Highlights of President Barack Obama’s State of the Union address:
• TAXES: Said the wealthy should pay their fair share in taxes, arguing that anyone who makes more than $1 million should pay a minimum tax rate of at least 30 percent. He also provided more details about the so-called Buffett rule, which sets a goal of a minimum tax rate for those earning $1 million or more a year.
• EDUCATION: Pushed measures for college affordability, including taking federal aid from colleges that don’t keep net tuition down and provide good value, and urged Congress to make permanent a tuition tax credit worth $10,000 over four years. He also called for a new emphasis on the teaching profession to include better evaluation systems and incentives for teachers and improved teacher education. And he challenged state governments to require students to stay in school until they graduate or turn 18, as 20 states already do.
• HOUSING: Proposed a nationwide program to allow homeowners with privately held mortgages to refinance at lower interest rates. It would cover both loans issued by government-controlled mortgage giants Fannie Mae and Freddie Mac and private bank mortgage lenders. Congress would have to approve, a difficult hurdle. Under the plan, any homeowner current on his or her mortgage could take advantage of lending rates now at 4 percent or below. Administration officials offered few details but estimated savings of about $3,000 a year for average borrowers.
• IMMIGRATION AND WORKFORCE: Reiterated a call for comprehensive immigration reform, including giving responsible young people a chance to earn their citizenship. He suggested creating a Veterans Job Corps to help communities hire veterans, and he committed to closing the wage gap between men and women.
• TRADE ENFORCEMENT: Called for the creation of a new trade enforcement unit that would go after unfair trade practices around the world, including China. Obama said the U.S. would provide financing to put its companies on even footing when the Chinese or other competitors use unfair export financing to help their businesses. He also called for better inspections to stop counterfeit, pirated or unsafe goods from entering the U.S.
• USING WAR SAVINGS FOR INFRASTRUCTURE: Proposed using half the savings achieved by winding down the wars in Iraq and Afghanistan to cover costs of new investments in infrastructure. Obama wants the money to go toward fixing existing roads and building new high-speed rail projects. He also plans to sign an executive order in the coming weeks to clear some of the bureaucratic roadblocks that have slowed work on projects that have already been funded. The White House says the other half of the savings from drawing down the wars would go toward reducing the national debt.
• OUTSOURCING/INSOURCING: Proposed eliminating tax incentives that make it more attractive for companies to ship jobs overseas. The proposal would require American companies to pay a minimum tax on their overseas profits in order to prevent other countries from attracting U.S. businesses with unusually low tax rates. Obama also wants to eliminate tax deductions companies receive for the cost of shutting down factories and moving production overseas. Instead, Obama wants to create a new tax credit to cover moving expenses for companies that close production overseas and bring jobs back to the U.S. He also wants to reduce tax rates for manufacturers and double the tax deduction for high-tech manufacturers in order to create more manufacturing jobs in the U.S.
• ENERGY: Directed his administration to develop a plan for safe extraction of natural gas from shale deposits, which the White House says will support more than 600,000 jobs. The administration is moving forward with what it calls “common-sense” rules to ensure that safe drilling practices are followed and the types of chemicals used in the so-called fracking method are disclosed for operations on public lands. Obama said he would offer incentives to manufacturers to boost the energy efficiency of the industrial sector by upgrading equipment and eliminating wasted energy in their facilities. The White House estimates those incentives and efforts to reduce regulatory barriers could save $100 billion from the nation’s energy bills and cut energy imports. Obama also said he will direct the Defense Department to make the largest renewable energy purchase in history — 1 gigawatt, or 1 billion watts. Obama plans to direct his administration to establish solar energy zones and wind energy areas on public lands to power 3 million homes by the end of 2012.
• FINANCIAL FRAUD: Proposed steps to target fraud in the financial sector and mortgage industry, with a Financial Crimes Unit to crack down on bankers and financial service professionals, and a separate special unit of federal prosecutors and state attorneys general to expand investigations into abusive lending that led to the housing crisis. “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,” Obama said.
• POLITICS: Responded to criticism from Republican presidential challengers, who have accused him of inciting class warfare by seeking higher taxes on millionaires and assailed his administration’s ties to Solyndra, a clean energy company which went bankrupt despite receiving a $528 million federal loan. Obama said critics could “call this class warfare all you want,” but argued that most people would consider it common sense for a billionaire to pay at least as much as his secretary in taxes. Obama did not mention Solyndra by name, but defended the promise of renewable energy from wind and solar power, saying he would “not walk away from the promise of clean energy.”
WASHINGTON (AP) — Declaring the American dream under siege, President Barack Obama called Tuesday night for a flurry of help for a hurting middle class and higher taxes on millionaires, delivering a State of the Union address packed with re-election themes. Restoring a fair shot for all, Obama said, is “the defining issue of our time.”
Obama outlined a vastly different vision for fixing the country than the one pressed by the Republicans challenging him in Congress and fighting to take his job in the November election. He pleaded for an active government that ensures economic fairness for everyone, just as his opponents demand that the government back off and let the free market rule.
Obama offered steps to help students afford college, a plan for more struggling homeowners to refinance their homes and tax cuts for manufacturers. He threw in politically appealing references to accountability, including warning universities they will lose federal aid if they don’t stop tuition from soaring.
Standing in front of a divided Congress, with bleak hope this election year for much of his legislative agenda, Obama spoke with voters in mind.
“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 said. “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.”
A rare wave of unity splashed over the House chamber at the start. Rep. Gabrielle Giffords, survivor of an assassination attempt one year ago, received sustained applause from her peers and cheers of “Gabby, Gabby, Gabby.” She blew a kiss to the podium. Obama embraced her.
Lawmakers leapt to their feet when Obama said near the start of his speech that terrorist leader Osama bin Laden, killed by a raid authorized by the president, will no longer threaten America.
At the core of Obama’s address was the improving but deeply wounded economy — the matter still driving Americans’ anxiety and the one likely to determine the next presidency.
“The state of our union is getting stronger,” Obama said, calibrating his words as millions remain unemployed. Implicit in his declaration that the American dream is “within our reach” was the recognition that, after three years of an Obama presidency, the country is not there yet.
He spoke of restoring basic goals: owning a home, earning enough to raise a family, putting a little money away for retirement.
“We can do this,” Obama said. “I know we can.” He said Americans are convinced that “Washington is broken,” but he also said it wasn’t too late to cooperate on important matters.
Republicans were not impressed. They applauded infrequently, though they did cheer when the president quoted “Republican Abraham Lincoln” as saying: “That government should do for people only what they cannot do better by themselves — and no more.”
Indiana Gov. Mitch Daniels, offering the formal GOP response, called Obama’s policies “pro-poverty” and his tactics divisive.
“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 said in excerpts released before the address.
In a signature swipe at the nation’s growing income gap, Obama called for a new minimum tax rate of at least 30 percent on anyone making over $1 million. Many millionaires — including one of his chief rivals, Republican Mitt Romney — pay a rate less than that because they get most of their income from investments, which are taxed at a lower rate.
“Now you can call this class warfare all you want,” Obama said, responding to a frequent criticism from the GOP presidential field. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”