Obama calls for revamping taxes, lifting middle class

Populist tone in State of the Union address

President Obama delivered the State of the Union address at the US Capitol.Mandel Ngan/Getty Images/Pool

WASHINGTON — President Obama Tuesday night outlined a robust agenda to guide his final two years in office, boldly claiming credit for a rebounding economy and confidently focusing on populist themes that aim to close the growing income-inequality gap and bolster the middle class.

Delivering remarks in a House chamber filled with more Republicans than it has held in decades, Obama used his sixth State of the Union address to propose plans for providing free community college, tax relief for the middle class, and expanded paid family leave for new parents.

“We have risen from recession freer to write our own future than any other nation on Earth,” he said during an hourlong address. “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”

He said again and again how far America has come, from times of war and recession at the beginning of his term to a period where combat missions have ended and, he said, the economy has recovered.

“The shadow of crisis has passed,” he said. “And the state of the union is strong.”

One of Obama’s most far-reaching ideas — and also least likely to pass Congress — is a proposal for $320 billion in tax increases over 10 years that would target the wealthy and raise capital gains tax rates while providing tax cuts for middle-income earners.

Although many of the proposals could prove unachievable in a gridlocked Washington — where newly resurgent Republicans now control the House and Senate — the Democratic president is seeking to secure a legacy as an economic populist while shaping the terms of the debate heading into the 2016 election.

Unlike during his State of the Union addresses the past six years, when dour economic news cast a pall, Obama said the country was finally on sound financial footing. He sought to claim victory for policies that helped the economy rebound, saying that the United States has emerged from a fiscal crisis and now has an opportunity to correct what he considers chronic imbalances.

Obama was confident, brash, and upbeat throughout as he continued to tout the success of his policies — and his political philosophy — in leading the economy back.

He managed to both show Democrats why they worked so hard to get him elected twice, while also putting on display for Republicans why they dislike him so.

He ad libbed at one point, smiling and winking to the packed chamber and saying, “This is good news, people!” At another, he engaged in a little political trash talk, telling Republicans who applauded sarcastically at a line that he had no more campaigns to run, “I know, because I won both of them.”

“At every step, we were told our goals were misguided or too ambitious; that we would crush jobs and explode deficits,” he said. “Instead, we’ve seen the fastest economic growth in over a decade, our deficits cut by two-thirds, a stock market that has doubled, and health care inflation at its lowest rate in 50 years.”

Many signs point to an improving economy. With gas prices down, the stock market up, and unemployment at its lowest rate since 2008, Obama referred to a sound foundation upon which he wants to build.

But while he stood before Congress, the message appeared aimed not at trying again to work with emboldened Republicans but at trying to win over the American public. He spent the weeks leading up to the State of the Union traveling the country and outlining some of his plans.

On Tuesday night, his administration planned a bigger presence on social media, trying to capture a younger audience less likely to tune in or read traditional news coverage.

Obama’s efforts to bypass Congress are also part of his new political reality: He came into office with Democrats in control of both the House and Senate, allowing his party to implement broad changes in health care and financial regulatory laws.

But after losing the House in 2010 and the Senate in 2014, Obama now faces a far more vigorous opposition to anything he proposes.

Republicans almost immediately panned Obama’s proposals. Even before the party’s official response, Mitt Romney, the 2012 Republican nominee who is considering running in 2016, weighed in, saying the president was “more intent on winning elections than on winning progress.”

“Americans have been hurting, but when we demanded solutions, too often Washington responded with the same stale mindset that led to failed policies like Obamacare,” Senator Joni Ernst, a Republican from Iowa, said in the official Republican response. “It’s a mindset that gave us political talking points, not serious solutions.”

Obama, harkening back to a unifying speech he gave in Boston at the 2004 Democratic National Convention, also delivered a new impassioned plea for “a better politics” that involves far less emphasis on political fund-raising or arguing on cable TV.

“I know how tempting such cynicism may be. But I still think the cynics are wrong,” he said Tuesday night. “A better politics is one where we debate without demonizing each other; where we talk issues, and values, and principles, and facts, rather than ‘gotcha’ moments, or trivial gaffes, or fake controversies that have nothing to do with people’s daily lives.”

Obama also called for Congress to pass a resolution giving him the authority to prosecute the five-month-old bombing campaign against the Islamic State in Iraq and Syria. The so-called use-of-force authorization is bound to trigger a robust debate within both parties, with critics claiming it gives the president authority that is too broad and could lead to other foreign conflicts.

Obama also called on Congress to pass legislation that would bolster the government’s ability to combat breaches of cybersecurity. The plans come on the heels of a security breach at Sony that Obama administration officials say was spearheaded by the North Korean government.

Obama, entering a phase of his presidency that he has referred to as the fourth quarter, is taking a more complex approach with Congress.

There are several areas of compromise — including potential trade deals with Asia and Europe that Republicans favor while some Democrats oppose — but the relationship is expected to be much more combative.

Obama has only vetoed two bills during his presidency, but just two weeks into this legislative session he has already issued several veto threats.

In the two months following a Democratic drubbing during the midterm elections, Obama has reasserted himself by using the tools of his office.

He has signed a broad climate change agreement with China and normalized relations with Cuba. He signed executive actions that halted deportation for millions of undocumented immigrants who meet certain requirements.

He touched on all of those Tuesday, but his address was mainly aimed at outlining a broad policy agenda, and he did not provide additional proposals for executive actions.

But he did forcefully call for more efforts to combat climate change, jabbing at Republicans who doubt the science and noting that 14 of the last 15 years have been the warmest on record.

“The best scientists in the world are all telling us that our activities are changing the climate,” he said. “The Pentagon says that climate change poses immediate risks to our national security. We should act like it.”