State of the Union: Obama pledges to make America 'fairer' with more taxes on the rich
PRESIDENT Barack Obama laid out a blueprint for a "fairer America" in his annual State of the Union speech last night, pledging to make millionaires pay higher taxes and setting out his stall for one of the most divisive US elections in living memory.
In an intensely political and populist speech, Mr Obama contrasted his vision for an America “where everybody gets a fair shot” with a country run for the benefit of a monied elite, drawing the key battle-lines with his Republican opponents this November.
Focusing on economic issues, Mr Obama set the scene for an election that will be fought over jobs and restoring the national finances, with US unemployment still running at 8.5 per cent and a soaring $15 trillion national debt that continues to rise.
Mr Obama pledged to increase spending on education, infrastructure and job creation and help pay for it by asking millionaires to pay at least 30 per cent in taxes.
The call to increase taxes on the rich came hours after Mitt Romney, the multi-millionaire Republican presidential hopeful, released tax returns showing that he paid just 14 per cent on earnings of more than $21m (€16m).
Citing the example of Warren Buffett, the billionaire investor who admitted last year that he paid lower tax rates than his secretary, Mr Obama called on Washington to “stop subsidising millionaires” and rescind a trillion dollars of tax breaks for the wealthiest 2 per cent.
“You can call this class warfare all you want,” he said, as Mr Buffett’s secretary looked on from the box of the First Lady Michelle Obama, “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”
Mr Obama attacked the “reckless” and “bad” behaviour of the banks that had caused the financial crisis and left millions of innocent Americans “holding the bag”, urging Congress to invest in rejuvenating America’s industry and infrastructure.
“Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that does the same. It's time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody,” he said.
After a year in which bitter ideological divisions between Democrats and Republicans have paralysed the US Congress, Mr Obama said it was little wonder that most American’s were cynical about politics and considered “Washington is broken”.
He cited the teamwork shown by the Navy SEALS that had captured and killed Osama bin Laden in Pakistan last year, and urged both parties in Congress to stop their “perpetual campaign of mutual destruction” and build consensus around common sense ideas.
“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
Today, in what is widely seen as the de facto start of his election campaign, Mr Obama will embark on a three-day tour of five key ‘swing’ states, including Iowa, Nevada and Arizona where pollsters say that the outcome of November’s elections will very likely be determined.
A new poll released on the eve of the speech by ABC News/Washington Post showed Mr Obama’s approval rating up by five points this month to 53 per cent as US unemployment continued to fall.
In a sign of the bitter debates to come, the Republican Party accused Mr Obama of presiding over an “explosion” of government spending and seeking to divide America at a time when tough measures to curb spending and stimulate real economic activity were most needed.
“No feature of the Obama Presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others,” said Gov. Mitch Daniels of Indiana, a middle-ground Republican who many in his party had hoped would run for the presidency.
Far from helping the middle class, Mr Daniels said that Mr Obama’s “grand experiment in trickle-down government” had failed, stifling the true potential of American entrepreneurs.
“A government as big and bossy as this one is maintained on the backs of the middle class, and those who hope to join it,” he added as he delivered his party's official response.
Earlier on Tuesday, Mr Romney, the long-term national front-runner for the Republican nomination to face Mr Obama, promised to lead America down a very different road if he was elected in November.
“This election is a choice between two very different destinies,” he said in a major speech delivered on the primary campaign trail in Tampa, Florida.
“This President puts his faith in government. We put our faith in the American people. Ours is the party of free enterprise, free markets, and consumer choice. …He leads the party of big government. He believes in ever-expanding entitlement. He’s wrong. We’re right.”