Obama outlines activist second term in State of the Union

Laying out an activist, big-spending second-term agenda, President Obama called on Congress in Tuesday night’s State of the Union address to spend more on job-creation proposals for the middle class and claimed it would not add to the nation’s huge budget deficits.

After four years of weak economic recovery, Mr. Obama issued a plea for lawmakers to approve more spending on infrastructure, renewable-energy projects and education. He also called for an increase of the federal minimum wage, to $9 per hour up from $7.25, saying “in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

“A growing economy that creates good, middle-class jobs — that must be the North Star that guides our efforts,” Mr. Obama said in his fourth State of the Union address. “It is our generation’s task, then, to reignite the true engine of America’s economic growth — a rising, thriving middle class.”

In a one-hour address that was mainly aimed at his Democratic base, Mr. Obama called for action on climate change, comprehensive immigration reform, voting rights and gun control. But the main thrust of his speech was devoted to proposals to boost the economy through more government spending.

The president proposed tens of billions of dollars in new spending, including a $50 billion program to fix aging bridges nationwide, $15 billion to rebuild communities hard-hit by the housing crisis and a sweeping expansion of early-childhood education services.

He argued that all his proposals will be paid for, and they won’t add to the annual deficit that has been running at more than $1 trillion per year for his entire term of office.

“Nothing I’m proposing tonight should increase our deficit by a single dime,” Mr. Obama said. “It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.”

Mr. Obama said his economic proposals are “fully consistent with the budget framework both parties agreed to just 18 months ago.”

Former House Speaker Newt Gingrich quickly disagreed, predicting on CNN that the “single dime” line would sink his proposals.

“This is the most pro-government speech since Lyndon Johnson,” he said after the speech, elaborating that Mr. Obama had reversed Democratic President Bill Clinton’s famous declaration that the “era of big government is over.”

The president focused his speech on jobs and the economy, reasserting themes from his campaign and his second inaugural speech. He is advocating higher taxes on wealthier households, such as the tax increase on families earning more than $450,000 that he secured Jan. 1.

As he delivered his new agenda, he’s facing a March 1 deadline with Congress to avoid automatic spending cuts aimed at reducing the deficit. He rejected suggestions from lawmakers of both parties to stave off defense cuts with revenue from domestic programs.

Deficit reduction was a relatively small part of Mr. Obama’s comments. The president said he would still accept a theoretical deal with the GOP to cut $900 billion in spending over the next decade, coupled with $600 billion in new tax revenue from closing loopholes mainly for wealthier taxpayers.

He also pledged to trim Medicare spending by reducing taxpayer subsidies to drug companies and by means-testing for wealthier seniors. But the president emphasized that he believes he has already done more than half of the heavy lifting of deficit reduction, by cutting $2.5 trillion over the next decade.

“Most of us agree that a plan to reduce the deficit must be part of our agenda,” he said. “But let’s be clear: deficit reduction alone is not an economic plan.”

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