Washington:
US President Barack Obama on Tuesday used his annual State of the Union policy address to denounce America's economic inequality, drawing a battleline with Republicans ahead of what is expected to be a tough fight for re-election.
The speech before a joint session of Congress, one of America's grandest political events, put Obama back in the spotlight after months of being overshadowed by the fierce race among Republicans vying to be his opponent in the November election. (
Read full speech)
Obama said the State of the Union "is getting stronger." But with the weak economic recovery threatening his reelection prospects, Obama pledged a revival, but one that will work for everyone and not just the rich.
Restoring a fair shot for all, is "the defining issue of our time," Obama said.
"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules," he said.
The US President also promised more jobs and called for the US economy to be taken away from outsourcing.
"First, if you're a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it... second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here. Third, if you're an American manufacturer, you should get a bigger tax cut. If you're a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers. My message is simple. It's time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I'll sign them right away. "
But even before Obama spoke, Republicans denounced the speech as "pro-poverty" and his tactics as divisive.
"No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others," said Indiana Governor Mitch Daniels, who presented the formal Republican response.
The remarks by both sides reflect the unmistakably different views of the economy and the role of government that will likely define the election.
Republican front-runners Mitt Romney and Newt Gingrich blame Obama for what they see as reckless spending, high taxes and out-of-control government regulations that hurt businesses, prevent hiring and stifle growth.
Obama casts government as a force that can help people get a shot at a better life. He has accused Republicans of defending the interests of the wealthy at the expense of everyone else.
His timing could not have been better for a message about income inequality. Earlier Tuesday, Romney released his tax returns under political pressure, revealing that he earned nearly $22 million in 2010 and paid an effective tax rate of about 14 percent. That is a lesser rate than many Americans pay because of how investment income is taxed in the United States.
In his speech, Obama proposed making millionaires pay more in taxes, proposing a minimum tax rate of at least 30 percent for those earning $1 million or more a year. He also proposed more relief for homeowners and eliminating tax incentives that make it more attractive for companies to ship jobs overseas.
Though domestic issues dominated his speech, Obama talked about extending new ties and influence toward Asia, while claiming that old alliances in Europe and elsewhere are stronger than ever.
He also called for the creation of a new trade enforcement unit that would go after unfair trade practices around the world. Obama said the US would provide financing to put its companies on even footing when the Chinese or other competitors use unfair export financing to help their businesses.
Obama faces considerable challenges three years into his term. Polling shows Americans are divided about Obama's overall job performance but unsatisfied with his handling of the economy.
The economy is improving, but unemployment still stands at the high rate of 8.5 percent. Government debt stands at $15.2 trillion, a record, and up from $10.6 trillion when he took office.
Given Obama's poor relations with congressional Republicans, who control the House of Representatives, it is unlikely that he will get any major initiatives approved this year.
Last year was marked by partisan breakdowns in Washington. The government neared both a shutdown and, even worse, a default on its obligations for the first time in history.
But a rare wave of unity splashed over the House chamber shortly before the speech. Democratic congresswoman Gabrielle Giffords, survivor of an assassination attempt in her Arizona district one year ago, received sustained applause from her peers and hugs from many. Obama, too, warmly embraced her as he made his way to the front of the chamber.
Lawmakers also leapt to their feet when Obama said near the start of his speech that terrorist leader Osama bin Laden, killed by a raid in Pakistan authorized by the president, will no longer threaten America.