Industry trade groups and lawmakers were quick to weigh in with praise and criticism of issues raised in President Obama’s mid-January State of the Union address, namely cybersecurity, the Dodd-Frank financial reform law, taxes and entitlement reform.
While Obama’s plans include raising taxes for higher-income Americans—“let’s close the loopholes that led to inequality by allowing the top 1% to avoid paying taxes on their accumulated wealth”—limiting IRA contributions and a “step-up basis” reform of capital gains, political strategist Greg Valliere of Potomac Research noted in his mid-January commentary that “none of the populist tax proposals from Obama have any chance of enactment.”
In his speech, Obama said that he would send by early February to the new Congress a “budget filled with ideas that are practical, not partisan,” and noted that he would veto any bills that seek to water down the Dodd-Frank financial reform law.
Policies currently in place “will continue to work as long as politics don’t get in the way,” Obama said. “We can’t slow down businesses or put our economy at risk with government shutdowns or fiscal showdowns. We can’t put the security of families at risk by taking away their health insurance or unraveling the new rules on Wall Street.”
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Said Obama: “If a bill comes to my desk that tries to do any of these things, I will veto it.”
Rep. Maxine Waters, D-Calif., ranking member on the House Financial Services Committee, praised Obama’s pledge to veto any Dodd-Frank rollback legislation as “even more critical in the aftermath of recent Republican efforts to chip away at the law and return to the lax policies that brought our economy to the brink of collapse.”
However, Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, said in a statement that “if the president is really concerned there is too much risk in the financial system, then clearly Dodd-Frank isn’t working as he intended and is thus yet another administration failure.” The financial reform law, he said, is “400 regulations [that] are stifling the Main Street economy.”
Hensarling added that lawmakers should “cooperate on reforms that will work to make our financial system more stable without hurting those on Main Street who had absolutely nothing to do with causing the financial crisis.”