After all the dust has settled from the speech, a huge question remains. Will this go anywhere? As I wrote in my last post, I think the speech did enough to put pressure on both sides. This increases the likelihood that something gets done, but is it enough? Maybe the answer is, not so fast.
Nothing in D.C. is ever what it seems. For most of the off-season Washington Redskins fans thought John Beck was going to be the starting quarterback. Instead Rex Grossman will be under center week 1. Football references aside, things in the nation’s capital tend to change quickly.
During the speech, several items like corporate taxes and entitlement reforms brought republicans to their feet. In the immediate aftermath they admitted that there was a lot to work with. No one wants to seem like they are against creating jobs, so the popular thing to do was say let’s get to work.
The devil will be in the details though. The president promised that everything would be paid for, but failed to deliver the details. He promised in the coming week that the details would be revealed. Those details will determine how much support republicans give him for paying for this.
He talked about improving on the corporate tax rate by closing loopholes. What loopholes will be closed and how will that lower the highest corporate tax rate in the world? He mentioned entitlement reform, which will upset his base, and in theory draw support from republicans. However, we need to know what that reform will look like. Is it just making cuts, or eliminating waste?
When talking about rebuilding our infrastructure, the key is shovel ready projects. The last stimulus promised similar construction projects, but found a lack of shovel ready projects. For this to work, there needs to be a plan at improving the number of shovel ready projects. The other issue is dealing with foreclosures. While it is great to talk about helping struggling homeowners refinance and capitalize on low rates. We need to know how we get this done. What is the plan to help those whose credit scores are too low? What is the plan for those who are unemployed or underemployed?
The point of all this is that the details still are coming out, and depending on what these details say will determine if this goodwill continues. I for one, am worried about these details. I am not sure that both sides are going to hear what they want. Once all the goodwill is gone and they get to work, we could be setting ourselves up for another nasty stalemate. No one wants to be seen as stopping job growth, but they also don’t want to create jobs at any cost.