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.


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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US Presidential Election 2012


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  • rate this

    Comment number 174.

    Hope and change, equality, a bit of socialism, and he spoke of universal values not American values. With luck he will not only win the election but will convince many UK critics of America that his country is worthy of left wing respect. Just hope he doesn't knock out any more Bin Laden's too soon. Anyone feeling cynical?

  • rate this

    Comment number 173.

    Sounds exactly like Nick Clegg, maybe he's been copying his pre-election party political broadcasts!!

  • rate this

    Comment number 172.

    A good speech overall, emphasising that America is still great. I liked the call for how the money saved by not having troops in Iraq, should be spent on "...some nation-building right here at home." But repeated calls for Congress to "...send me ... and I'll sign it right away" are a clear indication of his irritation with with Congress' inability to get stuff done due to political point-scoring.

  • rate this

    Comment number 171.

    The U.S. very rich can afford to pay much more tax if there is a clamp down on tax avoidance (and evasion), and still enjoy a luxury lifestyle. The money could be used to introduce a decent health service, probably based on the more efficient French system rather than our inefficient one.

  • rate this

    Comment number 170.

    @162. arthur
    ‘That 1% of most wealthy made much more for their countries than those 99% .. Do remember that 1% creats jobs which you hold, pays enormous taxes and makes your country competitive!’
    What a pathetic subservient lapdog outlook! The elite control the job market. Many are willing to work but cannot because the elite will not risk their big stash! Work creates stuff – not money!

  • rate this

    Comment number 169.

    He could do that. raise taxes on incomes above the US national average,lower them for the bottom 10% and tax people on their savings above $25000 at 10% . Re-distribution of wealth. He could do it,or propose it anyway but of course he won't. Helping the poor is all very nice but it wins zero votes.

  • rate this

    Comment number 168.

    another american political sotry, i take it the license fee will come down now as youve started charging the yanks?

    a rich man telling poor people hell make a change rich people wont like, rich people wont stand for it, block it veto it, set it alight, things stay the same, the rich will always be rich and the poor will always make them

  • rate this

    Comment number 167.

    Is this it now BBC. Are we the UK TV license payer going to have to be subjected to every irrelevant turn to our lives in the US presidential elevctions. So much airtime devoted to the republiucan primaries. I mean who cares. Lets take an interest when the election actually comes around. Maybe concentrate on giving us an understanding of who's running the Brics and our main EU trading partners...

  • rate this

    Comment number 166.

    It seems to me that people seem to have forgotten how the world was under Bush and his republican boot boys. Obama tried to bring around a re-balancing of the economy but was stopped by Congress so had to make a few deals which watered down the CHANGE which his last campaign was based on. Allow the man to make the changes in a world gone mad

  • rate this

    Comment number 165.

    Ah, yes. Obama. The man who was going to bring hope and change to a country dominated by Israeli lobby-groups, slimey, war-mongering millionaires who say only what the people want to hear at the time but behind their backs do exactly what they don't want, involved in a major war once every 15-20 years.

    You'll excuse me if I don't take a word this clown says seriously.

  • rate this

    Comment number 164.

    With all the religious nut jobs within the Republican party and their nasty attitude towards the needy surely they will not be elected. If Obama loses the election the USA will get reactionary government. Yes,Obama has disappointed but his comments about rebuilding the economy by manufacturing again within USA are right. China will destroy us all economically. We need to do the same in UK asap.

  • rate this

    Comment number 163.

    @157. Barry Ewart
    'Obama in US terms I guess is 'progressive' and our best hope.'

    Dangerous linguistic error warning: he may be the 'least bad' hope or 'least hopeless' but the difference is important. Your language is that of desperation... better the devil you know. He's basically tarred with the same brush as all his cohorts, Democrats and Republicans alike (obviously, no racism meant).

  • rate this

    Comment number 162.

    That 1% of most wealthy made much more for their countries than those 99%. If I am not right,lets impoverish that 1% and vote for communists party or something related to, who will bring us to equity of all kinds. But I am sure that you will then pray for current time to come back.Its idle talk. Do remember that 1% creats jobs which you hold, pays enormous taxes and makes your country competitive!

  • rate this

    Comment number 161.

    in fact mr obama has involved in agammaglobulineamia due to middle east crisis

  • rate this

    Comment number 160.

    Tax deductions/releif have become a form of political corruption, abolise them all and creat a simple flat rate of tax on ALL income.

  • rate this

    Comment number 159.

    "blaming Republicans more for the gridlock ... Partisan warfare on Capitol Hill almost shut down the federal government three times last year."

    And we're constantly being told how these bi-party systems lead to strong governments. Yeah right, and we voted away our chance not to end up stuck in 'deadlock' like the US.

  • rate this

    Comment number 158.

    Dear Mr Obama,

    Just say "I won't sign ACTA" and that will get you so many more votes than anything else. But right now you are selling out America's liberty in exchange for profit margins. This is what a Republican would do, so please remember what party you are in!


    The internet

  • rate this

    Comment number 157.

    Obama in US terms I guess is 'progressive' and our best hope - but do they rule for US Corporations, meddle in other countries, detain without trial, use drones indiscrimately? But he is up against same old Republicans who would use Big US Govt to help the rich, screw the poor and deny women choice. Will there ever be a US Labour Party?

  • rate this

    Comment number 156.

    China's business practices and undervalued currency are significant factors that contribute to the global economic crisis. We are consuming our way into slavery!

  • rate this

    Comment number 155.

    @White fall #150:

    You MUST be joking! You can't seriously be saying that asking people making over a million per year to pay the same tax rate that I do is "destroying the wealthy and most productive"? I make $50k per year ....why should I pay a higher percentage than ANYONE ELSE ....including millionaires???


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