After the president himself, the most important person in the House chamber Tuesday night for President Obama’s State of the Union address may have been a middle-aged woman from Bellevue, Neb., named Debbie Bosanek.
She is Warren Buffett’s secretary, and she pays a higher income-tax rate than her billionaire boss. The president has been talking about her for months. But now there’s a name and a face attached to what Mr. Obama calls “the defining issue of our time” – restoring fairness to the American economy.
“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 to the joint session of Congress. “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.”
The president pitched the issue of fairness in terms of “American values,” not Democratic or Republican. But in what was essentially his opening bid for reelection, Obama went long on populism, not bipartisanship. For the first time, he got specific about his proposal for a “Buffett Rule” as part of a broader tax reform: a requirement that anyone making more than $1 million a year pay no less than 30 percent in taxes. And, he added, anyone making less than $250,000 a year – the case for 98 percent of American families – should not see a tax increase.
“Now, you can call this class warfare all you want,” Obama said, anticipating the Republican rebuttal. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”
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Obama did not thank GOP presidential candidate Mitt Romney by name, but he could have. In a stroke of good timing for Obama, the wealthy Mr. Romney had released two years’ worth of tax returns earlier in the day, revealing an effective tax rate of about 15 percent. If Romney manages to win the Republican nomination, he will be a walking advertisement for the Buffett Rule.
Polls show a majority of Americans believe the wealthy should pay higher taxes, but Obama knows his argument to the American people will have to go far beyond tax rates. He scores especially poorly in polls on his handling of the economy, and to win reelection, he has to convince enough Americans that the economy is heading in the right direction. Obama has set his sights on a revival of American manufacturing, and as he embarks on a five-battleground-state swing Wednesday to pitch his economic message, the return of jobs – especially those that pay a living wage – will be central.
“We will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits,” Obama said, laying out what he called a “blueprint for an economy that’s built to last.” That economy, he said, would be built on “American manufacturing, American energy, skills for American workers, and a renewal of American values.”
Again, he went to the tax code: Companies should not get a tax break for shipping jobs and profits overseas, he said. Multinationals should also be required to pay a global minimum tax. And he proposed tax breaks for American manufacturers.
But with little ground for cooperation with Congress, the chances of tax reform before Election Day are slim to none. That makes any kind of economic boost that would come from a changed tax code a more distant prospect.
“For better or worse, an incumbent president’s record is at the heart of his reelection prospects,” writes Brookings Institution scholar William Galston in a post-State of the Union analysis. “[Obama] cannot run away from that record; he must run on it.”
Obama’s speech contained the usual recitation of jobs lost before and right after he took office, amid a crisis in the financial sector and housing markets. But, as the unemployment rate trickles downward, Obama asserted that “the state of our Union is getting stronger.”
And in an echo of President Truman’s successful 1948 reelection pitch against a “do-nothing Congress,” Obama declared that he intends to “fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.”
In the Republican reply to Obama’s address, Indiana Gov. Mitch Daniels acknowledged that the president did not cause the economic woes that continue to this day.
“But he was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse,” Governor Daniels said.
The sight of Daniels delivering the State of the Union reply no doubt gave a few Republicans a pang over his absence from the campaign trail. Daniels had strongly considered running, but opted out. Instead, the Republican race has boiled down to a race between two men with distinct flaws and strengths. But they are united in their desire to see Obama defeated in November.
“President Obama's class warfare, his commitment to raising taxes, increasing regulation, and his failed ideology make his vision for America one of the most radical in our history,” wrote former House Speaker Newt Gingrich in an e-mail to supporters Wednesday morning.
“The president’s agenda sounds less like ‘built to last’ and more like doomed to fail,” Romney said. “What he’s proposing is more of the same: more taxes, more spending, and more regulation. nd all of his proposals involve ‘big’ government and ‘big’ price tags.”