New York: President Barack Obama’s confident and somewhat combative State of the Union speech on Tuesday outlined an ambitious second term agenda. He rattled corporate America by pledging to fight for a higher minimum wage. Republicans were also left in no doubt that he would fight for more government investment in schools, gun safety, and immigration reform.
Obama’s address to a joint session of Congress comes at a time when he is again locked in a bitter battle with Republicans over taxes and spending. Obama and Congress are scrambling to find a way to avoid automatic spending cuts poised to hit by 1 March unless a deal is reached to replace them.
Obama’s deficit reduction plan and prescription for growth is at odds with that of the Republican Party. As expected, he made a case on Tuesday for the need to close the deficit through a combination of budget cuts and tax increases. Republicans, citing the tax-hike concessions they gave during the fiscal crisis talks, are absolutely averse to more tax increases.
Florida Senator Marco Rubio said in the Republican response to Obama's State of the Union address that Obama should "abandon his obsession with raising taxes."
"Presidents in both parties — from John F Kennedy to Ronald Reagan — have known that our free-enterprise economy is the source of our middle-class prosperity. But President Obama? He believes it's the cause of our problems," Rubio said.
To help struggling families Obama called for raising the minimum wage to $9.00 per hour. It's currently $7.25, so that's a significant jump. It's hard to imagine Republicans going along with such a jump, which they say would hit business owners and "job creators" hard and end up stifling growth.
"Our economy is adding jobs, but too many people still can't find full-time employment," Obama said.
"Corporate profits have rocketed to all-time highs, but for more than a decade, wages and incomes have barely budged," added Obama.
Obama also came up with a new plan to make high-quality preschool more widely available to low and moderate-income children. He reissued spending proposals that have died before in Congress, including $50 billion to improve aging roads and bridges, and said none of the proposals would add to the deficit. Republicans are opposed to such government spending after Obama's first term $787 billion stimulus did not lead to a dramatic reversal in the unemployment rate.
Obama tied climate change legislation to the economy, and singled out the McCain-Lieberman plan several years ago, a bipartisan gesture. But he also carried a stick, saying that if Congress won't act, he'll find executive actions to respond.
In fact, the challenge he laid down when discussing efforts to curb climate change could have been applied just as well to his approach to issues across the board: “If Congress won’t act soon, I will.”
"I think investors are going to interpret the State of the Union as a more intransigent President," Jeff Saut, chief investment strategist at Raymond James, told Yahoo News. He added that there is a tendency of the market to sell-off after big Obama speeches.
US in a hurry to quit Afghanistan
While heavily focused on domestic policies, Obama's speech outlined that 34,000 US troops will be home from Afghanistan by this time next year. That’s about half the US forces currently serving there. It marks the next phase in the Obama administration’s plans to leave Afghanistan by the end of 2014 after nearly a dozen years of debilitating war.
Obama did not give details of what sort of residual American presence might remain in Afghanistan after 2014, when the US withdrawal is supposed to be complete.
Of course, Obama’s hurry to hotfoot it out of Afghanistan is worrying for countries like India as Afghanistan lacks a firm state that can manage to roll back the Taliban insurgency after US soldiers pull out. Without some military support, analysts say civil war is likely to engulf Afghanistan, providing a breeding ground for Islamic extremism.
But the US is exhausted with the $600 billion Afghan war since September 2011, which has killed more than 2,000 American soldiers, and Obama appears to have decided to call it quits no matter what.
After talks with British Prime Minister David Cameron, Afghan President Hamid Karzai and Pakistan's Asif Ali Zardari said they would work towards a peace deal for Afghanistan within six months. They backed the opening of an Afghan office in Doha and urged the Taliban to do the same for peace talks to take place.
As Seema Sirohi pointed out in Firstpost, “Nervousness in India is growing about the withdrawal of US and NATO troops from Afghanistan because no matter which way you assemble the pieces, it doesn’t spell comfort. India has no reason to feel sanguine about the Taliban — good or bad versions.”
Updated Date: Feb 13, 2013 10:51 AM