WASHINGTON — President Barack Obama used his election-year State of the Union address Tuesday night to frame the national debate not as a referendum on him but as a pivotal decision on how to save the American dream.
Obama said the nation's economy has improved, albeit slowly, from the depths of the Great Recession. "The state of our Union is getting stronger," the president said.
But he said the middle class has been losing ground for decades, and he urged a new agenda of taxes and government spending to tilt the playing field away from the rich and powerful and more toward the rest of the citizenry.
"No challenge is more urgent. No debate is more important," Obama said. "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. 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."
Obama's address detailed his agenda for his 2012 re-election campaign on familiar terms: Asking the wealthy to pay more taxes, vowing greater regulation of Wall Street and using the federal government to do more to help the working and middle classes.
Among his proposals: a 30 percent minimum tax on millionaires, a minimum tax on companies that ship jobs overseas coupled with tax cuts for those that keep factory jobs at home, and a $200 billion, six-year plan to build roads, bridges and railways with money saved from bringing U.S. troops home from Afghanistan and Iraq.
Republicans countered with a similar vision of a more prosperous America where everyone shares the bounty. But they offered a far different agenda, and chastised Obama for policies they said have made things worse.
"As Republicans our first concern is for those waiting tonight to begin or resume the climb up life's ladder," said Indiana Gov. Mitch Daniels, giving the official GOP response. "We do not accept that ours will ever be a nation of haves and have nots. We must always be a nation of haves and soon to haves."
Daniels said Obama hurt the economy with over-regulation of business, a refusal to allow domestic energy production, and proposals to raise taxes on the rich that amount to dividing the country.
Obama insisted that his agenda is what's needed to put the country back on track.
"Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that does the same," he said. "It's time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs. An America built to last insists on responsibility from everybody."
A rare wave of unity splashed over the House chamber before Obama's speech. Rep. Gabrielle Giffords, D-Ariz., the survivor of a shooting a year ago, received sustained applause from her colleagues and cheers of "Gabby, Gabby, Gabby." Obama embraced her as he headed to the House podium.
Under the broad theme of helping build a fairer economy, Obama laid out proposals in four categories: helping restore U.S. manufacturing, improving U.S. energy independence, teaching workers new skills for a changing economy, and tax increases he called "a renewal of American values."
Obama wants to see Congress undertake a rehabilitation of the tax code, something he pushed for last year without success. Months after coming up with the "Buffett Rule" — which says high-earners like Omaha billionaire Warren Buffett should carry the same share of the tax burden as those who earn less — Obama added the 30 percent target to his wish list.
Seated in the balcony for the announcement was Debbie Bosanek, Buffett's secretary, who, as Buffett and the president frequently point out, pays a higher income tax rate than her boss.
"You can call this class warfare all you want," Obama said. "But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense."
Obama also proposed tilting the tax code to push companies to open factories here rather than overseas. He urged lowering the corporate tax rate for businesses that manufacture and create jobs in the United States. He also proposed higher taxes for companies that export jobs overseas.
To help the working class, he proposed:
>> Partnerships with community colleges and businesses to train and place 2 million workers;
>> Overhauling the unemployment compensation program that provides checks to laid-off workers, linking the aid to training;
>> Getting all states to require students to stay in school until they graduate or reach 18, as 20 states do now.
To ease the housing crisis, Obama said he'll send Congress a new plan that would help responsible homeowners who are current on their payments save $3,000 a year by refinancing their mortgage. The program would be paid for with a new bank fee he's proposed.
Obama looked out on a Congress where Republicans control the House of Representatives and have ruled out most of his proposals, particularly tax increases for the wealthy.
"As long as I'm president, I will work with anyone in this chamber," the president said. "But I intend 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.
"We will not go back to an economy weakened by outsourcing, bad debt and phony financial profits," he said.
This report includes material from the Tribune Washington Bureau and the Associated Press.
