SOTU Can't Fix The Economy

Moneybox
A blog about business and economics.
Feb. 12 2013 9:11 AM

The President Can't Actually Do Things

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The president can't cut corporate tax rates while adding a progressive consumption tax. All he can do is propose cutting corporate tax rates while adding a progressive consumption tax.

Photo by Alex Wong/Getty Images

David Brooks is afraid that the president will just use the State of the Union address to deliver another salvo in the endless disagreement over taxing the rich. Instead, he wants him to prioritize the future:

If the president were to propose an agenda for the future, he’d double spending on the National Institutes of Health. He’d approve the Keystone XL pipeline. He’d cut corporate tax rates while adding a progressive consumption tax. He’d take money from Social Security and build Harlem Children’s Zone-type projects across the nation. He’d means test Medicare and use the money to revive state universities and pay down debt.
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These are mostly good ideas, but note the slippage from "propos[ing] an agenda for the future" to active words like "cut corporate tax rates while adding a progressive consumption tax." The problem with that idea is that the president can't cut corporate tax rates while adding a progressive consumption tax. All he can do is propose cutting corporate tax rates while adding a progressive consumption tax. About a year ago, Obama rolled out a plan to cut corporate tax rates while closing corporate tax loopholes that was also a pretty good idea, but it's gone nowhere due to the existence of persistent partisan disagreement. The 2010 Patient Protection and Affordable Care Act did (among other things) cut Medicare spending in order to (among other things) improve health care services for children. Republicans lambasted it, but it passed anyway since Democrats had majorities in Congress. Today, a proposal to go farther down that road would go nowhere due to the existence of persistent partisan disagreement.

And so on down the list. There are a lot of ideas I would like to see secure the concurrent approval of the majority of House members and the majority of House Republicans (the "Hastert Rule") and also obtain 60 votes in the Senate and then be signed into law by the president. But the obstacles to ideas running that gauntlet are quite large, and really have very little to do with what's in speeches. So if Obama doesn't propose your favorite ideas tonight, don't be too sad, and if Obama does tout your pet notions, don't get too excited.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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