The economic highlights of President Barack Obama’s State of the Union address on Jan. 28 only added to the frenzy of last week’s headlines: the Fed considers adopting a new benchmark interest rate, Greek bondholders lose confidence from the country’s rising deficit, and J.D. Salinger dies at 91.
Because of that, the extreme economic occurrences of the past 18 months and solutions to these problems were a central focus of the speech.
Obama highlighted the resilience and spirit of the American people as a sign of hope.
“In this new decade, it’s time the American people get a government that matches their decency, that embodies their strength,” said Obama. “And tonight, tonight I’d like to talk about how together we can deliver on that promise. It begins with our economy.”
Obama took office in the middle of the financial crisis and increased the prior administration’s financial rescue program. Obama said he made the Troubled Asset Relief Program (TARP), commonly known as the bailout, more transparent and more accountable. Through TARP, the Department of Treasury purchased billions of dollars worth of ‘troubled assets,” or subprime mortgages and other financial instruments deemed integral to financial market stability.
“And as a result, the markets are now stabilized, and we’ve recovered most of the money we spent on the banks,” said Obama.
Obama is determined to recoup all of the $700 billion dollars spent on the big banks and even proposed a tax on the largest financial institutions to recover the $117 billion shortfall in the government’s financial crisis bailout fund.
The tax, which administrators are calling a “financial crisis responsibility fee,” is set at 15 percent on liabilities of large financial institutions. However, while the administration made strides in recovering the TARP funds, the markets have been anything but stable. The Dow Jones Industrial Average (DJIA) dropped 700 points in the last ten days of January.
The markets were not the only focus of the speech, as Obama addressed unemployment and tax issues.
“I think that Obama should develop a strong plan to deal with the high unemployment we face going into 2010,” said Sarah Bottomley, senior public health major. “After graduation, I may add to that statistic if the problem isn’t solved.”
Currently, nearly one in ten Americans is unemployed. Obama plans to extend unemployment benefits to over 18 million citizens as part of his plan. He also hopes that by cutting taxes to 95 percent of working families and small businesses, he can ease the tight spending of the working class while keeping small businesses afloat.
The President also tackled the rising deficit. It took over $1 trillion to rescue the economy last year alone, and the nation faces a similar deficit for 2010. To conquer the rising spending, Obama proposed spending freezes on certain government programs by veto if necessary. He also discussed overall financial reform, the importance of doubling exports, and making earmarks transparent.
Overall, there were mixed reactions on the speech and partisan sentiment remained.
“Wednesday night’s State of the Union audience is more Democratic than the nation as a whole, but speech-watchers were less Democratic this year than they were last year,” said Keating Holland, CNN polling director.