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President Obama Delivers First State of the Union

posted on January 28, 2010

Hello, I'm Mark Pearson. The government announced this week the U.S. economy grew in the fourth quarter of 2009 at its fastest pace in six years.

According to the Commerce Department, Gross Domestic Product -- the value of all goods and services produced in the U.S. -- grew at an annual rate of 5.7 percent in the 4th quarter of 2009. The expansion marked the second consecutive quarter of growth in the wake of an entire year of declines.

About 60 percent of the gains were attributed to companies rebuilding stockpiles depleted by the recession. Changes to inventories added 3.4 percentage points to the fourth-quarter growth.

Consumer spending rose 2 percent, which added nearly 1.5 percentage points to the GDP tally.

The economy also got a much-needed shot in the arm on the trade front, where U.S. exports rose more than 18 percent... much faster than the concurrent 10.5 percent advance in imports.

But, revelers hoping to celebrate the economic developments by popping the cork on a bottle of champagne might be well-advised to temper the sentiment with light beer. Many analysts expect growth to slow this year as companies finish replenishing inventories and as government stimulus efforts fade.

And with the nation's unemployment rate hovering around 10 percent, President Barack Obama has stepped up his focus on job creation. On Friday, he outlined specifics of a proposal to provide tax cuts to small businesses that hire new workers... a plan he also touted during his State of the Union address.

President Obama Delivers First State of the Union

President Barack Obama: "We cannot afford another so-called economic expansion like the one from last decade - what some call the lost decade - where jobs grew more slowly than during any prior expansion, where the income of the average American household declined while the cost of health care and tuition reached record highs, where prosperity was built on a housing bubble and financial speculation."

In his first State of the Union Address, President Obama reminded Americans of numerous economic issues in recent years and pressed for a series of legislative reforms. Following political setbacks in the normally liberal-leaning state of Massachusetts, Obama once again urged the passage of health care reform and set the 2010 legislative table by demanding a jobs bill stuffed with tax incentives.

President Barack Obama: "So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I am also proposing a new small business tax credit - one that will go to over 1 million small businesses who hire new workers or raise wages. While we're at it, let's also eliminate all capital gains taxes on small business investment and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment."

One of the President's rare applause lines from Congressional REPUBLICANS followed a commitment to nuclear power in upcoming cap-and-trade legislation.

President Barack Obama: "That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America."

Despite the President's public commitment to bipartisan energy legislation, future bills face an uncertain political future. Many lawmakers sitting in the House Chamber were fearful of an election year setback for incumbents – particularly Democrats. To that end, President Obama spent much of his address promoting jobs initiatives including a reference to the productivity of rural Americans.

"So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support 2 million jobs in America. To help meet this goal, we're launching a national export initiative that will help farmers and small businesses increase their exports and reform export controls consistent with national security."

Members of both parties largely applauded as the President called for strengthening trade relations with Asian partners and revitalizing Doha round talks at the World Trade Organization.

Following the President's address, recently elected Virginia Governor Bob McDonnell delivered a swift rebuke of Democratic policies during the Republican response.

Gov. Bob McDonnell, R-Virginia: "Today, the federal government is simply trying to do too much. In the past year, more than 3 million Americans have lost their jobs, yet the Democratic Congress continues deficit spending, adding to the bureaucracy, and increasing the national debt on our children and grandchildren."

McDonnell argued for lawmakers in Washington to adopt Republican principles on pending health care legislation including tort reform and increased portability of health insurance across states lines. The first-year Virginia Governor also advocated for drastic cuts in federal spending.


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