Obama Puts Hope on Revival of Growth

U.S. President Barack Obama declared the U.S. economy healed and said the nation now must begin work to close the gap between the well-off and the wanting.

“Tonight we turn the page,” Obama said in his sixth annual State of the Union address. “We have risen from recession freer to write our own future than any other nation on Earth.”

The economy’s performance in the past two quarters - an average of 4.8 percent growth - was the strongest in a decade. Private-sector employers added an average of 280,000 in each of the past three months, roughly double the monthly rate since the 2009 end of the recession. Consumer confidence in January reached an 11-year high.

Yet median household income fell 3.9 percent to $51,939 in 2013 compared with 2009 when Obama took office, U.S. Census Bureau data show. The poorest fifth fared even worse, with incomes dropping 5.9 percent to $20,900.

Keystone Pipeline

Obama made only a glancing mention of one Republican priority and a source of friction between the White House and Congress, building the TransCanada Corp. Keystone XL pipeline. Obama has said he would veto legislation that would force approval of the $8 billion pipeline to carry oil from Alberta, Canada, through the U.S., bypassing an administration review.

Over the weekend, the White House announced the president’s proposal to increase the top tax rate on capital gains and dividends to 28 percent from 23.8 percent and impose capital-gains taxes on asset transfers to heirs at death.

Obama is also renewing and expanding an earlier proposal for a fee on the liabilities of about 100 financial institutions with assets exceeding $50 billion.

The revenue raised - $320 billion over 10 years - would be used to expand tax credits for higher education and child care and create a new break for two-earner couples.