President Barack Obama showed on Tuesday night what it means to be an activist president on a diet.
In the State of the Union address that essentially presented his program for a second term, Mr. Obama spoke expansively of what government—his government—could do to improve life in America: build and repair the nation's infrastructure, spur alternative-energy sources, expand early education, raise pay for workers.
But behind that rhetoric lies a starker reality: The president actually has very little money to spend, so he proposed only limited new funding for these programs his party's liberal base loves. Spending caps, tax cuts, Republicans in Congress and the giant squeeze of entitlement programs that are sucking funds away from all else—all are tying his hands.
[h=3]Related Video[/h]
President Obama in his State of the Union address said that economic growth requires not just cuts but a balanced approach to deficit reduction that includes spending cuts as well as revenue. (Photo: Getty Images)
So, to underwrite his programs, he proposed in some cases recycling existing money or asking Congress again for funds previously denied. In other cases, he said he would seek his goals not with dollars but with regulations and tax incentives to prod the private sector to do Washington's bidding.
Indeed, one of his most ambitious initiatives to help workers was to propose an increase in the minimum wage to $9 an hour—an initiative paid for, obviously, not by government at all, but by businesses.
This is government activism in the age of yawning deficits. Mr. Obama acknowledged as much, though only obliquely. "It's not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth," he said.
Others might simply call the effort liberal government on the cheap.
[h=3]What They Said[/h]The modern tradition of delivering an oral State of the Union message to Congress began in 1934. Compare how often presidents used selected words in their addresses.
[h=3]What They Said[/h]
All this represents a considerable change, one not often recognized amid the seemingly constant warfare between Democrats and Republicans over the size and shape of government and the tax code.
In the 1990s, President Bill Clinton, a Democrat, proposed a lot of bite-sized government initiatives, but he did so not because his hands were tied by fiscal restraints—after all, the federal government was heading into a period of budget surplus rather than deficits in those days—but more because he thought small government was more in keeping with the public mood.
And the previous president, President George W. Bush, a Republican, felt he had the fiscal latitude to propose an expensive new entitlement program, a prescription drug benefit for senior citizens on Medicare.
Compare that to the wiring behind some of President Obama's sweeping rhetoric Tuesday night. He called for $50 billion in spending on infrastructure projects—rebuilding bridges and building rail lines, for example—but would pay for that by seeking anew funds previously requested and never approved by Congress.
And to supplement whatever the government might spend on infrastructure, he suggested public-private partnerships for projects important to businesses such as power grids and pipelines, a plan that by definition leans on private funding rather than taxpayer dollars.
Similarly, he called for creating "manufacturing innovation institutes" to develop new manufacturing technologies and train workers. But the administration's plan is to scrape together money from elsewhere in its existing budget to create three such institutes, because Congress has declined to fund an earlier request for $1 billion to set up 15.
To realize his dream of government policies to expand use of solar and wind-power technologies, he proposed a tax credit to give private companies an incentive to invest in them. And to expand preschool programs, he said he would work with states to achieve the goal—and to share the costs.
Of course, Mr. Obama proposed spending some money. He wants to use revenue from oil and gas lease sales to pay for research into alternative fuels, and said he'd seek $15 billion for a program to repair or rebuild abandoned or foreclosed homes.
It may simply be that the Democratic president knows the Republican-controlled House of Representatives wouldn't agree to cough up funds for many of his priorities, so, under duress, he's finding other ways to get where he wants to go.
The broader backdrop, though, is that, slowly and painfully, Washington is coming to grips with the new fiscal normal. The deficit remains an enormous problem, of course, but in large measure because Washington can't get its arms around the health-care costs and benefit programs that are eating up money.
The budget wars and resulting messy agreements on spending they have produced are having at least some effect. Mr. Obama's speech was evidence of that.
Write to Gerald F. Seib at [email protected]
A version of this article appeared February 13, 2013, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: A President Hungry for Action Has Bite-Size Budget.
