Barack Obama hasn’t run out of change yet. He outlined a radical agenda in his annual State of the Union address on Tuesday. He would boost taxes on millionaires, make big banks pay for mass mortgage refinancing and punish multinationals for outsourcing. As ideas, such proposals will resonate with the 99 per cent. As policies, they will mostly be blocked by Republicans in Congress.
The president began by bragging about a few key foreign policy accomplishments: Osama bin Laden is dead, and the war in Iraq is over. The rest of his speech focused on strengthening the US economy. As though responding directly to Occupy Wall Street protesters, Obama’s solutions stressed reducing income inequality.
One proposal wasn’t new. Obama called for a tax floor of at least 30 per cent for millionaires, an idea stemming from billionaire investor Warren Buffett’s complaint that his secretary pays a higher tax rate than he does. The president’s timing couldn’t have been better: his likely GOP competitor, Mitt Romney released his tax returns earlier in the day, showing a 14 per cent effective tax rate on over $21 million of income in 2010.
His progressive cannon aimed at Wall Street as well. Obama announced an initiative to investigate further the packaging of bad loans prior to the crisis. He also suggested providing all responsible homeowners the opportunity to save about $3,000 per year by refinancing their mortgage at historically low interest rates – paid for by a fee on big banks. They ought to repay a deficit of trust, Obama said.
The president offered several ways the government could spur job creation, focusing heavily on manufacturing. He wants to reward companies that bring jobs back to the United States, while creating a basic minimum tax for all multinationals. He also took a few shots at China’s trade practices.
It was a fine wish-list for liberals. But the US leader’s executive authority only allows him to make some minor tweaks. To reshape the nation’s economy, he needs the consent of Congressional Republicans, who will not be impressed. Potential laws fade to campaign talking points.