Obama to push tax hike and trade deals in State of Union speech

Opportunity for US president to talk of improved economy six years into his tenure

US president Barack Obama’s speech will allow him to update Americans on the threat of Islamist extremists, two weeks after 17 people were killed in attacks in France. Photograph: Jim Lo Scalzo/Getty Images

US president Barack Obama’s speech will allow him to update Americans on the threat of Islamist extremists, two weeks after 17 people were killed in attacks in France. Photograph: Jim Lo Scalzo/Getty Images

 

President Barack Obama aims in Tuesday night’s State of the Union address to outline his plans to help middle class people left behind by the economic recovery through tax increases on the most wealthy and by signing trade deals to expand markets for US goods and services.

The idea of raising the top capital gains and dividends tax rate to 28 per cent from 23.8 per cent is popular with Democrats who are looking beyond Mr Obama’s tenure to the 2016 elections.

But it seems dead on arrival with Republicans who control both houses of Congress.

For Mr Obama, seeking to burnish his legacy with two years left in office, the speech will be his best opportunity of the year to talk to millions of Americans watching on television about the improved economy six years into his tenure, which began with the Democrat facing a crippling financial crisis.

Mr Obama has said he wants to reach out to Republicans who support trade deals with Asia and Europe that his administration has pursued, over the objections of some of his fellow Democrats.

He could push for fast-track trade negotiating authority in his speech at 9pm EST (0200 GMT Wednesday).

“If President Obama can be more forward-leaning with members of his party, starting with tonight’s State of the Union address, I think we can get this [fast-track authority] done quickly. That is what I am committed to do,” said Republican Senator Orrin Hatch, chairman of the Senate Finance Committee, in a speech to the US Chamber of Commerce.

Relations between Mr Obama and Republicans have been off to a rocky start this year. Mr Obama has threatened to veto seven Bills so far as well as a proposal for tougher Iran sanctions.

Mr Obama’s speech will allow the president to update Americans on the threat of Islamist extremists, two weeks after 17 people were killed in attacks in France.

Cuba relations

Mr Obama also will defend his decision to seek to normalise diplomatic relations with Cuba.

Alan Gross, the US aid worker whose release from a Cuban prison helped pave the way toward restoring diplomatic ties with Cuba, will be among Michelle Obama’s guests for the speech.

Speaker John Boehner, the top Republican in the House of Representatives, and Republican Senator Marco Rubio, a Cuban-American who is a potential presidential candidate in 2016, have invited Cuban dissidents who oppose Mr Obama’s move.

The White House has taken some of the suspense away from the speech this year, sending Mr Obama on the road during the past two weeks to roll out themes he plans to highlight, like the need to beef up cybersecurity and invest in infrastructure.

Mr Obama will travel to Idaho and Kansas this week to continue to promote his ideas.

The White House has devised an elaborate social media strategy to target younger voters and those not watching on television. Senior adviser Dan Pfeiffer called the speech “the Obama administration’s Season Seven premiere”.

In a blog post, Mr Pfeiffer said the speech takes a different tack as “a story, not a laundry list” with some details left for Mr Obama’s February 2nd budget.

“Consider it ‘A Very Special Episode’ of the State of the Union,” Mr Pfeiffer said.

Reuters