“An economy built to last, where hard work pays off”
President Obama delivers State of the Union Speech in 2012
Printer-friendly versionPDF version
a a
Type Size: Small
The Fiscal Times
January 25, 2012

President Obama last night offered a Clintonesque State of the Union address, calling for economic fairness to fire up his political base.  He gave short shrift to the issues that have animated his virulent Republican opposition over the past three years – the desire to dramatically shrink government and rein in the nation’s still-rising national debt.

Even as he tried to reassure his base that the fighting Obama of 2008 was back – his 65-minute speech was interrupted over 75 times by House and Senate Democrats – he sought to reassure middle-of-the-road Americans that his stewardship of an economy ravaged by the worst downturn since the Great Depression is finally bearing fruit. Seizing on recent signs that the economy has finally turned a corner, the president offered a variety of programs to water those green shoots and said – as he has in previous budget proposals without success – that he will tax the rich to help pay for them.

Obama proposed a change in the tax code so that those who make more than  $1 million a year pay a tax rate of at least 30 percent and  forgo a series of  deductions he said they do not need. His proposal comes amid a controversy over the fact that Republican presidential candidate Mitt Romney, a wealthy former businessman and governor, pays only a 14 to 15 percent tax rate on his income.

The State of the Union address to a joint session of Congress was a particularly fitting way to launch the theme that Americans will no doubt hear over and over again on the campaign trail – that his efforts to restart the economy have been plagued by a highly partisan and do-nothing Congress. “As long as I’m President, I will work with anyone in this chamber to build on this momentum,” he said. “But 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.” 

Obama’s failure to devote more than a few passing lines to the nation’s $15 trillion debt was seized on by Indiana Gov. Mitch Daniels, who delivered the Republican rejoinder. “No nation, no entity, large or small, public or private, can survive intact with debts as huge as ours,” he said. “The president . . . sincerely seems to believe we can build a middle class society by creating government jobs with borrowed dollars.”

But the only public sector job creation mentioned in the president’s speech involved rebuilding the nation’s infrastructure and devoting more money to scientific research, efforts that usually win bipartisan support. To spur on the creation of new jobs, Obama focused on tax breaks for manufacturers, technology companies, and small business, which will be paid for by repealing other business tax breaks; a mortgage refinance program for troubled homeowners; mandatory schooling until age 18 or high school graduation; and reform of the nation’s community colleges, among other small-bore programs.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.