President Obama’s 2013 State of the Union Address: What You Need to Know

Alden Wicker
Posted

State of the Union Speech by ObamaFor President Obama’s fourth State of the Union address—and the first one of his second term—he laid out a long list of promises, requests and proposals to bolster the middle class.

He was under particular pressure to address the economy due to the latest jobs report, which showed that the unemployment rate had bumped up to 7.9%.

Despite this, his winning a second term was seen as a validation of his economic policy. So the president started the address by listing the economic achievements of his first term, including a healing housing market, a rebounding stock market, stronger protections for consumers (most likely referencing the busy-at-work Consumer Financial Protection Bureau), six million added jobs and a recovered auto industry.

But the president admitted that there was still much more work to do—a familiar refrain from his re-election campaign. ”It is our unfinished task to restore the basic bargain that built this country. The idea that, if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, what you look like or who you love.”

President Obama’s hour-long speech contained many bullet points—more than we can mention here. We’ve pulled out the portions that could affect your finances and the economy in the next four years and beyond.

The Sequester Is a “Really Bad Idea”

The president turned first to the impending sequester: Some $85 billion in automatic spending cuts are scheduled to take effect March 1st. They’re meant to incentivize lawmakers to come up with a deficit reduction plan, but he called them “arbitrary” and “harsh,” noting that they “would certainly slow our recovery.” A notable sound bite that political pundits remarked upon after the speech: “We can’t just cut our way to prosperity.”

RELATED: 5 Creative Debt Ceiling Solutions

His proposal: Focus on reducing government spending on Medicare through “modest reforms,” and slow healthcare cost growth—the biggest challenge to reducing the deficit—by paying for the quality of medical care instead of the amount.

“Now Is the Time for Comprehensive Tax Reform”

One thing that Democrats and Republicans can agree on is the costly complexity of our tax code—Americans clock about 6 billions hours each year tackling their taxes.

RELATED: How Attainable Is the American Dream, Really?

President Obama gave a nod to this, saying, “The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring—a tax code that ensures billionaires with high-powered accountants can’t pay a lower rate than their hard-working secretaries.” (A reference to Buffet’s proposed tax increase on the rich.) He did concede, however, that reforming the tax code wouldn’t be easy.

His proposal: Close tax loopholes for the wealthy and simplify the tax code.

  • Anne36

    constant repeating of his ideas. I have come to conclusion more schooling is not the answer. families put the child in to a pre school than into  kindergarten following 12 years of schooling and by the time a child hits 16 he or she is tired of education and decides to opt out reason so many  leave school early, the parent at thought is tired of the child and allows him or her to leave house. I no longer would pay for a child to go to college as there are very few decent colleges. Let child work and than pay for own education. This is how education is done in Europe and since Obama is following the socialism of Europe than we should do the same. Not that tI believe this way but I am so tired of lies and since so many voted for this man try his ideas as we are definitely not going to succeed with low employment, the many on government plans and socialism in the making. 

    • MJ_Brewer

      My idea of someone attending a university or college is that once they are eighteen, they should have learned they need to pay their own way into adulthood.  Those who determine it earlier than others will follow suit by acquiring scholarships throughout highschool.  Those who haven’t figured it out, can figure out how to pay for it, and those who never get it can continue working for what they get.

      And “socialism”?  Absolutely!  He made that perfectly clear in his initial running days that this is his goal.  Too many people are so accustomed to working and following orders at their jobs, they simply fall into line and do whatever someone higher up tells them to do.  THAT is the biggest issue in this country.  The reason he was re-elected?  He doesn’t ask the people what they want… he tells them what they want.

      • Jman

         I was in school for 26 years and never got burned out. I always has a drive to obtain my dream career. More schooling is needed, the more intelligent people we have out there, the better our society gets. There are a lot of amazing universities and professors out there. In order to go the university that gave me the best education in the field I wanted to work in, I had to go to college out of state because my state was landlocked and I wanted a career in marine fisheries. Unfortunately universities make students pay a much higher tuition if they are out of state than in-state, which makes no sense to me. I like Obama’s comment that there needs to be a cap on the amount that universities force students to pay in tuition because when I was attending college the rates would go up by 1,000s of dollars every year.

