CQ TODAY ONLINE NEWS – EXECUTIVE BRANCH
Updated Jan. 25, 2012 – 12:42 a.m.
Obama’s State of the Union Address Focuses on Economic Fairness
By Joseph J. Schatz, CQ Staff
President Obama sought to shift the national conversation to economic fairness in his State of the Union address, calling on a sharply divided Congress to help revitalize American manufacturing and make millionaires and multinational corporations pay more of the nation’s bills.
“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” Obama told lawmakers in a forceful and optimistic speech Tuesday night. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
Democratic lawmakers were generous with applause and standing ovations, while Republicans showed little reaction.
But even with half of his audience in the House chamber sitting on its hands, Obama was able to use one of the biggest advantages enjoyed by a president — the ability to command national attention by addressing a joint session of Congress — to temporarily reclaim the spotlight from the Republican presidential contenders. The president planned to follow up beginning Wednesday with a three-day tour of five states likely to be critical in the presidential campaign.
Obama drew attention to the final drawdown of troops from Iraq, and his administration’s success against al Qaeda - an issue where he holds an edge over Republicans in public opinion polls. “For the first time in two decades, Osama bin Laden is not a threat to this country,” he said.
The president also highlighted the success of the domestic automaker bailouts he oversaw, and the recent uptick in job creation. “Tonight, the American auto industry is back,” he said, to vigorous applause from Rust Belt Democrats.
With the economy still inching along and unemployment rates falling slowly – a situation that threatens his re-election – Obama challenged lawmakers to approve a familiar list of jobs-focused proposals.
A select few of those proposals, such as an extension of the Social Security payroll tax cut, benefits for the long-term unemployed and Medicare physician reimbursement rates will likely be enacted. Others, including new infrastructure spending, face an uncertain fate. And some, like an immigration overhaul, are dead on arrival in the GOP-controlled House.
But in a nod to the partisan gridlock gripping Capitol Hill, Obama asked state governments to take action on issues like education policy, and announced a series of unilateral executive actions that require no congressional action.
In addition to creating a new financial task force headed by New York Attorney General Eric Schneiderman to investigate fraud in the mortgage market, Obama announced plans to spur shale gas development and create a new federal trade enforcement unit aimed at cracking down on unfair trade practices by China and other countries — a move meant to boost U.S. manufacturing amid growing concerns about U.S. competitiveness.
And as part of a strategy of running against Congress, Obama urged lawmakers to clean up their own house. The president said the Senate should guarantee judicial and “public service” nominees up-or-down votes within 90 days of their nomination. He also suggested new rules to short-cut Senate filibusters — an idea the tradition-bound Senate is virtually guaranteed ignore.
Obama also called for rules banning insider trading by lawmakers and forcing members of Congress to abide by the same conflict-of-interest rules as the executive branch.
Focus on Equity
Obama’s State of the Union Address Focuses on Economic Fairness
But the president’s overriding theme was economic equity, a cause he has made a centerpiece of his re-election effort, particularly as congressional negotiators try to hammer out an extension of the 2011 payroll tax break and jobless benefits (PL 112-78).
“Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense,” Obama told lawmakers.
As part of an overhaul of the tax code that would make it “simpler and fairer for middle-class Americans,” the president is proposing legislation that would ensure that any household making more than $1 million pays an effective tax rate of at least 30 percent — a so-called Buffett Rule, named after Nebraska tycoon Warren Buffett, who famously said that his secretary pays a higher effective tax rate than he does.
The White House says the proposal could be implemented without “disadvantaging individuals who make large charitable donations.” Obama also wants to eliminate so-called tax subsidies — like credits for child care and housing — for those households as well.
To underline the point, the White House invited Buffett’s secretary, Debbie Bosanek, to sit in the House gallery with first lady Michelle Obama, along with Mark Kelly, husband of Rep.
Obama is also asking lawmakers for legislation that would take away tax breaks that, according to critics, encourage corporations to move work overseas — generally a code phrase for corporations’ current ability to defer taxation on their overseas profits.
Obama wants to eliminate deductions claimed when a company closes down a U.S. plant, reduce tax rates for manufacturers, double a tax deduction for high-tech manufacturers and create a new tax credit for companies investing in communities hit by the closure of factories or military bases.
But Republicans have little interest in such proposals at this point, and an overhaul of the tax code seems unlikely until after the election.
Jay Timmons, president of the National Association of Manufacturing, gave Obama’s proposals a lukewarm review. “We agree with the president on one point. Manufacturers are poised for a renaissance. However, it is 20 percent more expensive to manufacture in the U.S. compared to our largest trading partners,” he said.
The president also urged Congress to approve more export financing for U.S. firms, clean energy investment tax cuts, and move toward a renewable energy standard for utilities, which many Republicans have resisted.
Senate Finance Chairman
Republicans were predictably unimpressed with the president’s tax message. Sen.
“If you’re talking about raising the capital gains rate or the dividend rate — I assume it’s both of those — that’s a debate we need to have,” Portman said. “The reason that those rates are lower is because they generate economic growth through savings and investment.”
Obama’s State of the Union Address Focuses on Economic Fairness
GOP Response
The president’s focus on economic fairness carries political risks, particularly when it comes to attracting independent voters who may be averse to class-based politics.
“Job creation is the driving issue for working families, but President Obama largely ignored the fact that his own failed policies are making our economy worse,” House Speaker
House Majority Leader
In his official GOP response speech, Indiana Gov.
“As Republicans, our first concern is for those waiting tonight to begin or resume the climb up life’s ladder. We do not accept that ours will ever be a nation of haves and have nots. We must always be a nation of haves and soon-to-haves,” Daniels said. “No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others.”
Daniels also took aim at the administration’s regulatory approach, particularly on climate change and energy, and made a thinly veiled reference to the administration’s recent rejection of a permit for the proposed Keystone XL oil pipeline from Canada to the Texas Gulf coast.
“It must be replaced by a passionate pro-growth approach that breaks all ties and calls all close ones in favor of private sector jobs that restore opportunity for all and generate the public revenues to pay our bills,” he said.
Niels Lesniewski, Alan K. Ota and David Harrison contributed to this story.
First posted Jan. 24, 2012 9:00 p.m.