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| Checking Obama's financial promises and results for the state of the union | Checking Obama's financial promises and results for the state of the union |
| (7 months later) | |
| Tonight Barack Obama will deliver his sixth state of the union address as president, with an expected focus on jobs, inequality and middle class mobility. Obama has tackled those subjects before, to mixed results. In 2011, he said that America doesn't measure progress just by the state of corporate profits or the stock market, but rather "by the success of our people" and the quality of life their jobs had to offer. In November, he gave his clearest and longest economic speech on inequality, inspired in part by Pope Francis. | Tonight Barack Obama will deliver his sixth state of the union address as president, with an expected focus on jobs, inequality and middle class mobility. Obama has tackled those subjects before, to mixed results. In 2011, he said that America doesn't measure progress just by the state of corporate profits or the stock market, but rather "by the success of our people" and the quality of life their jobs had to offer. In November, he gave his clearest and longest economic speech on inequality, inspired in part by Pope Francis. |
| The state of the union address is meant to be a wishlist: often packed with goals, ideas and broad themes, but intentionally short on details. Those details, however, determine the state of the economy and, later, a president's legacy. | The state of the union address is meant to be a wishlist: often packed with goals, ideas and broad themes, but intentionally short on details. Those details, however, determine the state of the economy and, later, a president's legacy. |
| We examined the previous state of the union addresses that mention issues pertinent the personal finances of Americans and checked on the progress of the president's initiatives. | We examined the previous state of the union addresses that mention issues pertinent the personal finances of Americans and checked on the progress of the president's initiatives. |
| Taxes | Taxes |
| Nothing is as certain as death and taxes. Except, maybe the fact that taxes are bound to come up in the state of the union. Don't believe us? Here is our recap: | Nothing is as certain as death and taxes. Except, maybe the fact that taxes are bound to come up in the state of the union. Don't believe us? Here is our recap: |
| 2009: In his first state of the union, Obama promised to "end the tax breaks for the wealthiest 2% of Americans". He also reassured those making less than $250, 000 that they will "not see your taxes increased a single dime. I repeat: not one single dime." | 2009: In his first state of the union, Obama promised to "end the tax breaks for the wealthiest 2% of Americans". He also reassured those making less than $250, 000 that they will "not see your taxes increased a single dime. I repeat: not one single dime." |
| A week before his address, Obama signed into effect the American Recovery and Reinvestment Act, also known as the stimulus bill. (There haven't been any others on that scale since then). "The recovery plan provides a tax cut – that’s right, a tax cut – for 95% of working families. And these checks are on the way," he told the nation during the state of the union. | |
| Results: A number of the tax credits authorized under the Recovery Act have already expired or have been extended under other legislation. While in effect, the act's tax credits including individual tax credits for first-time homebuyers, tax incentives for businesses, and alternate energy tax credits totalled $290.7bn, according to the Office of Tax Analysis data released in June 2012. | |
| 2010: In his 2010 state of the union, Obama promised to extend tax cuts for middle-class families, but said that the US can't afford to extend the tax cuts for the wealthiest. | 2010: In his 2010 state of the union, Obama promised to extend tax cuts for middle-class families, but said that the US can't afford to extend the tax cuts for the wealthiest. |
| "At a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year. We just can't afford it," he said. | "At a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year. We just can't afford it," he said. |
| Results: Congress did not agree with that estimation. As the deadline for extending of the tax cuts approached, Obama claimed that congress was holding middle-class tax cuts hostage. In the end, the bill passed to extend the tax-cuts – even those for the rich. | Results: Congress did not agree with that estimation. As the deadline for extending of the tax cuts approached, Obama claimed that congress was holding middle-class tax cuts hostage. In the end, the bill passed to extend the tax-cuts – even those for the rich. |
| 2011: Just weeks after having to compromise on the tax-cut extension bill, Obama delivered his third state of the union. He took this opportunity to chide Congress for extending tax cuts for the rich, saying: | 2011: Just weeks after having to compromise on the tax-cut extension bill, Obama delivered his third state of the union. He took this opportunity to chide Congress for extending tax cuts for the rich, saying: |
| If we truly care about our deficit, we simply can’t afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools or scholarships away from our students, we should ask millionaires to give up their tax break. | If we truly care about our deficit, we simply can’t afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools or scholarships away from our students, we should ask millionaires to give up their tax break. |
| He also called on Congress to simplify the tax code and "get rid of the loopholes. Level the playing field." | He also called on Congress to simplify the tax code and "get rid of the loopholes. Level the playing field." |
