Obama: American dream in peril, fast action needed

Vice President Joe Biden and House Speaker John Boehner of Ohio listen as President Barack Obama gives his State of the Union address on Capitol Hill  in Washington on Tuesday, Jan. 24, 2012.
J. Scott Applewhite | AP
Vice President Joe Biden and House Speaker John Boehner of Ohio listen as President Barack Obama gives his State of the Union address on Capitol Hill in Washington on Tuesday, Jan. 24, 2012.
President Barack Obama delivers his State of the Union address on Capitol Hill  in Washington on Tuesday, Jan. 24, 2012.
Susan Walsh | AP
President Barack Obama delivers his State of the Union address on Capitol Hill in Washington on Tuesday, Jan. 24, 2012.
President Barack Obama gestures while giving his State of the Union address on Capitol in Washington on Tuesday, Jan. 24, 2012.
Evan Vucci | AP
President Barack Obama gestures while giving his State of the Union address on Capitol in Washington on Tuesday, Jan. 24, 2012.
Posted Jan. 24, 2012, at 10:04 p.m.
Last modified Jan. 24, 2012, at 11 p.m.

WASHINGTON — Declaring the American dream under siege, President Barack Obama called Tuesday night for a flurry of help for a hurting middle class and higher taxes on millionaires, delivering a State of the Union address packed with re-election themes. Restoring a fair shot for all, Obama said, is “the defining issue of our time.”

Obama outlined a vastly different vision for fixing the country than the one pressed by the Republicans challenging him in Congress and fighting to take his job in the November election. He pleaded for an active government that ensures economic fairness for everyone, just as his opponents demand that the government back off and let the free market rule.

Obama offered steps to help students afford college, a plan for more struggling homeowners to refinance their homes and tax cuts for manufacturers. He threw in politically appealing references to accountability, including warning universities they will lose federal aid if they don’t stop tuition from soaring.

Standing in front of a divided Congress, with bleak hope this election year for much of his legislative agenda, Obama spoke with voters in mind.

“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” Obama said. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

A rare wave of unity splashed over the House chamber at the start. Rep. Gabrielle Giffords, survivor of an assassination attempt one year ago, received sustained applause from her peers and cheers of “Gabby, Gabby, Gabby.” She blew a kiss to the podium. Obama embraced her.

Lawmakers leapt to their feet when Obama said near the start of his speech that terrorist leader Osama bin Laden, killed by a raid authorized by the president, will no longer threaten America.

At the core of Obama’s address was the improving but deeply wounded economy — the matter still driving Americans’ anxiety and the one likely to determine the next presidency.

“The state of our union is getting stronger,” Obama said, calibrating his words as millions remain unemployed. Implicit in his declaration that the American dream is “within our reach” was the recognition that, after three years of an Obama presidency, the country is not there yet.

He spoke of restoring basic goals: owning a home, earning enough to raise a family, putting a little money away for retirement.

“We can do this,” Obama said. “I know we can.” He said Americans are convinced that “Washington is broken,” but he also said it wasn’t too late to cooperate on important matters.

Republicans were not impressed. They applauded infrequently, though they did cheer when the president quoted “Republican Abraham Lincoln” as saying: “That government should do for people only what they cannot do better by themselves — and no more.”

Indiana Gov. Mitch Daniels, offering the formal GOP response, called Obama’s policies “pro-poverty” and his tactics divisive.

“No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others,” Daniels said in excerpts released before the address.

In a signature swipe at the nation’s growing income gap, Obama called for a new minimum tax rate of at least 30 percent on anyone making over $1 million. Many millionaires — including one of his chief rivals, Republican Mitt Romney — pay a rate less than that because they get most of their income from investments, which are taxed at a lower rate.

“Now you can call this class warfare all you want,” Obama said, responding to a frequent criticism from the GOP presidential field. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

Obama calls this the “Buffett rule,” named for billionaire Warren Buffett, who has said it’s unfair that his secretary pays a higher tax rate than he does. Emphasizing the point, Buffett’s secretary, Debbie Bosanek, attended the address in first lady Michelle Obama’s box.

Obama underlined every proposal with the idea that hard work and responsibility still count. He was targeting independent voters who helped seal his election in 2008 and the frustrated masses in a nation pessimistic about its course.

In a flag-waving defense of American power and influence abroad, Obama said the U.S. will safeguard its own security “against those who threaten our citizens, our friends and our interests.” On Iran, he said that while all options are on the table to prevent Iran from acquiring a nuclear weapon — an implied threat to use military force — “a peaceful resolution of this issue is still possible.”

