Obama Speech Makes Pitch for Economic Fairness

WASHINGTON — President Obama, confronting a Congress in which Republicans have been determined to stymie him, used his lastState of the Union address before he faces the voters to offer a populist pitch for greater economic fairness.

Mr. Obama asserted that government should work to better balance the scale between the rich and the rest of America — changing the tax code and other policies if Congress would go along, and making the most of his executive powers if Congress would not. People earning more than a million dollars a year should pay an effective tax rate of at least 30 percent and should not receive tax deductions for housing, health care, retirement and child care, he declared.

“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,” Mr. 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.”

By putting a significant accent on taxes, where his differences with Congressional Republicans have always been pronounced, Mr. Obama renewed the pressure on them to extend once again a temporary payroll tax break for most working Americans — and also amplified the attention that has been focused all week on the wealth of Mitt Romney, one of his leading challengers, who has disclosed that he pays less than 15 percent on income of more than $20 million a year.

In the Republican reply, Gov. Mitch Daniels of Indiana will respond that “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.”

“The state of our Union is getting stronger,” Mr. Obama said, citing the growth of private sector jobs and calling on business leaders to “bring jobs back to your country.”

Here, too, he said, “we should start with our tax code.” But that meant eliminating tax breaks for shifting jobs abroad and providing new tax incentives to make products here — not, as his Republican rivals have been urging, to further reduce the taxes on the gains from capital investments.

For weeks, Mr. Obama and his aides have been signaling that the theme of Tuesday’s speech would be that the richest Americans should shoulder more of the nation’s tax burden, that the middle class should have a shot at prosperity and that the disadvantaged should be provided social scaffolding to help them climb upward. The White House released excerpts early in the evening and a full text shortly before the speech began.

While Mr. Obama’s themes are cast in terms of seemingly universal appeal, like economic fairness, fiscal frugality, efficiency in government and national pride, on almost every point there are profound differences between the political parties that no number of applause lines can really bridge.

He repeated — this time, directly to a Congressional audience — his frequent warnings on the campaign trail that he would use executive powers to force action where he could.

“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,” he said.

Indeed, there is little prospect that the administration will be able to break the pervasive gridlock with Congress on many of the substantive issues the speech highlighted.

Among other things, it called for letting every homeowner who is currently paying a mortgage on time to refinance at favorable interest rates; to launch a new team of federal investigators of financial crimes; to spend half the savings from winding down the wars in Iraq and Afghanistan for rebuilding infrastructure at home, and the rest for deficit reduction; and to step up enforcement against unfair international trade.

The speech, which is expected to be watched by one of the biggest audiences the president may receive before the November election, comes just as the election campaign is reaching a boil, with his leading Republican opponents in a full-throated competition over how best to defeat him.

Strikingly, Mr. Obama stayed largely away from foreign affairs, although he started with a tribute to the troops who he said had “made the United States safer” and removed Osama bin Laden as a threat. He addressed tensions with Iran and trade relations with China, while noting the American military’s withdrawal from Iraq and later from Afghanistan. Republican presidential candidates have excoriated him on each of these subjects, just as on his handling of the economy.

He said the United States would not tolerate a nuclear-armed Iran, called its relations with Israel “ironclad,” spoke in glowing terms of the pro-democracy movement in the Arab world, and said that thosewho argue, as his Republican opponents often do, that American power and influence are waning do not “know what they are talking about.”

House Speaker John A. Boehner, who sat behind Mr. Obama, had said after a meeting of his caucus on Tuesday that he expected the president’s speech to be “a rerun of what we have seen before.”

Some of the themes in the speech were personified in the guests the White House invited to sit in Michelle Obama’s box seats. Among them was Debbie Bosanek, the secretary to Warren E. Buffett, a poster child for Mr. Obama’s thesis that it is unfair to tax an ordinary worker at higher effective rates than her billionaire boss. Alongside her were arrayed extraordinary and ordinary people drawn from commerce, education, technology, politics, the military and the struggling working class.

As if in mirror image, Mr. Boehner announced that he would offer his box seats across the cavernous House chamber to a group of energy business managers whose enterprises are being hurt by the Obama administration’s refusal to approve the cross-country Keystone XL pipeline.

For all its ceremonial staging, this was also a political prize fight.

“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,” Mr. Obama said.

“What’s at stake are not Democratic values or Republican values,” he said, “but American values.” But the differences between the parties are in fact as sharp as ever, especially on the subject of taxes, where his proposals — the latest formulation of a policy that would limit tax breaks for millionaires without raising taxes on the less wealthy — run directly counter to those of the Republicans.

And if both sides agree, for example, that American reserves of natural gas should be exploited, there is much less agreement on how the nation’s fossil fuels should be developed and transported, or about how alternative forms of energy should be encouraged. Mr. Obama said he was directing the opening up of additional offshore oil and gas resources, and noted that oil production has reached an eight year high, just as prices have risen.

But he said that subsidies for fossil fuel production are no longer needed, and should be shifted to solar, wind and other clean sources of energy.

Not waiting for Mr. Obama to speak, Republican leaders had responded in some detail hours before his delivery.

Mr. Romney, a leading contender for the Republican presidential nomination, said in a speech of his own on Tuesday that the president’s address was nothing but “partisan plans for his re-election campaign” and “tall tales about America.”

“President Obama has amassed an actual record of debt, decline and disappointment,” Mr. Romney said. “Instead of solving the housing crisis and getting Americans back to work, President Obama has been building a European-style welfare state.”

Source:New York Times

Mr. Boehner said, “The president’s policies have made our economy worse,” and predicted that Mr. Obama would “double down on what hasn’t worked.”