| Results: Millionaires did not give up any tax breaks that year, and no tax reform was passed. In 2013, the president proposed a budget in which millionaires would pay 30% of their incomes in taxes. This would later become known as the Buffett Rule, and it did not make it through Congress. | |
| 2012: The 2012 state of the union included a shout out to a particular taxpayer – Warren Buffett's secretary. Earlier in the summer of 2011, the billionaire called for higher taxes for the wealthy, noting that "while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks." | 2012: The 2012 state of the union included a shout out to a particular taxpayer – Warren Buffett's secretary. Earlier in the summer of 2011, the billionaire called for higher taxes for the wealthy, noting that "while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks." |
| As early as 2007, Buffett had noted that he pays a lower tax rate than his secretary – a refrain often repeated by the president in 2011. So it should come as no surprise that Obama recruited Buffett and his secretary in his fight to eliminate tax cuts for the rich and in his 2012 state of the union said: | As early as 2007, Buffett had noted that he pays a lower tax rate than his secretary – a refrain often repeated by the president in 2011. So it should come as no surprise that Obama recruited Buffett and his secretary in his fight to eliminate tax cuts for the rich and in his 2012 state of the union said: |
| Tax reform should follow the Buffett Rule. If you make more than $1m a year, you should not pay less than 30% in taxes. … You can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense. | Tax reform should follow the Buffett Rule. If you make more than $1m a year, you should not pay less than 30% in taxes. … You can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense. |
| Results: The Buffett rule was later blocked in the Senate. | Results: The Buffett rule was later blocked in the Senate. |
| 2013: Obama's most recent state of the union came after a bitter fiscal cliff fight, in which Congress decided not to extend the payroll tax cut. The decision had an impact on all Americans. For example, a family with an average income of $50,000 before taxes saw their after-tax income drop by 1.5%. Even the rich suffered – for family with a before-tax income of $1.67m, the drop was much steeper at 6.5%. | 2013: Obama's most recent state of the union came after a bitter fiscal cliff fight, in which Congress decided not to extend the payroll tax cut. The decision had an impact on all Americans. For example, a family with an average income of $50,000 before taxes saw their after-tax income drop by 1.5%. Even the rich suffered – for family with a before-tax income of $1.67m, the drop was much steeper at 6.5%. |
| So rather than focusing on particular tax cuts – which didn't work out so well in the past – Obama once again called on Congress to concentrate on tax reform. | So rather than focusing on particular tax cuts – which didn't work out so well in the past – Obama once again called on Congress to concentrate on tax reform. |
| Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit. We can get this done. The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring – a tax code that ensures billionaires with high-powered accountants can’t work the system and pay a lower rate than their hardworking secretaries; a tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that are creating jobs right here in the United States of America. That’s what tax reform can deliver. That’s what we can do together. | |
| Results: Senator Max Baucus and Congressman Dave Camp, who made tax reform their personal mission, have attempted for months to build a bi-partisan effort around the issue with no success. All hope is not lost yet. Congressman Paul Ryan, chairman of the House budget committee, said that there is a possibility that House Republicans will tackle tax reform early this year. | Results: Senator Max Baucus and Congressman Dave Camp, who made tax reform their personal mission, have attempted for months to build a bi-partisan effort around the issue with no success. All hope is not lost yet. Congressman Paul Ryan, chairman of the House budget committee, said that there is a possibility that House Republicans will tackle tax reform early this year. |
| Higher Ed | Higher Ed |
| Student loan debt is an issue close to the president's heart. While campaigning for re-election in 2012, he would mention that Michelle Obama and he had just finished paying off their student loans just eight years before. | Student loan debt is an issue close to the president's heart. While campaigning for re-election in 2012, he would mention that Michelle Obama and he had just finished paying off their student loans just eight years before. |
| Results: Families struggling to pay tuition costs received a helping hand from the Obama administration in the form of a $2,500 tax credit for all four years of college. Initially the tax credit, also known as the American Opportunity Tax Credit, or AOTC, was a part of the Recovery Act and was touted in the 2009 state of the union. | Results: Families struggling to pay tuition costs received a helping hand from the Obama administration in the form of a $2,500 tax credit for all four years of college. Initially the tax credit, also known as the American Opportunity Tax Credit, or AOTC, was a part of the Recovery Act and was touted in the 2009 state of the union. |
| The credit got a brief mention in 2010 address and in 2011, Obama called on Congress to make the tuition tax credit permanent, saying "it's the right thing to do." The credit, which was set to expire at the end of 2010, was then extended until December 2012 thanks to Tax Relief and Job Creation Act of 2010. In 2012 address, the president again called on Congress to extend it, which it did through the American Taxpayer Relief Act of 2012. The AOTC is now set to expire in December 2017. | The credit got a brief mention in 2010 address and in 2011, Obama called on Congress to make the tuition tax credit permanent, saying "it's the right thing to do." The credit, which was set to expire at the end of 2010, was then extended until December 2012 thanks to Tax Relief and Job Creation Act of 2010. In 2012 address, the president again called on Congress to extend it, which it did through the American Taxpayer Relief Act of 2012. The AOTC is now set to expire in December 2017. |
