“The state of the union is getting stronger.” That is how President Obama characterized the current state of the union. But, as we wrote in our State of the Union preview on Tuesday, we still have a long way to go before the economy is back on its feet. In our article, we recommended doing away with the looming budget cuts, increasing taxes on capital gains and financial transactions, and using the additional revenue to pay for more infrastructure projects and public protections. So what fiscal issues did Obama talk about in his speech on Tuesday?

One of the main themes of the speech was fairness, which we said was important for creating opportunity and building a vibrant middle-class. First, the president again called for the tax code to follow the “Buffett Rule,” which would ensure that millionaires such as financier Warren Buffett pay at least as much in taxes as their secretaries. In his “blueprint” document accompanying the speech, Obama interprets the rule as meaning millionaires should have an effective tax rate of at least 30 percent.

However, he is unclear on exactly how this would be accomplished. The only specific policy change mentioned is limiting tax breaks for millionaires, saying “there is no reason that those making over $1 million per year should get any tax subsidies for housing, health care, retirement, and child care.” (And even this policy provision is ambiguous; is the president proposing eliminating itemized deductions and all credits for anyone making more than a million dollars?) But this policy change alone most likely won’t increase most millionaire’s tax rates, since their low rates are often a function of the preferable tax treatment of capital gains.

As we wrote in our Watcher article, the best way to increase fairness in the tax code is to treat capital gains (which is profit from stocks, bonds, and other investments) as ordinary income (such as wages). Right now, the top capital gains rate is less than half the top rate for wages, which allows millionaires, such as Mitt Romney, to have a low tax rate. While the president has called for allowing the upper-income Bush tax cuts to expire, which would bring the top capital gains tax rate up to 20 percent from 15 percent, he has resisted advocating for taxing capital gains like wages (for the wealth, this would mean a tax rate of 35 percent on capital gains). However, his argument for millionaires to pay at least 30 percent of their income in taxes functionally amounts to the same thing.

We also wrote about infrastructure spending in our State of the Union preview, saying that such spending (in the form of grants to the states) is one of the best ways the government can boost the economy. In his speech, the president proposed increasing infrastructure spending, and paying for it with half of the savings from the troop drawdowns in Iraq and Afghanistan. This proposal would add approximately $500 billion to infrastructure spending over the next ten years, based on estimates included in the president’s fall deficit reduction plan. According to the Congressional Budget Office, that much spending could – thanks to multiplier effects - spur the economy by more than a trillion dollars, while giving the nation’s workforce a helping hand.

The most disappointing budget news was that the president appears to be sticking by the cuts contained in the Budget Control Act (BCA, also known as the debt ceiling deal). He praised these cuts several times in his speech, and even called for more deficit reduction on top of the BCA. These cuts of almost two trillion dollars over the next nine years will slow our nascent recovery. However, if taxes on the wealthy are raised and all the Bush tax cuts expire, such cuts won’t be necessary to reduce the deficit.

The BCA's budget cuts are already written into law, whereas many of the changes Obama called for in his State of the Union speech require congressional approval. So, if nothing new passes this year (with Congress mired in partisan gridlock and elections swiftly approaching, this seems likely), the budget cuts will go forward as planned, and we’ll have a de facto austerity budget in place. This will be damaging to the economic recovery effort and would set back efforts to make this a more fair and equitable nation.

Image by Flickr user Secretary of Defense used under a Creative Commons license.

On Jan. 11, the U.S. Environmental Protection Agency (EPA) released greenhouse gas (GHG) data to the public for the first time. Through an online tool, the public will be able to access critical air pollution data. With this new data, the public can hold industry accountable to ensure that emitters take responsibility for the way they are contributing to climate change.

The online tool presents 2010 GHG data from 6,700 large facilities around the country in nine industry groups, including suppliers of certain fossil fuels and industrial gases. The public will be able to use the data to analyze sources of GHG pollution in their areas, compare facility and industry performance, and eventually track trends. Enterprises can use the data to compare their performance against other companies in their sector, to set a baseline for their own reductions in carbon pollution, and to increase efficiency and save money. State and local officials can also use the data to compare the effectiveness of their policies and practices with those operating in other parts of the country. The 2010 GHG data shows that Texas has the highest total reported emissions in the country, and Indiana the second highest. Not surprisingly, power plants were the largest stationary sources for direct emissions in the country by far, followed by petroleum refineries.