        I had a great college experience in the colleges I went to and the best professors and connections I could possibly get for my field, which has allowed me to get a foot in the door and work for a federal agency managing one of the most complex fisheries issues in the U.S.. If I had not gotten this college education and gone to a school of a lesser caliber there is no way I’d have a shot at being where I am today. Unfortunately, my parents weren’t able to pay for the high tuition costs, but I got federal student aid. However, as I’m trying to start my career and life I am in immense debt, which has hindered my progress in buying a house and other life expenses. People should have a right to go to college where they want for their dream career and not have to be penalized by this debt. I think Obama understands this and is trying to help people in my generation out on this. I like the idea of giving high schools more incentives to teach at a higher level with better technology too because this only leads to better education of our next generation of people.

        • Hiddenmithril

           The thing is, “more education” being an earlier start in school is not even necessarily the best thing for young children. Young children, even Kindergarten age, are not best suited to the typical public school classroom environment (esp. with the many cuts in teachers leading to larger and larger class sizes). These children need to be able to learn through play. They need to be able to be free to explore, think and play freely, and not be constantly bombarded and pressured to meet specific learning standards, which will likely happen if this plan goes through. Not to mention that it undermines the many fantastic nannies working in our country who are already having to struggle to get fair wages and to be paid legally.

          In terms of college, no, it does not make sense for everyone to go. I worked my way through college and have no debt, but I had a clear goal in mind from the outset, and realistic plans (working as a nanny, so I knew I couldn’t afford debt). If someone does not know where they want to go with their life or wants to go into a career where having a degree is not required nor very beneficial (honestly, it’s not so beneficial for me, but, like I said, I was able to get my degree debt free and it gives me more desirability and flexibility if I need to change careers), it doesn’t make sense to just go to go, and it doesn’t make sense for parents to fund education 100% because this can lead to students who are unmotivated to truly figure out what they want/need.

  • Momfirst

    In my house, the way to pay down debt starts with cutting spending.  I work full-time, with 3 kids, so an extra job as income is not a realistic idea.  I wish our government would catch on. 

    And here’s a guy with a novel approach:
    http://www.youtube.com/watch?v=PFb6NU1giRA

    I, for one, and tired of the possibility of “hurt feelings” when I speak my opinion.  Our current administration stinks and we need better alternatives.

    • MJ_Brewer

      I am a single mother of two, attending school full-time, while home schooling one of my children.  My schooling costs are atrocious!  It would be awesome to have university costs cut, rather than high schools getting bonuses for teaching our kids more.  (This, incidentally, is under the assumption less kids are planning on attending universities.)  Instead of rewarding kids for doing great, so they can continue their education, we are lowering the bar so they can cram more into their already busy schedules in high school.  Messed up!

      • Tiffany

        Universities are almost as bad as the government as a whole, in terms of wasteful spending. I went to a state school and they had a botanical garden on campus and threw millions into the football program, including a special dining hall and special tutors for the players; they pay the same tuition (probably less with football scholarships) as the rest of us and they get gourmet food cooked for them and special treatment in class, and it’s all on on our dime? What a joke. I’ll bet most of us here on Learnvest could walk into any university and make some huge cuts to spending and decrease tuition rates by 50% without breaking a sweat. :)

