WASHINGTON – President Obama declared Tuesday night that the "shadow of crisis" has passed America and urged Congress to build on economic gains by raising taxes on the nation's wealthiest to pay for reductions for the middle class — an agenda more likely to antagonize the new Republican majority than win its approval.
In a shift from State of the Union tradition, Obama's address to a joint session of Congress was less a laundry list of new proposals and more an attempt to sell a story of national economic revival. He appealed for "better politics" in Washington and pledged to work with Republicans, even while touting bread-and-butter Democratic economic proposals and vowing to veto GOP efforts to dismantle his signature achievements.
"It has been, and still is, a hard time for many," Obama said. "But tonight we turn the page."
To illustrate improvements in the economy, the president highlighted the story of Minneapolis resident Rebekah Erler, a 36-year-old accountant and mother of two who wrote a letter to the president recounting her family's economic struggles. He met with her during a Twin Cities visit in 2014.
Erler and her husband, Ben, were in the audience as Obama spoke about how they made it through "some very, very tough times."
Sounding upbeat and defiant, he said, "We can't put the security of families at risk by taking away their health insurance or unraveling the new rules on Wall Street or refighting past battles on immigration when we've got a system to fix. And if a bill comes to my desk that tries to do any of these things, I will veto it."
Obama's address marked the first time in his presidency that he stood before a Republican-controlled Congress. Yet the shift in the political landscape has also been accompanied by a burst of economic growth and hiring, as well as a slight increase in Obama's once-sagging approval ratings.
After ticking through signs of the rising economy, the president turned toward Republicans sitting in the chamber and said with a wink, "This is good news, people."
The centerpiece of Obama's economic proposals marked a shift away from the focus on austerity and deficit reduction that has dominated his fiscal fights with Republicans. In a direct challenge to GOP ideology, Obama called for increasing the capital gains rate on couples making more than $500,000 annually to 28 percent.
The president's tax plan would also require estates to pay capital gains taxes on securities at the time they're inherited and slap a fee on the roughly 100 U.S. financial firms with assets of more than $50 billion.
Much of the $320 billion in new taxes and fees would be used for measures aimed at helping the middle class, including a $500 tax credit for some families with two spouses working, expansion of the child care tax credit and a $60 billion program to make community college free.
"Will we accept an economy where only a few of us do spectacularly well?" Obama asked. "Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?"
Republicans balked at his proposals and painted a far less rosy picture of the economy.
"We see our neighbors agonize over stagnant wages and lost jobs. We see the hurt caused by canceled health care plans and higher monthly insurance bills," said Iowa Sen. Joni Ernst, who delivered the Republican response. "But when we demanded solutions, too often Washington responded with the same stale mind-set that led to failed policies like Obamacare. It's a mind-set that gave us political talking points, not serious solutions."
With an eye on a swirl of foreign policy challenges, Obama also asked Congress to pass a new authorization for military action against the Islamic State in Iraq and the Levant (ISIL), as well as for legislation to boost U.S. defenses against cyberattacks. He promised to veto any legislation that would impose new sanctions on Iran.
"New sanctions passed by this Congress, at this moment in time, will all but guarantee that diplomacy fails — alienating America from its allies and ensuring that Iran starts up its nuclear program again," Obama warned.
Aides to Obama said that the address was intended as a blueprint that Republicans either accepted or rejected.
"He's not going to trim his sails because some people, before he's given the speech, said they don't like his ideas," a senior aide said before the speech.
Obama said that enacting his proposals would represent bold action to improve the lives of all Americans.
"That's what middle-class economics is, the idea that this country does best when everyone gets their fair shot, everyone does their fair share and everyone plays by the same set of rules," Obama said.