Top memories from Obama’s State of the Unions

21 Jan 2015 | Author: | No comments yet »

Butler BBQ buddy to Obama to be beside First Lady at State of the Union.

WASHINGTON (Reuters) – President Barack Obama aims in Tuesday night’s State of the Union address to outline his plans to help middle class people left behind by the economic recovery through tax increases on the most wealthy and by signing trade deals to expand markets for American goods and services. The idea of raising the top capital gains and dividends tax rate to 28 percent from 23.8 percent is popular with Democrats who are looking beyond Obama’s tenure to the 2016 elections. With new polls showing his personal approval rating now touching 50 per cent, Mr Obama was expected to give little quarter to his Republican opponents who took control of both houses of the US Congress following last November’s midterm elections.

This speech will be especially telling when it comes to the president’s state of mind, and what he thinks he can accomplish in his remaining time in office. The proposal would raise the top tax rate on long-term gains and qualifying dividends to 28-percent (including the Affordable Care Act’s 3.8 percent investment income surtax on high-income taxpayers).

He is one of eight guests from across the country who accepted invitations to sit with the First Lady and Jill Biden, the vice president’s wife, when the President gives his annual address to Congress. Since he has only been in office a few weeks in 2009, Obama’s first speech to a joint session of Congress wasn’t technically a “State of the Union” address. Most (if not all) of what is said tonight, from both sides of the aisle, should be looked at through the lens of the 2016 presidential election. “A lot of what’s going to go on tonight is a wish list for his last two years,” says John Hudak, managing editor of the FixGov blog at the Brookings Institution. “A wish list for the end of his presidency…and the top of that list is to get a Democrat elected” to the White House in 2016. So the burly 34-year-old former high school quarterback left his White House office and trudged in the freezing rain to the nearby apartment of one of his closest friends in the administration, Benjamin J Rhodes. Among wish-list of items announced by Mr Obama in a series of speeches around America this month is the promise of expanded high-speed internet, free community college education and paid sick leave – all funded by a $320 billion (£210 billion) tax increase on America’s richest “one per cent”.

It was after midnight, but Rhodes, a deputy national security adviser and the writer of many of the president’s foreign policy speeches, was up reading To Kill a Mockingbird to his four-week-old daughter. Obama has said he wants to reach out to Republicans who support trade deals with Asia and Europe that his administration has pursued, over the objections of some of his fellow Democrats.

The proposals, which Mr Obama has little or no prospect of passing through a Republican-controlled Congress, have already been dismissed as “not serious” by Republicans who accuse the president of playing partisan politics and engaging in “class warfare”. The first act of unusual behavior came when Justice Samuel Alito’s reacted to Obama’s criticism of the judicial branch for its reversal of the Citizens United case in 2010. Obama will madly accentuate his own positives as if on trial, find fault with his co-workers who have blocked his progress (Republicans, natch), dodge all blame, and promise to do better in the coming year.

Although Mr Obama knows his plan has almost no chance of becoming reality, he hopes that the Republicans’ opposition to his tax plans will put them in the politically uncomfortable position of being aligned with America’s millionaires against working families. Under current law, heirs of appreciated property benefit from so-called “stepped up basis,” which is a wonky way of saying that past capital gains or losses are ignored. Keenan, who is not shy but did not want to talk about himself on a day when attention was on the president, declined to be interviewed for this article.

But Obama said their decision would “open the floodgates for special interests — including foreign corporations — to spend without limit in our elections.” After the comment from the President, cameras panned to the section where the justices were seated, stone faced, except for Alito. There are typically two ways that Obama – the author of the highly regarded Dreams From My Father who writes large parts of his own speeches – responds to one of Keenan’s first drafts. Though both sides would like to tinker with the tax code to give some relief to the middle class, Obama and the Democrats want to pay for it by making those at the very top of the economic ladder share a slightly larger piece of their vast wealth. They were designed to keep immigrant families from being broken up by deportations; to expand the pool of those available for Deferred Action for Childhood Arrivals exemptions; and to provide easier access for undocumented immigrants to become citizens.