        • Brenda

          I can’t be positive, but I would bet that a majority of the funds for the special athlete dining hall, tutors, scholarships and the new botanical gardens primarily come from donations to your univerisity specifically earmarked by the donors to go those programs, not from your dime.  Likely, your dime goes to paying the faculty/staff, lab equipment, heating/cooling, classroom upkeep, etc.  I work at a major US university and know that student tuition here only covers about 1/2 – 1/3 of what it actually costs to educate students.  Price tends to vary depending on the major, science and engineering classes vs. liberal arts (labs and special equipment are more costly).
          Unfortunately, more and more state schools are depending heavily on donations because state and federal funding is being cut dramatically.  Those schools with successful athletic programs are going to try to capitalize on them as much as possible because their success will attract more donors.  The more athletic scholarships your school can provide, the more it frees up the university’s unrestricted funds.  And (hopefully) they’ll use those to fund more need based scholarships or whatever else is a priority (of which a botanical garden probably isn’t).  I’m not saying it’s the best way to do things, but it’s a basic reality of college/ university funding at the moment.

    • Tiffany

      I agree; Obama says “We can’t just cut our way to prosperity.” Why not? The alternative, spending our way to prosperity, is what’s gotten us into this mess. The disturbing amount of debt from our government is going to continue to grow until the country completely collapses if this doesn’t stop. I can’t believe we’ve let it get this bad already, honestly. They need to send in someone who has some common sense to deal with the excessive government spending and our country’s debt.

      • Amanda

        If the government cuts too much spending then the economy will tank even more.  They need to cut spending on salaries and benefits to politicians.  Also, I would love to see welfare and disability reformed, but that will never happen.

  • Guest

    When the leader speaks, the desperate followers listen. Please bear in mind that the middle class is rated at about $166,000/year and low-income is $14,500/year. His big plan is to create manufacturing jobs? (This will make the low income work four jobs, instead of the usual three, instead of making it possible for them to attend universities to learn a real position.)

    • Lane

       As someone who is college educated, but works in an area hard hit by the loss of manufacturing jobs, I can attest to the fact that a renewed focus  on manufacturing would be a good thing for a lot of cities. Manufacturing jobs pay very well ( you don’t need three jobs)  and they are stable, blue collar jobs. Why should everyone fork out an arm and a leg to go to college if that’s not what they want to do? I’m sure you don’t complain when you’re using a car or other device or technology…somebody somewhere had to make it…it might as well be here.  And no, I’m not a democrat. Just a sensible person.

      • SJLA

        I agree. We don’t need to force everyone into an increasingly expensive and dysfunctional university system when we have more need than ever for jobs that will make America more self-sufficient, and manufacturing is not necessarily a low-skill set of jobs. There is a middle ground between educated positions and entry-level/unskilled work that we used to respect as “skilled tradesmen”. I think there has been an unfair marginalization of these artisans and technical workers. We should have a lot of respect for people who actually have job skills when they leave trade school – electrical engineers, metalworkers, etc, all could be called manufacturing.

  • Steve Booth

    I have a problem with the President stating that we need to move away from an Oil-Based economy. While I understand the desire to do so, from a practical point of view, it is a non-starter. The president is very fortunate that the fracking technology was developed. If that had not happened, we would be in much worse shape.

    The problem here, is that the president’s answer is non-renewable technologies which are Solar, Wind and Hydro (with some other oddities such as geo-thermo and bio-mass). All have significant physical (and cost) limitations which restrict their widespread implementation. A Wind Generator has at most 1/2 the expected lifespan of a power plant and costs twice as much on a per megawatt basis. And you are limited to where you can put them. With Respect to Solar, it’s not efficient enough up here in Wisconsin.

    Coal is inexpensive. Other technologies are not. A wholesale mandated moving to these alternative technologies will result in the Electric utilities having to raise their electric rates which will impact business’ cost of goods which will impact the price that the consumer has to pay.

    Whether you want to characterize big companies as “robber barons” or not, the bottom line is that somebody is going to have to pay for this stuff and it’s going to end up being all of us.

    • Jman

      Wind, solar, and hydro (however I would consider hydro non-renewable if climate change continues in some areas esp. California) are considered renewable energy sources. Coal and fossil fuels are non-renewable (meaning they take thousands of years or more to replenish).

