WASHINGTON – President Barack Obama used his State of the Union address to call on Congress to lower the corporate tax rate by closing industry-specific loopholes, find spending cuts across the government and invest more money in education, infrastructure and research. The president also called for a five-year freeze on nondefense discretionary spending.
“We need to out-innovate, out-educate and out-build the rest of the world,” Obama said. “We have to make America the best place on Earth to do business,” reported the Wall Street Journal.
In substance and tone, the president challenged the GOP to move beyond the divisive politics of the last election to ensure the country sustains its economic recovery and meets “our generation’s Sputnik moment” in the face of global competition from countries like China.
“With their votes, the American people determined that governing will not be a shared responsibility between parties,” the president said. “We will move forward together, or not at all?for the challenges we face are bigger than party, and bigger than politics.”
Republicans were underwhelmed by the president’s pledge to freeze spending for five years on a sliver of the federal budget. Nonsecurity, discretionary spending is a relatively small portion of total outlays, accounting for roughly 15 percent of the $3.5 trillion spent by the federal government last year.
“It strikes me as too little, too late,” Rep. Jeb Hensarling (R., Texas), a member of the new Republican House leadership team, said earlier Tuesday. “After this huge inflation of spending he’s willing to level-fund it. If that’s his idea of fiscal responsibility, this nation is in deep trouble.”
The president’s address marks the official beginning of the legislative calendar. It also marks the unofficial start of his own re-election effort.
The pre-speech blowback from congressional Republicans reflects the tension Mr. Obama will have to confront with a new GOP majority in the House and Democrats who may resent his move to the political center.
An early sign of that resentment was on display Tuesday afternoon. Senate Majority Leader Harry Reid (D., Nev.) called the president’s proposal to ban earmarks “a lot of pretty talk.”
“It is only giving the president more power, and he has enough power already,” Reid told reporters Tuesday as details of the speech leaked out to lawmakers on Capitol Hill. “I don’t think it’s helpful.”
As he sets the stage of his own re-election next year, Obama channeled the same post-partisan rhetoric that characterized his first run for the White House in 2008. And he drew heavily on fears that the U.S. will be supplanted by foreign competition as the foremost global power.
“At stake right now is not who wins the next election?after all, we just had an election,” he told the crowd of lawmakers and invited guests. “At stake is whether new jobs and industries take root in this country, or somewhere else.”
Interspersed between these now-familiar themes were a few policy prescriptions, like extending a tax credit in the stimulus for college tuition for families making less than $160,000 and hiring more teachers?particularly in math and science.
President Obama was applauded by Vice President Joe Biden and House Speaker John Boehner prior to delivering his State of the Union address.
Obama called for $8 billion a year in research and development on clean-energy technologies, a one-third increase, toward a goal of putting one million clean cars on the road by 2015. He also called for new standards to ensure that 80 percent of electricity comes from renewable, nuclear or so-called clean-coal energy sources by 2035.
That incentives-based approach to weaning the nation from fossil fuels marked a shift for Mr. Obama in the climate-change debate?an acknowledgment that his plans to cap carbon emissions and force polluters to purchase and trade “carbon emissions credits” was going nowhere in a Republican-controlled House and a Senate where not even 59 Democrats could pass such a plan.
The president also called for a six-year investment in road-building, a massive expansion of high-speed rail and an expansion of wireless Internet so that 95% of the country will be able to get online remotely in the next five years.
The president also sought an immediate overhaul of the tax code for businesses that won’t add to the deficit.
“Get rid of the loopholes,” he said. “Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years?without adding to the deficit.”
Those programs were being proposed to a Congress where much of the political momentum is pointed toward austerity. Before the president took to the podium, the House voted to give House Budget Committee Chairman Paul Ryan (R., Wis.) broad new powers to cut spending quickly.
“We owe you a better choice and a different vision,” Ryan was to say after the president’s address, in the Republican rebuttal. “Our forthcoming budget is our obligation to you?to show you how we intend to do things differently.”
On Wednesday, a group of Senate Republicans planned to revive a push for a constitutional amendment mandating balanced budgets, an issue little heard from since the heyday of the Republican “revolution” of 1994.
Some proposals seemed aimed at pleasing business groups. Obama promised to work with Republicans to support state efforts to rework the rules for medical-malpractice lawsuits.
He also called on Congress to approve a recently signed free-trade deal with South Korea as means to boost exports to other countries.
Underlying the entire speech were the specters of foreign competition and the tragic shooting spree in Arizona that left six dead and Rep. Gabrielle Giffords (D., Ariz.) gravely wounded.
“It’s no secret that those of us here tonight have had our differences over the last two years,” Obama said. “The debates have been contentious; we have fought fiercely for our beliefs. And that’s a good thing. That’s what a robust democracy demands. That’s what helps set us apart as a nation.
“But there’s a reason the tragedy in Tucson gave us pause,” he continued. “Amid all the noise and passions and rancor of our public debate, Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater?something more consequential than party or political preference.”
The president told the roomful of lawmakers that “we are part of the American family” and remind them that “we are still bound together as one people?that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled.”
In a nod to the revised seating arrangement in which Republicans and Democrats broke with tradition to sit together, Obama said, “What comes of this moment is up to us. What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.”
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