Obama Appeals for Action on Boosting Economic Mobility

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President Barack Obama takes the podium to give his State of the Union address on Capitol Hill in Washington, Tuesday Jan. 28, 2014. Vice President Joe Biden and House Speaker John Boehner of Ohio are behind the president. Photograph: AP Photo/Charles Dharapak

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President Barack Obama takes the podium to give his State of the Union address on Capitol Hill in Washington, Tuesday Jan. 28, 2014. Vice President Joe Biden and House Speaker John Boehner of Ohio are behind the president. Photograph: AP Photo/Charles Dharapak Close

President Barack Obama takes the podium to give his State of the Union address on Capitol Hill in Washington, Tuesday... Read More

Photographer: Larry Downing/Pool via Getty Images

U.S. President Barack Obama, front, delivers his State of the Union address, as Vice President Joe Biden, back left, and House Speaker John Boehner, a Republican from Ohio, listen before a joint session of Congress at the U.S. Capitol in Washington D.C. on Jan. 28, 2014. Close

U.S. President Barack Obama, front, delivers his State of the Union address, as Vice President Joe Biden, back left,... Read More

Photographer: Larry Downing/Pool via Bloomberg

U.S. President Barack Obama delivers the State of the Union address. Close

U.S. President Barack Obama delivers the State of the Union address.

Photographer: Andrew Harrer/Bloomberg

U.S. President Barack Obama delivers the State of the Union address to a joint session of Congress at the Capitol in Washington, D.C. on Jan. 28, 2014. Close

U.S. President Barack Obama delivers the State of the Union address to a joint session of Congress at the Capitol in... Read More

President Barack Obama offered modest steps to chip away at the country’s economic and social challenges in a State of the Union address that reflected the limits imposed on him by a divided Congress.

Striking a defiant tone, Obama promised to take executive action to steer around Republican opposition to his agenda where he can. Among the steps he outlined are raising the minimum wage to $10.10 for future federal contract workers and creating a retirement savings program for people whose employers don’t offer a 401(k) plan.

“America does not stand still -- and neither will I,” he told a joint session of Congress. “So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”

In all, the president announced a dozen actions using presidential authority that he said would push against economic forces that have left lower- and middle-income Americans still struggling to recover from the worst recession in more than seven decades.

Enlisting Companies

He also said he’s enlisting companies to help, including Apple Inc. (AAPL) and Verizon Communications Inc. (VZ) to assist in expanding broadband in schools, and to boost hiring of the long-term unemployed. “We have pledged to contribute MacBooks, iPads, software and our expertise to support the ConnectED project,” said Apple spokeswoman Kristin Huguet.

Obama appealed for cooperation from the Congress on other priorities, including immigration, corporate taxes, trade and transportation.

He also asked lawmakers to back an expansion of the earned income tax credit to aid the working poor, saying he agreed with Republicans including Senator Marco Rubio of Florida, seen as a future presidential contender, who say the existing credit doesn’t do enough for childless workers.

Rubio after the speech said that Obama “missed on opportunity” to work with Congress. “We need a real opportunity agenda that helps people seize the enormous potential that the coming years hold.”

Imploring Congress

Obama expressed impatience with Congress.

“The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead,” Obama said. “Our job is to reverse these trends.”

The agenda Obama laid out in his address demonstrates shrinking ambitions for his sixth year in office as he confronts persistent opposition from Republicans, who control the House of Representatives. With every member of the House and a third of the Senate up for election in November, Obama has little chance of getting action on legislation that would bring about major changes in direction.

With November’s midterm elections posing a risk for Democrats with a tenuous hold on the Senate, Obama sought to rally female voters, calling for equal pay and parent-friendly workplaces. “It’s time to do away with workplace policies that belong in a ’Mad Men’ episode,” he said.

Obama focused his remarks largely on Americans aspiring to the middle class, and on outreach to business.

“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. Inequality has deepened.”

Economic Growth

Since Obama delivered the State of the Union last year on Feb. 12, the benchmark Standard & Poor’s 500 Index (SPX) 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.

The U.S. still hasn’t replaced all of the jobs lost during the recession. Only 62.8 percent of working-age Americans are employed or actively seeking work, the lowest mark since February 1978. Almost 4 million people have been out of work for more than six months, three times the pre-recession average.

Real median household income of $51,000 is 8 percent lower than in 2007.

“Opportunity is who we are,” Obama said. “And the defining project of our generation is to restore that promise.” He said he’d start four new manufacturing institutes this year and order a government-wide review of job training programs.

New Partnerships

Obama called for a new partnerships between the federal government and states and local governments through “sustainable shale gas growth zones” to promote fracking “the right way,” according to a fact sheet the administration released to correspond with the State of the Union address.

He said the U.S. was leading the world in reducing greenhouse gases. He didn’t mention the TransCanada Corp. (TRP)’s proposed Keystone XL pipeline, which is opposed by environmentalists as a global warming threat and supported by business and labor groups as a source of jobs.

While foreign policy played a secondary role in this year’s annual address to Congress, Obama again said he would veto new sanctions against Iran amid negotiations over its nuclear program.

He also asked Congress to let him close the prison for suspected terrorists at Guantanamo Bay, Cuba, saying it shouldn’t outlast the end of the war in Afghanistan.

Republican Response

In the official Republican response, Representative Cathy McMorris Rodgers said her party offered 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 Obama’s record on the economy and the president’s health-care law.

The president avoided direct confrontation with Republicans on issues that hold potential for bipartisan agreement this year, including immigration and extending long-term unemployment (USURTOT) benefits.

“Republicans and Democrats in the Senate have acted,” he said of immigration legislation. “I know that members of both parties in the House want to do the same.” He framed the need for an immigration overhaul in the context of economic growth, and refrained from repeating his previous insistence that legislation should create a path to citizenship for 12 million undocumented residents.

Reprising Proposals

In the speech, Obama reprised initiatives he has failed to move through the divided Congress in prior years, and then promoted less ambitious policies he can achieve with executive action or narrower legislation.

Last year, Congress enacted only two of 41 legislative requests in his State of the Union speech -- reauthorizing the expiring Violence Against Women Act and raising the legal debt limit to avoid a U.S. default. That amounts to a success rate below 5 percent according to analysis by Donna Hoffman of the University of Northern Iowa and Alison Howard of the Dominican University of California.

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.

Obamacare Defense

At the same time, Obama defended his signature domestic policy achievement -- an expansion of health care coverage known as the Affordable Care Act, or Obamacare -- against Republican calls for repeal.

“I don’t expect to convince my Republican friends on the merits of the law,” Obama said. “But let’s not have another forty-something votes to repeal a law that’s already helping millions of Americans.”

He used the speech to call on Americans to sign up for coverage and encourage others to sign up ahead of a March 31 enrollment deadline. “Moms, get on your kids to sign up,” he said. “Kids, call your mom and walk her through the application.”

Signaling that environmental regulation is one area where he may have more latitude to change policy through executive powers, Obama said his administration is taking additional steps on regulating fracking, raising fuel efficiency for trucks and declaring off limits some public lands even as it permits renewable energy projects.

“The debate is settled,” he said. “Climate change is a fact. And when our children look us in the eye and ask us if we did all we could do leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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