In his State of the Union speech before Congress last night, President Obama sought to reassure recession-weary Americans that the economy is on the right track, by naming proposals aimed at helping the beleaguered middle class.
He called it a "blueprint for an economy that's built to last," and one that would bring greater fairness to a country where the divide between rich and poor has been growing steadily in recent years.
In the 65-minute speech, the president outlined his vision of an economy that is "built on American manufacturing, American energy, skills for American workers and a renewal of American values." It included proposals for bringing greater fairness to the nation's outdated income-tax system and providing incentives to companies that create jobs in cities hard hit by economic decline.
Here are select highlights of the President's State of the Union address:
Obama said the wealthy should pay their fair share in taxes, arguing that anyone who makes more than $1 million should pay a minimum tax rate of at least 30 percent. He also provided more details about the so-called Buffett rule, which sets a goal of a minimum tax rate for those earning $1 million or more a year.
The president pushed measures for college affordability, including taking federal aid from colleges that don't keep net tuition down and provide good value, and urged Congress to make permanent a tuition tax credit worth $10,000 over four years. He also called for a new emphasis on the teaching profession to include better evaluation systems and incentives for teachers and improved teacher education. And he challenged state governments to require students to stay in school until they graduate or turn 18, as 20 states already do.
He proposed a nationwide program to allow homeowners with privately held mortgages to refinance at lower interest rates. It would cover both loans issued by government-controlled mortgage giants Fannie Mae and Freddie Mac and private bank mortgage lenders. Congress would have to approve, a difficult hurdle. Under the plan, any homeowner current on his or her mortgage could take advantage of lending rates now at 4 percent or below. Administration officials offered few details but estimated savings of about $3,000 a year for average borrowers.
Immigration and Workforce
Obama reiterated a call for comprehensive immigration reform, including giving responsible young people a chance to earn their citizenship. He suggested creating a Veterans Job Corps to help communities hire veterans, and he committed to closing the wage gap between men and women.
The president called for the creation of a new trade enforcement unit that would go after unfair trade practices around the world, including China. Obama said the U.S. would provide financing to put its companies on even footing when the Chinese or other competitors use unfair export financing to help their businesses. He also called for better inspections to stop counterfeit, pirated or unsafe goods from entering the U.S.
Using War Savings on Infrastructure
He proposed using half the savings achieved by winding down the wars in Iraq and Afghanistan to cover costs of new investments in infrastructure. Obama wants the money to go toward fixing existing roads and building new high-speed rail projects. He also plans to sign an executive order in the coming weeks to clear some of the bureaucratic roadblocks that have slowed work on projects that have already been funded. The White House says the other half of the savings from drawing down the wars would go toward reducing the national debt.
Outsourcing and Inscourcing
Obama proposed eliminating tax incentives that make it more attractive for companies to ship jobs overseas. The proposal would require American companies to pay a minimum tax on their overseas profits in order to prevent other countries from attracting U.S. businesses with unusually low tax rates. Obama also wants to eliminate tax deductions companies receive for the cost of shutting down factories and moving production overseas. Instead, Obama wants to create a new tax credit to cover moving expenses for companies that close production overseas and bring jobs back to the U.S. He also wants to reduce tax rates for manufacturers and double the tax deduction for high-tech manufacturers in order to create more manufacturing jobs in the U.S.
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