President Barack Obama called for raising the federal minimum wage to $9 an hour and threatened to use executive action on climate change and economic incentives if Congress doesn’t act, laying out an activist second-term agenda that quickly provoked Republicans.
Along with a renewed appeal for votes on immigration and gun control, Obama proposed making preschool available to all 4-year-olds, negotiating a new trade agreement with the European Union and spending $50 billion on “urgent” infrastructure projects. He lauded steps by companies such as Apple Inc., Caterpillar Inc. and Ford Motor Co. to bring manufacturing jobs back to the U.S.
The government should be guided by three questions, Obama said last night in his fourth State of the Union address before a joint session of Congress. “How do we attract more jobs to our shores? How do we equip people with the skills they need to get those jobs? And how do we make sure that hard work leads to a decent living?”
The hourlong speech signaled Obama’s plans to move quickly to leverage his political strength from last November’s re-election by challenging the Republican majority in the U.S. House of Representatives to schedule votes on his agenda. Over the next three days he’ll travel to North Carolina, Georgia and Illinois to promote his agenda.
It also illustrated his decision to test the limits of his executive powers to implement his priorities without the House or even the Democratic Senate’s majority.
Obama spoke as he and congressional Republicans are at an impasse in talks to head off $1.2 trillion in automatic, across-the-board spending cuts set to begin taking effect on March 1. He’s also in a struggle over the government’s role in addressing economic inequality, a central theme of his re-election campaign and his inaugural address.
On budget and economic matters, Republicans showed no sign they were ready to accede to Obama’s position.
House Speaker John Boehner, an Ohio Republican, criticized the president for promoting “a go-it-alone approach to pursue his liberal agenda.”
Obama’s program “as always is lacking the real pro-growth jobs agenda,” said Texas Republican Kevin Brady, a member of the tax-writing House Ways and Means Committee. “Jobs have never been the president’s priority. That’s why unemployment is higher than it was the day he took office.”
Obama’s call for a minimum wage increase is his first as president. While it last rose in 2009, under his presidency, the increase came out of a 2007 law signed by President George W. Bush. Raising the hourly federal minimum wage to $9 from $7.25 by the end of 2015 would return it to its highest inflation-adjusted value since 1981, under President Ronald Reagan, according to a White House fact sheet.
Such an increase, affecting an estimated 15 million people, would require approval by Congress. Republican lawmakers have repeatedly criticized such proposals, saying a higher minimum wage would throw lower-paid employees out of work because of the cost to businesses.
While the U.S. pulled out of its worst economic downturn since the Great Depression after Obama took office, unemployment has remained high and the ranks of jobless workers have reduced employee leverage to gain wage increases.
Real median household income declined to $51,088 in December 2012 from $55,012 when he took office in January 2009, according to an analysis of census data by Sentier Research, an economic-consulting firm in Annapolis, Maryland.
Obama began with a warning about the “sudden, harsh, arbitrary” spending cuts that hit if Congress fails to act to avert the sequester. It would slow the economy, “jeopardize our military readiness” and “devastate priorities like education, energy, and medical research,” he said.
He said he stood by an offer he had previously made to cut spending on the Medicare health insurance plan for the elderly by cutting payments to drug companies, raising premiums for the wealthy and changing medical reimbursement procedures.
He repeated his demand that Republicans accept raising tax revenue along with spending cuts as part of any “balanced” approach to his goal of $1.5 trillion in additional deficit reduction over a decade. He said the balance could be achieved by “getting rid of tax loopholes and deductions for the well-off and well-connected.”
Senator Marco Rubio of Florida said in the official Republican response that more tax increases on the wealthy would slow economic growth and ultimately harm the economic prospects for all Americans.
“The tax increases and the deficit spending you propose will hurt middle class families,” Rubio said. “It will cost them their raises. It will cost them their benefits. It may even cost some of them their jobs.”
Obama said that while the automatic cuts are “a really bad idea,” it would be “even worse” if he accepted Republican proposals to prevent the defense cuts by cutting deeper into education, job training and entitlement programs.
“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 most powerful,” he said. “How is that fair? How does that promote growth?”
Obama didn’t lay out the cost of his proposals, including universal pre-school, saying only that they wouldn’t add “a single dime” to the deficit.