President Obama Did Propose Several Initiatives. Article Reviews Example

1. President’s Sense of the State of the Union
In President Obama’s mind, he is presiding over a stable, growing, economy and is a force for peace throughout the world. He cited the end of war in Iraq and Afghanistan, consistent growth in the US GDP and consistent growth in job creation. He made the case that the shadow of crisis has passed and that the state of the Union is strong. His body language and tone gave every indication that he sees himself as a strong successful leader and that his biggest problem is that those pesky Republicans just won’t do what he wants them to do.
2. Agreement or Disagreement?
I could not disagree more with just about everything President Obama said. Growth in the 2014 4th qtr. was only 2.6%, down from 5% in the 3rd qtr. We had negative growth in the 1st qtr. of 2014. Most economists will argue that while there has generally been positive growth in recent quarters, it is the weakest post WW2 recovery from a recession on record. Were we in a typical recovery phase from a recession, our growth rate should be consistently well over 5%, fueling fears of inflation. Instead, the Federal Reserve is holding interest rates to near zero. That’s the best indication of the state of our economy.
President Obama cites the decline in unemployment from a recent high of 10% to about 5.8% as proof his economic policies are working. Nothing could be further from the truth. Technically, the rate did decline from 10% to 5.8%, but that’s a reflection of the metrics of how the rate is calculated. The unemployment rate is a ratio of all employable workers actively looking for work, to the total available workforce. The total available workforce number is what it is – it doesn’t change. But, if a large portion of people looking for employment just give up, they are removed from the number of people actively looking for work, giving the false impression that the unemployment rate has declined. And that’s exactly what happened – a significant number of people have just quit looking for work and are no longer used in calculating the unemployment rate. Many economists speculate that if all those who quit looking for employment are factored back in to the calculations, the unemployment rate would be about 15 – 18%.
A better indicator of the state of the economy is the labor force participation rate which is the percentage of working age persons who are either employed or looking for work. That rate is currently at its lowest level since 1978.
President Obama talked at length about how great it was that he ended the war in Iraq and Afghanistan. He positioned this as a great and honorable achievement. In my opinion it is a delusion. If two people are fighting and one just says I quit, that doesn’t mean the fight is over. Sure, President Obama has withdrawn all military from Iraq, but look at what happened. ISIL now controls one third to one half of the country, and the Kurdish northern area has all but succeeded from Iraq central authority. The country is in disarray and the US is sending more trainers back into Iraq. In Afghanistan, we are withdrawing our troops but the Taliban is gaining in strength, just biding their time until we actually leave to continue their quest to topple the government and control the country once more.
In general, I felt President Obama made this speech wearing rose colored glasses, twisting words and using semantics to paint a false picture of the true state of the union.
3. Administration Problems and Initiatives
I believe the administration has two problems. The first is that their Democratic party no longer controls the Senate. The entire Congress is now controlled by the Republicans. From a practical standpoint, this means that Congress will likely begin passing legislation to which President Obama is ideologically opposed. This will force him to have to decide what, if anything, he chooses to veto. For six years, those types of bills died in the Senate. No more.
The second problem the administration has is that neither President Obama nor those he has surrounded himself with, have experience in crafting legislation and working with the opposition to get it passed. As a result, he simply issues ultimatums to Congress that if they don’t pass what he wants, he will issue Executive Orders and veto what they do pass. This approach all but guarantees governmental gridlock for the next two years.

In the area of tax reform, Obama proposed tax credits for the working poor, an expanded tax credit for child care and a special tax credit for couples where both spouses work. These would be paid for by increasing the capital gains tax and taxes on inherited wealth.
Perhaps the most controversial initiative that Obama proposed is two years of free community college for any student meeting some minimal qualifications.
In the area of trade, Obama asked congress to grant him fast track authority to negotiate trade agreements with foreign countries. This authority gives Obama the freedom to negotiate trade agreements subject to Congressional approval. The catch is that Congress could only vote yea or nay on the agreement and would not be able to offer any amendments.

In the area of infrastructure, Obama called for massive investments in roads, bridges, and ports.

