Obama Pushes Tax Plan to Give His Party, and His Legacy, a Lift

19 Jan 2015 | Author: | No comments yet »

2 Coloradans To Be White House Guests At State Of The Union.

President Barack Obama takes the dais in the House of Representatives on Tuesday to tell a joint session of Congress, Cabinet members, judicial and military dignitaries and a national television audience about his plans for the coming year. The White House on Monday announced that 27-year-old medical student William Elder, Jr., of Englewood will sit in the first lady’s box during Tuesday night’s speech.WASHINGTON — An enduring tradition of the State of the Union is the long list of special guests who sit with the First Lady during the speech — and this year is no different, with Colorado twice represented.WASHINGTON — Republican lawmakers are already signaling they will do what they can to block President Barack Obama’s pitch for tax increases on the wealthiest Americans.

During the address, these folks often are tagged by the president as either stars from the past year or examples of a policy the commander-in-chief wants to highlight. Others invited to watch the annual presidential speech to Congress from the First Lady’s box Tuesday night include an astronaut, a 13-year-old boy from the South Side of Chicago and an army veteran who lost both legs in Afghanistan. Obama is making that pitch to a huge television audience in hopes of putting the new Republican Congress in the position of defending top income earners over the middle class. If the president and his administration don’t have to do their duty in standing with France against terrorism committed by radical Islamists, then the rest of us don’t have to tune in tomorrow for the yearly lecture on how the country is doing so well and how Obama is going to make things even better with more of his socialist policies.

It’s a bit of stagecraft that dates back to Ronald Reagan and the oratory tool has been successful enough that each president since Reagan has kept it alive. Alan Gross, alongside his wife Judy, speaks at a press conference after being released by Cuba on December 17, 2014 in Washington ©Saul Loeb (AFP/File) Gross, who was freed December 17 as part of the deal, spent five years in Cuban jails for distributing laptops and communications equipment to the island’s small Jewish community as a subcontractor for the US Agency for International Development. That’s because while he was able to check off most of what he promised to do through executive action in last year’s speech, Obama was unable in the bitterly partisan election year to get Congress to go along with the bigger plans he had for the country that required their approval. Here’s a brief explanation of what was originally known as the president’s Annual Message to Congress: Beginning with Thomas Jefferson, who rejected the ceremonial speech in 1801, presidents for more than a century gave their messages not in person but in writing.

Others on the list are ordinary Americans who exemplify aspects of the administration’s programs — a community college student, an auto worker, a woman who trained to be a construction worker, a small business owner, a college student brought to the United States as a child by her undocumented parents. But Obama’s new tax plan takes a more targeted approach: He wants to raise taxes on the richest Americans’ inherited wealth, not income, to help the middle-class build their own wealth. As Obama prepares to make that annual trek up Pennsylvania Avenue to address Congress once again, here’s a look back a year later at five of the promises he made — and which got fulfilled and denied. “Let’s get immigration reform done this year,” Obama declared to a Congress that had long blocked his efforts.

From expanded health coverage to broadening a tax credit for workers, the president also wants to put more money in the pockets of lower-income earners. He would raise the capital gains tax for those with incomes above $500,000 from 23.8% to 28% and eliminate a loophole used by a handful of wealthy individuals – including Mitt Romney – to turn tax-preferred retirement plans into tax shelters. Instead, Obama took executive action to make more than 4 million of those immigrants eligible for protection from deportation and eligible for work permits. His plans face opposition from the Republican-run Congress, which wants to cut taxes and spending. “Now that the economy’s in a stronger place than it’s been in a very long time, we need to double down on our efforts to deal with wage stagnation and declining economic mobility,” Dan Pfeiffer, a senior adviser to Obama, said Sunday on CBS’s “Face the Nation” program. “In divided government, each side should lay out their agenda, what they think is in the best interest of the country.

In her note, she also mentioned that she looked forward to benefiting from the Affordable Care Act, and currently she and her husband, David, are enrolled in the Colorado state exchange. Also on the guest list is astronaut Scott Kelly, who will launch in March to the International Space Station, on a mission to become the first American to spend a year living and working on the orbiting platform. Republican Senator Marco Rubio, meanwhile, said he had invited Rosa Maria Paya, the daughter of a Cuban dissident Oswaldo Paya who was killed in a 2012 car crash in Cuba to be his guest at the speech. “While I disagree with the president’s new Cuba policy, I hope Rosa Maria Paya’s presence on Tuesday night will at least remind him that her father’s murderers have not been brought to justice, and that the US is now, in fact, sitting at the table with them,” Rubio said.

But he said on ABC’s “This Week” that the president has fallen short by failing to establish close ties to Congress. “Slapping American small businesses, savers and investors with more tax hikes only negates the benefits of the tax policies that have been successful in helping to expand the economy, promote savings and create jobs,” Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee, said in a weekend statement. “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,” said Michael Steel, a spokesman for House Speaker John Boehner. But as has been widely documented, the growing wealth gap and stagnant middle-class incomes remain persistent national challenges, which in turn leads Obama to this next phase of his economic platform – ensuring prosperity that’s more broadly shared.

