The Age

By Sarah Graham

This year's State of the Union address was more about politics than policy, despite the president's frequent assertion that ideas and not partisanship should guide the national debate. Entering his "lame duck" phase, and with an oppositional Congress in place, the bolder proposals in the address are better thought of as establishing President Barack Obama's rhetorical strategy for the year ahead than as future bills.

The process started last week with Mr Obama's "SOTU spoilers". On visits to three states he pulled focus from the new Congress' first week by announcing two big initiatives: redistributive tax reforms and free community college.

With this "middle-class economics" Mr Obama is staking out a classically Democrat economic ideology and placing the national debate on ground he feels he controls. This is partly about 2016 but also about the president's legacy and that he is gearing up for a tough year in Washington.

If Republicans can't answer Mr Obama's challenge with convincing ideas on solving the economic problems of working Americans, they will struggle. Complaints that the President has usurped the powers of the legislative branch will become stale fast if he can keep shifting the contest to one of ideas. Mr Obama, though, needs to find a way to ensure that, having articulated his "middle class economics" vision, he doesn't look ineffective when bills aren't passed.

Last year the economy took centre stage. Back then, Mr Obama touted the recovery but said he would do more to boost incomes and jobs, and encourage investment. Now he has cause to celebrate generally good economic data, especially on jobs, manufacturing, and investment, and he is at long last seeing better approval ratings. But the President needed to address issues of economic inequality and stagnant incomes that have become a huge media issue over the past year. This is not just a global financial crisis hangover; it's a more longstanding problem (economists disagree about the causes) and it means that most people simply aren't feeling the benefits the national economic recovery.

Proposals such as paid sick leave and equal pay for women sound the right notes, and having failed to impose an increase to the minimum wage last year Mr Obama returned to the issue. The minimum wage is a huge problem for working-class Americans and deserves urgent national attention. It buys less than it did in 1968 and annual increases by many states are often only cents on the dollar.

The President also alluded to his new proposals on tax without the specifics: he has proposed an increase in capital gains to 28 per cent and an inheritance tax, as well as more taxes on large companies and banks. These will be used to provide breaks that might be components of "middle class economics" that Congress can get behind if the funds can be found elsewhere.

Mr Obama's bold proposal to create a free community college aims to tackle a 79 per cent rise in tuition costs over the past decade that has been the cause of a fast-growing inequality of opportunity in higher education. Mr Obama would need Congress to approve $US6 billion annually for the plan and there is little chance that will happen, especially considering that less radical initiatives such as boosting federal grants to low-income students were already to be cut by the incoming Congress.

Had Mr Obama presented this at a time of less partisan tension and with a friendly Congress, it might have won the support of a few Republicans, particularly in the states. Tennessee's non-profit program to provide free tuition has been supported by the state's Republican governor and two Republican senators (up to now, anyway). In the current climate, free college is probably just an idea that Mr Obama will use to differentiate his "middle class economics" from the policies of the other side. The public is unlikely to really benefit.

States of the union aren't known for their insight on foreign policy but this year's was quite substantive. Last year Mr Obama claimed that the nation was no longer on a war footing. This year he needed to place the rise of Islamic State and ongoing US air strikes in the context of a Middle East policy. He has tried to show that he has a new approach to the region, with no commitment of ground troops and coalition partners at the forefront. Mr Obama was expected to seek a new authorisation of force against IS at some stage this year. Whether and when this becomes a legal requirement is debatable, but it would certainly be politically useful. Destroying IS could take years and require many more US military "advisers" on the ground. Better to cement unity of purpose with the legislative branch of government.

More surprising was the promise to close the prison at Guantanamo. He has made this multiple times and with no solution for the remaining inmates. Mr Obama has an eye to his legacy in at least reiterating his wish to end this blight on America's reputation, but he could be setting himself up to fail. Cuba was a predictable inclusion as a legacy issue, but it is important foreign policy and will pay dividends in bilateral relationships across Latin America. The move has been popular with a surprisingly broad range of constituencies as well. Politics and the campaign ahead, even if Obama isn't running, are never far away.

This article was originally published in The Age