Voters are going to hear a lot about fairness over the next several months.
President Obama has kicked off his re-election campaign with a new emphasis on the government's role in making sure middle-class workers get a "fair shot" and the wealthy do their "fair share." Some components of this new fairness regime are old standbys, such as Obama's call for more infrastructure spending, investments in green energy, and higher taxes on the wealthy.
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But Obama also unveiled some new ideas in his State of the Union speech, which will soon be presented to Congress as formal legislative proposals. They'll also become key talking points on the campaign trail, as Obama explains his vision for a second term and differentiates himself from his Republican opponent. Here are eight new ideas that form the basis of Obama's plan to create jobs and restore prosperity:
1. A minimum tax for multinational corporations. This is Obama's response to the controversial news from last year that General Electric effectively paid no income tax, even though it earned $3.2 billion in profit in 2010. That revelation led to greater scrutiny of corporate tax practices and the ability of many companies to exploit loopholes that dramatically lower their tax burden.
Odds it will get enacted: Extremely low. Congress is unlikely to make any major changes to the tax code this year. But a minimum corporate tax could be an element of broader tax reform, which is possible over the next several years.
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2. A minimum tax for millionaires. In addition to raising marginal tax rates on high earners, which Obama has long called for, he also wants a new rule that would require everybody earning $1 million or more to pay a minimum tax rate of 30 percent. This would effectively raise the tax rate on investment income for top earners, which is currently taxed at lower rates than many middle-class workers pay on wages.
Odds it will get enacted: Extremely low. Again, major changes to the tax code are unlikely until Congress takes up comprehensive tax reform, which won't happen during an election year.
3. Reforms to Medicare, Medicaid and Social Security. Until now, Obama has said little about these costly entitlement programs, which are becoming unaffordably expensive and need to be reined in. Obama still hasn't spelled out what he would do, but now says he'll consider some Republican ideas—such as raising the retirement age, cutting benefits for wealthier seniors and giving states more control over Medicaid spending—as part of a deal to raise taxes on the wealthy.
Odds it will get enacted: Extremely low. But something has to be done eventually about these huge programs, and Obama has now joined the debate.
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4. Tax breaks for manufacturers and other companies that boost U.S. hiring. Obama made similar proposals last year as part of his "American Jobs Act," which went nowhere. What's different now is an intensified focus on manufacturing and on incentives to reverse the flow of jobs out of the United States.
Odds it will get enacted: Moderate. Congressional Republicans generally support tax breaks for companies, and might pass small measures if the cost is offset by spending cuts elsewhere. But any new tax breaks would probably be temporary, with major changes put off until later.
5. A major job retraining program. Obama wants a national program to provide job training to two million workers, to help more people get the kinds of skills employers are looking for, especially high-tech manufacturers. His plan would include more funding for community colleges, partnerships with local businesses, and a one-stop website that would include detailed information on what kind of training is available, and where.
Odds it will get enacted: Moderate. Congress might pass new job-training requirements at the same time it extends unemployment benefits, but seems unlikely to fund a large new program this year. The Obama administration could, however, take some steps on its own, such as launching a job-training website and providing a clearinghouse to help bring companies, community colleges and new trainees together.
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6. New rules to keep kids in school longer. As part of his push for improved education, Obama wants every state to require kids to finish high school or stay in school until they're 18. About 15 states already have such laws, but the minimum dropout age in most other states is 16 or 17.
Odds it will get enacted: Moderate. The federal government can't require states to change their laws, but a sustained campaign by the president could raise awareness and generate support for this common-sense idea.
7. More aid for distressed homeowners. Obama wants to try out a new plan that he says will help as many as three million homeowners who are underwater on their mortgages refinance at a lower rate, which could save each family up to $3,000 per year. The new loans would be backed by the government, which would require about $10 billion in funding that Congress would have to approve. Obama says a new fee on banks would cover the cost.
Odds it will get enacted: Low. While some ideas for homeowner relief have bipartisan support, the new funding required for this plan will make it a tough sell in Congress. Plus, there have been several other efforts to help struggling homeowners, and virtually all of them have fallen far short of expectations. There are a few other things Obama could do to help homeowners, which in general would be less generous but wouldn't require Congressional approval.
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8. More domestic energy production. Obama wants to increase the use of domestically produced natural gas through a variety of incentives and requirements, while expanding offshore oil drilling and continuing to invest in new technologies like wind and solar.
Odds it will get enacted: Moderate. Any funding for new forms of energy has to come from Congress, where green energy is controversial on account of the recent Solyndra flap. But there are some things the Obama administration can do without Congressional approval, such as easing regulations and speeding the approval of drilling permits. Some industry leaders, however, say that despite Obama's words of support, his administration still takes too long to approve new projects.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success , to be published in May. Follow him on Twitter: @rickjnewman
Reader Comments Read all comments (3)
ur mama of DC 10:13AM October 05, 2012
ruth milcarek of IN 1:57AM February 05, 2012
Annie Lenihan of NY 7:59AM January 26, 2012