State of the Union Speech Shows Few Opportunities for Congressional Action

Obama aims high in feisty, populist speech, but likely will find little cooperation with Republicans.

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President Obama alternated between feisty populism to a few conciliatory notes on Tuesday night, but ultimately made his point clear—he's tired of a Congress which has rejected key proposals and likely will continue to do so in an election year.

That's why so many of the key planks in his speech—including a Trade Enforcement Unit to crack down on unfair trade practices from China, clearing away red tape for new construction projects, and promising heightened legal action of those involved in the housing crisis—don't need Congressional approval. The go-it-alone strategy from the White House is leaving Congressional Republicans feeling increasingly miffed.

"I thought the talk was a little top-heavy on what he would do without our authority," says Kentucky Republican Sen. Rand Paul. "Halfway is halfway. He's going to have to come here to Capital Hill and try to work with us."

Republicans were heartened to hear the president call for an "all-of-the-above" energy strategy, and promises to open more of America's domestic oil fields. Whether Obama meant the comment as a hint that he was willing to reconsider the shelved Keystone XL pipeline will remain to be seen. Also unclear is whether Republicans, who have blasted failed investments in clean energy companies such as Solyndra, will support any strategy that would put more money toward them.

"His call for all-of-the-above energy policy is good," says Oregon Republican Rep. Greg Walden. "We'll look forward to seeing the details on that."

The president's call for increased investment in American manufacturing, especially in clean energy, and for a tax code which taxes millionaires with an effective rate of at least 30 percent is likely to hit a wall in Congress.

While the president pushes for changing the tax code to penalize companies who move overseas, Republicans have been pushing for a "repatriation" tax holiday, which would allow companies with off-shore assets to move them back into the United States at a lower tax rate. Critics claim it's just another loophole for companies to hide profits overseas.

And as far as the so-called "Buffett Rule" goes—the principle that America's top earners shouldn't pay a tax rate lower than middle-class Americans—many critics see it only as an election-year prop, perhaps aimed at former Massachusetts Gov. Mitt Romney, who revealed Tuesday that he paid only a 14 percent tax rate despite making millions. So far, the president has yet to be outline the Buffett Rule in detail. It could mean hiking the capital gains tax above 15 percent, or eliminating some tax deductions that wealthy Americans tend to use.

Democrats are pushing for some version of the principle to be included in a deal over the expiring payroll tax cut. Republicans are insisting that any move to raise taxes, even to offset another tax cut, is a non-starter.

But Obama's call for increased taxes on the rich adds yet another wrinkle to the emerging showdown at the end of the year. The capital gains tax is scheduled to hike from 15 percent to 25 percent at the beginning of 2013 as the Bush-era tax cuts expire.

One item which may not see much resistance is a proposed ban on insider trading from members of Congress, which was sparked by a 60 Minutes report showing alleged abuses. But, as always, the devil is in the details. Despite widespread support for such a measure, so far proposed bills have been caught in legal technicalities.

aparker@usnews.com

Twitter: @AlexParkerDC