This year, President Obama focused on what he called "middle class economics," an idea that aims to help working families succeed economically.

This year, President Obama focused on what he called “middle class economics,” an idea that aims to help working families succeed economically.


WASHINGTON —President Barack Obama refocused his economic agenda on the idea of “middle-class economics” on Tuesday night, immediately drawing both praise and opposition from business leaders.

The U.S. Chamber of Commerce, a lobbying group representing more than 3 million businesses, opposes Obama’s proposed tax reform, said the chamber’s president and CEO Thomas Donohue.

“What we really need is comprehensive tax reform that broadens the base, makes the code flatter and fairer, and eliminates loopholes. That would do more to spur economic growth than arbitrarily raising taxes for some while providing tax credits to others. The president’s tax plan fails on all fronts,” Donohue said in a statement.

The president proposed tax reform in his call for “middle-class economics”, calling for tax breaks for the middle class and working families combined with holding the richest 1 percent accountable for taxes on their accumulated wealth.

Obama said lobbyists “rigged” loopholes in the tax code that allow some corporations to pay nothing and give “giveaways the superrich don’t need.” These loopholes prevent middle class families from tax breaks, Obama said.

The Business Roundtable urged Obama to encourage private sector investment as a way to create more jobs.

“The president’s State of the Union address rightly focused on the need for our nation to reach its full potential,” said Business Roundtable Chairman Randall L. Stephenson, Chairman and CEO of AT&T.  “Working together, the president and Congress have an opportunity to achieve pro-growth reform. However, we are concerned that some of the president’s tax proposals could actually slow the prospects for permanent reform.

Workplace policies, tax reform and the Affordable Care Act all folded into the idea of middle-class economics in the president’s speech, focusing more on the sweep of the proposals than the legislative tactics.

But Obama did raise the idea of sick pay.

“Today, we’re the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers. Forty-three million workers have no paid sick leave…And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home,” Obama said.

That’s a policy that does not sit well with some small business owners, said Jack Mozloom, spokesman at the small business advocate National Federation of Independent Business.

The National Federation of Independent Business represents 350,000 small business owners, according to their website.

Mozloom said reform that would help small businesses would lower income taxes for small business owners. “Most Americans don’t realize that a number of business owners pay taxes as individual filers,” he said. “The best way to help them is to cut that rate.”

Another point of contention between the business community and the president is the Affordable Care Act, which has already spurred debate in the new Congress.

Under the current law, businesses with more than 50 full-time employees are required by the act to provide healthcare to full-time workers. Employers who opt out of providing the entitled healthcare face as much as a $3,000 penalty. The provision has not yet taken effect.

Some congressmen are re-introducing legislation that would change the definition of a full-time employee to one who averages 40 hours weekly.

During his speech, Obama did not directly discuss the proposed alteration, but did say any bill that threaten families’ security by preventing healthcare would be vetoed.

Speaking on behalf of some small business owners, Mozloom said the healthcare needed alterations like the suggested change of the definition of what is a full-time employee.

“I worry that its becoming more difficult in this economy to create full-time jobs,” Mozloom said. “The healthcare law is a very big impediment for small business owners.”

Mozloom said the Affordable Care act creates an avalanche of costs for business owners who want to expand beyond 50 employees

Still, the pros and cons of changing the definition of a full-time employee do not strongly outweigh each other, said Jeffrey Frankel, a professor at Harvard’s Kennedy School. It would not make a “huge difference” whether the government changed the definition of a full-time employee, he said.

All of this comes at a time the president has been calling “America’s resurgence,” which refers to the economic recovery experienced in 2014.

According to the Bureau of Labor Statistics, 2014 experienced on average 52,000 more jobs added per month than 2013.

“The last time we had an economy with growth like this was in the (19)90s,” Frankel said Frankel.