Obama Focuses on Economy, Nation’s Future in State of the Union

WASHINGTON, DC-In his third State of the Union address Tuesday evening, President Barack Obama spoke of issues bound to resonate on the campaign trail this year. That was okay by the commercial real estate industry—like the rest of the American people, they too are eager to hear of plans to accelerate job creation and grow the economy. With his usual oratory flourish, President Obama delivered. “Think about the America within our reach: A country that leads the world in educating its people,” he said. “An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we’re in control of our own energy and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off and responsibility is rewarded.”

The hour-long speech touched on many themes: from the education system to the fine service record of the military to foreign affairs. Woven throughout the speech, though, were references to the economy and plans Obama would like to see put into action. Underpinning that, of course, was the 800-pound gorilla in the room: the fact that Congress has been unable to accomplish much of anything.

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“People tuned into the speech to get a sense of the direction of the country, the direction of Washington,” Joe Brennan, managing director of government investor services for Jones Lang LaSalle, tells GlobeSt.com. “We all know, though, that the President can’t propose anything that the House will agree to.”

Indeed, the speech was full of proposals unlikely to ever get by Congress. President Obama spoke of the manufacturing industry—one of the economy’s bright spots throughout the recession and sputtering recovery. Right now, he noted, it’s getting more expensive to do business in places like China, while America is more productive. “A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in 15 years, Master Lock’s unionized plant in Milwaukee is running at full capacity. So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it.”

One way to do that, he said, is to reward domestic manufacturers with lower tax rates. High-tech firms that keep operations here would receive double a tax deduction.

The President also hit on an issue of perennial interest to builders—crumbling infrastructure—an issue that never seems to be resolved no matter how many politicians in both parties reference it. 

He said he would, in the next few weeks, sign an Executive Order clearing away the red tape that slows down too many construction projects. Funding for these projects, he said, would come from what the nation is no longer spending at war. Half of that could be used to pay down the debt and half could be used for nation building “right here at home,” the President said. “There’s never been a better time to build, especially since the construction industry was one of the hardest hit when the housing bubble burst.”

It is good rhetoric, David Johnson, principal of Strategic Vision, tells GlobeSt.com. “But,” he adds, “Obama knows perfectly well that a Republican House is never going to pay for anything like that.” 

Maybe, though, in an election year some compromise can be cobbled together. Brennan points to a very effective comparison President Obama made during the State of the Union—the cooperation of the military during their missions and, well, the way Congress has behaved. “I think what he was telling people is that ‘it is time to take the Hill,’” Brennan says. 

At this point, he adds, it almost doesn’t matter what the President proposes—just so long as some forward momentum is made. “The real estate industry is going to follow Washington’s lead. If the focus is on health care, great. If it is on defense, great. Anything is better than the month-to-month stop-and-go that we have now.”