McDonald Hopkins Government Strategies Advisory: State of the Union Primer


Tonight, President Barack Obama will deliver his State of the Union address. Here is a quick look at what the key components of the speech are expected to be:

Tax Reform

The president is proposing tax code changes that would raise $320 billion in revenue from wealthy Americans and businesses, while cutting middle class taxes by $175 billion. The plan would eliminate the so-called “trust-fund loophole,” taxing inheritances of high-income Americans. President Obama is also proposing to raise the capital-gains tax to 28 percent from 23.8 percent for those making over $500,000 a year and impose a new fee on big banks. For families, the changes would include a $500 credit for working parents; increased child and education tax credits; and new retirement savings incentives.

Community College Program

President Obama unveiled a $60 billion plan over 10 years to provide free community college tuition to students who attend at least half-time and maintain good grades. Schools would also have to meet certain requirements to qualify, and states would have to cover a quarter of the cost. The White House estimates up to 9 million students could save an average $3,800 per year if every state participates.

Boosting the capital-gains tax and imposing the fee on financial firms would raise an estimated $320 billion over 10 years to cover the estimated $235 billion cost of the tax credits and the community-college plan.

Executive Action on Environment

By executive authority, President Obama imposed new regulations on the oil and gas industry’s emissions of methane. The administration says the goal will be a 45 percent cut in 2012 emission levels in 10 years.

Defending Executive Action on Immigration Reform

President Obama is expected to use this speech to defend his executive action on immigration reform, threaten to veto legislation that passed in the House that seeks to curtail his efforts and to urge Congress to pass comprehensive immigration reform

Infrastructure Investment

President Obama frequently mentions infrastructure investment as a potential area of common ground between Republicans and Democrats. It is expected that Obama will use the State of the Union to highlight initiatives at several federal agencies aimed at promoting greater private sector capital investment in infrastructure projects. The efforts will help expand access to existing federal grant and loan programs to speed application and approval, officials say.

Despite increasing talk about the possibility of a gas tax increase, it is considered highly unlikely that President Obama will push for such a move.


President Obama is expected to talk extensively about cybersecurity – particularly in light of several high profile cybersecurity breaches over the last few months.

Obama will propose a 30-day notification law mandating companies to inform consumers promptly after a data breach has been identified. President Obama will also renew his call for consumer privacy "bill of rights" legislation and voice support for proposed legislation putting new nationwide limits on mining of student data from devices used in K-12 classroom settings.

Additionally, President Obama will propose legislation to promote greater information sharing between the government and private sector businesses, including liability protection for data they share. He will propose new tools for law enforcement to investigate and prosecute cybercrime.

Lower Mortgage Insurance Premiums

Obama will highlight the recent announcement that the Federal Housing Administration would cut insurance rates from 1.35 percent to 0.85 percent. The agency estimates that 2 million U.S. borrowers will save an average of $900 a year if they purchase or refinance homes.

Fast Track Authority on Trade

In what might be the only drama of the night, President Obama may use his State of the Union address to call for fast-track trade negotiating authority – something that many Democrats oppose.

Family and Medical Leave

Obama will call on Congress to pass a bill that would require all U.S. companies to give employees seven days of paid sick leave a year. He’ll also ask for $2 billion to help states start their own paid family and medical leave programs. President Obama is also expected to highlight a presidential memorandum that he signed last week to make it easier for federal employees to take up to six weeks of “maternity” leave by advancing paid sick leave.

Cheaper and Faster Access to the Internet

President Obama will repeat his call that the Federal Communications Commission fight state laws that limit broadband service competition. In essence, the President wants the Internet treated like a public utility. The President is also expected to highlight $40 to $50 million in new loans and grants through the Agriculture Department aimed at encouraging rural Internet providers. 

For more information

Please feel free to reach out to McDonald Hopkins Government Strategies for more information about any of the issues mentioned above and how they may impact you and what you can do about it.  


 Steven C. LaTourette, President | 202.559.2600

McDonald Hopkins Government Strategies LLC
101 Constitution Avenue NW, Suite 600 East, Washington, D.C. 20001


Although McDonald Hopkins Government Strategies LLC is owned by the law firm McDonald Hopkins LLC, McDonald Hopkins Government Strategies is not a law firm and does not provide legal services. Accordingly, the retention of McDonald Hopkins Government Strategies does not create a client-lawyer relationship and the protections of the client-lawyer relationship, such as attorney-client privilege and the ethics rules pertaining to conduct by lawyers, do not apply.


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