Taxpayer's Tab: Obama’s State of the Union Address Would Cost Billions

NTUF’s Line-by-Line Score of the President’s Address
Vol. 6 Issue 3, January 22, 2015
 

Study: Obama’s State of the Union Address Would Cost Billions

 
NTU Foundation Analyzed President Obama's 2015 State of the Union Address

President Obama’s “tone-setting” State of the Union (SOTU) Address was intended to hit both sharp and conciliatory chords, but the notes the President struck in between would increase spending by $40.967 billion per year, and none of his proposals would decrease spending. That’s the conclusion of National Taxpayers Union Foundation’s (NTUF’s) 15th line-by-line cost analysis of the President’s speech.

“If the country is looking for a message in this year’s SOTU, it’s ‘more of the same’, as President Obama’s wish list would rack up a $41 billion total with no reductions in outlays,” said NTUF Director of Research Demian Brady. “The cost of the 2015 Address was near Obama’s average, though the President discussed some unquantifiable items taxpayers will want to note as potentially quite costly, and many of the ‘tax cuts’ he proposed are actually new spending increases.”

In advance of the speech, the White House laid out a plan to increase taxes by $320 billion over the next ten years and to carve out “middle class tax cuts” totaling $175 billion. However, a number of these tax cut proposals are “refundable” and are available to filers above and beyond any income taxes they may owe.

NTUF’s key findings on the President’s fiscal proposals:
  • The President offered no items that could be determined to reduce spending to go with 10 proposals to increase outlays and 5 with costs that could not be quantified.
  • The most expensive single item President Obama called for was an infrastructure plan, specifically the White House’s 4-year $87 billion GROW AMERICA Act.
  • The President offered five calls for fiscal agenda items in the billions of dollars. The most expensive of these was the community college “free tuition” plan, which according to the White House’s potentially low estimate, would cost $6 billion per year ($60 billion over a decade). The others include:
    • The refundable portion of American Opportunity Tax Credit plan, $5.993 billion annually.
    • A proposal to increase childcare affordability: $3.46 billion per year.
    • New grants to help states establish paid leave benefits, a $2.24 billion annual cost.
    • And, reducing monthly payments on student loans: $1.46 billion per year.
There is certainly more to the story: The President spoke about a number of issues that could incur significant costs but are not included in the official estimate due to lack of detail. 

Notably, the White House’s pre-speech tax credit plan included expansion of the refundable Earned Income Tax Credit that could cost $5.6 billion per year over ten years. The President spoke strongly on climate change, if he had specifically mentioned “cap-and-trade” legislation that could have added $56 billion in annual costs. Finally, it’s unclear whether additional funding would be required if war powers are authorized against the Islamic State terrorists.

If these costs were included, they would pack $61.6 billion on to NTUF’s estimate – making the total $102.6 billion.

Barack Obama’s 2013 speech was his most expensive at $83.4 billion; the record for any President remains Bill Clinton’s $327 billion SOTU in 1999.
NTUF’s study calculates the cost of each item in the Address in terms of its impact on federal outlays only.

“The President did correctly note that deficits have decreased over the past few years, but did not remind his audience of the mounting debt problem of the federal government,” Demian Brady concluded. “His agenda is missing three key ingredients to deal with the debt: pro-growth tax reform, entitlement reform, and spending restraint.”

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The Bottom Line: In the weeks before the speech, President Obama laid out plans for tax hikes to raise $32 billion per year. His 2015 State of the Union Address included proposals that would increase federal spending by $41 billion per year. The most expensive items were community college funding and new infrastructure investments. There were no savings proposals mentioned in the speech.
State of the Union Resources:
  • Line-by-Line 2015 SOTU Report: Check out the individual proposals of this year’s State of the Union and how NTU Foundation scored them using objective, third-party data.
  • SOTU in Historical Context: NTUF has been analyzing and costing out the President’s annual Address since 1999. Our breakdowns show differences between each year and the last three Administrations.
  • Media Summary: Get the data breakdown of what President Obama said, how many budget-influencing proposals were in the 2015 speech, and how NTUF researchers came to the $41 billion price tag.
  • SOTU Graphic and Timeline: See how President Obama's State of the Union Addresses have changed over time and the breakdown of the 2015 spending.
  • Full SOTU Archive: Interested in President Obama’s, Bush’s, or Clinton’s State of the Union Addresses? Go to our archive and see how SOTU agendas have changed in the last 15 years. So far, we have added all of President Obama’s studies and will add the rest soon!
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National Taxpayers Union Foundation is a nonpartisan research and educational organization dedicated to helping Americans of all ages understand how taxes, government spending, and regulations affect them. Through our timely information, analysis, and commentary, we’re empowering citizens to engage in important policy debates and hold officials accountable.

Our findings are provided for educational purposes only and are not intended to aid or hinder the passage of legislation or as a comment on any Member’s or Candidate's fitness to serve.