With Congress almost universally held in low regard, Obama went after an easy target in calling for reforms to keep legislators from engaging in insider trading and holding them to the same conflict-of-interest standards as those that apply to the executive branch.

With the foreclosure crisis on ongoing sore spot despite a number of administration housing initiatives over the past three years, Obama proposed a new program to allow homeowners with privately held mortgages to refinance at lower interest rates. Administration officials offered few details but estimated savings at $3,000 a year for average borrowers.

Obama proposed steps to crack down on fraud in the financial sector and mortgage industry, with a Financial Crimes Unit to monitor bankers and financial service professionals, and a separate special unit of federal prosecutors and state attorneys general to expand investigations into abusive lending that led to the housing crisis.

At a time of tight federal budgets and heavy national debt, Obama found a ready source of money to finance his ideas: He proposed to devote half of the money no longer being spent on the U.S. military in Iraq and Afghanistan to “do some nation-building right here at home,” to help create more jobs and increase competitiveness. The other half, he said, would go to help pay down the national debt.

Obama also offered a defense of regulations that protect the American consumer — regulations often criticized by Republicans as job-killing obstacles.

“Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same,” Obama said. “It’s time to apply the same rules from top to bottom: No bailouts, no handouts and no copouts. An America built to last insists on responsibility from everybody.”

Member’s of Maine’s congressional delegation offered thoughts after Obama’s speech.

“Tonight, the President described the challenges confronting America and our highest shared priority of economic growth and job creation — but what is regrettable is that these are issues we should have already addressed on a bipartisan basis long ago. The question is, will the President now go beyond words and apply leadership to truly corral the best ideas from both sides of the aisle to advance our nation, rather than advancing any one political agenda,” said Olympia Snowe, R-Maine.

“Thirteen million Americans remain out of work, and our unsustainable debt exceeds $15.2 trillion. … In this time of escalating deficits, it is important that we rein in spending and get our financial house in order while also taking into account our nation’s priorities. I am hopeful that the President’s promise tonight to seek bipartisan consensus on the important issues is more than election year rhetoric,” said Sen. Susan Collins, R-Maine.

“After having conducted a year-long examination of Maine’s manufacturers and touring many of them, I strongly support the President’s call to do more to boost this critical sector of our economy,” said Rep. Mike Michaud, D-Maine.

“I agree that we have to bring American manufacturing jobs home, invest in education and clean energy and protect Medicare and Social Security. And it’s time to end tax breaks for the rich and time for the wealthiest to start paying their fair share,” said Rep. Chellie Pingree, D-Maine.

The president’s State of the Union address spawned several viewing parties in Maine, including one that drew about 25 local Democrats — some of whom are candidates in the November elections — to the Charles Inn in downtown Bangor.

Margaret Payne of Orono, a volunteer for Obama’s 2008 campaign who has signed on for another round, was one of the gathering’s organizers.

“It’s a great way to bring people together who support the president and to celebrate his accomplishments,” she said.

Payne said that she and other Obama campaign volunteers brought thousands of University of Maine students to the polls four years ago — two-thirds in support of their candidate.

Former Secretary of State Matthew Dunlap, who is challenging U.S. Sen. Olympia Snowe this fall, said he attended because he wanted to hear what is on Mainers’ minds and because he is concerned about the state of the economy and crushing health care issues that are affecting people here and across the country.

“I’m here because I care,” Dunlap said. “Nothing’s happening. There are no jobs. People are scared and that don’t know what’s going to happen.”

Charles Longo and Geoffrey Gratwick, a candidate for the Maine Senate District 32 seat now held by Sen. Nichi Farnham, were among the Bangor city councilors who turned up.

“I think that the economic agenda that the president unrolls tonight will be important to the people of Bangor,” Longo said when asked what brought him to the gathering.

Obama will follow up Tuesday night’s address with a three-day tour of five states key to his re-election bid. On Wednesday he’ll visit Iowa and Arizona to promote ideas to boost American manufacturing; on Thursday in Nevada and Colorado he’ll discuss energy, and in Michigan on Friday he’ll talk about college affordability, education and training.

Polling shows Americans are divided about Obama’s overall job performance but unsatisfied with his handling of the economy.

The speech Tuesday night comes just one week before the Florida Republican primary that could help set the trajectory for the rest of the race.

Romney, caught up in a tight contest with a resurgent Newt Gingrich, commented in advance to Obama’s speech.

“Tonight will mark another chapter in the misguided policies of the last three years — and the failed leadership of one man,” Romney said from Florida.

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