Though Supreme Court Justice Ruth Bader Ginsburg is among the most liberal justices currently on the bench, she just couldn’t muster her energy to stay interested in Obama’s speech that night. Republicans don’t want to make up for lost revenues at all, unless it is by squeezing government programs such as food stamps and environmental protection even more than they have been. A recent poll by The Wall Street Journal showed that 52 percent of Americans approve of the president’s unilateral action on immigration, while 44 percent disapprove—but a plurality of those who disapprove do so because they believe the president should act with Congress, not because they disagree with the substance of the policy. “What the president can do tonight is work the politics of this issue—that’s what he sees as his role and really his only path forward,” says Hudak.

Keenan, the president’s chief speechwriter for nearly all of the second term, is a different breed than his predecessor, Jon Favreau, who was known for his ability to write lofty, big-picture speeches about hope and change. However there remain sharp divisions with Republicans over Mr Obama’s recent diplomatic outreach to Cuba, which polls show is supported by 62 per cent of Americans, and his handling of the Iran nuclear negotiations which will come to a head in March.

To that end, the president tonight will likely continue his strategy of spinning his use of executive powers into a positive for himself and his party. Obama’s speech will allow the president to update Americans on the threat of Islamist extremists, two weeks after 17 people were killed in attacks in France. When Republicans accused Obama of executive overreach in November, his response that they should “pass a bill” resonated with voters. “The institution that looks like they’re being lazy is the institution Americans will be upset with,” says Hudak. “That type of framing can be very effective with the American people.” And, as Latino voters become increasingly influential, the Democrats can only benefit by focusing on immigration reform.

When Congress stands opposed to the president, as is Obama’s current misfortune, he must decide how many words of persuasion to spend on his political enemies and how many to spend on his loyal constituents. Alan Gross, the U.S. aid worker whose release from a Cuban prison helped pave the way toward restoring diplomatic ties with Cuba, will be among Michelle Obama’s guests for the speech. The GOP’s stance on immigration has changed little since then, meaning Democrats may need only to remind Latino voters of that fact to win their votes.

A man took the bus home from the graveyard shift, bone-tired but dreaming big dreams for his son.” In fact, Keenan, born in Chicago, went to high school in the wealthy town of Ridgefield, Connecticut, in Fairfield county, where he threw more football interceptions than touchdowns, voraciously read spy novels and was president of the student body. Speaker John Boehner, the top Republican in the House of Representatives, and Republican Senator Marco Rubio, a Cuban-American who is a potential presidential candidate in 2016, have invited Cuban dissidents who oppose Obama’s move.

Even though Obama has robbed the event of suspense by unveiling many of his policy ideas ahead of time there is a good reason to gather the family around the television to see what the president actually says. He graduated from Northwestern University, and rolled into Washington at the age of 21 with just a fraternity brother’s couch to crash on and a cocky attitude. Bachmann, who is now retired from Congress, insisted her separate reaction was “not to compete with the official Republican remarks” but the move was widely seen at a poke at establishment Republicans loathed by tea party followers. However determined a president may be to deliver a thematic or poetic speech that stirs the nation’s soul, inter-administration battles have a way transmuting it into a boring check-list of proposals and initiatives.

Postponing realization of capital gains until death is the holy grail of tax planning because a taxpayer can escape millions of dollars in taxes on a substantially appreciated asset. The address is an exercise in political rhetoric, not campaign rhetoric, and the attention-deficit quality of its language is not a bug but a feature. In the past, the most prominent tax breaks have generally been treated as equals–the mortgage deduction is pretty much the same as, say, the capital gains preference or the charitable contributions write-off. Under current tax law, assets passed on to heirs when their owners die are taxed on what they were originally worth, not what they were worth at the time of the owner’s death. Obama said: “We’ve already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years.

