US to cut oil and bank subsidies and boost tech

Barack Obama sent a bullish message to the broader technology sector and a bearish one to oil and banks in his State of the Union speech last night.

The American president used his annual address to Congress and the nation to propose eliminating subsidies to oil companies and make it clear he would not reintroduce subsidies to banks.

At the same time, he said the country would sustain education spending and increase technology research, in particular clean energy.

Obama aims for 80% of American energy to come from clean sources by 2035, including nuclear, clean coal and natural gas as well as wind, solar and other renewable sources.

The president also reiterated his commitment to infrastructure programmes.

He aims to increase internet access as well as renovating the country’s ailing transportation networks, including giving 80% of Americans access to high-speed rail within 25 years. (article continues below)

To encourage investment, Obama proposes to simplify corporation tax and make it more competitive with other nations over time.

He also proposes to freeze annual domestic spending for five years, which he projects would reduce the deficit by more than $400 billion (£293 billion) over the next decade.

However, he was vague on plans to reduce social security and health liabilities, which constitute a large chunk of government spending.

Other than cuts already announced by the Pentagon, he also did not ask for any significant reductions in defence.