Ten Economic Lessons from President Obama’s State of the Union Address


The economy is still very difficult for voters at the pocketbook level. 

This economy is still very painful for people. In focus groups with swing voters who watched the President’s speech with us, participants were very graphic about their personal financial situations and economic outlook.  They are very much on edge financially, which is their dominant context because they live it every day. Every speech needs to start from a place that understands this is not theoretical or ideological, but tangible and painful for people.

You can’t survive on one income. You can’t buy gas.

I work 7 days a week to afford my house, my car.

Often times I worked 5 jobs, never saw the kids. They raised themselves. A majority of politicians don’t understand the hardship.

The President can highlight economic progress without taking credit.

For the first time since 2009, the President was able to highlight good economic news without shutting voters down; these voters in Denver applauded it. In past exercises, we have found that when President Obama takes credit for progress on the economy in these times, voters react badly and view him as out of touch. The President thread a very careful needle in this speech and it worked. These voters are open to the President’s celebration of good economic news, as long as the President does not take credit for it.  The way President Obama framed current economic growth was through business, not government – businesses hiring again and jobs coming back to America was news these voters were willing to celebrate. We should not underestimate voters’ responses—this was a major turning point.

 Voters are aware of, and concerned about, the decline of the middle class. 

One of the biggest shifts came when President Obama talked about a decade of stagnation, and the need to reignite the middle class and restore the basic middle class bargain. All respondents (including Republican-leaning participants) responded to this. But the President lost the Republicans in our audience when he said that the government works on behalf of the many, not just the few. They came back, however, when he returned to the values of free enterprise.

Voters support a growth agenda rather than an austerity agenda.

Voters showed strong support for growth and jobs when the President asserted that “deficit reduction alone is not an economic plan.” The electorate is ready for a growth agenda that creates good, middle class jobs, and this was clear in their responses to specific policy items. Every time the President mentioned investment, our swing voters in Denver were very receptive—investment in manufacturing, science, and infrastructure all got positive support. One of the strongest responses came when the President talked about not cutting funding for education, job training, Medicare, and Social Security benefits. On that point, independents and unmarried women responded most sharply, climbing above the Democrats’ line. The only group to respond negatively were the Republicans in our audience, who proved outliers on many of these issues.

WATCH THE VIDEO: http://www.youtube.com/watch?v=fgKj3Tm9EP8

Voters are looking for a balanced approach.

Taken in the context of the sequester, there is significant support for President Obama’s balanced approach rather than the Republicans’ cuts-only approach to deficit reduction. Voters, especially unmarried women, responded with deep concern to the potential budget cuts. And the President got broad support when he talked about replacing reckless cuts with smart savings. He also won the voters in our audience when he talked about getting rid of tax loopholes and deductions for the well-off and the well-connected. This balanced approach was met with a great deal of approval from our audience, who fully grasped the contrast between closing loopholes for the wealthiest versus cutting retirement benefits for those who cannot afford it.

 There is strong support for further and more progressive tax reform.

There is strong support for reform, including closing loopholes and instituting the Buffett rule, to make sure the wealthiest pay their share. At the end of the speech we saw big shifts in support for the President in supporting the middle class and handling the economy.

WATCH THE VIDEO: http://www.youtube.com/watch?v=t9szy76-73g

Raising the minimum wage is a good start.

Given the on-going stagnation and difficulties at the middle and bottom of the income spectrum, voters are looking for policies that will grow the economy from the bottom up. Raising the minimum wage produced a strong result among all groups except Republicans. Democrats reacted very favorably, as did independents and unmarried women. When the President proposed linking the minimum wage to the cost of living all groups, including Republicans, spiked.

WATCH THE VIDEO: http://www.youtube.com/watch?v=IJI3yWCvTk8

Unmarried women are more engaged and are the most engaged on economic issues affecting them. 

When we have conducted similar exercises in the past among unmarried women, their movement on the dials presaged their level of engagement and openness to voting for Democrats. During the 2012 campaign, they were more tentative and more closely aligned with independents. In sharp contrast, unmarried women in our group in Denver moved in close concert with the Democrats, and climbed even higher than the Democratic line at several key moments—including when the President talked about his growth and investment agenda, not allowing the painful sequester cuts to hit programs like education and job training, not cutting entitlement benefits for those who need it most, and closing tax loopholes for the wealthy and well-connected.

WATCH THE VIDEO: http://www.youtube.com/watch?v=PUEW1ZU8rC4

Republicans are on a path different from all others on economic and budget choices.

The President’s call to raise taxes on the wealthiest instead of making reckless cuts to education received strongly positive responses from all groups except the Republicans in our audience. On these measures, all of the dials rose while the Republican line dropped. In several key places in the speech, Republican lines moved in the opposite direction of all other lines: “consumers, patients and homeowners enjoy stronger protections than ever before”; “this government works on behalf of the many, and not just the few”; “deficit reduction alone is not an economic plan”; “by raising tax rates on the wealthiest 1 percent of Americans”; “the Affordable Care Act is helping to slow the growth of health care costs”; “no one who works full time should have to live in poverty — and raise the federal minimum wage to $9 an hour.” The point is not that Republicans were less receptive to the President’s speech than those who voted for him. We expected that. The striking observation is that these Republicans were unquestionably moving in the opposite direction as everyone else in the room. There is a difference between the points at which the Republican lines moved in unison with, just several octaves below, Democrats and independents, and the points at which all lines moved up while Republican lines dropped.

   Voters are receptive to smarter government that invests in broad-based growth.

This is not 2010, when voters looked to punish the President for a lagging economy, the health care law, or high spending. While their trust in government has eroded, voters seem very open to the President’s call for smarter government that tackles big issues. For now, voters seem ready to support both his short-term plan and his long-term vision for restoring the economy.

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