(Bloomberg) — President Barack Obama today offered modest steps to chip away at the country’s economic and social challenges in a State of the Union address that reflects the limits of his power to sway Congress.
Using executive authority to enact portions of an agenda that’s been stalled by Republicans, Obama said he will work to create a retirement savings program for workers whose employers don’t offer a 401(k) plan.
Obama said workers would get access to a new type of “MyRA” retirement savings bond “with no risk of losing what you put in.”
Obama also talked about giving “every American access to an automatic IRA on the job.”
Obama appealed for cooperation from the divided Congress on other priorities, including immigration, corporate taxes, an expansion of the earned income tax credit to aid the working poor, and easing income inequality.
“After four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better,” Obama said in the text. “But average wages have barely budged.”
Since Obama delivered the State of the Union last year on Feb. 12, the benchmark Standard & Poor’s 500 Index has surged 18 percent, the Bloomberg Dollar Spot Index is up 2.8 percent and the U.S. economic growth rate has accelerated to 4.1 percent in the 3rd quarter from 1.1 percent. Unemployment has dropped to 6.7 percent from 7.7 percent last February. Still, in December, the average weekly earnings of U.S. workers were flat compared to a year earlier when adjusted for inflation. Real median household income of $51,000 is 8 percent lower than in 2007.
Obama said he supports lowering the corporate tax rate and curtailing tax breaks, then using any one-time revenue that change generates to build bridges, transit and other infrastructure. That plan is stalled in Congress, stymied by a partisan dispute over whether wealthy individuals should pay more.
Obama also took time during his speech to defend the Patient Protection and Affordable Care Act (PPACA).
“Already, because of the Affordable Care Act, more than three million Americans under age 26 have gained coverage under their parents’ plans,” Obama said. “More than 9 million Americans have signed up for private health insurance or Medicaid coverage. And here’s another number: zero. Because of this law, no American can ever again be dropped or denied coverage for a preexisting condition like asthma, back pain, or cancer.”
Obama said he is open to considering specific proposals from Republicans or others about ways to cut health care costs, cover more people, and increase choice.
“But let’s not have another forty-something votes to repeal a law that’s already helping millions of Americans,” Obama said, referring to House votes on bills to repeal or dramatically revise PPACA. “The first forty were plenty. We got it. We all owe it to the American people to say what we’re for, not just what we’re against.”
In the Republican response, Rep. Cathy McMorris Rodgers, R-Wash., said her party is offering a different vision: “One that empowers you, not the government. It’s one that champions free markets -– and trusts people to make their own decisions, not a government that decides for you.”
The Washington Republican also criticized PPACA.
–Editors: Joe Sobczyk, Steven Komarow