WASHINGTON — President Barack Obama returned to the unfinished business of a still struggling economy Tuesday night, outlining a second-term agenda with proposals designed to create jobs, expand the middle class and spur financial growth.
“We can fix this — and we will,” the president said repeatedly.
In his annual State of the Union address, Obama laid out plans in four main areas — manufacturing, education, clean energy and infrastructure — to try to help the nation recover from the worst recession in decades at what he said would be no additional cost.
“A growing economy that creates good, middle-class jobs — that must be the North Star that guides our efforts,” Obama said. “Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills they need to get those jobs? And how do we make sure that hard work leads to a decent living?”
Obama described a nation that has made progress, ending long wars in Afghanistan and Iraq while clearing away “the rubble” of the Great Recession, but one that still needs additional help to prosper. He declared that the state of the union is stronger, but not strong.
“It is our generation’s task, then, to reignite the true engine of America’s economic growth — a rising, thriving middle class,” he said.
“It is our unfinished task to restore the basic bargain that built this country — the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like, or who you love. 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 of ours,” he said.
He proposed raising the minimum wage from $7.25 to $9 an hour. He recommended spending $65 billion on road, bridge and building repairs. He unveiled a plan to save eligible homeowners $3,000 annually by refinancing at lower interest rates.
Obama starts his second term with a stubbornly high unemployment rate — higher for women and blacks than when he first took office — falling consumer confidence and a mounting deficit as he faces often uncooperative lawmakers on Capitol Hill. He insisted that Democrats and Republicans put aside their differences and take action, mostly immediately to find an alternative to looming across-the-board budget cuts that could harm the economy in weeks.
Tens of millions watched the address, delivered to a joint session of Congress. The applause mostly fell along partisan lines with House Speaker John Boehner, R-Ohio, sitting behind Obama often with a solemn expression while Vice President Joe Biden beside him stood to applaud.
Sen. Marco Rubio of Florida, a rising Republican star, was offering his party’s response in English and Spanish. Rubio said, in prepared remarks, that the “free enterprise economy” will create jobs and, not as Obama has suggested, the collection of new revenue.
“Raising taxes won’t create private sector jobs,” he said in prepared remarks. “That’s why I hope the president will abandon his obsession with raising taxes and instead work with us to achieve real growth in our economy.”
Obama spoke about other issues Tuesday — including rewriting the nation’s immigration laws and combating climate change — but mostly in the context of the economy.
There were few exceptions: Obama pressed anew for the most aggressive gun-control plan in generations. More than 100 victims and family members of victims — including some from Newtown, Conn., where 26 people were killed at an elementary school in December — were at the Capitol Tuesday. In the most emotional moment of the speech, he listed the locations of recent mass shootings — from Aurora, Colo., to Blacksburg, Va. — and said the gun victims and survivors deserve a vote. The room erupted in sustained applause.
Obama is forming a nonpartisan commission to study changes in the voting system after Americans endured long lines and administrative problems at the polls in November.
He announced that by this time next year more than half the U.S. troops in Afghanistan — 34,000 — will have returned home as the Afghans take responsibility for security. He condemned North Korea for conducting its third nuclear test hours earlier, warning that it undermines regional stability, violates North Korea’s United Nations obligations and increases the risk of proliferation. He called for a reduction in nuclear weapons worldwide.
Obama will fly to Asheville, N.C., on Wednesday to begin selling his plans to the nation. Later in the week, he will continue the campaign-style pitch with stops in Atlanta and Chicago.
“He’s going to take his press conference out to the country,” said Rep. Sander Levin of Michigan, the highest-ranking Democrat on the tax-writing House Ways and Means Committee. “The president learned from his first term, you need to have a major dialogue.”
Obama’s speech included both proposals that already had been rejected by Congress, such as $50 billion for roads and bridge repairs, as well as new plans like raising the minimum wage, which has not been authorized since 2007.
Obama pledged, as he did during his campaign last year, to protect the middle class and the country’s social safety net. He pressed for a “balanced” solution to boost the economy that includes additional revenue that comes from eliminating tax loopholes and deductions benefiting certain industries or the wealthy as well as reductions in projected spending.
And he kicked off his speech by urging Congress to pass a package of modest cuts and tax changes as a way to delay drastic, across-the-board federal spending reductions that are scheduled to take effect March 1.
