State of the Union: Obama proposals show president on ‘offense’ despite GOP …
From calls for more infrastructure spending to a free community college push to another tax hike scheme, the highlight reel from President Obama’s looming State of the Union address shows him charging into his final two years in office with little heed for the results of the midterms.
The Republican takeover of the Senate last November — and the party’s historic gains in the House — for a short time fueled speculation that the president might entertain
But within weeks, the president announced sweeping changes to immigration policy via executive action. Then, he vowed to veto a slew of bills from the new Congress, including one to undo those executive actions. And now, his State of the Union address leaves little doubt that Obama, as he told Senate Democrats last week, plans to play “offense” against the GOP-led Congress.
The latest plank of his 2015 agenda was unveiled Saturday night, and calls for more than $300 billion in new tax increases over the next 10 years, to pay for middle class tax credits and his community college plan, among other programs.
Already, Republicans are describing the plan as a “non-starter” with the new Congress.
“More Washington tax hikes and spending is the same, old top-down approach we’ve come to expect from President Obama that hasn’t worked,” Michel Steel, spokesman for House Speaker John Boehner, R-Ohio, said.
Don Stewart, deputy chief of staff for Senate Majority Leader Mitch McConnell, R-Ky., ripped the president’s plan and renewed calls to overhaul to whole tax system. “Republicans believe we should simplify America’s outdated tax code; that tax filing should be easier for you, not just those with fancy accountants; and that tax reform should create jobs for families, not the IRS,” he said in a statement.
The president, unlike past years, has previewed many elements of his State of the Union address in the run-up to the speech. Some, like the tax plan, have already attracted Republican ire.
Tax hikes, to pay for tax cuts: The centerpiece of the president’s tax proposal is an increase in the capital gains rate on couples making more than $500,000 per year to 28 percent, the same level as under President Ronald Reagan. The top capital gains rate has already been raised from 15 percent to 23.8 percent during Obama’s presidency.
Obama also wants to close what the administration is calling the “trust fund loophole,” a change that would require estates to pay capital gains taxes on securities at the time they’re inherited. Officials said the overwhelming impact of the change would be on the top 1 percent of income earners.
Administration officials pointed to a third proposal from the president as one they hope Republicans would support: a fee on the roughly 100 U.S. financial firms with assets of more than $50 billion. Raising the capital gains rate, ending the inheritance loophole and tacking a fee on financial firms would generate $320 billion in revenue over a decade, according to administration estimates.
Obama wants to put the bulk of that money into a series of measures aimed at helping middle-class Americans. This would include expanding the child care tax credit, offering up to $3,000 per child for families making up to $120,000 a year. And it would include a new $500 credit to “second earners” in a family, to help a spouse pay for additional costs entailed when both spouses work — like child care.
Free community college: The president wants to offer two years of free community college to students who can keep a 2.5 GPA. The White House estimates the program would cost the federal government roughly $60 billion over 10 years.
The White House wants the federal government covering three-quarters of tuition costs, and states picking up the rest.
Workplace leave: Obama is urging Congress and local governments to back measures allowing workers to earn up to a week of paid sick time a year. As part of this effort, he wants Congress to approve more than $2 billion in new spending to encourage states to create paid family and medical leave programs.
In addition, Obama will take steps to provide federal employees with up to six weeks of paid sick leave to care for a new child. And he’ll propose that Congress pass legislation to give federal workers an additional six weeks of paid parental leave.
Infrastructure: The administration is proposing to create a new municipal bond for public-private partnerships.
A new Water Finance Center at the Environmental Protection Agency also will work with state and local governments, utilities and the private sector to use federal grants to leverage private capital to address more than $600 billion in needs for drinking water and wastewater management.
Housing help: Obama earlier this month announced plans the White House says could save homeowners $900 a year. Under the plan, at the end of this month, the Federal Housing Administration mortgage premium will drop from 1.35 percent to 0.85 percent. In addition to the 250,000 new homebuyers the White House hopes to attract — a figure that marks a modest increase in sales — administration officials said the rate cut would help 800,000 homeowners who refinance their mortgages.
The Associated Press contributed to this report.