In the State of the Union address that essentially presented his program for a second term, Mr. Obama spoke expansively of what government—his government—could do to improve life in America: build and repair the nation's infrastructure, spur alternative-energy sources, expand early education, raise pay for workers.
But behind that rhetoric lies a starker reality: The president actually has very little money to spend, so he proposed only limited new funding for these programs his party's liberal base loves. Spending caps, tax cuts, Republicans in Congress and the giant squeeze of entitlement programs that are sucking funds away from all else—all are tying his hands.
[h=3]Related Video[/h]
President Obama in his State of the Union address said that economic growth requires not just cuts but a balanced approach to deficit reduction that includes spending cuts as well as revenue. (Photo: Getty Images)So, to underwrite his programs, he proposed in some cases recycling existing money or asking Congress again for funds previously denied. In other cases, he said he would seek his goals not with dollars but with regulations and tax incentives to prod the private sector to do Washington's bidding.
Indeed, one of his most ambitious initiatives to help workers was to propose an increase in the minimum wage to $9 an hour—an initiative paid for, obviously, not by government at all, but by businesses.
This is government activism in the age of yawning deficits. Mr. Obama acknowledged as much, though only obliquely. "It's not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth," he said.
Others might simply call the effort liberal government on the cheap.
[h=3]What They Said[/h]The modern tradition of delivering an oral State of the Union message to Congress began in 1934. Compare how often presidents used selected words in their addresses.
[h=3]What They Said[/h]
All this represents a considerable change, one not often recognized amid the seemingly constant warfare between Democrats and Republicans over the size and shape of government and the tax code.
In the 1990s, President Bill Clinton, a Democrat, proposed a lot of bite-sized government initiatives, but he did so not because his hands were tied by fiscal restraints—after all, the federal government was heading into a period of budget surplus rather than deficits in those days—but more because he thought small government was more in keeping with the public mood.
And the previous president, President George W. Bush, a Republican, felt he had the fiscal latitude to propose an expensive new entitlement program, a prescription drug benefit for senior citizens on Medicare.
Compare that to the wiring behind some of President Obama's sweeping rhetoric Tuesday night. He called for $50 billion in spending on infrastructure projects—rebuilding bridges and building rail lines, for example—but would pay for that by seeking anew funds previously requested and never approved by Congress.
And to supplement whatever the government might spend on infrastructure, he suggested public-private partnerships for projects important to businesses such as power grids and pipelines, a plan that by definition leans on private funding rather than taxpayer dollars.
Similarly, he called for creating "manufacturing innovation institutes" to develop new manufacturing technologies and train workers. But the administration's plan is to scrape together money from elsewhere in its existing budget to create three such institutes, because Congress has declined to fund an earlier request for $1 billion to set up 15.
To realize his dream of government policies to expand use of solar and wind-power technologies, he proposed a tax credit to give private companies an incentive to invest in them. And to expand preschool programs, he said he would work with states to achieve the goal—and to share the costs.
Of course, Mr. Obama proposed spending some money. He wants to use revenue from oil and gas lease sales to pay for research into alternative fuels, and said he'd seek $15 billion for a program to repair or rebuild abandoned or foreclosed homes.
It may simply be that the Democratic president knows the Republican-controlled House of Representatives wouldn't agree to cough up funds for many of his priorities, so, under duress, he's finding other ways to get where he wants to go.
The broader backdrop, though, is that, slowly and painfully, Washington is coming to grips with the new fiscal normal. The deficit remains an enormous problem, of course, but in large measure because Washington can't get its arms around the health-care costs and benefit programs that are eating up money.
The budget wars and resulting messy agreements on spending they have produced are having at least some effect. Mr. Obama's speech was evidence of that.
Write to Gerald F. Seib at [email protected]
A version of this article appeared February 13, 2013, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: A President Hungry for Action Has Bite-Size Budget.