Obama Lays Out Second Term Policy Agenda

omamWashington D.C.

In his first State of the Union address since being reelected, President Obama outlined an ambitious second term policy agenda that lays out his policy plans to revive the U.S. economy while advocating for deficit reduction, immigration reform, government investment in schools, and clean energy.

Continuing with the same progressive themes as he did in his first term, President Obama used his first second term address on Tuesday night to urge Congress to approve a $50 billion “Fix It First” program of infrastructure improvements by rebuilding America’s roads, bridges, and railroads while also investing in clean energy.

“We have doubled the distance our cars will go on a gallon of gas and the amount of renewable energy we generate from sources like wind and solar, with tens of thousands of good, American jobs to show for it” Obama said.

“But for the sake of our children and our future, we must do more to combat climate change” he added.

Although President Obama asked Congress to do more to combat climate change, environmentalists will likely be disappointed that he did not call for a cap on carbon emissions in his address.

Claiming that he wants to pursue a bipartisan, “market-based solution to climate change”, President Obama emphasized that if Congress won’t act soon to protect future generations, he will act on his own.

“I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy” Obama stated.

Deficit Reduction

As expected, President Obama called on Congress to embrace a deficit reduction plan that consists of a mixture of spending cuts and revenues instead of following a Republican inspired proposal that contains only spending cuts and spending reforms.

“Now, some in this Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training, Medicare and Social Security benefits. That idea is even worse” Obama said.

President Obama acknowledged the need for “modest” healthcare reform, the biggest driver of long-term U.S. debt, and he mixed in a plan to also raise revenues on the wealthiest Americans.

“But we can’t ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and the most powerful” Obama said.

Reaching a bipartisan agreement over the looming sequester budget cuts is a major challenge that still awaits Congress in the near future.

Unless Congress acts swiftly and forges ahead with an alternative deficit reduction plan, across the board government spending cuts, known as sequester cuts, amounting to $85 billion in 2013, divided between defense and non-defense programs, are set to kick in on March 1st, just over 2 weeks away.

The sequester cuts will be felt across America in various different ways besides the level of preparedness with  the U.S. military.

In early February the Federal Times reported about some of the federal cuts that are expected from a White House report.

“If sequestration takes effect March 1, more than 1,000 FBI and other federal law enforcement agents would be sidelined, hundreds of federal prosecutors and thousands of food safety inspectors would be furloughed, and widespread furloughs at the IRS would leave millions of taxpayers unable to get answers from IRS call centers as the April 15 tax deadline approaches” the Federal Times reported.

President Obama used his speech on Tuesday night to remind Congress that the most Americans support a balanced deficit reduction approach and pursuing a Republican proposal to reduce the deficit through budget cuts will weaken U.S. economic growth.

“Most Americans — Democrats, Republicans and independents — understand that we can’t just cut our way to prosperity. They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share” Obama said.

President Obama wants to reach deficit reduction targets through a new system of tax reforms that includes raising revenues on wealthiest Americans by eliminating tax loopholes and deductions.

‘To hit the rest of our deficit reduction target, we should do what leaders in both parties have already suggested and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and the well-connected” he said.

Aware of the political challenges that await U.S. lawmakers as they attempt to implement new tax reforms, Obama admitted, “I realize that tax reform and entitlement reform will not be easy. The politics will be hard for both sides.”

During the State of the Union rebuttal speech by Sen. Marco Rubio (R-Florida) it became clear that reaching a bipartisan agreement over the deficit reduction won’t come easy due to the steep philosophical differences that separate the two parties over fiscal policies.

Rubio explained in his rebuttal speech that Republicans are not interested in raising revenues through higher taxes on the wealthy and are aiming to adopt a different approach towards fiscal responsibility.

“We don’t have to raise taxes to avoid the President’s devastating cuts to our military. Republicans have passed a plan that replaces these cuts with responsible spending reforms” Rubio said.

“In order to balance our budget, the choice doesn’t have to be either higher taxes or dramatic benefit cuts for those in need. Instead we should grow our economy so that we create new taxpayers, not new taxes, and so our government can afford to help those who truly cannot help themselves” Rubio continued.

Housing, Immigration, and Jobs

One of the more encouraging economic bright spots for the U.S. economy that began in mid 2012 and has picked up steam in 2013 has been the housing sector which has witnessed major declines from 2007-2011 across much of the United States.

President Obama pointed out some of those recent gains in the housing sector while still acknowledging the need to continue helping young families and underwater homeowners who aren’t allowed to refinance under the current system.

“But even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no” Obama said.

“That’s holding our entire economy back. We need to fix it” he added.

Obama spoke about the need for creating the right economic climate for manufacturing jobs to return to America which has already been occurring, partly due to lower energy costs because of recent gains made in oil and natural gas industries.

“Our first priority is making America a magnet for new jobs and manufacturing. After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three” Obama said.

Obama said that he was in favor of raising the minimum wage by over 20 percent from $7.25  to $9.oo an hour to help reduce poverty levels.

Obama also spoke about immigration during his speech and used the time to lay out some of his key principles with immigration reform, including border security, legal immigration reform through extending visas, and a creating a pathway to citizenship for undocumented immigrants already living in the country.

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