      The use of them also creates health hazards such as high rates of asthma/lung disease/ etc. in areas where there are coal burning plants (I’m originally from one and I have developed chronic asthma). Also, look at the many oil spill accidents that have occurred in relation to drilling over the years, it practically decimated the fisheries of the Gulf a few years ago, and it has still struggled to regroup.  At our world’s population growth rate we can’t all continue to use non-renewable energy. I like the president’s focus on new technology, sustainable energy, and better infrastructure, and his acknowledgement that scientists have been correct in modeling climate change events (just look at the extreme weather happening and the overwhelming evidence of sea level rise). He is the first president to mention these things and I think it is a sstep in the right direction for our country. I’m not as fond of fracking because of the damage it has done to local water supplies where it is done. There needs to be more review of that practice.

      However, Obama inherited a terrible economy and the passing of important laws for our country has been slowed by the opposing party. So, we really haven’t been able to see everything that his administration has laid out in his first term and won’t until the other party can agree instead of dragging everyone into the ground by not acting on these new law proposals and stalling the budget talks. I think he has done a great job in trying to implement new ideas and reform laws that and policies that are failing in this new world we live in. Let’s face it we are in a time of action and unprecedented pressure to solve major issues in our country.

      • Jill T.

        You say he inherited a terrible economy, yet, he had no problem adding to the bad economy by adding 15 trillion in debt..  You also take of solar, etc. energies; these are not cost effective and how many solar plants or solar product makers have gotten sweetheart deals and gone belly up.  If the persons who think this is such a great investment, they should be investing their funds including retirement to make it possible, meanwhile, I will spend my money more productively!

        • Jman

          Well, it didn’t help that his laws weren’t completely put into effect until a few years after he took office and many of them stalled or were changed to please the Repub. house, which Bush never had any issues with this. So the years of mistakes before from 200-2008 were still showing up in our economy and we were still cleaning up the mess from the unneeded war we started in Iraq. The economy can’t be revived overnight, it takes changes and laws to be passed to to make an effect.

          In the long run alternative sustainable energy technology costs less money and we don’t have to destroy our environment. I don’t know what you think, but without the environment and natural processes we wouldn’t have oil or gas. Without the environment we wouldn’t have an economy period, there is no disputing that. So, I say lets start using new technology and get away from 50 to 100 year old technology that is inefficient and catch up to countries like Singapore and Japan who already do so and are whooping us in the use of these technologies.

          Also, have you heard of subsidence in the Gulf of Mexico in Lousiana wetlands, it is happening at a much faster rate because the protective shoreline wetlands are sinking from all of the oil and fossil fuels being drilled into and sucked out of the ground. I’m okay with having some oil production, but we don’t need to do any more exploration in the Gulf and we can certainly use less by switiching to new energy technologies. I also am not a fan of paying higher and higher oil prices, which seem to be dictated by the most random reasonings or for greed, which is why I will be buying a hybrid or electric car soon ( you get a rebate for that in some states and it costs less money in the long run). I agree we should still invest in retirement funding too, but to get away from technology and efficiency is idiotic. Solar energy is becoming more and more cost effective and not all of the companies are going belly-up like you say in fact the centers of this technology boom in CA, Research Traingle Park in Raleight, NC, and the DC area are bringing in more people and jobs for those places than ever before. I’d much rather train people to be innovators in new energy technology than working in a coal mine.

          • Rob Drury

            Wow; this would be funny if it weren’t so sad.  