| Continuing to address the costs of higher education, in 2011 Obama also called on Congress to increase Pell Grants. Unfortunately, in its budget negotiations that year, Congress, while keeping the maximum Pell Grant at $5,550, changed its eligibility criteria. That made close to 100,000 recipients no longer eligible. What's more, effective July 2012, the grants can only be used for a total of 12 semesters, not 18. | |
| The next year, 2012, Obama met with more success. That year, he called on Congress "to stop the interest rates on student loans from doubling in July". In a rare display of bipartisan compromise, Congress passed the bill – maybe because Obama slow-jammed the news with Jimmy Fallon. | The next year, 2012, Obama met with more success. That year, he called on Congress "to stop the interest rates on student loans from doubling in July". In a rare display of bipartisan compromise, Congress passed the bill – maybe because Obama slow-jammed the news with Jimmy Fallon. |
| In his two most recent State of the Union addresses, Obama has also called to task American universities and colleges, calling on them to keep their costs down. "Higher education can’t be a luxury – it is an economic imperative that every family in America should be able to afford," he said in 2012. | In his two most recent State of the Union addresses, Obama has also called to task American universities and colleges, calling on them to keep their costs down. "Higher education can’t be a luxury – it is an economic imperative that every family in America should be able to afford," he said in 2012. |
| Last year, he called on Congress to help ensure that colleges keep their costs affordable: | Last year, he called on Congress to help ensure that colleges keep their costs affordable: |
| Taxpayers can’t keep on subsidizing higher and higher and higher costs for higher education. Colleges must do their part to keep costs down, and it’s our job to make sure that they do. So tonight, I ask Congress to change the Higher Education Act so that affordability and value are included in determining which colleges receive certain types of federal aid. | |
| While the amendment was introduced by congressman Matt Cartwright, it has yet to come up for a vote. | While the amendment was introduced by congressman Matt Cartwright, it has yet to come up for a vote. |
| Minimum Wage | Minimum Wage |
| In his 2013 State of the Union address, Obama called on Congress to increase the federal minimum wage to $9 an hour. | In his 2013 State of the Union address, Obama called on Congress to increase the federal minimum wage to $9 an hour. |
| Today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher. Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. We should be able to get that done. | |
| Results: They weren't able to get it done. | Results: They weren't able to get it done. |
| Early on in the year, congressman George Miller introduced an ambitious bill that would raise the federal minimum wage to $10 over the next two years. The bill would also increase the tipped minimum wage to 70% of the minimum wage. House Republicans, however, unanimously voted against the bill. Another bill by Senator Bill Harkin, also calling for minimum wage to be raised to $10.10 over the next two years, has been left to die in committee. | Early on in the year, congressman George Miller introduced an ambitious bill that would raise the federal minimum wage to $10 over the next two years. The bill would also increase the tipped minimum wage to 70% of the minimum wage. House Republicans, however, unanimously voted against the bill. Another bill by Senator Bill Harkin, also calling for minimum wage to be raised to $10.10 over the next two years, has been left to die in committee. |
| The issue of minimum wage increase is to play a large role in Democrats' 2014 strategy, reports the New York Times. As a result, in addition to announcing that he is signing an executive order to increase minimum wage for federal contractors, Obama is likely to call on Congress to take action on this issue. | |
| Equal Pay | Equal Pay |
| For a president whose first bill signed into law was the Lilly Ledbetter Fair Pay Restoration Act, Obama has been pretty quiet on the issue of equal pay in his addresses. | For a president whose first bill signed into law was the Lilly Ledbetter Fair Pay Restoration Act, Obama has been pretty quiet on the issue of equal pay in his addresses. |
| In 2010, 2012 and 2013, Obama dedicated just one sentence each speech to the issue, reminding the nation that the women should earn equal pay for an equal day's work. Yet, according to the most recent data, that is still not the case. Annually, women earn $11,500 less than men. | In 2010, 2012 and 2013, Obama dedicated just one sentence each speech to the issue, reminding the nation that the women should earn equal pay for an equal day's work. Yet, according to the most recent data, that is still not the case. Annually, women earn $11,500 less than men. |
| In his 2013 address, Obama said, "I ask this Congress to declare that women should earn a living equal to their efforts, and finally pass the Paycheck Fairness Act this year." | In his 2013 address, Obama said, "I ask this Congress to declare that women should earn a living equal to their efforts, and finally pass the Paycheck Fairness Act this year." |
| Results: About two months later, House Republicans blocked Democrats' effort to bring the bill to a vote, calling it a liberal plot to paint Republicans as anti-women. | Results: About two months later, House Republicans blocked Democrats' effort to bring the bill to a vote, calling it a liberal plot to paint Republicans as anti-women. |
| Mortgage Refinancing | Mortgage Refinancing |
