Obama's 'Built to Last' Economy
Blogging the Beltway: Half policy report, half campaign speech, the president's address targeted wealth inequality.
The State of the Union address is framed as one that sets the year's legislative agenda, but in an election year it serves double duty as a campaign speech that expresses a vision for a second term. At moments, with rousing applause from the Democratic caucus, President Obama's assertive address on Tuesday evening resembled a full-on campaign rally.
The president largely focused on the economy through the lens of the struggling poor and disappearing middle class. Laying out his blueprint for restoring the economy through manufacturing, clean energy, education and a revised tax code, he also touched on what he called "the defining issue of our time" -- delivering on the American promise of hard work and responsibility paying off with the ability to own a home, raise a family and retire.
"No challenge is more urgent. No debate is more important," the president said. "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, or we can restore an economy where everyone gets a fair shot, and everyone does their fair share and everyone plays by the same set of rules."
Among many other initiatives, Obama called for the passage of new tax breaks for companies that keep jobs in the United States, and the elimination of tax benefits for businesses that outsource jobs overseas. He also pushed his forthcoming plan to allow "responsible" underwater homeowners to refinance their mortgages.
"No more red tape. No more runaround from the banks," he said. "A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust."
On education, he proposed an initiative to train 2 million workers in the science and technology industries struggling to find skilled workers, a federal funding reduction for colleges if they can't curb tuition hikes and a state-level law requiring students to stay in high school until they graduate or turn 18.
The Buffett Rule and a Corporate Crime Unit
Clearly not limiting himself to policies that Republican lawmakers might allow, the president also revived his call to rewrite the tax code. "Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes," he said. "In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up."
Further keeping attention on the economically depressed, Obama announced a new initiative to investigate corporate fraudsters. "I am asking my attorney general to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis," he said. "This new unit will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans."
It was this section that warily grabbed the attention of Rashad Robinson, executive director of the online activist organization ColorOfChange.org. "This announcement is an important step, and we're optimistic, but we know there is a ways to go in terms of what will actually happen in the investigations and what will come out of them," he told The Root. "We hope that any agreement doesn't limit a full investigation into all aspects of the mortgage-backed securities market, and that there's real money set aside for reducing the mortgage principal of homeowners who are underwater. The details are really important for us."
Hopeful Tone, but a Gridlocked Congress
Attempting to present an optimistic view of the country (and to persuade voters for a second term), President Obama peppered the speech with reminders of some of his accomplishments, even kicking off the speech with references to the end of the war in Iraq and the killing of Osama bin Laden. He pointed out that last year, the private sector added the most jobs since 2005, the American auto industry is back in business and, fact-checking Santorum's claims in a recent GOP debate, Veterans Affairs spending has increased each year he's been in office.
Michelle Bernard, president and CEO of the Bernard Center for Women, Politics & Public Policy, told The Root that she was encouraged by President Obama's ideas but knows realistically that he'll have an uphill climb. "He made compelling arguments for the Buffett rule and tried to offer something for everyone," she said of his broad set of ideas, which included both boosting clean-energy production and increasing offshore drilling. "But pushing that through a split Congress, I think that's going to be very difficult for the president."
Cynthia Gordy is The Root's Washington reporter.