President Barack Obama offered modest steps to chip away at the country’s economic and social challenges in a State of the Union address that reflects the limits of his power to sway Congress.
Using executive authority to enact portions of an agenda that’s been stalled by Republicans, Obama said he’s raising the minimum wage to $10.10 for future federal contract workers while urging lawmakers to apply it to the rest of the nation. He also plans to create a retirement savings program for workers whose employers don’t offer a 401(k) plan.
“The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by — let alone get ahead,” Obama said, in the text released by the White House. “Our job is to reverse these trends.”
In all, the president announced a dozen actions that he said would help push against the economic forces that have left lower- and middle-income Americans still struggling to recover from the worst recession in more than seven decades. He also said he’s enlisting companies, including Apple Inc. and Verizon Communications Inc., to help solve issues from expanding broadband in schools to hiring the long-term unemployed.
Obama appealed for cooperation from the divided Congress on other priorities, including immigration, corporate taxes, trade, transportation and an expansion of the earned income tax credit to aid the working poor. He also expressed impatience.
“America does not stand still — and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do,” he said.
While foreign policy played a secondary role in this year’s annual address to Congress, Obama again said he would veto new sanctions against Iran amid negotiations over its nuclear program, and asked them to let him close the prison for suspected terrorists at Guantanamo Bay, Cuba, saying it should not outlast the end of the war in Afghanistan.
The agenda Obama laid out in his address demonstrates the shrinking of his ambitions for his sixth year in office as he confronts persistent opposition from Republicans, who control the House of Representatives. With every member of the House and a third of the Senate up for election in November, Obama has little chance of getting action on legislation that would bring about major changes in direction.
Obama focused his remarks largely on Americans aspiring to the middle class, and on outreach to business.
“After four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better,” Obama said. “But average wages have barely budged. Inequality has deepened.”
Since Obama delivered the State of the Union last year on Feb. 12, the benchmark Standard & Poor’s 500 Index has surged 18 percent, the Bloomberg Dollar Spot Index is up 2.8 percent and the U.S. economic growth rate has accelerated to 4.1 percent in the 3rd quarter from 1.1 percent. Unemployment has dropped to 6.7 percent from 7.7 percent last February.
Still, in December, the average weekly earnings of U.S. workers were flat compared to a year earlier when adjusted for inflation.
The U.S. still hasn’t replaced all of the jobs lost during the recession. Only 62.8 percent of working-age Americans are employed or actively seeking work, the lowest mark since February 1978. Almost 4 million people have been out of work for more than six months, three times the pre-recession average.
Real median household income of $51,000 is 8 percent lower than in 2007.
“Opportunity is who we are,” Obama said. “And the defining project of our generation is to restore that promise.”
In the Republican response, Rep. Cathy McMorris Rodgers said her party was offering a different vision: “One that empowers you, not the government. It’s one that champions free markets — and trusts people to make their own decisions, not a government that decides for you.”
The Washington Republican also criticizes Obama’s record on the economy and the president’s healthcare law.
The president avoided direct confrontation with Republicans on issues that hold potential for bipartisan agreement this year, including immigration and extending long-term unemployment benefits.
In the speech, Obama reprised initiatives he has failed to move through the divided Congress in prior years, and then promoted less ambitious policies he can achieve with executive action or narrower legislation.
He said he supports lowering the corporate tax rate and curtailing tax breaks, then using any one-time revenue that change generates to build bridges, transit and other infrastructure. That plan is stalled in Congress, stymied by a partisan dispute over whether wealthy individuals should pay more.
At the same time, Obama defended his signature domestic policy achievement — an expansion of health care coverage known as the Affordable Care Act, or Obamacare — against Republican calls for repeal. He used the speech to call on Americans to sign up for coverage and encourage others to sign up ahead of a March enrollment deadline.
Signaling that environmental regulation is one area where he may have more latitude to change policy through executive powers, Obama said his administration is taking additional steps on regulating fracking, raising fuel efficiency for trucks and declaring off limits some public lands even as it permits renewable energy projects.
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