White House officials said the president will pay for his spending proposals by re-prioritizing items in the budget. His proposed budget will be released in mid-March.
“Tonight, I’ll lay out additional proposals that are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago,” he said. “Let me repeat — 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.”
On education, Obama spoke of expanding education for children before they enter kindergarten, investing in vocational programs that fill the need of the business community and making college more affordable.
On infrastructure, Obama stressed the need to spend public money on roads and bridges.
“We’re not investing enough in our infrastructure,” said Bob Costello, chief economist and vice president of the American Trucking Association. “You have an industry that has been saying for years, ‘Please tax’ our fuel consumption to pay for highway improvements.”
Obama announced that he issued executive orders, which do not require congressional approval, to open three manufacturing institutes and to improve the security of the computer networks that direct the nation’s crucial infrastructure systems — such as electricity, finance and transportation. And he threatened to sign more if Congress does not pass changes to prepare for climate change.
Members of Maine’s delegation weighed in on Obama’s speech.
“The 113th Congress faces extraordinary challenges as we work to grow our nation’s economy, lower the unemployment rate, seek both short-term and long-term ways to reduce federal spending to bring the national debt under control, and debate a host of other important issues. I appreciate that the President tonight called for members of both parties to work together to address these challenges and I hope that he is sincere in his desire to work with all of us,” said Sen. Susan Collins, R-Maine.
“Our national debt now stands at an almost incomprehensible $16.4 trillion. That ever-increasing sum, along with rising interest payments, is our legacy to future generations. The President outlined an ambitious agenda tonight, but I am concerned that he did not explain how he intends to pay for it without further burdening middle-income families and small businesses,” Collins said.
“Our first step to right America’s path must be to immediately address the looming sequester cuts – a collection of severe, indiscriminate, across-the-board spending reductions, which if implemented, will wreak economic havoc in Maine and across the country. In a recent Armed Services Committee hearing, Defense Secretary Leon Panetta characterized the current budgetary uncertainty as the single greatest threat to our national security. According to a recent study, Maine would lose approximately 7,000 jobs if the sequester is implemented. Further, that statistic does not even begin to describe the economic ripple effects sequestration would have throughout the state. That’s why it is crucial that the President and Congress work together to promptly alleviate this immediate threat – one that was originally intended to be so irresponsible and reckless that we could not even fathom considering it. Tonight, I reiterate my call on the President and Congressional leadership to meet immediately to resolve this issue,” said Sen. Angus King, I-Maine.
“Improving our economy has to be our number one objective. While the president outlined a number of goals, I strongly support his focus on manufacturing and economic development. In fact, there are two things that he can do right now without congressional approval to help Maine’s economy. He should work to level the playing field for American companies by taking action against unfair trade practices, such as the subsidized Canadian paper mill in Port Hawkesbury that is threatening our state’s pulp and paper industry. He should also order the Defense Department to comply with current law, which mandates that our military be supplied with uniforms made in America. This would support Maine jobs at businesses like New Balance, said Rep. Mike Michaud, D-Maine.
“As the war winds down, more of our men and women will take off the uniform and seek VA services. As such, we must recommit ourselves as a nation to ensuring all who’ve served and sacrificed receive the support they need here at home,” said Michaud.
“With Congress stuck in a cycle of repeating fiscal crises, I’m glad that the President put the focus back on the economy tonight—which is where it should be. Our recovery is persistent, but much too slow and incredibly vulnerable to these avoidable, ever-looming fiscal cliffs. We need a long-term solution and we’re only going to get there with a balanced approach that grows the middle class, which the President outlined tonight,” said Rep. Chellie Pingree, D-Maine.
“I was also happy to hear the President mention several other important issues tonight. He’s right that we should continue developing clean energy so we can cut our dependence on foreign oil and create jobs at home, including right here in Maine. Like him, I’m hopeful that we can finally pass meaningful immigration reform. Finally, I appreciate that he has not backed down on reducing violence in this country. We owe it to our children to pursue every strategy to make this country a safer one, and we would do a disservice to them by not looking at common sense gun control policy.”
Kevin G. Hall and David Lightman of the Washington Bureau contributed to this report.
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