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What exactly is in President Obama’s State of the Union proposals

The Morning Line

Today in the Morning Line:

  • Obama unveils tax increases on wealthy, credits for the middle class
  • It’s the latest round of economic populism from this president
  • Here’s everything else he’s proposed over the last two weeks ahead of the State of the Union

Obama’s first salvo in tax reform negotiations: President Obama rolled out his latest State of the Union policy plank Saturday night, and it was a big one — proposing a populist tax plan that would give breaks for working, married couples and child-care tax credits by increasing taxes and fees on the wealthy and Wall Street banks. Expect this to be a central theme of Tuesday’s State of the Union address. Even if Congress doesn’t act, it’s something the White House is betting is the kind of economic populism Democrats can run on in 2016.

How the plan would work:

  • Increase capital gains and inherited assets taxes, which the White House is calling the “Trust Fund Loophole”
  • Create a fee on financial firm borrowing
  • What the funds would be used for:

  • A $500 tax credit for families in which two people work
  • A $3,000 child-care tax credit for each child under 5 years old
  • Up to $2,500 a year toward completing a college degree
  • Automatic enrollment in retirement accounts (something the president proposed in last year’s address, which Congress did not act on)
  • What it would cost: David Nather at Politico reports the plan would cost $175 billion over 10 years, but the White House says it would be more than paid for with the capital gains taxes and bank fees raising $320 billion over that same period. All of the proposals and numbers will be fleshed out Feb. 2 when the White House submits its budget to Congress.

    What else has the president proposed in the last two weeks?

    Jan. 7 — Jobs/Economy/auto industry. Ford plant in Wayne, Mich., near Detroit: Obama touted his economic record and success of the auto bailout.

    Jan. 8 — Affordable Housing. Central High School in Phoenix, Ariz.

  • Action: Obama directed the Federal Housing Administration to lower its mortgage insurance premium from 1.35% to 0.85% at end of January. (FHA decision was announced the day before.)
  • Effect: The White House estimates that will attract 250,000 new homeowners and lower mortgages for 800,000 current homeowners.
  • Opposition: Republicans, including House Financial Services Chair Jeb Hensarling, R-TX, say the FHA has insufficient capital reserves and question if those can be repaid adequately with the rate change.
  • Jan. 9 — Free Community College. Pellissippi State Community College in Knoxville, Tenn.

  • Proposal: Obama announced proposal to pay for two-year community college tuition for students meeting criteria. (Example: 2.5 GPA.) Many details TBD.
  • Cost: Would be paid for via a state-federal partnership. White House estimates federal cost at $60 billion over 10 years, state cost at $20 billion over 10 years.
  • Effect: White House estimates 9 million students would be eligible and it would save $3,800 a year on average.

  • Jan. 12 — Identity Theft/Consumer Protection Online. Federal Trade Commission, Washington, D.C. (Same day CentCom’s Twitter feed was hacked.)

  • Proposal: Obama unveiled the “Personal Notification & Protection Act,” requiring companies to notify customers within 30 days of a breach.
  • Proposal: Obama also unveiled the “Student Digital Privacy Act” preventing companies whose software is used in classrooms from selling student data.
  • New resource: The president announced the Federal Trade Commission is developing a one-stop resource for victims of ID theft.
  • Jan. 13 — Cybersecurity. National Cybersecurity and Communications Integration Center. (Biden speech on same theme Jan. 15 in Norfolk, Va.)

  • Proposal: Encourage public-private threat sharing.
  • Proposal: Give law enforcement greater authority to prosecute and go after cybercrime.
  • Proposal: Create federal statute clarifying how businesses should report data breaches to customers.
  • Jan. 14 — Net Neutrality and Expanding Internet Access. Cedar Falls Utility, Cedar Falls, Iowa.

  • Action: Obama has directed the FCC to implement “the strongest possible rules to protect net neutrality” and require providers to allow as much open access as possible.
  • Obama called for an end to laws in 19 states that allow some blockage of broadband access.
  • Community Initiative: Commerce is launching “Broadband USA” to offer online and in-person assistance for communities building broadband.
  • Jan. 15 — Paid Sick Leave. Roundtable with women at Charmington’s, a cafe in Baltimore.

  • Action: President signed memorandum allowing federal workers to take “advance” sick leave (they have to pay it back);
  • Proposal: Obama called on Congress to pass the Healthy Families Act, legislation previously proposed by Democrats in 2009 that went nowhere. It would allow employees to earn up to seven paid sick days; Republicans argue this could hurt small businesses.
  • Proposal: President wants Congress to pass $2.2 billion grant program to incentivize states to create sick-leave programs.
  • Daily Presidential Trivia:
    On this day in 1955, President Dwight Eisenhower held the first ever filmed presidential news conference. Which president held the first live news conference? Be the first to tweet us the correct answer using #PoliticsTrivia and you’ll get a Morning Line shout-out. Congratulations to Rich Polanski ‏(@ao2666) and roy wait ‏(@ind22rxw) for guessing Thursday’s trivia: Who was sent to negotiate the peace terms with the North Vietnamese? The answer: Henry Kissinger.




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