4 Minute Read
In the first State of the Union address of his second term, President Obama focused on his vision for continued economic recovery with a long list of proposals and ideas he claims will strengthen the middle class.
The president started by pointing out the creation of 6 million new jobs, a rebounding stock market and a healing housing market as proof of the nation’s economic recovery. He also acknowledged that the recovery is not yet complete. “It’s our generation’s task, then, to reignite the true engine of America’s economic growth: a rising, thriving middle class,” he said.
Here’s how President Obama would accomplish that goal:
Avoid looming budget cuts.
Local experts you can trust.Find an ELP
On March 1, an automatic $85 billion spending cut, called the sequester, is scheduled to take effect. President Obama called this a “really bad idea” and said the cuts would slow the country’s economic recovery. As an alternative to the sequester, Obama proposed slowing the growth of healthcare costs, lawmakers’ largest hurdle to reducing the deficit, with “modest reforms” to Medicare.
Tackle tax reform.
The president also proposed tax reform as another means to reduce the deficit. “We should do what leaders in both parties have already suggested and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and well-connected,” he said.
Become a magnet for manufacturing.
President Obama praised the recovery of 500,000 U.S. manufacturing jobs over the last three years and said he wants to accelerate the trend. He announced the launch of three “manufacturing hubs” where businesses partnering with government will create “global centers of high-tech jobs.” He also encouraged Congress to create a network of 15 more hubs across the nation.
Deal with climate change and create jobs.
Using 2012’s Superstorm Sandy, widespread drought and record-setting wildfires as proof of the threats posed by climate change, the president encouraged Congress to find a “bipartisan, market-based solution to climate change.” If Congress is unable to agree on such a solution, Obama said he would take executive action to reduce pollution, prepare communities for the consequences of climate change, and encourage the use of sustainable energy sources.
Help for homeowners.
The president encouraged lawmakers to pass a bill currently in Congress that would make it easier for responsible homeowners to refinance their mortgages and take advantage of today’s low interest rates. He also asked them to remove overlapping regulations that currently prevent many people with good credit from buying their first homes.
You May Also Like
Education should come earlier, result in better-trained graduates, and provide value, the president said in his speech. He first proposed that preschool classes should be made available to all children. Next, President Obama announced a redesign of high schools with the goal of graduating students who are better equipped for high-tech jobs. “We’ll reward schools that develop new partnerships with colleges and employers, and create classes that focus on science, technology, engineering and math,” he said. At the college level, the president asked Congress to tie federal aid the colleges receive to each school’s affordability and value.
Increase the minimum wage.
Workers making the minimum wage earn $14,500 a year. “Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line,” the president said. “That’s wrong.” As a result, Obama asked Congress to raise the minimum wage to $9 an hour and tie it to the cost of living.
Let the Debate Begin
President Obama’s State of the Union address contained many more proposals, including immigration reform and increased gun-safety measures. As you might expect, the president’s speech did not receive a warm welcome from the Republicans, who have their own ideas about what the government’s priorities should be and how to handle them. So it’s difficult to say what ideas, if any, will become the law of the land.
While it’s your responsibility to pay attention to what’s happening in Washington, D.C., you ultimately have little control over what happens there until it comes time to vote. If you have problems in your life that you’re waiting on the government to solve, you’re going to be waiting … and waiting … and waiting. And it’s likely you’ll never get the answer you need.
To truly improve your situation, you have to take action. But it’s not always easy to know where to start. If you need help managing your money or just want to improve your financial knowledge, all of our tools here at daveramsey.com are designed to do just that.
What are your thoughts on the State of the Union address?