US President Barack Obama lays out the design for a ‘fairer America’ in his annual State of the Union speech last, assuring to make Us millionaires pay higher taxes and explains the reasons behind his stall for one of the most divisive US presidential elections in the recent past.

Washington / NationalTurk – The US economy continues to struggle and Americans are largely pessimistic, but dueling events at Tuesday State of the Union 2012 indicate why in politics it’s good to be the incumbent.

In Washington, President Obama harnessed one of the grand symbols of his office — a prime-time State of the Union speech — to present himself to voters as a champion for middle-class families struggling to get by and declare that “we’ve come too far to turn back now.”

Obama speech State of the Union 2012 : Obama is Robin Hood

In an intense speech, Us President Barack Obama contrasted his vision for an America “where everybody gets a fair shot” with a country run for the benefit of a monied elite, drawing the key battle-lines with his Republican opponents this November.

The outcome of the 2012 presidential election in USA depends in large part on which of those arguments Americans decide to embrace.

The centerpiece of Mr. Obama’s call for economic fairness was the so-called “Buffett Rule,” which is predicated on the notion that the wealthy investor should pay as much as his secretary in taxes. ( Obama said Tuesday night that anyone making more than $1 million per year should pay no less than a 30 percent tax rate; as learned earlier in the day that one of the chief contenders for the GOP presidential nomination, Mitt Romney, paid less than 14 percent on $21.7 million in income in 2010.)

Focusing on economic issues, Obama set the scene for an election that will be fought over jobs and restoring the national finances, with US unemployment still running at 8.5 per cent and a soaring $15 trillion national debt that continues to rise.

‘It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America’

Obama pledged to increase spending on education, infrastructure and job creation and help pay for it by asking millionaires to pay at least 30 per cent in taxes. The President pointed to his successes from his first three years in office and the widening income gap between the rich and poor, hoping to appeal to the middle class during an election year.

The call to increase taxes on the rich came hours after Mitt Romney, the multi-millionaire Republican presidential hopeful, released tax returns showing that he paid just 14 per cent on earnings of more than $21m.

State of the Union 2012 : Obama focuses on fairness

Citing the example of Warren Buffett, the billionaire investor who admitted last year that he paid lower tax rates than his secretary, President Obama called on Washington to “stop subsidising millionaires” and rescind a trillion dollars of tax breaks for the wealthiest 2 per cent.

State of the Union 2012: Obama to make pitch for second term 24 Jan 2012

“You can call this class warfare all you want,” he said, as Mr Buffett’s secretary looked on from the box of the First Lady Michelle Obama, “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

Obama attacked the “reckless” and “bad” behaviour of the banks that had caused the financial crisis and left millions of innocent Americans “holding the bag”, urging Congress to invest in rejuvenating America’s industry and infrastructure.

State of the Union 2012 : Obama playes the fairness and bash the wealthy card

“Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that does the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody,” he said.

After a year in which bitter ideological divisions between Democrats and Republicans have paralysed the US Congress, Mr Obama said it was little wonder that most American’s were cynical about politics and considered “Washington is broken”.

He cited the teamwork shown by the Navy SEALS that had captured and killed Osama bin Laden in Pakistan last year, and urged both parties in Congress to stop their “perpetual campaign of mutual destruction” and build consensus around common sense ideas.

“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.”

Today, in what is widely seen as the de facto start of his election campaign, Mr Obama will embark on a three-day tour of five key ‘swing’ states, including Iowa, Nevada and Arizona where pollsters say that the outcome of November’s elections will very likely be determined.

A new poll released on the eve of the speech by ABC News/Washington Post showed Mr Obama’s approval rating up by five points this month to 53 per cent as US unemployment continued to fall.

In a sign of the bitter debates to come, the Republican Party accused Mr Obama of presiding over an “explosion” of government spending and seeking to divide America at a time when tough measures to curb spending and stimulate real economic activity were most needed.

State of the Union – Republicans slam Obama for dividing America

“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 Gov. Mitch Daniels of Indiana, a middle-ground Republican who many in his party had hoped would run for the presidency.

Far from helping the middle class, Mr Daniels said that Mr Obama’s “grand experiment in trickle-down government” had failed, stifling the true potential of American entrepreneurs.

“A government as big and bossy as this one is maintained on the backs of the middle class, and those who hope to join it,” he added as he delivered his party’s official response.

Earlier on Tuesday, Mr Romney, the long-term national front-runner for the Republican nomination to face Mr Obama, promised to lead America down a very different road if he was elected in November.
“This election is a choice between two very different destinies,” he said in a major speech delivered on the primary campaign trail in Tampa, Florida.

“This President puts his faith in government. We put our faith in the American people. Ours is the party of free enterprise, free markets, and consumer choice. …He leads the party of big government. He believes in ever-expanding entitlement. He’s wrong. We’re right.”

The central theme of President Obama’s State of the Union address on Tuesday night was the notion that in America, everybody deserves a fair shake – and that his policies will help make sure they have one.

The central theme of Indiana Gov. Mitch Daniels’ Republican response was that Mr. Obama has shown himself to be a divisive failure that has chosen class warfare and stifling big government over economic progress.

The outcome of the 2012 presidential election depends in large part on which of those arguments Americans decide to embrace.

“Now, you can call this class warfare all you want,” he said. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”

State of the Union 2012 : Obama hints at differences on class warfare

Class warfare is exactly what Republicans are calling it. House Speaker John Boehner – who sat behind Mr. Obama during the speech, along with Vice President Joe Biden – suggested earlier in the day that the president’s politics of “division and envy” are “almost un-American.” Daniels said that “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.”

