President Obama’s State of the Union address Tuesday night is shaping up as an election-year rallying cry to his Democratic base to fight for income equality in America, even as the gap between rich and poor grows during his presidency.
Mr. Obama’s nationally televised speech to a joint session of Congress at 9 p.m. will strike themes intended to fire up Democratic voters for the midterm elections, including proposals for a nearly 40 percent hike in the federal minimum wage and an extension of long-term unemployment benefits.
Aides say Mr. Obama also will remind lawmakers that he intends to issue more executive orders in this “year of action” after criticizing the 2013 Congress as one of the most unproductive in history. He is expected to announce executive actions on job training and retirement security.
Mr. Obama also will renew the call for comprehensive immigration reform, one of the few legislative issues on which there still appears to be room for compromise between the president and House Republicans.
Lawmakers in both parties are intent to learn whether Mr. Obama will call for fast-track authority to complete trade deals in Asia and Europe, although a majority of House Democrats oppose the move in allegiance with their labor base. Tea party conservatives also oppose the move.
But the president is expected to focus on economic “fairness” issues, such as the minimum wage, as part of his push to reverse increasing income disparity in America, which he calls “the defining issue of our time.”
Rich man, poor man
That income gap also has helped define Mr. Obama’s presidency. After-tax corporate profits in America are at their highest levels since World War II, while workers are receiving a smaller share of economic output than at any other time since 1952.
In 2012, the richest 10 percent of Americans earned their largest share of income since 1917, said Emmanuel Saez, an economist at the University of California at Berkeley. Meanwhile, Census Bureau statistics showed that real average income among the poorest 20 percent of families continued to fall each year from 2009 to 2011.
Lance Roberts, a Houston economist, said policies during Mr. Obama’s presidency have exacerbated the gap between rich and poor. He cited the Federal Reserve’s rounds of “quantitative easing,” which have pumped trillions of dollars into Treasury bonds and mortgage-backed securities as economic stimulus. The pumping, he said, resulted in higher stock prices as investors were forced out of the bond markets.
“Seventy-six percent of people in this country live paycheck to paycheck,” said Mr. Roberts, CEO of STA Wealth Management. “They don’t have any money in the market. So you’ve had this massive surge in profits and this massive surge in asset prices, but none of that has filtered down to Main Street America. They don’t see the economy being a lot better.”
The debt ceiling deal that Mr. Obama struck with congressional Republicans in 2011, which set into motion the sequestration budget cuts last year, also tended to hurt lower-income people, Mr. Roberts said.
“It didn’t affect the top 10 percent of the population at all,” he said.
Mr. Obama’s aides say he has promoted policies such as expanded child tax credits that have lifted millions of people out of poverty. One of the president’s first acts in office was to sign the Lilly Ledbetter Fair Pay Act of 2009, which made it easier for workers to file lawsuits alleging paycheck discrimination.
But as the president has tried to strengthen the recovery from the Great Recession of 2007-2009, evidence suggests his policies are not closing the gap. A record 23 million households received food stamps last year, a jump of 51 percent since 2009. The Agriculture Department said a total of 47.6 million people were on food stamps last year, an increase of 1 million from 2012.
Focusing on income inequality does give the president a popular, poll-tested campaign issue in a year when he needs to avoid being a drag on his party, which is in danger of losing the Senate.
“He’s been very partisan on almost every major occasion where he gives speeches on inequality,” said Ron Haskins, a specialist on welfare issues at the left-leaning Brookings Institution. “Democrats love this agenda.”
Changing the subject
Saddled with a weak economy, low job approval ratings and the persistent problems of his health care law, Mr. Obama has good reasons to change the subject.
“This whole promotion about income inequality is about diverting your attention from the real problem,” said Mr. Roberts of Houston. “The real issue is the impact of the Affordable Care Act this year as it hits consumers.”
White House press secretary Jay Carney dismissed criticism that Mr. Obama is changing the public discourse, saying the president has been focused on improving economic opportunities for all since his first day in office.
“That’s been his central preoccupation since he first thought about running for the Senate and then the presidency,” Mr. Carney said. “And you can certainly expect that that will be the focus of what he talks about not just [Tuesday] but throughout the rest of his presidency.”
Economic fairness polls well. The George Washington University battleground poll found last week that 79 percent of respondents believe income inequality is either a “big problem” or “somewhat of a problem.” Among undecided voters, 84 percent shared those views.
Democratic pollsters Celinda Lake and Alex Dunn, in their review of the survey, said elections last year in New Jersey, Washington state and New York City proved that Democratic voters were motivated by raising the minimum wage and by other economic “fairness” issues.
“Democrats are poised to harness this energy through their charge to raise the federal minimum wage and provide economic help for working class Americans still struggling to find a place in the new economy,” they wrote. “Voters will reward an economic vision relying on policy prescriptions that offer relief to struggling middle-class families by leveling the playing field.”
But they said Republican voters appear to be more energized than Democrats this year and that there are concerns about low turnout in November among young voters, Hispanics and single white women — key blocs for Democrats.
“Consolidating and turning out young voters (and other key progressive constituencies such as unmarried women, African American voters, and Latinos) in November rests on Democrats’ ability to connect with their core values and make 2014 a year that can produce positive change in their lives,” said Ms. Lake and Mr. Dunn. “African Americans, Democrats, and liberals disproportionately want a State of the Union speech that addresses income inequality.”
Republican pollsters Ed Goeas and Brian Nienaber said Mr. Obama is trying to overcome persistently strong opposition to Obamacare and public dissatisfaction with his job results.
“With Obamacare struggling to garner support, President Obama and the Democrats have indicated that they want to return to a more reliable political play — class warfare — and have been telegraphing their strategy to push ‘income inequality’ as their rally cry,” they wrote.
But they noted that voters are evenly split in the GW poll about the preferred solution for addressing income inequality; 45 percent favor cutting taxes and reducing regulations, while 43 percent favor “closing the gap.”
Republican lawmakers have voiced opposition to raising the minimum wage this year, and the president’s liberal supporters are urging him to sign an executive order that would raise the minimum wage for federal contractors as an alternative.
It’s just one example of ways that Mr. Obama could try to bypass Congress with a renewed emphasis on executive action. At a White House reception last week for the nation’s mayors, the president promised to take more unilateral steps to help cities.
But at the same event, Vice President Joseph R. Biden unintentionally defined the limits of executive action when he urged the mayors to confer with Transportation Secretary Anthony Foxx, a former mayor of Charlotte, N.C., about their infrastructure needs.
“He doesn’t have all the money in the world, but he’s ready to help,” Mr. Biden said, inadvertently reminding everyone in the room that Congress, not the president, controls the nation’s purse strings.