Obama’s Fractured State of the Union

This will be a two-part blog focusing on President Obama’s State of the Union speech. The second part will focus on foreign policy issues and fact-checking.

President Barack Obama’s State of the Union speech was a long laundry list of proposals, a number of them distilled from prior State of the Union speeches and others either unworkable or dead on arrival in Congress. Obama started his speech with a claim that the current generation of military heroes has made the nation safer and more respected in the world and concluded it with a recommendation that a democratic republic should operate in the same way as the hierarchical, orders from the top down structure as found in the military. Except for a brief mention of a new defense strategy, Obama gave no indication that there would be a significant reduction of a bloated Pentagon, a less formidable nuclear weapons inventory and any trimming of a sprawling intelligence empire.

Obama’s celebration of killing those designated as terrorists overlooks the contention of some analysts, including former intelligence czar, Dennis Blair, that conducting the War on Terror through primary use of the military, especially missile-firing drones, is probably creating more terrorists. So Obama’s terrorist list is probably a seriously flawed definition  of success. Obama should also have explained why and how he has abrogated for himself the right to order killings, even of U.S. citizens.

President Obama’s “fair share” tax policy is heavily oriented to requiring millionaires and billionaires to pay a tax rate of at least 30 percent. Only about a quarter of these very wealthy people pay a tax rate that is less than the average middle-class taxpayer. This tax provision would lead to a very modest increase in revenue.

Relative to the post-World War II, pre-Reagan years, when the nation was enormously prosperous, and the top marginal tax rate was never lower than 70.45 percent, U.S. taxpayers, in general, are under-taxed in regard to federal income tax. What is needed is a progressive tax rate schedule, with a top marginal tax rate of 60 to 70 percent.

In regard to income taxes on corporations, Obama proposed to have a two or even more tier system, whereby corporations that outsource work would pay a higher rate of taxes than would corporations that create U.S. jobs. Obama would also give high-tech manufacturers a double tax break; however, manufacturers currently receive multiple tax credits and deductions.Counting both national and state corporate income taxes, the average corporate tax rate is 39.2 percent but it falls to 27 percent when tax loopholes are included. These are Tax Foundation percentages. 280 corporations in the Fortune 500 paid an average rate of 18.5 percent in the last tax year studied.

When all loopholes, credits, deductions and exemptions are taken into account, U.S.-based corporations pay a lower tax rate than do corporations based in the other industrialized nations; also, according to the Congressional Budget Office, two-thirds of U.S. corporations pay no income tax. Moreover, a study of the top Fortune 100 found that 25 of them paid their CEO more than they paid in corporate income tax.

President Obama’s stated intent to create tax breaks for specific groups of people and corporation runs a danger of riddling the tax code with more exceptions than it now has. Military veterans already have a number of benefits which those without military service do not have. Why build more tax breaks for veterans into the tax code?

President Obama has already cut governmental revenue by more than he proposes to increase it during the rest of his presidency; therefore, the capacity to do more home nation-building will have been diminished during his presidency.

Obama’s claim that the Pentagon will be saving energy by making operations to be more fuel-efficient — the Navy will reputably save enough energy to power 3 million homes — is misguided because a much smaller military would use far less energy.

Renewable energy was to have been a major focus of the Obama administration; however, to this point, the administration has devoted more resources to the fossil fuel industry than to renewable energy sources, by opening up much more coal mining in Western states and opening up more offshore oil leases. Obama is now proposing to make available 75 percent of the potential offshore oil and gas leases; also, he wants much more reliance placed on natural gas, yet he has been depicted as “leaning” toward support of fracking. Fracking is suspected of contaminating underground water sources and possibly even causing earthquakes where they were unknown to occur before.

In regard to underwater homeowners, Obama is proposing to provide each “responsible” family a saving of $3,000 annually. This proposal is built on one he proposed in an October 2011 speech in Las Vegas. Most underwater homeowners didn’t participate in that program. Economists calculate that because of many restrictions built into the Obama proposal, only about one million of the six million underwater homeowners will fully participate in the program.

President Obama’s position on business regulation is tangled: he speaks of cutting red tape on small businesses but wants more regulation of Wall Street. He boosted of imposing fewer regulations on business than did George W. Bush. ABC News fact-check found that he had imposed 30 fewer regulations than Bush but Obama had imposed more on businesses earning over $100 million.

President Obama is also a day late and a dollar short when he proposes a trade inspection unit and a new unit in the Justice Department to focus on fraudulent business practices. He has shown little interest in investigating major malefactors in the Bush administration or holding anyone responsible for the massive mess created by major financial institutions. Obama’s vow that he will vigorously go after the bankers who played a big role in causing the housing fiasco sounds hollow when he and the attorney general  displayed little past concern for determining their culpability and the penalties they should pay.

Obama was being grossly hypocritical when he asked for an end to deportation of the fully Americanized children of illegals. Immigration rights groups have assailed Obama for heedlessly breaking up families in the one million plus illegals he has sent back to Mexico.


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