4. Doable? Realistic? Feasible?
I believe almost everything President Obama proposed in his state of the Union Speech will be dead on arrival in Congress. He knows it and Congress knows it. This was not a speech about serious proposals as much as it was a litany of left wing wish lists.
There is absolutely no way a Congress dominated by Republicans is going to agree to increase the capital gains tax. They will probably pass legislation to lower it. And the same goes for the inheritance tax. Without these two tax increases, the tax credits President Obama proposed will not have a source of funding.
The initiative to provide two years of free community college education to anyone that wants it was never seriously considered by just about anyone. Polls indicate President Obama is losing popularity among the young people who were his base of support. Proposing free college was just a political attempt at trying to regain support of young voters.
Other presidents have been given fast track authority to negotiate trade agreements so there is some possibility Congress might grant it here. The problem is that the Obama administration has been such a notoriously bad negotiator, both Republican and Democratic members of Congress are leery of granting this President fast track authority. Just look at the decision to release five Taliban Generals for one American deserter or unilaterally opening the door to normalization of relations with Cuba without negotiating any concessions from the Castro brothers beforehand and you have to wonder about the wisdom of giving this President even more negotiating authority.
Congress might be persuaded to appropriate money for infrastructure but they will have to overcome two obstacles. First, how do you pay for it? There is no appetite on the part of Republican congressmen to use deficit spending to support infrastructure products. Secondly, there is the problem of integrity and oversight. There were billions appropriated in the last Stimulus Package for infrastructure projects, only to find there were very few serious infrastructure projects ready to go and much of the appropriated money was needlessly squandered. A Republican congress will not be as willing to give this administration another blank check.
5. What did the President leave out?
A lot. The Republicans made significant gains in the last election in the House of Representatives which they had already controlled and picked up nine Senate seats to take over control of the Senate. President Obama never mentioned this historic increase in Republican members of Congress, despite the fact he will have to work with them as a co-equal branch of government for the next two years.
He failed to address both the growth of ISIS and of Al-Qaeda. The day before the State of the Union Message, Al-Qaeda backed rebels seized control of the capital of Yemen and forced the US backed government to resign. While he did say we had halted the gains of ISIS in Syria, he did not mention that they still control major cities in Iraq and Syria. He failed to address the total chaos in Syria today and never mentioned the rise of Boko Haram in Nigeria, another Islamic terrorist group that threatens the stability of Nigeria, one of the largest countries in Africa. He also failed to mention the situation in Ukraine, where that country is fighting for their life against Russian backed insurgents.

Nor did he mention the growing fiscal crisis in funding Social Security and Medicare.

Budget Message Analysis
What items dominate and on what will the money be spent
Proposed tax increases seem to be the primary focus as a way to pay for tax cuts to low and middle income groups. The budget calls for $1.5 trillion in new taxes over the next decade. It proposes to increase both the capital gains tax, and the inheritance tax (the so-called death tax). In addition it proposes to begin taxing the profits US corporations make overseas that they never bring back to their US corporations. Currently corporations pay no tax on those profits, unless they bring that money back to the US. They do however pay taxes to the foreign governments where they operate. The budget proposes taxing all profits wherever they are earned and regardless of whether the money was brought back to the US.
The proposed tax cuts include: Creating a tax credit of $500 for families where both parents work, triple the child care tax credit and increase the upper income eligibility levels, extend the Earned Income Tax Credit to low wage workers with no children, and consolidating tax credits for education into one larger credit.
In addition Obama has proposed a $478 billion public works (infrastructure) program and a 4.5% increase in defense and military spending. He has also proposed spending $60 billion over 10 years to fund free community college for anyone that applies and meets minimal standards

Why are the priorities the way they are?

