health insurance. Even House Speaker Nancy Pelosi, D-Calif., has begun suggesting that smaller measures might be more politically possible. But Obama made the case to millions of viewers–and members of Congress gathered in the House chamber–not to give up on the sweeping measure he staked his first year as president on.

“After nearly a century of trying…we are closer than ever to bringing more security to the lives of so many Americans,” Obama said, noting that it also would save the Treasury up to $1 trillion over the next two decades.

Obama’s call for bipartisanship on issues was answered with a blistering retort from Sen. Chuck Grassley of Iowa, the top Republican on the Senate Finance Committee, which devoted much of the past year to health care reform. Grassley said Obama and Democrats had ignored Republicans’ viewpoints while drafting the measure in private.

“During the last year, the administration’s focus has been on government spending, government control of the financial system, energy and health care policies that mean more regulation, higher taxes and new mandates for employers, and a national security strategy that treats terrorists like common criminals,” Grassley said. 

 “People wanted President Obama to change Washington, not change America,” Grassley said.

Obama accepted some blame for not explaining his health care plan more clearly, as skepticism grew over the horse-trading involved in pulling together the bill, which affects about 17 percent of the nation’s economy. At a time when the public is focused on pocketbook issues, Obama’s argument that health care reform will help the economy boosts his case, according to John Rother, AARP’s director of policy.

“The job of the president is to lead and also to communicate to the public why this is important,” Rother said in reaction to Obama’s speech.

Ron Pollack, the executive director of Families USA, which backs a health-system overhaul, said the unambiguous presidential backing of a major bill is just what was needed to convince lawmakers.

But Lance deHaven-Smith, a professor of public administration at Florida State University, said it may not be enough to persuade a public–including older Americans–now skeptical how their own health coverage would be affected. “He’s gotten himself into a very tough corner,” deHaven-Smith said. “I’m not sure the product is salable.”

Obama clearly had his eye on the topic that Americans say is on their mind–fixing the economy and creating jobs. He spent more than half of the speech on economic issues.

“Now, the true engine of job creation in this country will always be America’s businesses,” Obama said. “But government can create the conditions necessary for businesses to expand and hire more workers.”

Obama said he will push for tax credits that would encourage small businesses to hire new workers and give others raises. He proposed using money repaid by Wall Street financial companies to help free up lending for small businesses. And he called for infrastructure spending on things such as highway building and high-speed rail that would create jobs.

Jobs promotion is especially important to older Americans, because workers age 50 and over are a fast-growing group of the unemployed, said David Sloane, AARP’s senior vice president for government relations and advocacy.

But deHaven-Smith said infrastructure spending wouldn’t necessarily lead to jobs for older Americans. “They’re going to hire young people,” who are less expensive to pay and buy health insurance for, he predicted.

Obama walked a tightrope between promoting jobs, which costs money, and reducing the deficit. Obama noted that he had added $1 trillion to the debt he inherited when he took office, because of programs designed to keep the nation out of a depression. But now, he said, the country must tighten its belt.

“If we don’t take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery–all of which would have an even worse effect on our job growth and family incomes,” he said.

“Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt. Let’s meet our responsibility to the citizens who sent us here. Let’s try common sense,” Obama said.

As part of getting the nation’s fiscal house in order, Obama proposed a three-year freeze on spending for domestic programs that don’t involve security. Obama’s annual budget proposal Monday will lay out which agencies will be denied an increase to cover inflation under the freeze and which might be cut outright. He vowed to use his veto to keep spending in check through the freeze.

“We understand why they’re proposing a freeze,” Sloane said. “We are concerned about the effect on critical agencies.”

Social Security and Medicare benefits would fall outside the freeze. But the Social Security Administration, for instance, could find itself without enough staffing to provide services to older Americans because it’s already underfunded, Sloane said. “They’re trying to squeeze blood out of a turnip.”

Sloane said he’s worried about programs that help low-income people pay for housing, home heating, Meals on Wheels, and inspection programs for drugs and medical devices.

“Those nuts-and-bolts programs are going to get hurt,” he said. “There are a lot of discretionary programs that affect low-income senior citizens.”

But Obama also signaled support for funding increases in certain highlighted programs. About $102.5 million would be set aside to help the “sandwich generation,” which is caught between caring for kids and older parents. The money would beef up respite care for families caring for their older members. About 200,000 caregivers would get help if it passes Congress. And older Americans also would get more help with transportation, adult day care and other assistance designed to let them stay in their own homes.

“We have finished a difficult year,” Obama said in closing his speech. “We have come through a difficult decade. But a new year has come. A new decade stretches before us. We don’t quit. I don’t quit. Let’s seize this moment–to start anew, to carry the dream forward, and to strengthen our union once more.”


Tamara Lytle was a correspondent and Washington bureau chief for the Orlando Sentinel from 1997 to 2008.