Obama State of Union Address Includes Push for Climate Change Legislation, Other Initiatives

February 13, 2013 12:37 AM
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via a special arrangement with Informa Economics, Inc.

Initiatives include raising minimum wage, boosting spending on infrastructure, confronting climate change and passing gun-control and immigration reform legislation

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The Key topics during President Barack Obama's hourlong State of the Union address were raising the minimum wage, increasing spending on infrastructure, confronting climate change and passing gun-control legislation

Reducing budget deficit. As expected, Obama again called for reducing the budget deficit through a mix of tax increases and spending cuts, saying he would support "modest reforms" in programs including Medicare, as long as wealthy Americans contribute as well. Obama called for a package of spending cuts and tax hikes to replace the $85 billion in automatic Fiscal 2013 spending cuts scheduled to begin March 1. Without a deal, Obama warned, furloughs would occur that would undermine the economic recovery, hurt military and domestic programs and “cost us hundreds of thousands of jobs.”

Tax code. Obama made clear that the tax code would be at the center of his efforts to broker deals with the GOP to tackle the deficit, spur growth and strengthen the middle class. The president underscored his interest in a corporate tax overhaul and said revenue generated by eliminating some tax breaks would permit reducing both the 35 percent top corporate income tax rate and the budget deficit. “Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit,” he said.

A statement Republicans pounced on was when President Obama said, “Nothing I’m proposing tonight should increase our deficit by a single dime. It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth,” Obama said. That observation was quickly disputed by Republican leaders in Congress.

Raising federal minimum wage. Resurrecting a favorite Democratic goal, Obama proposed raising the federal minimum wage to $9 per hour, up from $7.25 today. "It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation,'' Obama said. A minimum wage hike from $7.25 to $9 by the end of 2015 would give raises to 15 million workers, according to the White House, restoring the buying power the wage level had in 1981 and lifting many of those workers over the poverty line.

Infrastructure. Obama returned to a favorite spending push regarding infrastructure. Under a program titled “Fix it First,” Obama called for a $50 billion program but added a new twist with a call to spend most of the money to fix failing infrastructure first. His plan would target $40 billion of the new spending on urgent upgrades, such as the nation’s 70,000 structurally deficient bridges. The president said he also would propose a new “partnership to rebuild America” to attract private investment in transportation systems, power grids, and oil and gas pipelines and “to make sure taxpayers don’t shoulder the whole burden.”

“Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and Internet; high-tech schools and self-healing power grids,” the president said, saying such investments would result in new jobs.

Obama offered no comprehensive new ideas for funding transportation initiatives. In the past, he has said savings from the end of the wars in Iraq and Afghanistan should be invested in transportation infrastructure. White House officials declined to provide details on financing his proposals, other than to say that if enacted along with Obama’s plan for deficit reduction, they would be revenue neutral.

Obama’s energy proposals could impact the transportation sector. He proposed creating an Energy Security Trust that would shift drivers from oil-burning vehicles to ones using “a range of cost-effective technologies — like advanced vehicles that run on electricity, homegrown biofuels and vehicles that run on domestically-produced natural gas.”

Other energy initiatives. Obama said he would call on Congress to make renewable energy production tax credits permanent in an effort to double renewable energy generation by 2020. He also wants to create an "Energy Security Trust." The trust would paid for by revenue from oil and gas development on federal lands, including offshore production, and would fund research for clean energy technologies. The president's plan also seeks to increase energy efficiency in order to double energy productivity by 2030 through a new energy efficiency "Race to the Top."

On trade policy, the president said he would work toward a comprehensive trade agreement with the European Union, a push some observers see as an uphill battle to get concluded.

On climate change, Obama pushed for legislation, but said he would use his executive powers if Congress balked. "I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy," Obama said. The EPA is currently moving to regulate emissions for new power plants, but a similar approach is now expected for existing plants.

Obama noted that the 12 hottest years on record have come in the past 15 years, and he said the raft of extreme weather events of the past several years should not be considered a fluke. “We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence,” he said. “Or we can choose to believe in the overwhelming judgment of science — and act before it’s too late.”

Obama named specific goals, such as doubling renewable electricity generation again by 2020 and a new Race to The Top program to reward states for energy efficiency efforts.

He also said he wants Congress to pursue a bipartisan, market-based solution like the one Sen. John McCain (R-Ariz.) worked on. But the president again warned that if Congress won’t act, “I will.”

Immigration reform. Obama continued his push for a comprehensive immigration policy reform, which got a warm bipartisan response. The president's plan would likely include a measure to allow more foreign scientists and engineers to stay in the United States after completing their graduate education here. “Our economy is stronger when we harness the talents and ingenuity of striving, hopeful immigrants,” Obama said. “And real reform means fixing the legal immigration system to cut waiting periods, reduce bureaucracy and attract the highly skilled entrepreneurs and engineers that will help create jobs and grow our economy.”

On new initiatives, the president announced creation of a commission to study ways to cut wait times for those voting in elections. The new bipartisan panel will include as chairmen the former Obama White House counsel Bob Bauer and Ben Ginsberg, an attorney for Mitt Romney's presidential campaign who was on George W. Bush's election-law team during the 2000 Florida recount.

Other proposals include a push for a massive refinancing for homeowners at today’s low rates, $15 billion to rehabilitate or demolish damaged or vacant properties and the creation of 20 new “Promise Zones” for development.

President Obama's plan includes $1 billion to create 15 manufacturing institutes around the country — an idea that had members of both parties cheering — and a new “college scorecard” aimed at giving students information comparing costs and quality. Obama will use his executive authority to create three new manufacturing centers while waiting for Congress to act.

North Korea and Russia. The president referred to North Korea's latest nuclear test, saying that "provocations of the sort we saw last night will only further isolate them,'' and he promised to "lead the world in taking firm action'' that he didn't describe. He also said he would "engage Russia'' in an effort to make further reductions in nuclear stockpiles.

Afghanistan. Obama announced that 34,000 troops will leave Afghanistan by this time next year, cutting the total from just over half the current level of 66,000 troops. “This drawdown will continue. And by the end of next year, our war in Afghanistan will be over,” Obama said.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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