Thu, Nov 8, 2012Obama's To-Do List: What He Plans for a Second Term
What was a contentious issue during the campaign will likely remain so. Obama said that higher taxes on the rich will not stifle economic growth and that both tax hikes and spending cuts are needed to achieve long-term deficit reduction. Whether he can get Republicans to agree to any tax hikes may be his greatest domestic challenge.Obama also has said he would like to raise taxes on the wealthy and ensure they pay 30 percent of their income, which he says would help reduce the budget deficit. Obama said he supports extending Bush-era tax cuts for everyone making under $200,000, or $250,000 for couples. He had agreed in 2010 to a two-year extension of the lower rates for all taxpayers. But that extension ends on Dec. 31, and Obama has said he would let the top two tax rates go back up 3 to 4 percentage points to 39.6 percent and 36 percent—and raise rates on capital gains and dividends for the wealthy. A Treasury Department report says Obama's proposal to let the Bush tax cuts expire for top earners would hit only a tiny fraction of all small businesses—but it includes nearly 1 million companies. Other taxes going up under Obama would be to help cover Medicare costs from the Affordable Health Care Law—with a tax on highest-value health insurance plans. Obama has said he would replace the Alternative Minimum Tax (AMT) with the "Buffett Rule," named after billionaire investor Warren Buffett. The AMT was originally designed to keep top wage earners from taking too many deductions, but it currently captures many middle-class families. The Buffett rule holds that millionaires shouldn't have a lower effective tax rate than anyone else—and that they should pay at least 30 percent of their income in federal taxes. Obama would continue a 15 percent tax rate on dividends and capital gains for families making less than $250,000 a year. When it comes to business, Obama would reduce the top corporate rate to 28 percent from 35 percent. Obama has also called for new tax codes to encourage investment at home and discourage the offshoring of jobs and factories. As for the estate tax, Obama said he would reinstate the 2009-level rate of 45 percent after a $3.5 million exemption on assets passed to heirs.
Economy & Jobs
The current unemployment rate sits at around 7.9 percent. So, to get the economy moving — and to create jobs — Obama said on the campaign trail that he wanted Congress to pass his $447 million American Jobs Act that he initially proposed in 2011. It was defeated in the Senate. The key elements of the package reprise parts of Obama's 2009 stimulus measure and a Social Security payroll tax cut enacted in 2010. The plan combines payroll tax cuts for workers and businesses with $175 billion in spending on roads, school repairs and other infrastructure, as well as unemployment assistance and help to local governments to avoid layoffs of teachers, firefighters and police. The jobs measure would be paid for by a 5.6 percent surcharge on income exceeding $1 million, expected to raise more than $450 billion over a decade, according to the Obama campaign. Obama has also proposed tax breaks for U.S. manufacturers producing domestically or repatriating jobs from abroad, and tax penalties for U.S. companies outsourcing jobs.
For the fourth-straight year the U.S. is projected to have trillion-dollar deficits. Obama has called for tackling the debt with a mix of spending cuts and revenue increases. Central to Obama's plan is to let Bush-era tax cuts expire for couples making more than $250,000.
During the campaign Obama admitted failure on getting promised immigration legislation through Congress—that included a pathway to citizenship for undocumented immigrants. But he says he will try again. As part of immigration reform, Obama had vowed to get Congress to pass the Dream Act—which would give young illegal immigrants who were brought to the United States as children a path to citizenship if they attend college or serve in the military. The bill was blocked by the Senate in 2010. But in June, Obama issued an executive order to allow many immigrants brought illegally to the United States as children to be exempted for two years from deportation and granted work permits if they apply to the government.
As for what he would do in a second term, Obama has called on Congress to end $4 billion in oil tax breaks for firms like BP, Chevron, ExxonMobil, and ConocoPhillips. Instead that money would be used to invest that money in clean energy. Obama also pledged to cut subsidies for oil, coal, and natural gas. During the campaign Obama said he supported extension of the production tax credit for wind generated electricity. He has also touted nuclear power as a clean source of energy. Obama said that the Commodity Futures Trading Commission should increase its oversight of Wall Street, in the belief that trading speculators drive up oil prices. Obama called for an increase in penalties for such illegal activity. As for the controversial Keystone XL Pipeline that the White House put a temporary hold on in 2012, Obama has said he would make a final decision on the project after an environmental study on a new route through Nebraska would be finished sometime in 2013.
Since he won re-election and the Democrats control the Senate for at least the next two years, GOP threats to dismantle Obamacare would seem to have taken a back seat for now. The bill goes into full effect in 2014, with some provisions for tax increases on incomes more than $200,000 to pay for certain Medicare costs.
The president did not propose a comprehensive plan to address Social Security's potential financial problems. In 2011, he proposed a new measure of inflation that would reduce annual increases in Social Security benefits. The proposal would reduce the long-term financing shortfall by about 25 percent, according to the Social Security actuaries. 、
Obama said often on the campaign trail that he opposed vouchers and using any public tax money to pay tuition at private schools. Obama also said he wanted to preserve a key federal student loan interest rate at 3.4 percent. The rate had been scheduled to double, an increase the president said would hurt students and parents. Congress voted in June to avert a higher rate. Obama also wants to tighten federal oversight of for-profit colleges. He has said that too many students graduate from these types of schools in too much debt.