WASHINGTON -- In a State of the Union address focused on creating middle-class jobs, President Barack Obama called on lawmakers to help pull working Americans out of poverty by raising the federal minimum wage and pegging it to inflation.
Obama's proposal to boost the wage floor to $9 an hour revives an old campaign pledge to the working poor that was derailed by the Great Recession and the stubbornly high unemployment rate of his first term. It also sets the stage for a fight with congressional Republicans and powerful business lobbies, who no doubt will assail the measure as a job-killer during a fragile recovery.
"Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong," Obama said. "Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9 an hour. This single step would raise the incomes of millions of working families.
"It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets."
Obama framed the issue as a matter of economic fairness as well as sound economic policy. The current minimum wage of $7.25 per hour translates to a $15,000 salary and is well below a living wage in most areas of the country. It hasn't been raised since 2009, after the last in a series of increases signed into law by President George W. Bush.
The federal minimum wage prevails in roughly 30 states that don't mandate a higher one, and the president called for raising it to $9 in stages by 2015.
By tradition, the federal minimum wage gets hiked nominally every few years by Congress. The more significant piece of Obama's proposal is to link the minimum wage to a cost-of-living adjustment, guaranteeing that it rises with inflation over time -- a step already undertaken by ten states.
Such a measure would boost the minimum wage each year, and would preclude Congress from having to hammer out a new one through partisan negotiations, essentially stripping politics out of the process.
The president's proposal will likely thrill advocates for low-wage workers, many of whom feel lawmakers have catered far more to job-creators than to those on the lowest rungs of the economic ladder during the slow recovery.
"It's about time. We're incredibly excited that this critical issue bas been put on the most front of all burners," said Jen Kern, minimum wage campaign coordinator for the National Employment Law Project, a worker advocacy group. "It reflects what Americans already know: the minimum wage is too low. It needs to go up."
As for the proposal to index it to inflation, "It's hard to overstate the importance," Kern said. "The fact that we've never had an indexing discussion at the federal level is probably why we're in the position we're in. It guarantees wages are not going backwards for people making the lowest of wages."
Significantly, the administration's minimum wage proposal also calls for raising the so-called "tipped" minimum wage and pegging it to inflation as well. For restaurant servers and other tipped employees, the minimum wage is currently $2.13 an hour, meaning employers can pay that hourly wage and let diners make up the difference.
Under pressure from the restaurant industry, the "tipped" minimum wage was split from the standard minimum wage in 1996, when the Clinton administration negotiated a new wage floor with congressional Republicans. As a result, the wage that employers are required to pay servers hasn't budged in two decades -- an industry carveout that Obama's proposal would address.
Of course, heavyweight lobbies such as the U.S. Chamber of Commerce and the National Restaurant Association -- both of which have long histories of opposing minimum wage increases -- can be expected to strongly resist the president's proposal. Such groups typically claim that wage increases strain small businesses and force them to cut hiring, ultimately hurting the workers such raises are designed to help. It's a line of argument often echoed by conservative lawmakers and economists.
Michael Saltsman, a research fellow at the conservative Employment Policies Institute, immediately panned the president's proposal.
"This proposal will only harm the people the President wants to help -- especially teens, who have already endured more than four years of 20+ percent unemployment," Saltsman said. "If the President wants to boost the economy and have an impact on the country’s unemployment rate, he needs to lower barriers to hiring -- not raise them."
Perhaps in recognition of the politics, Obama's proposed minimum wage hike is lower than the one he suggested on the campaign trail in 2008. Back then, he pledged to raise it to $9.50 and link it to inflation by the end of 2011. The still-sputtering economy made that proposal a political non-starter, and the president rarely, if ever, spoke of raising the minimum wage during his first term.
Now, with steady if modest job growth month after month, the administration has reconsidered. It may well find strong support among the general public, as the minimum wage is a far less polarizing issue outside of the confines of Capitol Hill. In a 2010 poll, more than two-thirds of respondents said they supported raising it above $7.25.
This post has been updated with comments from Michael Saltsman.
BEFORE YOU GO
02/13/2013 1:22 AM EST
Paul Ryan: Obama Immigration Remarks 'Productive'
Rep. Paul Ryan (R-Wis.) had rare words of praise on Tuesday for President Barack Obama's message on immigration.
"I thought on comprehensive immigration reform, I thought his words were measured," Ryan said in an interview with CNN after the State of the Union address. "I think the tone and the words he took were productive on that front."
Obama urged Congress to act quickly -- "in the next few months" -- and praised the work of bipartisan groups in the House and Senate. Ryan said he appreciated that nod to Congress, adding that he thinks immigration is "an area where we have a good chance of getting something done."
"I think, you know, when you have -- when you are in the legislative arena and we're trying to get a comprehensive bipartisan agreement here, the words he uses matters," Ryan told CNN. "And he used what I thought was a measured tone, which gives me a sense that he is trying to get something done."
