Last night, President Obama gave his State of the Union address, a formal check-in with the country on his goals from last year and a rundown of what he hopes to accomplish in 2012.
As you can probably guess from our get-it-done attitude toward our own goals, we like check-ins.
Most pressingly, we were eager to hear his forecast for the coming year. We want to know what the president hopes to get done during this last year of his term, how it will impact the downtrodden economy and what it will mean for our own lives.
One of President Obama’s big messages was that the defining issue of our time is how to keep the promise that, "If you worked hard, you could do well enough to raise a family, own a home, send your kids to college and put a little away for retirement."
Namely, he addressed many of the issues that we saw in the Occupy protests, like the increasing gulf between rich and poor (case in point: class mobility in the U.S. is lower than in Canada or Europe), economic inequality, unemployment, student loan burden and the fact that some of the wealthiest members of society pay less in taxes than the rest (another case in point: Warren Buffett pays a lower tax rate than his secretary).
Face-off: The Buffett Rule vs. "Go It Alone" Ideology
President Obama has been pushing this message in contrast to what he’s calling the “go it alone” ideology of Republicans, in which free markets are supposed to take care of everything without outside intervention. One of the biggest points he argued for was tax reform.
In particular, he spoke about the so-called "Buffett Rule," an offshoot from billionaire Warren Buffett's complaints that it's unfair for him to pay a lower tax rate than his secretary. For the first time, Obama attached numbers to it, saying that anyone earning $1 million or more per year shouldn't get any special subsidies and should be paying at least 30% in taxes. Of course, this statement isn't a coincidence, given recent revelations that Mitt Romney pays only about 15% in taxes on his roughly $21 million in annual income.
With the money saved by reducing tax breaks for high net worth individuals, President Obama wants to fund social programs to prop up the middle class. As he put it, "When I get a tax break I don't need, it either adds to the deficit or someone else has to make up the difference."
In particular, he framed his speech around four pillars:
- Manufacturing: This important sector has taken a major hit in the recession. President Obama is proposing tax breaks for companies that “insource” jobs back to the U.S. He also wants to see a greater dominance of U.S. exports, saying he is willing to travel all around the world to open up new markets for U.S. products. He mentioned China in the context of leveling the playing field for manufactured goods and cracking down on trade violations like selling counterfeits.
- Energy: One of Obama's big goals is to reduce U.S. dependence on foreign oil. He wants to implement an "all-out, all-of-the-above strategy" to develop every available source of American energy, from using our natural gas resources (he noted that he wants all companies that drill for gas on public lands to disclose the chemicals they use to avoid health risks) to implementing tax incentives to create jobs and new technology in the clean energy sector.
- Skills for workers: The president is proposing additional programs to improve education and job training, especially for the millions of long-term unemployed Americans. First, he wants to encourage companies to partner with training facilities to teach skills like high tech manufacturing to workers ... and then employ them. (He pointed to a cooperation between Siemens and a community college.) He also wants to improve our education system by helping schools fund great teachers, including the mission to use "creativity and passion" rather than just teach to standardized tests.
- “American values”: This is the president’s push toward equal economic opportunities for all, particularly with regard to the tax code. In a video preview before the State of the Union address, he referred to it as, “a return to American values of fairness for all and responsibility from all.” He wants to build “an economy that works for everyone, not just a wealthy few.”
Additionally, the president urged lawmakers to pass a year-long extension of the payroll tax cut—White House officials have called this a top priority for 2012.
What This Means for You
In a broad sense, this means that the government is focusing on improving the economy, stepping up job creation and funding programs for those in need by increasing taxes on the wealthy.
In a personal arena, if all of Obama’s intentions come to pass, it would mean:
- You’d feel the return of American jobs, especially in the manufacturing sector, thanks to the incentives for companies to “insource” their employees.
- You would see more infrastructure projects underway, like new roads and high speed rail (construction was one of the sectors hit hardest when the housing bubble burst).
- Your home could be powered by clean energy; Obama is directing the "development of clean energy on enough public land to power three million homes."
- Congress would pass a law requiring students to stay in high school until they graduate or turn 18, as the president argues that higher graduation rates will strengthen our workforce.
- Funding a college education would get easier: Congress would intercede to prevent student loan rates from going up, extend a tax credit for college tuition and double the number of work-study jobs in the next five years.
- States would also have to make higher education a higher priority in their budgets, and universities would have to keep costs down—universities that couldn't stop their tuition from going up would see their funding from taxpayers go down.
- If you or people you know are part of the long-term unemployed, you would see more opportunities for job training to get back on your feet. Obama has made a "commitment to train two million Americans with skills that will lead directly to a job."
- If you’re in the top tax brackets, you would experience a heavier tax burden.
- If you're a veteran, you'd notice more available jobs. Obama wants new tax credits for companies that hire vets, has pledged 135,000 jobs for vets and their families and is proposing a jobs corps for vets to put them in fields like firefighting and police work, so "American is as strong as those who defend her."
- Insider trading by members of Congress would be banned. (Here's more on this legal version of "insider trading.")
Did you watch the State of the Union? What did you think?
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