Obama’s 2012 State of the Union proposals: what flopped and what succeeded
By Glenn Kessler,
Every president announces a slew of initiatives in his State of the Union address. Here, in order of delivery, is a summary of the key proposals, pledges or priorities announced by President Obama a year ago — and what happened to them.
Given election-year politics and conflicts with congressional Republicans, Obama’s success rate on legislative proposals in 2012 is relatively poor — at least until the year-end “fiscal cliff” negotiations.
Obama: “We should start with our tax code. Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it. So let’s change it.”
No progress has been made on reforming the tax code. Obama has repeatedly proposed changing tax breaks to reward companies that stay in the United States and punish those that leave, but there has been little enthusiasm in Congress, even when Democrats controlled the House.
Obama: “We’re also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over five years. With the bipartisan trade agreements we signed into law, we’re on track to meet that goal ahead of schedule.”
Oops, Obama spoke too soon. Obama’s goal was already set from a fairly low bar — the depths of the recession, after exports had fallen 15 percent — but export growth lagged dramatically in 2012. Exports in 2012 are up only about 39 percent above 2009, making it increasingly unlikely that Obama’s goal can be met in the next two years. As we have noted, just counting exports — rather than a gain in net exports — does not tell you much.
Obama: “Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.”
By executive order, Obama created the Interagency Trade Enforcement Center (ITEC), and it has challenged trade practices by China, India, Indonesia and Argentina.
Obama: “Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job.”
This has been a frequent refrain for the president. He first proposed in 2009 a $12 billion “American Graduate Initiative” for community colleges, but the plan was scaled back to just $2 billion over four years; only $1 billion in grants have been awarded. After the State of the Union address, the president called for an $8 billion fund called the “Community College to Career Fund.” But the plan has gone nowhere.
“Tonight, I am proposing that every state — every state — requires that all students stay in high school until they graduate or turn 18.”
One state, Maryland, in the past year has adopted legislation that would eventually require students to stay in school until age 18, bringing the number to 22 states plus the District of Columbia.
Obama: “At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July.”
Congress acted to extend the 3.4 percent interest rate on federally subsidized Stafford loans for another year.
Obama: “Extend the tuition tax credit we started that saves millions of middle-class families thousands of dollars.”
The American Opportunity Tax Credit was extended for another five years as a result of the end-of-the-year deal between the White House and Congress that averted the so-called fiscal cliff.
Obama: “Give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.”
As part of this proposal, the president had hoped to add an additional 110,000 federal work-study jobs in fiscal year 2013, on top of about 700,000 students. Not only was his plan not accepted by Congress, but the program now is threatened with a cut of 50,000 jobs because of the looming automatic sequester.
Obama: “So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down.”
This proposal has met with resistance in Congress, and no action has been taken.
Obama: “We should be working on comprehensive immigration reform right now.”
Virtually nothing happened in the election year, but prospects are much brighter for a deal this year.
Obama: “We’ve subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs.”
Obama made no progress on taking away tax benefits for oil companies — which he has long advocated — but did win an extension of wind-energy tax credits as part of the fiscal cliff deal.
Obama: “Here’s a proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, more jobs for construction workers who need them. Send me a bill that creates these jobs.”
This idea went nowhere in Congress, and no bill was passed.
Obama: “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates.”
Obama: “Tonight, I’m asking my attorney general to create a special unit of federal prosecutors and leading state attorney general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.”
New York Attorney General Eric Schneiderman was appointed to head the task force, and in October it filed a civil suit against JPMorgan Chase alleging a “systemic fraud on thousands of investors.” The task force also filed a lawsuit against Credit Suisse in November over an alleged $11 billion scheme.
Obama: “Our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay. Let’s get it done.”
Republicans, who had balked at extending the payroll tax cut, caved quickly and extended it for another year — in what was seen as a clean win for Obama. But the tax cut died a quiet death at the end of 2012 as part of the fiscal cliff negotiations.
Obama: “If you make more than $1 million a year, you should not pay less than 30 percent in taxes.”
Obama’s proposal of a minimum tax for the wealthy was largely ignored by Congress.
Obama: “On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up.”
In the fiscal cliff negotiations, Obama did win a permanent extension of the Bush tax cuts for individuals making less than $400,000 and couples making less than $450,000, as well as a modest increase in taxes on wealthier Americans. That’s not quite what he wanted, but we’ll count it as a win.
Obama: “I ask the Senate to pass a simple rule that all judicial and public service nominations receive a simple up-or-down vote within 90 days.”
No such idea — especially with a time frame — has been adopted by the Senate, though the time for debate has been reduced after there is already a bipartisan consensus for a final vote.
Obama: “In Syria, I have no doubt that the Assad regime will soon discover that the forces of change cannot be reversed, and that human dignity cannot be denied.... We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings — men and women; Christians, Muslims and Jews.”
The Pentagon’s top leaders recently revealed that they supported a plan — advocated by David H. Petraeus, then CIA director, and Hillary Rodham Clinton, then secretary of state — to supply weapons to rebels fighting the Syrian government in a brutal civil war. But the president rejected the idea, and there is little indication it will be revived. Syrian President Bashar al-Assad remains in power, and a report for the United Nations High Commissioner for Human Rights estimates that at least 60,000 people have died in the conflict.
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