President Obama’s State of the Union address Tuesday night is shaping up as an election-year rallying cry to his Democratic base to fight for income equality in America, even as the gap between rich and poor grows during his presidency.
Mr. Obama’s nationally televised speech to a joint session of Congress at 9 p.m. will strike themes intended to fire up Democratic voters for the midterm elections, including proposals for a nearly 40 percent hike in the federal minimum wage and an extension of long-term unemployment benefits.
Aides say Mr. Obama also will remind lawmakers that he intends to issue more executive orders in this “year of action” after criticizing the 2013 Congress as one of the most unproductive in history. He is expected to announce executive actions on job training and retirement security.
Mr. Obama also will renew the call for comprehensive immigration reform, one of the few legislative issues on which there still appears to be room for compromise between the president and House Republicans.
Lawmakers in both parties are intent to learn whether Mr. Obama will call for fast-track authority to complete trade deals in Asia and Europe, although a majority of House Democrats oppose the move in allegiance with their labor base. Tea party conservatives also oppose the move.
But the president is expected to focus on economic “fairness” issues, such as the minimum wage, as part of his push to reverse increasing income disparity in America, which he calls “the defining issue of our time.”
Rich man, poor man
That income gap also has helped define Mr. Obama’s presidency. After-tax corporate profits in America are at their highest levels since World War II, while workers are receiving a smaller share of economic output than at any other time since 1952.
In 2012, the richest 10 percent of Americans earned their largest share of income since 1917, said Emmanuel Saez, an economist at the University of California at Berkeley. Meanwhile, Census Bureau statistics showed that real average income among the poorest 20 percent of families continued to fall each year from 2009 to 2011.
Lance Roberts, a Houston economist, said policies during Mr. Obama’s presidency have exacerbated the gap between rich and poor. He cited the Federal Reserve’s rounds of “quantitative easing,” which have pumped trillions of dollars into Treasury bonds and mortgage-backed securities as economic stimulus. The pumping, he said, resulted in higher stock prices as investors were forced out of the bond markets.
“Seventy-six percent of people in this country live paycheck to paycheck,” said Mr. Roberts, CEO of STA Wealth Management. “They don’t have any money in the market. So you’ve had this massive surge in profits and this massive surge in asset prices, but none of that has filtered down to Main Street America. They don’t see the economy being a lot better.”
The debt ceiling deal that Mr. Obama struck with congressional Republicans in 2011, which set into motion the sequestration budget cuts last year, also tended to hurt lower-income people, Mr. Roberts said.
“It didn’t affect the top 10 percent of the population at all,” he said.
Mr. Obama’s aides say he has promoted policies such as expanded child tax credits that have lifted millions of people out of poverty. One of the president’s first acts in office was to sign the Lilly Ledbetter Fair Pay Act of 2009, which made it easier for workers to file lawsuits alleging paycheck discrimination.
But as the president has tried to strengthen the recovery from the Great Recession of 2007-2009, evidence suggests his policies are not closing the gap. A record 23 million households received food stamps last year, a jump of 51 percent since 2009. The Agriculture Department said a total of 47.6 million people were on food stamps last year, an increase of 1 million from 2012.
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