Us President Barack Obama would seem to have the advantage in this fight: A CBS News/New York Times poll out Tuesday found that 55 percent of Americans think upper-income taxpayers pay less than their fair share. And in the wake of the emergence of the “Occupy” movement, a Pew survey earlier this month found that two in three Americans now see a strong conflict between rich and poor. Even the two leading Republican presidential candidates, Romney and Newt Gingrich, have gotten into a fight over whether Romney’s former company Bain Capital engages in heartless capitalism that rewards the rich while leaving average Americans behind.

That’s why Republicans are not eager to spend the year fighting on Barack Obama’s terms. Instead, they want to put the focus squarely on the fact that Mr. Obama has spent three years presiding over an economy that has yet to recover from the 2008 financial crisis. Daniels said Tuesday night that the president “cannot claim that the last three years have made things anything but worse: the percentage of Americans with a job is at the lowest in decades. One in five men of prime working age, and nearly half of all persons under 30, did not go to work today.” (Daniels’ full remarks are at left; the president’s are above.)

This is the argument that Republicans want to have. A CBS/NYT poll earlier this month showed that just 40 percent of Americans approve of Mr. Obama’s handling of the economy, while 54 percent disapprove. Only 35 percent say the president has made real progress on the economy, which voters overwhelmingly say is their top concern. If Republicans can hammer home the notion that Mr. Obama has failed to guide the economy effectively – in a way that has harmed all Americans, rich, poor and middle-class – they will likely win the election.

From a political perspective, good news for the economy is bad news for the Republicans: Amid signs that the economy is improving, the survey showed a slight uptick in perceptions of the condition of the economy – and Mr. Obama’s handling of it. Still, the economic picture is unlikely to be rosy in November, and Republicans know their best hope is to convince Americans that Mr. Obama has squandered his opportunity to turn things around.

That’s the reason you heard Daniels speaking in relatively dour terms Tuesday night. “When President Obama claims that the state of our union is anything but grave, he must know in his heart that this is not true,” he said at the outset of his remarks. You can expect to hear the GOP hammering home that notion right up until Election Day.

The other key plank in the GOP offensive against Mr. Obama is the notion that he wants an overregulating, nanny-state government that doesn’t let American businesses succeed and American individuals make their own choices. That argument has long been effective for Republicans, which is why you heard Mr. Obama note Tuesday night that he “approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.” It’s also why he uttered a line you’d expect to hear from a Republican: That he believes “[g]overnment should do for people only what they cannot do better by themselves, and no more.”

But that’s playing defense, and Mr. Obama knows he needs to play offense. That’s why he brought Buffett’s secretary to his speech Tuesday night, and it’s why he’s embarking on a three day swing-state tour on Wednesday to hammer home his State of the Union arguments. The president and his re-election team believe that a focus on income inequality and economic fairness are good politics. They also know that while Romney may well be a formidable opponent if he gets the nomination, a focus on income inequality could transform what was supposed to be the former Massachusetts governor’s biggest strength – his time in the business world, which helped him reach a net worth in the hundreds of millions of dollars – into a weakness that puts him on the wrong side of an argument they are eager to have.

The President pointed to his successes from his first three years in office and the widening income gap between the rich and poor, hoping to appeal to the middle class during an election year.  President Obama’s reelection campaign is raising money and reaching out to voters and volunteers.

In Florida, the escalating battle for the right to challenge Obama threatened to further bloody the leading contenders — with Mitt Romney on the defensive over his tax rate as revealed by the Tuesday release of his 2010 returns and Newt Gingrich trying to fend off questions about his consulting work for mortgage giant Freddie Mac.

The day brought a reminder that, for all of Obama’s many political challenges and relatively low approval ratings, the White House has some reason for optimism.

In addition to the prospect of a protracted GOP nomination fight, Obama has been boosted as the jobless rate has ticked down in recent months. And a new Washington Post-ABC News poll found independent voters quickly souring on Romney, whose strength with that group not long ago made him the opponent that many Democrats feared most.

The president’s address Tuesday served far more as a roadmap for how Obama as a reelection candidate intends to capi­tal­ize on his built-in advantages than as a governing blueprint for the next year.

He sprinkled his remarks with anecdotes and shout-outs to key cities in election battlegrounds, from Raleigh to Pittsburgh and Milwaukee to Cleveland. He hit back against GOP attacks on an array of foreign and domestic policy areas — declaring victory on the auto bailout and his overhauls of health care and Wall Street regulations.

State of the Union 2012 : Obama states America is back

“America is back,” the president said at one point.

A gift of timing allowed Obama to draw a stark contrast with Romney.

It came, indirectly, as the president highlighted his quest for the “Buffett rule,” named for the billionaire investor who has criticized a tax system that allows him and other investors to pay a lower rate than their staffs. The rule would require people making more than $1 million a year to pay at least the same tax rates as middle-class Americans, which can be close to 30 percent. Buffett has said he paid an effective 17.4 percent rate last year.

Buffett’s secretary was sitting in the gallery, but Americans learned Tuesday that Romney, too, stands as a symbol of what the White House is portraying as a major inequity. In 2010, he paid an effective rate of 13.9 percent on $21.7 million in income, most of it from investments.

“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,” Obama said, “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 invoked a common refrain from Romney and other Republicans about his support for raising taxes on the right, saying: “Now, 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.”

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