OBAMA OUTLINES PLANS FOR “AN AMERICA BUILT TO LAST” IN STATE OF THE UNION SPEECH

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President calls for trade reforms to bring jobs back to U.S., tax fairness and more

By Mia Myklebust and Miriam Raftery

January 26, 2012 (San Diego)—The State of the Union address traditionally reviews the condition of our nation and previews the President’s legislative plan for the future. This year, Barack Obama’s speech had added importance as his last State of the Union address before the 2012 election.  The incumbent presidents challenges were to address successes of his current term and his long-term goals for a potential five more years.    

The President provided evidence that economic recovery is underway. He touted his administration’s success in combating terrorism, eliminating Osama bin Ladin, ending the Iraq War and improving America’s relationships overseas. In addition, he laid out ambitious proposals for “an America built to last.”  He issued repeated calls to action, among them:

  •   Trade reforms and tax credits for businesses that bring jobs back to America
  •   Tax “fairness” to help middle class Americans
  •   Invest savings from ending the Iraq war into reducing the deficit and creating jobs
  •  Creation of a Veterans Jobs Corps
  •  Prevent high school drop-outs and provide incentives to stop tuition hikes
  •  End oil subsidies, increase U.S. oil production, and support clean energy  technologies

An America built to last

The theme of building an “America built to last,” was heavy throughout the hour and a half long speech.   He called for a return to “american values” and an economy “where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same set of rules.”

Obama urged Congress to, “Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.”

The President addressed many of the issues pertaining to the struggling economy and gave some fresh ideas for working to fix them.

“Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that's built to last - an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values,” Obama said.

Many aspects of Obama’s plan for the future tie back to job creation.

He touched on creating clean energy, graduating kids from high school and college, increasing construction, making it easier to create a small business, and implementing programs for returning soldiers.

“It's time to turn our unemployment system into a reemployment system that puts people to work,” Obama said.

Repeatedly, Obama called on Republicans, Democrats, schools, businesses, Congress and business leaders to take action for the good of America. His entreaties for the people of the United States to come together and support one another in this time of economic hardship were prevalent throughout his address.

Many of these appeals were to Congress, which has deadlocked on key components of his previous proposals.

He asked for assistance in realizing new plans and passing new legislation.

Jobs plans include new proposals to bring manufacturing back from overseas

Another tax reform President Obama would like to see is one that rewards companies who use American rather than foreign labor.  While some gains have been made in bringing back manufacturing jobs, more needs to be done, he said.

“It's time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America,” daid Obama. “Send me these tax reforms, and I'll sign them right away.”

 

Specifically, the President said he seeks to eliminate tax deductions for companies that outsource jobs overseas and impose a minimum tax on multinational corporations.  By contrast, he would offer financial incentives to companies that bring jobs back to America. 

 

“If you’re an American manufacturer, you should get a bigger tax cut.  If you’re a high-tech manufacturer, we should double the tax deduction you get for making your products here,” he said.  “And if want to relocate in a community that was hard hit when a factory left town, you should get help financing a new plant, equipment, or training for new workers.” 

 

He also had this message for business leaders: “Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.”

 

In addition, Obama said he will sign an executive order to cut red tape that slows down major construction projects. He further urged Congress to approve funds, such as was done during the Depression to put Americans to work building roads, bridges and dams. 

 

 

Job growth and economic milestones

 

The President acknowledged that 4 million jobs were lost before he took office and another 4 million “before our policies were in full effect.” Since then, however, the economy has improved, with more jobs created last year than any year since 2005.  In the past 22 months, over 3 million private sector jobs have been added. 

 

That includes 160,000 new U.S. jobs in the auto industry, with General Motors position as the world’s leading auto maker restored.  By contrast, the President recalls, “On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen.”

 

The President noted that despite high unemployment,  growing industries in science and technology have “twice as many openings as we have workers who can do the job,” he said.  His solution? He asked  the public to “join me in a commitment to train 2 million Americans with skills that will lead directly to a job. My administration has already lined up companies that want to help.”  His plan also includes more resources for community colleges to train people in skills businesses seek now.

 

Despite wrangling in Congress, legislators did agree to cut the deficit by $2 trillion, he noted.  Obama also said he’s ordered every federal agency to “eliminate rules that don’t make sense.”

 

Taxing issues

Obama also urged Congress to, “Pass the payroll tax cut without delay,” which essentially means keeping money in working Americans’ pockets.

In terms of the tax reform that many middle class Americans have been calling for, Obama called for tax fairness. 

 “Tax reform should follow the [Warren] Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes,” he said.  The message comes on the heels of news this week that a leading GOP contender, Mitt Romney, paid just 15% in federal income taxes on his multi-million dollar income last year.  “Washington should stop subsidizing millionaires,” the President said, adding that such a move is not class warfare. “Asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

He tied tax reforms to reducing the deficit.  “Right now we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans,” he said.

 

 

Financial and mortgage reforms announced

Economic collapse began before his tenure of office in 2008, fueled in part by banks that “made huge bets and bonuses with other people’s money” as well as irresponsible practices by the mortgage industry, he noted.

 

In his speech, Obama revealed that he has asked the 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.”

This new special unit would protect against banks lending money to those who can’t pay it back, and allowing people to take out mortgages they can’t pay. He pledged that the unit will hold accountable those who broke the law and speed assistance to homeowners.

Moreover, he said of recently enacted regulatory reforms, “If you are a big bank or financial institution, you’re no longer allowed to make risky bets with your customers’ deposits.”  To lenders, he cautioned, “the rest of us are not bailing you out ever again.”

He praised newly appointed consumer watchdog Richard Cordray, a recess appointment made by the president, adding, “If you’re a mortgage lender or a payday lender or a credit card company, the days of signing people up for products they can’t afford with confusing forms and deceptive practices—those days are over.”