Despite what Jimmy Carter said about Obama being too busy catching up from his vacation, the president let us all know that football is more important than standing united against terrorism. For years, Obama has been asking Congress to encourage more Americans to grow a retirement nest egg by allowing all workers to be automatically enrolled in IRAs unless they specifically opt out. Roosevelt, with World War II looming, used his 1941 address to outline the “Four Freedoms” — freedom of speech, freedom of worship, freedom from want and freedom from fear.

While workers at the bottom have been aided by government transfer payments, the picture is grim: Transfers boosted after-tax 2011 income for the bottom fifth from $15,500 — based solely on earnings from work — to $24,100, according to a November 2014 Congressional Budget Office analysis that uses different data than the Census report. The safety net stabilized income in the 2007-2009 recession and its aftermath, said Richard Reeves, a senior fellow at the Brookings Institution in Washington. Bill was diagnosed with cystic fibrosis when he was eight years old, at a time when most cystic fibrosis patients were only expected to live to early adulthood. While most policies were in effect when Obama entered office, his economic-stimulus plan — which included initiatives such as an expansion of a refundable tax credit — helped keep households afloat, Reeves said. But thanks to a unique collaboration between the Cystic Fibrosis Foundation, patients, researchers, and a pharmaceutical company, Bill, now 27, expects to live a long, full life.

While most of Obama’s proposals last year were positions he had long advocated, one of the few new proposals he offered was extension of the earned-income tax credit, which helps boost the wages of low-income families through tax refunds. Transfer payments don’t have the same quality-of-life value as earning money from work, said Mark Calabria, director of financial-regulation studies at the Cato Institute in Washington and a former Republican Senate aide. Obama wanted it broadened to provide more help to workers without children, a view embraced by some Republicans and conservative economists. “Let’s work together to strengthen the credit, reward work, and help more Americans get ahead,” Obama said optimistically — too optimistically, it turned out. Amid low wage growth, he said, “the bottom fifth has not done well.” “Our job now is to make sure that every American feels that they’re a part of our country’s comeback,” he said in his Jan. 17 weekly radio address. The plan ignores income taxes and envisions tax reforms that target specific kinds of wealth, raising top long-term capital gains and creating a tax on large banks’ borrowing.

And it has seen presidents make proposals that never happen, such as Ronald Reagan’s call for a missile defense shield to protect against nuclear attack or Obama’s vision of 1 million electric cars on U.S. roads by this year. Bill’s story is a testament to the promise of precision medicine, an emerging approach to treatment that takes into account patients’ individual characteristics, such as their genetic make-up, to improve treatment. Obama said the goal of his energy policy is to create jobs and a cleaner planet and announced that he wanted to set higher fuel economy standards for trucks. Or put another way, President Obama has apparently decided the deficit has already shrunk, and unemployment has already fallen, and it’s time to start addressing income inequalities in a more direct way.

The process for making the change is underway within the administration, with a new regulation planned to be proposed in March 2015 and finalized in March 2016. IRAs, 401(k)s, and other tax-advantaged retirement accounts are supposed to encourage people to save by offering preferential tax treatment to money placed in the accounts.

Obama’s plan would require all companies with at least 10 workers to automatically enroll their employees in an IRA program (employees could subsequently opt-out) and provide money for small businesses to defray the administrative costs. CAP, founded by Obama counselor and expected Clinton campaign chairman John Podesta, released proposals last week that it says will promote prosperity for all.

This administration isn’t new to ambitious plans to benefit the poor: The president’s health law is intended to offer low-income Americans stability through insurance. In theory, people are only allowed to contribute $5,500 per year to an IRA, so amassing that level of wealth requires either stupendous good luck or else some kind of shenanigans involving deliberate undervaluing of the assets you put in your account. Obama would also consolidate several education tax breaks into a single tax credit worth up to $2,500, and is proposing to end taxation of some student loan debt forgiven under income-based repayment plans.

That said, Obama’s proposal put Republicans in an awkward position: they have no credible ideas for improving middle-class wages; they’ll have to make the case against generous middle-class tax breaks; and the entire debate positions Democrats on the side of popular economic populism in advance of next year’s elections. Earlier this month, he announced that the Federal Housing Administration would cut its mortgage-insurance premiums by about 37 percent, enough to save most borrowers $900 a year on their loan payments.

She has gotten both a bachelor’s and a master’s degree since being laid off from her full-time position in 2009 yet only landed a part-time, $20,000 job as a community organizer in Charlotte, North Carolina. Under the plan, about 7.7 million workers would qualify for a larger credit and 5.8 million more would become newly eligible, according to an administration analysis. Obama also called on Congress to raise the minimum wage to $10.10 from $7.25, which would benefit 28 million Americans, according to the Department of Labor.

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