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”

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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.


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

    Comment number 134.

    Why all the squabbling about the distribution of money? In truth, it's useless stuff. The real evil is the love of money which perverts human motivation, pushing it towards two extremes. The resultant problem is that the few get a buzz out of using money to control the mass who let themselves be controlled ... didn't hear Obama address that in the slightest. Like most, he's still in money-mode.

  • rate this

    Comment number 133.

    Don't believe a word he says, besides its just rhetoric. Just look at his previous speeches, exactly the same, just a bought suit comfortably lying from his teleprompter preaching "change" and "recovery" that never happens. Its ironic he speaks of "recovery" while he has increased the Nat. debt the most in history, its almost laughable how people still cheer him on.

  • rate this

    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

    Comment number 131.

    This will in current circumstances be a vote winner apart from being morally and intellectually the right policy.

  • rate this

    Comment number 130.

    Fairness in taxation is a prerequisite for reducing inequality.But its roots lies in stagnant/declining middle and lower incomes.

    The solution lies in giving people the skills and training to fit into a high tech high value future since we can`t compete with Asia on cost.

    That and investment to drive it forward.If private capital won`t do it,the state will have to

  • rate this

    Comment number 129.

    @119.arthur - The 1% do not have the same as the 99% - they hold a majority of the worlds wealth, i.e. more than 51%.

    And I'd like to know where your "no more than 5%" figure comes from because looking at Africa which accounts for something like 14.72% of the worlds population that claim holds about as much water as your other comments.

    But don't let that stop you justifying extreme greed.

  • rate this

    Comment number 128.

    Obama biggest waste of space ever, maybe he borrowed Gordon Brown's defective moral compass, which will lead to the USA having double digit inflation by 2013, high interest rates and gas at US$28 a gallon,

  • rate this

    Comment number 127.

    It is a rich persons civic duty to pay a fair amount/proprtion of tax in the country that gave them the oportunity or they exploited to become rich in the first place. Sides if I earned say 2 million and was taxed 50% thats still a million more than I would have had and still more than alot of people would ever hope to earn in a year. The more you earn the higher a % you can afford.

  • rate this

    Comment number 126.

    There is little to choose between Democrats and Republicans, just as there is little to choose between all the public school boys in UK politics. It’s a sham contest in which Mr Average is always the loser. It’s pathetic how many people are taken in by the hollow words of politicians. However, you cannot blame them alone when the foolish public continue to hand power to them on a plate.

  • rate this

    Comment number 125.

    So where do we go from here? Implement the 'Warren Buffet rule' where the wealthiest pay at least 30-35% of their earnings in tax and stop hiding behind the so called unearned income and off shore accounts.
    Mr Romney has no idea how the poorest people in the US lives and yet he wants to be the next president. How can he connect with the voters when he is a millionaire?

  • rate this

    Comment number 124.

    When last I looked Obama was an American politician. His sayings have import to Americans,they are not headlines for the UK. The sycophantic following by the BBC of this man has reached a point where one expects to read a BBC "breaking news" that he has walked on water.

  • rate this

    Comment number 123.

    "And the wealthy shall pay much lower taxes, if any at all, than the rest of the citizens of the United States of America"

    Can't seem to find that one in the "Bill of Rights" or the Constitution.
    I wonder what the Founding Fathers would make of today's America?

  • rate this

    Comment number 122.

    As a relatively human rights oriented, university educated, social-democracy loving twenty something you might think that I would prefer that Obama was president, but right now, given the internet crisis, I find myself in favour of the libertarian republicans and tea party. Interesting times.

  • rate this

    Comment number 121.

    @113. ship-of-fools

    what i meant is that i dont understand how people can act like they know everything about the rich, no hard work involved and no tax, which is a complete lie considering 1% pay 28% of income tax total. from this ignorant belief, that the rich contribute and do nothing, people's envy flares up that they have so much more money then them when they supposedly didn't work for it.

  • rate this

    Comment number 120.

    Here we go again - The U.S. elects its first Black president, and just because some people don't endorse his brand of politics, or choose not to kiss his backside, they get labeled as racist.

    Always the race card - truly tiresome.

  • rate this

    Comment number 119.

    65. ravenmorpheus2k 1% = 99% wealth comparison. If 1% of people have the same what 99% do, it does not mean that 99% are poor. No more than 5% are getting by. If all people start to drive BMW 7-series, this luxury car will begin to consider as Nissan Tida and you'll dream about jet...

  • rate this

    Comment number 118.

    He inherited huge social and economic inequality, collapsing productivity, haemorrhaging sovereign debt, a bloated public sector and a manufacturing industry disappearing before his very eyes. Sound familiar? So how do you fix one of these never mind ALL of them? while hamstrung by a political system that constrains any type of reform - very hard times ahead for USA. My advice: move to Denmark.

  • rate this

    Comment number 117.

    Americans, especially Republicans, must try to understand this: economic fairness is integral to a renewing of a nation's unity, spirit & self-belief. Taxing the rich more will not erase the deficit but it will help reset America on a positive virtuous cycle. People need to believe that the system will work for all Americans, not just the rich. To the GOP - show us what you got.

  • rate this

    Comment number 116.

    There is some confusion about the president's comments concerning millionaires paying 30% income tax. Most middle class Americans pay 30% or even he is saying that millionaires should too! It's that simple. He's not saying they should pay MORE than anyone else ....but currently they are paying less than HALF of what the middle class pays.

  • rate this

    Comment number 115.

    So sad that the GOP have no reasonable alternative. Huntsman would have given the General Election some meaningful discussion. But choose Gingrich or Santorum and it'll be like Barry Goldwater in '64, Paul is just a ballot splitter and Romney...well if you've been campaigning for 6 years and you're still stuck at 30%! November = awful choice between impotent idealist and redneck crazies.


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