Bolstered by economy, Obama faces hostile Congress

WASHINGTON - Barack Obama faces the massed ranks of Congress on Tuesday for the first time since his party lost control there, but don't expect him to cut a humbler figure.

Borne on a tide of optimistic economic data, Obama will use the State of the Union address to taunt his Republican rivals with an ambitious tax plan that they will never agree to pass.

In doing so, Obama will set the tone for the battles to come both in Congress and on the campaign trail, as Republican and Democrat hopefuls limber up for the battle to replace him.

The US leader no longer commands a majority in either house of Congress, but the failure of his legislative programme will not stop him using it as a stage to celebrate his successes.

Unemployment has dropped below six per cent, the stock market is back near record levels, growth is at its highest in 11 years and gas prices have plummeted for middle-class motorists.

With all this to commend him, Obama will use Tuesday's speech to propose redistributive tax reforms that will cheer his disappointed base and enrage his entrenched opponents.

"The 400 richest taxpayers paid an average tax rate below 17 per cent in 2012, lower than many middle-class families," the White House noted last week in a briefing paper on the plan.

Obama's plan was necessary, his office argued, because the "tax code is unfair, allowing the rich to play by different rules."

Under his reform, extra taxes on capital gains targeting just the wealthiest 0.1 per cent of people -- those earning more than $2 million per year -- would pay off 80 per cent of new revenue.

"By ensuring those at the top pay their fair share in taxes, the president's plan responsibly pays for investments we need to help middle class families get ahead," the paper said.

This would notably be used to lower college fees for poorer students, but it was laughed out of court by Republican budget hawks.

"This is not a serious proposal," scoffed Brendan Buck, a spokesman for Congressman Paul Ryan, a former vice-presidential candidate and lead Republican budget negotiator.

"We lift families up and grow the economy with a simpler, flatter tax code, not big tax increases to pay for more Washington spending," Buck argued, in remarks echoed across his party.

Poll bounce

So what hope is there for Obama's bold plan to spend the fruits of a rising economy -- and taxing the rich -- on free community colleges, help for first-time homeowners and subsidized, high-speed Internet?

The latest opinion polls suggest that if Obama is not in a position to impose his plan, he can at least force Republicans to pay a political price for opposing him.

Meanwhile, he has used his executive authority to the limit -- opponents would argue stretched it to the limit -- to impose or oppose some policies by decree.

The new Congress has made one of its first priorities to approve the Keystone XL oil pipeline from Canada, an idea Obama has said he will veto out of hand if experts says it will damage the environment.

On the foreign policy front, he has announced moves to normalize relations with Cuba and pushed on with talks with Iran on its nuclear programme, in defiance of conservative foreign policy foes.

Polls suggest Americans support the Cuban outreach and Obama will hammer home his advantage by inviting newly freed US citizen Alan Gross, a former prisoner in Cuba, to the speech.

Coincidentally -- or not -- the State of the Union falls on the same day as US envoys begin new talks in Havana on restoring ties, and Obama will push Congress to end the trade embargo.

He won't get everything he wants, and much angry politicking lies ahead in the years before his next and last State of the Union, but Obama is already enjoying a popularity bounce.

The latest ABC/Washington Post monthly poll published Sunday saw Obama's approval rating up nine to 50 per cent, against 44 per cent who thought he was doing a bad job, a 10-point drop in disapproval.

Why? It's the economy... as ever. Just three months ago, only 27 per cent of Americans thought the economy in good health. Now, 41 per cent do.