“The state of our union is getting stronger,” he declared in time-honored tradition. “In the last 22 months, businesses have created more than three million jobs.” He pointed to renewed hiring by American manufacturers and — borrowing the “built to last” phrase from the auto industry he helped save — he sketched out, albeit vaguely, what he called a blueprint for economic growth in which the wealthy play by the same rules as ordinary Americans.
Taking aim at financial institutions that engaged in risky lending practices that many believe tipped the country into financial crisis, Mr. Obama said he was asking Attorney General Eric H. Holder Jr. to create a special unit of federal prosecutors and state attorneys general to expand investigations into abusive lending. The new unit, he said, “will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans.”
None of the proposals constitutes a single bold stroke to revive the economy, but the heart of Obama’s message — one he has underscored in appearances around the country in recent months — was that America’s wealthiest citizens must do more to cement the economic recovery and pull the country from its dire fiscal condition. The approach was typified by his call for those who make more than $1 million a year to pay a tax rate of at least 30 percent and to forgo a host of deductions he said they do not need.
Nearly all of the roughly hour-long speech Tuesday was devoted to the economy. Obama spent only a brief time on foreign policy. He underscored that in the past year he has overseen the killing of Osama bin Laden and the end of the Iraq war, an unpopular conflict that he had pledged to end as a candidate.
Pledging no tax increases for those earning under $250,000 (£160,000), Mr Obama said: "If you make more than $1 million a year, you should not pay less than 30% in taxes...Now, you can call this class warfare all you want," he added. "But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense."
“When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich,” Mr. Obama said, answering Mr. Romney’s charge that the president engages in the “bitter politics of envy.” “It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit or somebody else has to make up the difference.”
Indiana Governor Mitch Daniels, in the Republican response to President Obama's State of the Union address, acknowledged that the president was not responsible for the recession, but said Mr. Obama has "held back" the economy and is making the U.S. debt situation "radically worse."
In a speech that lasted less than 15 minutes, Daniels delivered the Republican rebuttal from the auditorium stage of the Indiana War Memorial building in Indianapolis.
"The president's grand experiment in trickle-down government has held back rather than sped economic recovery. He seems to sincerely believe we can build a middle class out of government jobs paid for with borrowed dollars. In fact, it works the other way: 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," Daniels said.
Opinion polls show Mr Obama's approval numbers languishing beneath 50%, with most Americans disapproving of how he has handled the economy. More than 13 million people are out of work and government debt stands at a record high of $15.2 trillion, up from $10.6 trillion when he took office.
Mitt Romney repeatedly called the president "detached" from the country's reality, telling supporters: "This is a president who talks about deregulation, even as he regulates. Who talks about lowering taxes, even as he raises them."