The site offers various options for searching and viewing the new data. For instance, users can search for data by facility, location, industrial sector (e.g., power sector, chemical industry), and the type of gas emitted (e.g., carbon dioxide). Data can be viewed on maps of the nation, specific states or even counties. Highlighted blue circles denote the number of facilities reporting in each location. Users can also view data on lists (i.e., data tables), bar and pie charts, and tree maps. Viewing the data on the tables (rather than on the maps or charts) allows users to categorize the data according to the facilities or industries that produce the most pollution. The tool allows users to download data in Excel files, which can be used to conduct further analysis and includes data on parent companies.

One short-coming of the data, which EPA cannot control, is that it reports emissions from a limited set of facilities - those that are required to report to EPA. There is no data from transportation or agricultural facilities. On the plus side, an additional 12 source categories will begin reporting emissions data this year.

Public reporting of pollution is a powerful tool in the hands of citizens - it fosters public awareness and/or confirmation of concerns about local environmental problems. It gives citizen activists the evidence they need to push for significant reductions in emissions in their communities. After the Emergency Planning and Community Right-to-Know Act created the Toxics Release Inventory (TRI), a national database of toxic emissions reported by industrial sources was established in 1986, the private sector has reduced the amount of toxins it releases by more than half. We hope this online tool will achieve similar results in reducing emissions.

On Dec. 31, 2011, Recovery Accountability and Transparency Board Chairman Earl Devaney stepped down after leading the Board for almost three years. Devaney did more than anyone else to ensure Recovery Act spending was as transparent as it was, and his presence will be sorely missed.

While he didn't create the transparency provisions in the Recovery Act (those were written into the law or created by the Office of Management and Budget (OMB)), Devaney implemented the law's requirements. He and his team created the Recovery.gov website from scratch in remarkably little time and did a great deal to ensure that recipients understood their reporting responsibilities under the law. As a former inspector general (for the Department of the Interior), Devaney placed a strong emphasis on finding and preventing fraudulent contracting and wasteful spending, creating the Recovery Operations Center. He also insisted on making maps of Recovery Act spending the focal point of Recovery.gov, arguing that the government needed to do more to display information in useful ways.

Devaney understood the importance of providing information to the public and talked of empowering an army of citizen inspectors general. We appreciated the fact that he frequently reached out to the transparency community to get feedback and guidance. When we raised concerns about the quality of the data from the first rounds of recipient reporting, the Board moved quickly to fix the problems it could, such as automatically filling in some data fields for recipients (for example, pulling in company information from existing contracting databases) and creating algorithms to spot potential red flags (such as recipients reporting that they had spent more money than they had received).

Devaney also championed transparency beyond the Recovery Act. He has been a vocal supporter of unique identifiers for recipients of federal funds, a thorny problem that has long plagued federal spending transparency. For the past six months or so, he has also been the head of the Government Accountability and Transparency (GAT) Board, created by President Obama last year to "provide strategic direction for enhancing the transparency of Federal spending and advance efforts to detect and remediate fraud, waste, and abuse." The GAT Board's recent report advocated for many reforms, most importantly centralizing spending databases and streamlining reporting obligations, in addition to calling for a universal system of unique identifiers for contracts and grants throughout the federal government.

Devaney will be replaced by current Education Department Inspector General Kathleen Tighe. Tighe has been on the Recovery Board since March 2010, serving as the chair of the Board's Accountability Committee since March 2011. Interestingly, Tighe will not be stepping down from her inspector general role, which possibly indicates a diminution of the position of Recovery Board chair. The chair was a full-time job for Devaney, who stepped away from his Department of the Interior position to lead the Board, and Devaney clearly had Vice President Biden's ear, meeting frequently with him to discuss various issues related to the Board's work.

The chair's reduced prominence is likely a reflection of the administration's desire to move on from the Recovery Act. With most of the Recovery Act money already spent, Tighe's job will largely be overseeing the dissolution of the Board and the application of lessons learned from the Recovery Act to the entire federal government, a process Devaney has already started with the GAT Board. There's still much to be done to improve federal spending transparency, but hopefully, even in a part-time role, Tighe will bring to her new position just as much passion and success as Devaney.

Image by Flickr user OversightandReform.