State of the Union: Obama calls for end to inequality

 

Obama renewed call for the Buffett Rule on taxation

US President Barack Obama has attacked income inequality, using his third State of the Union speech to set the tone for his re-election bid.

Mr Obama emphasised the importance of an economy that works for everyone, in the nationally televised address to Congress.

The speech saw a renewed call for higher taxes on the wealthy, something Republicans strongly oppose.

The US economy is on the mend, but unemployment remains high at 8.5%.

The annual State of the Union address - one of the most keenly watched events in US politics - traditionally includes policy prescriptions from the White House for the upcoming year.

Mr Obama will now take the themes of Tuesday night's speech on the road, spending three days visiting manufacturing companies and higher education institutions in five states - all seen as important in November's election.

'Reclaim American values'

President Obama's speech on Tuesday in the Republican-dominated House of Representatives was delivered with an eye on November's presidential election, when he will seek another four years in office.

Start Quote

At the heart of this speech is a president, defiant. Defending the role of government and what he wants it to do”

End Quote

He 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, everyone does their fair share, and everyone plays by the same set of rules.

"What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them."

Mr Obama said the economy was bouncing back from the 2007-09 recession.

He sounded a warning to his conservative opponents, as he added: "I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place."

US media reaction

For the New York Times, Mr Obama went in the right direction in challenging the Republican notion that excessive government spending was to blame for the country's economic plight. "He sounded many of the same themes as last year, but his tone was sharper and he was far more willing to apportion blame," it says approvingly.

There was a very different view in the Wall St Journal, which accuses him of trying to campaign as an incumbent whose every move has been stymied by Congress. "For two years he had the largest Democratic majorities in Congress since the 1970s and achieved nearly everything he wanted." But those achievements have resulted in such weak, unpopular results, the paper argues, that he is forced to resort to the "politics of envy".

For Time, Mr Obama's "startlingly blunt" insistence that America was not in decline was not, according to polls, shared by the vast majority of the American people. And this optimism characterised the whole of the speech. "He came out swinging, with positive data, happy anecdotes and an energy that he rarely displays these days when he's off the campaign trail."

Fox News' depiction of this optimism was laced with a little more scorn. "Don't worry, America," writes Rich Lowry. "There's nothing that ails this country that can't be made right by a catalogue of piddling proposals that will be forgotten tomorrow - and oh yeah, more taxes on the rich. Such was the message of President Obama's State of the Union address."

Mr Obama also made a renewed call for his Buffett Rule - a principle that millionaires should not pay a lower tax rate than typical workers.

The idea is named after billionaire investor Warren Buffett, who famously complained that his secretary pays a higher rate of tax than he does.

Mr Buffett's secretary, Debbie Bosanek, watched the speech alongside First Lady Michelle Obama from the gallery.

Pledging no tax increases for those earning under $250,000 (£160,000), Mr Obama said: "If you make more than $1 million a year, you should not pay less than 30% in taxes."

"Now, you can call this class warfare all you want," he added. "But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense."

Republicans have repeatedly rejected Mr Obama's call for higher taxes on the wealthy and accuse him of resorting to class warfare to get elected again.

Mr Obama also proposed:

  • tax reforms to make it less attractive for US companies to transfer jobs overseas
  • allowing homeowners with privately held mortgages to refinance at lower interest rates
  • a new trade enforcement unit dedicated to deterring unfair practices by rival economies, such as China

A wave of unity swept over the chamber as Democratic Representative Gabrielle Giffords, who was shot by a lone gunman in Arizona shortly before the last state of the union, attended during her last week serving as a congresswoman.

What is the State of the Union?

  • The US Constitution (Article II, Section 3) requires the president to "from time to time give to the Congress Information of the State of the Union"
  • Making a speech to Congress is not required by the constitution
  • The tradition of making a speech only took hold in the early 20th Century
  • President Calvin Coolidge (1923) made the radio address, and Harry Truman (1947) the first televised one
  • In 2002 President George W Bush made the first address to be streamed online

Source: Encyclopaedia Britannica

Ms Giffords, who announced on Sunday that she would resign to focus on her recovery, was embraced by Mr Obama, amid rousing cheers.

'Pro-poverty'

Indiana Governor Mitch Daniels, delivering the Republican Party's response to Mr Obama's speech, called it "pro-poverty".

He said: "No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favour with some Americans by castigating others."

The address put the political spotlight firmly back on the Democratic president, after months of focus on the Republican candidates vying to challenge him for the White House.

Earlier, one of those contenders, Mitt Romney, was forced by political pressure to release his tax returns.

Mitch Daniels gives Republican reaction

The forms revealed the private equity tycoon earned nearly $22m in 2010 and paid an effective tax rate of about 14%, a lower rate than most other Americans pay.

On Tuesday morning, the former Massachusetts governor held his own "prebuttal" on the campaign trail in Tampa, Florida, saying that the "real state of our union" was high unemployment and record home foreclosures.

Mr Obama will promote the ideas outlined in his speech over the coming days in five states key to his re-election bid: Iowa, Arizona, Nevada, Colorado and Michigan.

Opinion polls show his approval numbers languishing beneath 50%, with most Americans disapproving of how he has handled the economy.

More than 13 million people are out of work and government debt stands at a record high of $15.2 trillion, up from $10.6 trillion when he took office.

However, surveys also show that Congress is far less popular than Mr Obama, with many blaming Republicans more for the gridlock in Washington.

Partisan warfare on Capitol Hill almost shut down the federal government three times last year.

 

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  • rate this
    -4

    Comment number 226.

    There is no such thing as economic fairness, that's socialism. What any government can do, is to make sure that all rich people and companies pay their taxes. And not hide their hidden wealth and profits in some off shore tax haven.

  • rate this
    -4

    Comment number 177.

    Obama has failed to introduce just about all of the promises he made before being elected. He looks and sounds great but without any substance. If judged on his deeds then he is no better than the last puppet. The US needs is a President with real conviction and a proven track record instead of the richest candidate buying an election. US tax rates will never change in favor of fairness.

  • rate this
    +21

    Comment number 154.

    It is not the politics of envy or class warfare. Income tax should be progressive, based on the ability to pay. Taxing different types of incomes at different tax rates distorts the free market and investment decisions.
    Now about that budget deficit. Those on higher incomes need to do their share when times are tough. If those on over $250k pa paid a little more in tax, the deficit would fall.

  • rate this
    -9

    Comment number 132.

    The devil is in the detail here - this will be spun to be a democrat fairness vs republican low tax for wealthy debate when really it isn't.

    If you look at the proposals put forward by all four of the republican candidates, all four have proposals that would bring the tax rates of the rich and the lower paid into line.

  • rate this
    +5

    Comment number 37.

    Obama seems to be sincerely trying to fix all the malaise in the US economy that he inherited. However, even though I am an admirer, I feel that what he has done till now has not really made a dent in any way. The economy is still in a shambles, the promises that were made prior to the elections are not being delivered. The performance of his govt so far has been so-so ... may be expected a lot.

 

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