On January 20th of 2015, President Barack Obama gave his traditional State of the Union speech to the nation. The speech covered a number of topics, ranging from education to immigration. His thoughts regarding the economy provided a number of statements and proposals:
Unlike previous occasions in which the President downplayed the improving economic numbers, in his recent speeches, he enumerated the individual data points indicating that the “shadow of the crisis has passed.” He touched these specific facts:
- The national unemployment rate is now at 5.6 percent.
- No sign of inflation threatens the economic picture
- Gasoline prices are down to $2 per gallon, helping the recovery.
- Consumer sentiment is improving as more people return to work.
Educational Access For New Jobs
To counteract stagnant wages that have beset the country, the President hopes to increase training that will help to prepare workers for better paying jobs in today’s highly technical workplace by offering free community college for students who keep a 2.5 grade point average and graduate on time.
Proposals To Boost the Middle Class
President Obama proposed legislation to require sick pay for the 43 million American workers who do not yet have it, noting that loss of wages during minor illnesses negatively impacts many American families’ financial stability and affects the health of workers across the nation. He also proposed tripling the child tax credit to $3,000, and increasing the federal minimum wage.
Increased Taxes on the Wealthy
One of the President’s proposals asks for a higher tax on long-term gains, such as stocks held for more than one year. In 2014, the maximum tax rate on these investments was 23.8 percent. The President would raise this rate to 28 percent. In addition, he would eliminate the step-up inheritance tax loophole that allows stocks that increase significantly in value to pass on to heirs without taxation of their increased value. However, capital gains of $100,000 for individuals and $200,000 would be tax-free.
Infrastructure Building and Repair
The nation’s infrastructure is in serious disrepair, and the President hopes to correct this problem with a comprehensive bill that would modernize ports, build high-speed rail systems and expand broadband connection to all cities. The President downplayed the building of the Keystone XL pipeline as a significant infrastructure project that would help to create more jobs for Americans.
One area that President Obama is likely to get more support from the opposition party is on trade. He emphasized the importance of fast-tracking two trade deals that are currently under consideration, one involving the Pacific Rim countries and another involving countries around the Atlantic. Some secrecy surrounds the details of these trade deals, which has made them controversial even in the President’s own party.
The Republicans in Congress, who hold majority votes in both houses, are likely to be a stumbling block for implementation of many of these proposals. However, they may have to contend with significant public support of the programs that would help the vast majority of Americans.