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Recycled ideas at odds with political reality

- Associated Press - Wednesday, January 25, 2012

It was a wish list, not a to-do list.

President Obama laid out an array of plans in his State of the Union speech as if his hands weren't so tied by political realities. There can be little more than wishful thinking behind his call to end oil industry subsidies - something he could not get through a Democrat-controlled Congress, much less today's divided Congress, much less in this election year.

And there was more recycling, in a climate even more forbidding than when the ideas were new. He pushed for an immigration overhaul that he couldn't get past Democrats, permanent college tuition tax credits that he asked for a year ago, and familiar discouragements for companies that move overseas.

A look at Mr. Obama's rhetoric Tuesday night and how it fits with The Facts and political circumstances:

Mr. Obama: "We have subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that's rarely been more profitable, and double-down on a clean energy industry that's never been more promising."

The Facts: This is at least Mr. Obama's third run at stripping subsidies from the oil industry. Back when fellow Democrats formed the House and Senate majorities, he sought $36.5 billion in tax increases on oil and gas companies for the next decade, but Congress largely ignored the request. He called again to end such tax breaks in last year's State of the Union speech. And he's now doing it again, despite facing a wall of opposition from Republicans who want to spur domestic oil and gas production and oppose tax increases generally.

Mr. Obama: "Our health care law relies on a reformed private market, not a government program."

The Facts: That's only half true. About half of the more than 30 million uninsured Americans expected to gain coverage through the health care law will be enrolled in a government program. Medicaid, the federal-state program for low-income people, will be expanded starting in 2014 to cover childless adults living near the poverty line. The other half will be enrolled in private health plans through new state-based insurance markets. But many of them will be receiving federal subsidies - a government program - to make their premiums more affordable.

Mr. Obama: Asking Congress to pay for construction projects: "Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home."

The Facts: The idea of taking war "savings" to pay for other programs is budgetary sleight of hand. For one thing, the wars in Iraq and Afghanistan have been largely financed through borrowing, so stopping the wars doesn't create a pool of ready cash, just less debt. And the savings appear to be based at least in part on inflated war spending estimates for future years.

Mr. Obama: "The Taliban's momentum has been broken, and some troops in Afghanistan have begun to come home."

The Facts: Mr. Obama is more sanguine about progress in Afghanistan than his own intelligence apparatus. The latest National Intelligence Estimate on Afghanistan warns that the Taliban will grow stronger, using fledgling talks with the U.S. to gain credibility and stall until U.S. troops leave, while continuing to fight for more territory. The classified assessment, described to the Associated Press by officials who have seen it, says the Afghan government hasn't been able to establish credibility with its people, and predicts the Taliban and warlords will largely control the countryside.

Mr. Obama: "On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world's No. 1 automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories."

The Facts: He left out some key details. The bailout of General Motors and Chrysler began under Mr. Bush, though Mr. Obama did earmark more money for it, and Ford never asked for a federal bailout and never got one.

Mr. Obama: "Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households."

The Facts: It's true that a minority of millionaires pay a lower tax rate than some lower-income people. As an overall average, though, wealthy people pay taxes at a much higher rate than middle-income taxpayers.

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