-- Elise Foley
02/13/2013 1:20 AM EST
Immigrant Workers Surprised, Disappointed By Obama Immigration Remarks
WASHINGTON -- For many of the 300 immigrant day laborers, cooks and manual laborers watching the State of the Union address at a Hilton Hotel in Washington on Tuesday, President Barack Obama's remarks on immigration were underwhelming.
When Obama called for swift action on immigration reform, the crowd in the Hilton conference room roared with cheers. But as the president laid out his policy ideas, including enhanced border security, taxes and penalties, the immigrant workers quickly turned to boos, hisses and indignation.
"I was surprised that he dedicated so little time of his speech to immigration," said Guillermina Castellanos, 52, a community organizer from San Francisco. "We know it's our labor that makes this country function."
The group was gathered for grassroots organizing trainings hosted by the United Workers Congress and the National Guestworker Alliance, and later this week will attend a Senate Judiciary Committee hearing and a press conference with Rep. Luis Gutierrez (D-Ill.).
The organizers and workers are staunch supporters of comprehensive immigration reform that includes a pathway to citizenship, and one of their top priorities is to urge Obama to halt deportations -- which currently stand at record levels -- until immigration reform discussions are complete. About one-fifth of the crowd was undocumented, National Day Laborer Organizing Network spokesman B. Loewe estimated.
For immigrants, Obama's statements were particularly important. Raul de la Torre, 46, is a worker from Mexico who along with 89 of his colleagues was fired by his employer for allegedly being undocumented after the group tried to organize to bargain for fair wages. He is involved with Voces de la Frontera, an immigrant rights group, and was with Jennifer Martinez, a 33-year-old U.S. citizen also involved with Voces. She has four small children she is raising alone after her undocumented husband was deported to Mexico last year.
With Martinez acting as a translator, de la Torre said he "hoped and prayed with all his heart that Obama has a conscience."
-- Preston Maddock
CORRECTION: This post has been corrected to clarify details of Raul de la Torre's case.
02/13/2013 1:14 AM EST
Jobs Proposals Don't Go Far Enough, Economists Say
President Barack Obama argued Tuesday night that a growing economy with more middle-class jobs "must be the North Star that guides our efforts."
But some outside observers and economists said the president's State of the Union address reflected a less ambitious approach to job creation than in the past -- one that acknowledged the realities of dealing with a Congress focused mostly on deficit-reduction.
"I'm sure there are a lot of good things in there, but it's just going to be nickel-and-dime stuff," said Dean Baker, an economist with the Center for Economic and Policy Research. "He's starting his term, in my view, by asking for very, very little."
Obama's new proposals included a "Fix It First" program that calls for $50 billion to hire people to fix decaying infrastructure such as bridges, and new upgrades to roads and railroads financed by reduced war spending. He also proposed a program to put people to work revamping vacant homes in communities ravaged by foreclosures, estimated to cost $15 billion.
The president made a passing reference to a $447 billion jobs bill he proposed in 2011, but he stressed that "nothing I’m proposing tonight should increase our deficit by a single dime."
The language was a marked contrast from last year's speech, where Obama referenced the Hoover Dam, the Golden Gate Bridge and the interstate highway system as examples of past administrations investing in "great projects that benefited everybody."
"You need to fund these projects," he said in the 2012 address. "Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home."
"Rhetorically, there were some bold visions in this speech, but I didn't see the level of specificity about the new projects this time as I have in the past," said Scott Paul, president of the Alliance for American Manufacturing. "Part of that may be an aspect of realism, but I'm of the school that if you don't ask for it, you're not going to get it."
Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, said some of the more modest initiatives on job creation in this speech reflect the country moving beyond the crisis mode of 2009 and 2010.
"As opposed to his agenda in his first years, where he was really putting out a huge fire, at this point he's talking about rebuilding the house," said Bernstein, a former Obama administration economist. "You're going to hear much less about large deficit spending on a big stimulus, and more about investments in kids, in infrastructure, in our manufacturing base."
-- Chris Kirkham
02/13/2013 12:46 AM EST
Howard Fineman: The Emotion Of The Night
I was playing the role of hard-boiled -- not to say cynical -- reporter on the Hill when I got into a conversation with Rep. Debbie Wasserman Schultz after the president's State of the Union address Tuesday night.
"So," I asked, "do YOU have your own personal victim of gun-violence with you tonight?"
The Florida Democrat, an important party leader, shot me a glance that was equal parts pity, surprise and annoyance. "Yes I do," she said, and turned to introduce me to 17-year-old from Miami named Megan Hobson. The young woman explained that she had been injured in a drive-by shooting last year.
"We needed to have people here such as Megan to underscore the point we want to make about gun violence," Wasserman Schultz said.