  • http://twitter.com/kgal1298 Suspicious ^^^

    I don’t know why everyone places opinions in the pot, but as someone whose obviously still young I will say this I think that education should include financial teaching before college. If I would have had better lessons and a better sense of how much bad credit would hurt me I wouldn’t have nearly accumulated the debt I did granted my debt is still under 100K, but it’s still a lot. I meet people whose parents taught them good finance, but some parents are just as bad at finance as the next generation or those parents didn’t go to college so they don’t understand the cost. If you offered education reform that actually does teach students things instead of allowing tenure for horrible teachers (as was the case with my high school) then I feel like I would not had made the mistakes I did. Granted my own will and passion lead me to the path of taking control of my finances I still don’t see this as being black and white. So many people taught socialism…do you understand our government? Do you understand socialism? Stop using terms you can’t justify. We have a system of checks and balances the corruption in government comes from special interest why else do you think laws are created? Did you notice people in office can still trade stock? It’s a huge problem and many regular citizens pay the price. So when you ask about the tax cuts or the corporate spending in this country why not look at the interest of your politicians you elect? That makes more sense then sitting here trying to blame it on one thing or another when we allowed ourselves to become a country controlled by corporation. The fact is in life we create our own paths and at the end we can blame ourselves…I know some people can blame other things like horrible health and what not and falling on bad times, but for a majority that’s really not the case. Anyway I guess we have 4 years to see what will be done now and 10 till we see what was done will effect us. 

  • Schmidt Katrina

    Its good to see that many people are finally catching on to all of the President’s BS.  All this administration is going to do is raise our debt, and turn the middle and lower classes into debt slaves. We need drastic changes, and I’m glad that people are finally starting to get their heads out of the sand, because Obama’s plans have NOT been working.  They are only making things worse.  The government should take a tip from Learnvest and cut their spending, while sticking to a solid, realistic budget. Our government wastes SO MUCH MONEY on unnecessary things. If something doesn’t change quick, I forsee an overall economic collapse.  Then things are going to get REALLY ugly.  

  • http://profile.yahoo.com/K4HUERIGIDKRCDQQM2SVQYQBIU Dee

    What in the heck does Obama not see? Reducing government spending thru Medicare??  Why not cut the “nonsense”  that the government themselves spend????  I see red whenever I hear his voice..

  • C.

    It seems like most everyone commenting is complaining about what Obama is doing, and throwing out generalities.  I think Obama is doing what he can for the people (and isn’t all about the money, like so many politicians and businesses), and no it’s not perfect, but it gets tiresome to hear complaining without giving possible solutions.  Be part of the solution.  All this complaining and fighting is getting us nowhere.

    • Jill T

      Term limits, no pay raises for politicians, same insurance for politicians as constituents (that would dissolve Obamcare), cut the staff,  no PAC’s  or Lobby’s (that will never happen), their wage should be no more tha $60K a year and if they have book monies or make in the millions, they don’t need a paycheck, cut down on expenses or have the state they are from incur costs(they spend way toio much of our money).  We could also give so much for travel, etc.,when it’s gone no more spending.  No more executive orders either, everything is voted on, it is President not His Imperial Majesty!

      • Jab30

        Athletes get paid way more than presidents.

    • Rob Drury

      Agreed!  All of this fighting is helping BO succeed in his goal; to tear down the fabric of this nation.  

  • Janetsd14

    Raising the minimum wage isnt’t the answer either. We own a small business–restaurant franchise. My husband starts them out at minimum and raises wages based on performance. With a $9.00 minimum we may as well close the doors. Most of our employees are part time. Food and labor costs keep rising but our bottom line keep going up. As we are franchise, we have to
    run the deals that are advertised. 

    • guest

      I  am not sure if this is everywhere but where I live restaurants can start servers on as little as 2.65 an hour plus tips so there the 9.00 doesn’t affect the business and if it is a small business there shouldn’t be that many employees that are not servers. My last job as a server we had 13 servers rotated  out and like 4 guys in the kitchen. The kitchen crew made like 9.00 starting then and were bumped as they were cross trained.  The hostess/ host made minimum wage which was 5.50. 

  • Rob Drury

    OMG!  This article appears to be implying that Obama has ANYTHING whatsoever to do with anything positive in our economy.  If you expect to be taken seriously as a financial resource, you’re going to have to correct this!