Obama says 'shadow of crisis' has passed
Washington — President Barack Obama declared Tuesday night that the "shadow of crisis" has passed America and urged Congress to build on economic gains by raising taxes on the nation's wealthiest to pay for reductions for the middle class — an agenda more likely to antagonize the new Republican majority than win its approval.
In a shift from State of the Union tradition, Obama's address to a joint session of Congress was less a laundry list of new proposals and more an attempt to sell a story of national economic revival. He appealed for "better politics" in Washington and pledged to work with Republicans, even while touting bread-and-butter Democratic economic proposals and vowing to veto GOP efforts to dismantle his signature achievements.
Obama cited the auto industry in his campaign to help create additional jobs. And he hailed tougher fuel efficiency standards and low gas prices, saying the average American would save $750 this year at the pump.
In Michigan and elsewhere in recent weeks, the president touted the return of the U.S. auto industry and his administration's role in the industry bailout. Yet the only American carbuilder he mentioned by name was Tesla — not one of the Detroit Three automakers.
"We need the new economy to keep churning out high-wage jobs for our workers to fill," Obama said. "Our manufacturers have added almost 800,000 new jobs. Some of our bedrock sectors, like our auto industry, are booming. But there are also millions of Americans who work in jobs that didn't even exist 10 or 20 years ago — jobs at companies like Google, and eBay, and Tesla."
Obama said he'll veto any bill sent to his desk that would "put the security of families at risk by taking away their health insurance or unraveling the new rules on Wall Street or refighting past battles on immigration when we've got a system to fix."
The president sought out more common ground on foreign policy, pledging to work with Congress on a new authorization for military action against the Islamic State group in Iraq and Syria, as well as legislation to guard against cyberattacks. In a rare move away from his own party, Obama also renewed his call for fast-tracking free trade agreements with Asia and Europe, generating more applause from pro-trade Republicans than skeptical Democrats.
Obama's address marked the first time in his presidency that he stood before a Republican-controlled Congress. Yet the shift in the political landscape has also been accompanied by a burst of economic growth and hiring, as well as a slight increase in Obama's once sagging approval ratings — leaving the White House to see little incentive in curtailing or even tweaking its agenda in response to the Republicans' midterm election victories.
After ticking through signs of the rising economy, the president turned toward Republicans sitting in the chamber and said with a wink, "This is good news, people."
The centerpiece of Obama's economic proposals marked a shift away from the focus on austerity and deficit reduction that has dominated his fiscal fights with Republicans. In a direct challenge to GOP economic ideology, Obama called for increasing the capital gains rate on couples making more than $500,000 annually, to 28 percent.
The president's tax plan would also require estates to pay capital gains taxes on securities at the time they're inherited and slap a fee on the roughly 100 U.S. financial firms with assets of more than $50 billion.
Much of the $320 billion in new taxes and fees would be used for measures aimed at helping the middle class, including a $500 tax credit for some families with two spouses working, expansion of the child care tax credit and a $60 billion program to make community college free.
"Will we accept an economy where only a few of us do spectacularly well?" Obama asked. "Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?"
Sen. Gary Peters, D-Bloomfield Township, who took office this month, said that while the nation's economy has made "great strides toward recovery" under Obama, "we must keep working to ensure that middle class families, and those aspiring to get there, are also benefiting from our economic recovery.
"Many middle class families feel squeezed, and are finding it harder to feel like they are getting ahead. Improving the child care tax credit, expanding paid family leave and making home ownership more affordable are all positive steps that will help boost middle class families. Congress and the President must work together to focus on creating jobs, growing the economy and strengthening the middle class so that America is truly a country where if you work hard and play by the rules, you can build a better life for yourself and your family.
Sen. Debbie Stabenow, D-Lansing and Michigan's senior senator, praised the speech. "Our economy is growing at the fastest rate in over two decades, thanks to an American auto industry that has rebounded and a resurgent American manufacturing industry that is creating new, innovative jobs every day. The most important priority is to make sure everyone who wants and needs a good paying job, gets a job," she said. Obama, she said, laid out a clear plan "to keep our country moving forward by investing in the very people who helped to build it — America's middle class."
But even before the president's address, Republicans were balking at his proposals and painting a far less rosy picture of the economy.
"We see our neighbors agonize over stagnant wages and lost jobs. We see the hurt caused by canceled health care plans and higher monthly insurance bills," said Iowa Sen. Joni Ernst, who delivered the Republican response. "But when we demanded solutions, too often Washington responded with the same stale mindset that led to failed policies like Obamacare. It's a mindset that gave us political talking points, not serious solutions."
With an eye on a swirl of foreign policy challenges, Obama defended his decision to return to military action in Iraq and also authorize airstrikes in Syria. He said Congress could "show the world that we are united in this mission" by passing a new resolution formally authorizing the use of force against the Islamic State group.
Detroit News Staff Writer David Shepardson contributed.