Throughout his presidency, Obama has pursued a philosophy of wealth redistribution. He wants to transfer money from the wealthy to those on the low end of the economic scale. It’s often referred to as a Robin Hood philosophy – take from the rich and give to the poor. Hence the steady increase of taxes on corporations and the wealthy and the steady increase of entitlements and tax credits to the poor. Obama uses a lot of different wording and semantics to disguise the real intent of his programs, even calling this year’s budget proposals middle class economics. Or he will focus on programs that benefit the lower income earners, referring to the programs as investments. No matter what you call it, it’s a policy of wealth redistribution.
The budget calls for extensive spending on public works and increases in the Defense budget. Even Obama recognizes that the last round of military cuts – referred to as sequestration – has hurt our military preparedness and he knows it’s a top priority for Republicans to increase military spending. He’s hoping to set up a scenario where he can say to Republicans that I will agree to increase military spending if you agree to fund public works programs.
The proposal for free community college was a political plea to a large part of his base – young people. He knows it does not stand a chance to getting through Congress, but now he can say I tried to get you free community college but the Republicans stopped me.

Why the deficit?

In the past year, the deficit has gone down, but long term projections have it rising considerably. There were two primary reasons for the deficit decline – the drop in the price of oil and the strength of the dollar relative to other currencies.
Oil has dropped from about $100 a barrel to less than $50 a barrel. In addition, the US has become a major source of its own oil needs, dramatically reducing the amount of money we have to pay to oil producing countries around the world.
As the US economy has stabilized, the EU economy has slowed. At the same time, the pace of growth of the Chinese economy has slowed. These two factors have increased the strength of the dollar relative to other currencies, which works to decrease the deficit.
The number of people on Social Security is steadily increasing as the Baby Boomers retire, straining the sources of income needed to fund those monthly Social Security checks. Under Obamacare, the number of people on Medicaid is projected to rise significantly. As these two entitlements grow in numbers, they will significantly increase the deficit.

What would I add, drop or change?

The Senate has not passed a budget in the first 6 years of the Obama presidency. The government has been funded by single appropriations and continuing resolutions. The past annual budgets submitted by Obama were never serious budgets, intended to be used to govern the country. This year’s budget is no different. It’s simply a budget that appeals to his political base and will be DOA on arrival at Congress.
That said, I would restructure my proposed revenue and spending amounts to more accurately reflect what has a reasonable chance of being approved. A budget is never adopted as is, and there are always items thrown out. But why base your budget on proposals everyone says will never be approved? For example, Obama has factored in a $320 billion dollar revenue gain from increasing the capital gains tax. That has zero – zero – chance of passing a Republican controlled congress so why include it as if it might actually pass? Obama has proposed spending $60 billion on free community college. That too has zero – zero – chance of passing as both Republicans and Democrats have come out months ago as against it. Beyond just spending money we don’t have, leading educators have begun saying that it’s time we recognize that college isn’t the answer for everyone and that we need to put more focus on developing trade schools which have almost become obsolete.

How would I balance the budget?

The best way to increase revenue is to grow the economy. As companies grow, they pay more taxes. As new companies are started, they contribute new taxes. As more and more people become employed, they pay new taxes. I would build around proposals that would grow the economy as a way to grow revenue.
Economists estimate there are $3 -$5 trillion being held abroad by US corporations from profits earned there. That money is being used to invest and grow foreign operations and will never be brought back to the US as long as it is subject to taxation. . I would propose a two year amnesty on repatriated profits. Even if only half is returned, that would serve as a $2 trillion stimulus package as companies use that money to invest and grow business within the US. And it doesn’t cost us a penny.
I would propose a 2 year accelerated depreciation schedule on new capital asset purchases made from US companies. This would motivate companies who are considering new capital asset purchases to do it now and to spend their money with other US companies.
I would propose a strong reduction in the corporate tax rate. Right now we have US companies leaving the US to move to other countries whose corporate tax rate is less than one half of ours. Not only would a lower rate entice companies to stay here, but it would entice foreign companies to open businesses here.
I would propose opening drilling sites offshore, in Alaska and on Federal Lands. This would also grow revenue and more and more companies take advantage of new opportunities, increasing job growth in the US. I know the price of oil has dropped recently but nobody expects it to keep dropping forever. Eventually it will stabilize and oil companies will benefit. Countries that now buy from Russia or Iran would certainly consider buying from more dependable US suppliers.
I would propose spending on infrastructure projects but in the form of block grants to the states, where they would have to put up some level of matching funds. Let the states take the lead on deciding what infrastructure projects need done, in prioritizing them and managing them.