President Barack Obama laid out a detailed progressive agenda, a recitation that some pundits panned, but that early polls showed the public liked. Still, the emotional highlight -- and potentially most politically astute maneuver -- was when Obama and his fellow Democrats discussed the lives and losses of gun-violence victims.
In an effort organized by five Democrats from New York and New England -- the region of Newtown -- more than 30 members brought to the Capitol families that had experienced gun-related tragedies. It was powerful theater, especially when Obama himself paid homage to the parents of a victim from Chicago.
Using the call-and-response cadence of a church service, the president demanded that the Congress allow up-or-down votes on several gun measures. The idea was to put Republicans and wavering Democrats from Red States on the spot.
And it felt in the House Chamber Tuesday night that he had done so.
"The president backed them into a corner and they sat there like they were trying out for stone faces on Mount Rushmore," said Rep. Steve Cohen, a Democrat from Tennessee. "I loved that. And maybe we'll get those voters."
Maybe the Democrats and Obama will. Whether they will win them is another matter. If they do, the beginning of the story of that victory will be this night in the U.S. House -- and with people such as Megan Hobson.
-- Howard Fineman
02/13/2013 12:35 AM EST
Obama Promises Climate Change Action
The Huffington Post's Ryan Grim reports:
President Barack Obama Tuesday night pledged that if Congress refuses to take action to stem climate change, his administration would act unilaterally.
"I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago," Obama said, as McCain offered a tight smile from a back row. "But if Congress won’t act soon to protect future generations, I will. I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy."
There's about zero chance that the GOP-led House will pass climate change legislation this session, given that many of its members do not acknowledge that human activity has anything to do with it, if it's happening at all.
Click here to read more.
02/13/2013 12:34 AM EST
Sen. Joe Manchin, West Virginia Democrat, Miffed Obama Didn't Mention Coal
Sen. Joe Manchin, a Democrat from West Virginia, said he liked President Barack Obama's speech, but was miffed the energy portion left out his state's key resource -- coal.
Obama and his administration have talked about coal in the past, but Manchin noticed the president didn't bring it up when he was addressing energy efficiency and climate change.
"I was disappointed on energy," Manchin told reporters. "Not to say a word about coal -- and coal produces about 35 percent of the the nation's energy. When you look at it, you've got to talk about climate, and if you're talking about climate, the United States of America consumes close to one-eighth of the the coal that's burned in the world -- you should be finding the technology that helps use it cleanly, and uses it much better and more efficiently. So that was disappointing."
Many analysts have said there is no such thing as clean coal, although Obama and Vice President Joe Biden have talked up the idea in the past.
-- Michael McAuliff
02/13/2013 12:18 AM EST
Obama Short On Details For Climate Change And Green Energy
HuffPost's Lynne Peeples reports:
President Barack Obama's State of the Union remarks fell in line with what many energy experts, industry representatives and environmental advocates predicted to me earlier today -- lots of rhetoric yet little detail on how to tackle climate change and propel green energy.
Read more here.
02/13/2013 12:10 AM EST
What Stands In The Way Of A Minimum Wage Increase
The payroll tax increase that went into effect at the beginning of the year stands to offset significantly the president's proposal to raise the federal minimum wage to $9 an hour.
In his State of the Union address, Barack Obama called on lawmakers to increase the federal minimum wage from $7.25. For an employee working a 40-hour work week, the bump would translate to a 24 percent raise to $18,720 a year.
-- Caroline Fairchild
02/12/2013 11:50 PM EST
Obama Calls For Pre-K Expansion
HuffPost's Joy Resmovits reports:
During Tuesday night's State of the Union address, President Barack Obama proposed several major education initiatives, including a big push to expand pre-kindergarten and a potential revamp of the federal aid system for college students.
"Tonight, I propose working with states to make high-quality preschool available to every child in America," Obama said. "Every dollar we invest in high-quality early education can save more than seven dollars later on.”
Instead of focusing on the bulk of American public school students, the president's proposals zeroed in on the margins, targeting the oldest and youngest members of the country's education system.
Read more here.
02/12/2013 11:49 PM EST
Obama Calls For Immigration Reform To Attract Skilled Entrepreneurs, Engineers
President Barack Obama during his State of the Union address called for reforms to the nation's immigration system that would help highly-skilled immigrants remain in the country.
"Real reform means fixing the legal immigration system to cut waiting periods, reduce bureaucracy and attract the highly-skilled entrepreneurs and engineers that will help create jobs and grow our economy," Obama said.
The president said bipartisan groups in both chambers of Congress were working to draft an immigration reform bill. "Send me a comprehensive immigration reform bill in the next few months, and I will sign it right away," he said.
Advocates said a massive backlog of visas is preventing immigrants with advanced degrees in engineering from securing visas to remain in the country.
-- Gerry Smith