Trade reforms and consumer protections

 

“Tonight, I’m announcing the creation of a Trade Enforcement unit,” the President stated. The unit will investigate unfair trading practices in China and other countries, increase inspections to halt counterfeit or unsafe goods  from entering the U.S.   He also called on Congress to take steps to prevent foreign companies from having advantages over U.S. manufacturers in accessing financing or emerging markets.

 

Energy policies

Obama called for an end to the century-old practice of subsidizing oil companies.  “It’s time to end the taxpayer giveaways to an industry that has rarely been more profitable and double-down on a clean energy industry that has never been more promising,” he said, calling on Congress to create clean energy credits to fuel job growth in clean energy fields.

Noting that his administration has cut dependence on foreign oil to the lowest level in 16 years, he further said he will direct his administration to open over 75 percent of U.S. potential offshore oil and gas resources--a move that may draw the ire of environmentalists opposed to offshore drilling.

 

Military matters and foreign policy


“Osama bin Ladin is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated,” the President observed, adding that “a wave of change” has washed across the Middle East in Egypt, Tunisia and other nations where dictators have been toppled.

“Anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they’re talking about,” he said bluntly. “That’s not the message we get from leaders around the world who are eager to work with us…We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.”

 In addition to ending the Iraq War last year, troop withdrawals from Afghanistan have also begun, with 23,000 more troops due to come home this summer, he noted.

To help returning veterans, Obama’s administration is providing new tax credits to companies that hire vets. To date, pledges of 135,000 jobs have been secured from American companies to hire veterans.  In addition, the President announced, “Tonight, I’m proposing a Veterans Jobs Corps that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.”

With the wars ending, the President sees opportunities. “At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known,” he said.

Another new Obama proposal regards military spending. “I have proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget. “

Education

Other appeals were regarding education reform.

He called on every state to require that all students stay in high school until they graduate or turn eighteen. He called on states to make higher education funding a higher priority in their budgets. In addition he demanded that universities stop raising tuition so that education can be affordable for everyone and suggested federal funds may be withheld from colleges that fail to rein in tuition hikes.  

The latter may be unrealistic expectation. Tuition raises at public schools are often fueled largely by state budget cuts in education funding to public colleges. On the other hand, is it mere coincidence that one day after Obama’s speech, California State University trustees moved to cap salaries for college presidents? 

The President also urged Congress to stop interest rates on student loans from doubling in July and to extend tuition tax credits.

Immigration and border security

 Illegal immigration is lower than during the Bush administration, said Obama, noting that his administration has put “more boots on the border than ever before.”  He then chided Congress to address comprehensive immigration reform. “The opponents of action are out of excuses.”

If Congress cannot agree on a complete immigration reform package, the President urged starting with agreement to stop expelling young people and to “send me a law that gives them the chance to earn their citizenship.”

 “Washington is broken”

Obama referred to Washington as, “broken,” a reference to the difficulty he has faced passing legislation over the past year.

He spoke about combating a broken Washington by taking action.

His ideas included asking for authority to consolidate the federal bureaucracy in order to make it more responsive and quick.

Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow,” said Obama.

He also asked, “the Senate to pass a rule that all judicial and public service nominations receive a simple up or down vote within 90 days.”

If this rule were passed it would help speed things up when moving through the Senate.

Obama was tough on Congress stating that, “With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help.”

How accurate was Obama?

According to Factcheck.org the majority of the claims made in Obama’s speech were accurate, however in several cases he may not have given the entire background.

One example of this was when Obama said he has approved fewer regulations in the first three years of his presidency than his predecessor, George W. Bush, did in his first three years.

This is a true fact, however Obama failed to mention that his regulations were more costly than his predecessor’s. 

Perhaps most notable was Obama’s statement about the number of American jobs created during his Presidency.

“Last year, they (businesses) created the most jobs since 2005,” said Obama.

This was another true fact. However, Obama didn’t mention that there are currently 1.7 million more American’s without a job than there were when he was elected.  The economy clearly is improving with over 3 million jobs created in the past 22 months, according to the U.S. Department of Labor, but it has not yet fully recovered.  

Republicans' respond

Expectedly, Obama’s address received criticism from prominent Republicans, whose criticism centered around the fact that unemployment remains higher than when the President took office and that despite job growth, total jobs have not rebounded to pre-Obama levels.  The irony in the GOP position, however, is that Republicans in Congress repeatedly blocked the President’s legislative proposals aimed at fueling job growth, such as through investment in rebuilding America’s infrastructure and funds for research in new technologies.

The GOP opposes the President’s plan to raise taxes on millionaires and instead, wants further tax breaks to fuel business growth in the private sector.  The Republicans have called for cuts in “entitlements” such as Social Security and Medicare as part of their alternative vision to reduce the deficit. 

“The routes back to an America of promise, and to a solvent America that can pay its bills and protect its vulnerable, start in the same place,” the official Republican Party response to the State of the Union states. “The only way up for those suffering tonight, and the only way out of the dead end of debt into which we have driven, is a private economy that begins to grow and create jobs, real jobs, at a much faster rate than today.”

Obama calls for unity

The President, by contrast, called on leaders in both parties to work together as a team to implement his reform packages, just as the Seal team that terminated bin Ladin worked together to succeed.  “All that mattered was the mission. No one thought about politics,” the President concluded.

He called for “shared responsibility” among all Americans . “This generation’s success is only possible because past generations felt a responsibility to each other, and to the future of their country,” he concluded. “They know our way of life will only endure if we feel that same sense of shared responsibility. That’s how we’ll reduce our deficit. That’s an America built to last.”

Read full text of speech.

View video of full address:

  


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