Obama Will Push Education (And Some Itty-Bitty Tax Hikes) During SOTU Speech
Education will take center stage during President Obama’s State of the Union Address on Tuesday night, with the president proposing a host of new programs and benefits to help low-income students — and a bevy of tax hikes to pay for them.
Most of what the president will propose has already been revealed by the White House.
Two weeks ago, a video was released in which the president said he wanted to pay for two years of community college for any American “who’s willing to work for it.” The plan is inspired by a similar policy in Tennessee, where high school students who meet GPA thresholds and perform community service receive free tuition at community colleges. Some details on the program remain fuzzy, including what it means to “work for it,” and could be revealed either during Obama’s speech or shortly afterwards.
The president will also be pushing a variety of tax policy changes that would help some students. Currently, people on income-based student loan repayment programs can have their remaining balance forgiven after 20 years of on-time payments, but they’re then slapped with a “tax bomb” because the IRS treats the forgiveness as taxable income.
Obama wants to eliminate that practice. He also wants to extend the American Opportunity Tax Credit, a $2,500 tax credit for college students that’s scheduled to end in 2017.
All those benefits won’t come cheap. Even the White House has estimated the total price tag of its community college plan at $60 billion over ten years, and his proposed middle class tax breaks would cost another $175 billion in the same span.
To pay for it all, Obama will be pushing a big tax hike for higher earners, which would hike the top capital gains tax rate to 28 percent (nearly double what it was just three years ago) and close a loophole that lets people avoid paying capital gains taxes on assets that were inherited. He also wants to eliminate Section 529 tax breaks that are used by high earners to save for education.
While these proposals will likely form a big part of Obama’s speech, don’t expect it to be driving much debate in Congress.
Republicans are unsurprisingly hostile to any tax hikes, and Sen. Lamar Alexander, chair of the Senate’s education committee, captured the mood of the GOP well with his reaction to the president’s community college proposal: “Hopefully the president’s address will also include some proposals that might actually have a chance to become law.”
Newly-elected Sen. Joni Ernst is giving the GOP response following Obama’s speech, and may offer her own critique of Obama’s education proposals.
While it remains a major issue at the state level and is also becoming one on the floors of Congress, don’t expect Obama to make much if any reference to Common Core. The president’s involvement in what was originally a state-led initiative has been absolutely toxic, and in 2014 supporters of the standards were literally begging Obama not to talk about them. A year later, there’s no reason for that attitude to change.
Shout-outs to various guests in attendance have become a tradition at the speech, and the guest list for Michelle Obama suggests that many of those shout-outs will be education-related as well.
Ana Zamora, an illegal immigrant and advocate for the DREAM Act, will be joining the First Lady, as will Tennessee community college student Chelsey Davis, California technical educator Katrice Mubiru, and Anthony Mendez, a formerly homeless teen from the Bronx who represents Michelle’s “Reach Higher” initiative encouraging young people to continue their education past high school.
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