State of the Union proposals: What might pass?

Two-thirds of the way through his State of the Union address on Tuesday night, President Obama paused for a moment to say something that already was on the minds of many viewers: “Most Americans are thinking the same thing right now: Nothing will get done this year.”

Idea after idea, proposal after proposal, Obama laid out an aggressive agenda for reshaping the tax code, encouraging more manufacturing jobs and reworking some of the rules that govern Congress. Leading Republicans dismissed the speech as the highest-profile appearance of the president’s reelection campaign, not serious governing.

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President Obama, following up on his annual State of the Union address to Congress, defended the government's role in ensuring fairness and rejected accusations that he is engaging in class warfare as his re-election bid begins. (Jan. 25)

President Obama, following up on his annual State of the Union address to Congress, defended the government's role in ensuring fairness and rejected accusations that he is engaging in class warfare as his re-election bid begins. (Jan. 25)

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INTERACTIVE: State of the Union breakdown
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“It’s pretty clear to me that he hasn’t been involved for the last four months. And unless I see something here in the near future, I have no indications that he actually wants to sit down and work with us,” House Speaker John A. Boehner (R-Ohio) said Wednesday morning on Laura Ingraham’s radio show.

Republicans have largely dialed back their expectations for 2012 and are hoping to approve several key pieces of legislation, expecting to then frame other proposals as an alternative vision for voters to judge in the November elections. Across the Capitol, Senate Majority Leader Harry M. Reid (D-Nev.) said Wednesday that the only path to legislative deals is if “Republicans will stop listening to the tea party and start listening to the American people.”

The biggest optimist is Sen. Charles E. Schumer (D-N.Y.), who spent most of last year privately criticizing the White House’s engagement with Republicans. Now, he says the year-end fight over whether to extend a payroll tax holiday has shifted the dynamic in Congress toward deal-making.

“This is a president who has not given up on governing. . . . Don’t underestimate our chances of success,” he told reporters Wednesday.Schumer’s optimism is based largely on the belief that Republicans will find themselves in political quicksand and latch onto any deal Democrats offer, a proposition that Republicans firmly reject.

Here’s a breakdown of some of the proposals that have the best chance of winning approval, some chance of approval and those that will have to wait until next year:

Can Pass


PAYROLL TAX HOLIDAY:
House-Senate negotiations are underway on extending this tax break through the end of the year, and both sides are optimistic that a deal can be reached. However, the entire package — which includes extending unemployment benefits and adjusting Medicare payments so that doctors don’t see a drop in fees — would cost $160 billion and the impasse has been over finding the offsetting cuts or revenue increases to make up for those extensions. Still, Republicans are smarting over their bitter infighting from December’s debate on temporary extensions, and most leaders want to find a quick resolution to the matter.


STOCK ACT: That’s the formal name for a bill that would make it illegal for lawmakers to trade stocks based on information from private congressional briefings. Some experts say that this is already illegal, but most agree that it’s a gray area. Obama called for going a step further and prohibiting “any elected official from owning stocks in industries they impact,” which is an attempt to bring Congress in line with executive branch rules. This is a tougher sell on Capitol Hill, where the Stock Act is likely to be the fallback legislation in this area. With the public support of Obama, Reid and House Majority Leader Eric Cantor (R-Va.), the stock bill has hit a trifecta that should guarantee its passage early this year.

Might pass


“ALL OF THE ABOVE ENERGY”:
Latching onto a line that Republicans trumpeted in 2008 , Obama has pushed for greater natural gas exploration and more funding to create renewable energy. He also wants to end oil industry subsidies and increase “clean energy tax credits.” This is an ambitious agenda, but pieces of it could fall into place, particularly natural gas exploration. The biggest stumbling block to any compromise on energy legislation is twofold: Liberal Democrats oppose the construction of the Keystone XL pipeline, which would send oil from Canada down to the Gulf Coast, a project that Republicans are demanding; and Republicans have rejected expanding renewable energy programs after the collapse of Solyndra, a California company with White House connections that went bankrupt after receiving $535 million in federal loan guarantees.


UNEMPLOYMENT REFORM:
Obama called for turning “our unemployment system into a reemployment system,” suggesting ways to increase job training. Former House speaker Newt Gingrich, a leading GOP presidential contender, has suggested similar proposals, as have House Republicans. However, Senate Democrats rejected GOP proposals that called for drug testing and requiring unemployed workers to work toward getting at least a high school diploma. There is room for compromise, and one idea Democrats floated last year was to modify the duration of unemployment assistance based on the regional economy, so that laid-off workers in hard-hit states such as Nevada would receive longer benefits.


EDUCATION REFORM:
No legislative area connects better to Boehner’s legislative background than classroom reform. The speaker, who co-wrote the No Child Left Behind legislation, has long wanted to work with Education Secretary Arne Duncan on the next steps for change. When Obama talked about granting schools “flexibility” and keeping “good teachers on the job,” he hit the sweet spot of GOP efforts to overhaul schools. Republicans have pushed for giving schools more freedom to fire under-performing teachers, an issue that riles teachers unions and their Democratic allies on Capitol Hill. This issue is ripe for compromise, but may have to wait another year or two.

Waiting Until next year


A TAX OVERHAUL:
Nowhere was Obama more ambitious than in his proposals to overhaul the tax code, trying to push ideas that he said would make it more fair. Some of these were familiar — such as allowing rates on the top 2 percent of earners to return to their Clinton-era levels — but several were new, including eliminating enough loopholes so that millionaires paid at least 30 percent in taxes. Also, he wants to establish a minimum tax for multinational companies that store revenue overseas. Democrats say these ideas are popular, but most insiders want all of them to be considered as part of a reform package that deals with corporate and personal taxes. Even Reid suggested Wednesday that such a major undertaking would reach only the committee stage this year.

“We know we have to do tax reform. There will be hearings in that regard. But we want — we know we have to do tax reform,” he said, saying there is hope for a “bipartisan basis” for a bill.


NOMINATION REFORM:
The president criticized Senate Republicans for blocking or slow-walking so many of his nominees to federal agencies and the judiciary. Reversing himself from his own position seven years ago when he was senator, Obama endorsed eliminating filibusters on those nominees and guaranteeing a vote on them within 90 days. Republicans flatly rejected that, and after the speech, Reid stipulated that Supreme Court nominees should remain subject to the 60-vote threshold. An effort by junior Senate Democrats in late 2010 to eliminate filibusters floundered when senior Democrats objected, lecturing younger senators about how they would want those prerogatives once they served in the minority.

 
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