| During his very first state of the union address, Obama announced that he was launching a housing plan to assist Americans facing foreclosure lower their monthly payment by refinancing their mortgage. "In fact, the average family who re-finances today can save nearly $2,000 per year on their mortgage," he said. | During his very first state of the union address, Obama announced that he was launching a housing plan to assist Americans facing foreclosure lower their monthly payment by refinancing their mortgage. "In fact, the average family who re-finances today can save nearly $2,000 per year on their mortgage," he said. |
| Weeks later, the Federal Housing Association launched Home Affordable Refinance Program (Harp). Within that first year, the program saved participating homeowners an average of $1,500 a year, Obama told America during the following address in 2010. And the program was only going to get better, "so that homeowners can move into more affordable mortgages". | Weeks later, the Federal Housing Association launched Home Affordable Refinance Program (Harp). Within that first year, the program saved participating homeowners an average of $1,500 a year, Obama told America during the following address in 2010. And the program was only going to get better, "so that homeowners can move into more affordable mortgages". |
| And while the 2011 address went by without a mention of mortgages or refinancing, the topic resurfaced in 2012 when Obama compared the housing industry to a house of cards. Citing struggling homeowner, the president announced that he was sending Congress a bill that would improve on the existing program to offer them "the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates". Yet Congress seemed to forget all about the bill and never brought it up for a vote in the months to follow. | And while the 2011 address went by without a mention of mortgages or refinancing, the topic resurfaced in 2012 when Obama compared the housing industry to a house of cards. Citing struggling homeowner, the president announced that he was sending Congress a bill that would improve on the existing program to offer them "the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates". Yet Congress seemed to forget all about the bill and never brought it up for a vote in the months to follow. |
| Tired of inaction, Obama issued a stern reminder to his friends on the Hill in his 2013 address: | Tired of inaction, Obama issued a stern reminder to his friends on the Hill in his 2013 address: |
| Right now, there’s a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates. Democrats and Republicans have supported it before, so what are we waiting for? Take a vote, and send me that bill. Why would we be against that? Why would that be a partisan issue, helping folks refinance? Right now, overlapping regulations keep responsible young families from buying their first home. What’s holding us back? Let’s streamline the process, and help our economy grow. | Right now, there’s a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates. Democrats and Republicans have supported it before, so what are we waiting for? Take a vote, and send me that bill. Why would we be against that? Why would that be a partisan issue, helping folks refinance? Right now, overlapping regulations keep responsible young families from buying their first home. What’s holding us back? Let’s streamline the process, and help our economy grow. |
| Now, year later, Obama is still waiting for Congress to call that vote, so it's very likely that the subject of mortgage refinancing might come up again. | Now, year later, Obama is still waiting for Congress to call that vote, so it's very likely that the subject of mortgage refinancing might come up again. |
| Pre-school | Pre-school |
| Before there was Bill de Blasio's universal pre-school plan, there was Obama's early learning program proposal. Just weeks after de Blasio, who is now mayor of New York, launched his campaign, Obama delivered his 2013 state of the union, saying: | Before there was Bill de Blasio's universal pre-school plan, there was Obama's early learning program proposal. Just weeks after de Blasio, who is now mayor of New York, launched his campaign, Obama delivered his 2013 state of the union, saying: |
| And that has to start at the earliest possible age. Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than three in 10 four year-olds are enrolled in a high-quality preschool program. | |
| Most middle-class parents can’t afford a few hundred bucks a week for a private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives. So tonight, I propose working with states to make high-quality preschool available to every single child in America. That's something we should be able to do. | |
| Senator Tom Harkin and congressmen George Miller and Richard Hanna introduced legislation for expanding preschool in November of last year. The bill, which came with a price tag of $30bn over the first five years, according to Education Week, has yet to come up for a vote, even though its costs are less than Obama's $75bn plan. | |
| The plan would provide states that want to offer pre-school education to four-year-olds from families earning less than 200% of the federal poverty level, or less than $47,000 a year, with 90% of the funds required for the program in the first two years. After that, over the span of eight years, the funds provided by the state would gradually increase to 100%, reports Education Week. | |
| In some states, legislators have began exploring launching state-wide pre-school programs. Most recently, New York Governor Andrew Cuomo pledged to expand pre-school classes using state's general funds. | |
| The topic is bound to come up tonight, reports NPR. What remains to be seen is if the president will make any changes to his previous early learning program proposal. | The topic is bound to come up tonight, reports NPR. What remains to be seen is if the president will make any changes to his previous early learning program proposal. |