So, a $1 million investment that appreciates during the owner’s lifetime to $10 million will be treated as $1 million for tax purposes upon the owner’s death; the other $9 million in gains goes untaxed. “Capital gains income is very highly concentrated in the hands of the 1 percent,” says Matt Gardner, executive director of the Institute on Taxation and Economic Policy. “The stepped-up basis loophole is costing us an awful lot of money that isn’t benefiting middle and low-income families at all.” In fact, the Congressional Budget Office estimates that untaxed income from the stepped-up loophole will cost the U.S. 0.3 percent of GDP in the next decade. The lawyers, accountants, and finance experts who come up with clever schemes for their clients to extract the cash from highly appreciated assets without technically selling them could otherwise apply their talents to socially productive work. We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill — because milk was somehow classified as an oil. Under Obama’s plan, only capital gains over $100,000 would be taxed for individuals, and only those over $200,000 for families, meaning only the very wealthy would see any difference at all. With a rule like that, I guess it was worth crying over spilled milk.” As President Obama made his way up to the stage before the 2013 address, he gave an exploding fist bump to Republican Sen.

The third part of the plan is to tax financial institutions deemed “too big to fail.” If a bank can depend on a government bailout when its investments go sour, the thinking goes, it should pay a price for the peace of mind. White House brawls over the length of sentences and punctuation are common. “A program has a higher priority if it is presented separately from the frequent ‘laundry lists’ if it comes earlier in the domestic section of the message; or if it is mentioned in the introduction or conclusion of the address,” Light writes. One unnamed former presidential speechwriter tells Light that administration staffers “want to take the document to the Hill and point to the exact number of words” assigned to their initiative. This, too, is a non-starter, says Amy Ellen Duke-Benfield, a senior policy analyst at the Center for Law and Social Policy. “Would this be realistic in the near-term?

Rubio tried to be stealth and subtly snag a swig from his water bottle but instead of a surreptitious sip, the Republican star was mocked for the clumsy move. The increases aren’t huge — on average, Obama has gone from approval in the low 40s during the run-up to the midterm elections to a position in the middle to high 40s in the most recent surveys — but they add up. One such number: The average gap between a community college student’s financial assistance and the amount of money he or she actually needs to complete a semester of school is $6,000, according to Duke-Benfield.

But taxing gains at death reduces this “lock-in effect” and mean that the tax rate increase will produce much more revenue (and fewer economic distortions). Also, 27 percent of college students work part time, and another 39 percent work full time—and research shows that working more than 20 hours per week has negative impacts on academic performance. Perhaps presidents have inflated their batting averages by including sure-bet legislative proposals in addresses, but the addresses still frame the White House’s intentions, clarify the direction the president’s budget will take, focus press corps coverage, and help structure the legislative agenda. But education advocates like Duke-Benfield hope Obama’s focus on community college might spur a discussion about reforming the educational tax credit. The President’s proposal would make the overall tax system more progressive, especially since much of revenue from raising taxes on gains would be used to expand middle-class tax breaks.

NY1’s Michael Scotto was interviewing Grimm and tried to ask Grimm about allegations on campaign finances, which set off the Staten Island statesman. “Let me be clear to you, you ever do that to me again I’ll throw you off this f—–g balcony… you’re not man enough, you’re not man enough. One study of addresses from 1946 to 2003 found that every 50 words devoted by a president to an issue resulted in a 2 percentage point increase (sometimes temporary) in the public’s identification of the issue as America’s most important problem. And it would provide a huge benefit to charities because donations to these groups would become the only easy way to legally avoid capital gains taxes (since gains on charitable contributions are exempt from tax).

But his role is no longer to push policies; his role is to set the stage for Hillary Clinton in 2016. “Economic opportunity and inequality are going to be huge themes in 2016, especially when we have an economy that’s statistically recovering but not necessarily recovering for certain demographic groups,” says Hudak. Clinton will need to wed herself to progressive elements of her party to pull off an easy nomination in 2016, and Obama begins that conversation on the grand stage tonight. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers’ own, as is responsibility for the content of their blogs. Those aren’t Super Bowl numbers (111.5 million watched the 2014 game between the Broncos and the Seahawks), but given that they go to a prized demographic of most of the politically committed, it’s the president’s best shot to be heard over the media cacophony.

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