President Barack Obama urged Congress to back two priorities for U.S. multinational corporations: broader authority for his administration to negotiate trade deals, and changes to immigration laws.
In his State of the Union address to Congress, Obama sought fast-track authority to give lawmakers an up-or-down vote on trade deals as the U.S. tries to complete agreements with the European Union and Pacific nations.
“We need to work together on tools like bipartisan trade- promotion authority to protect our workers, protect our environment, and open new markets to new goods stamped ‘Made in the USA,’” Obama said, according to prepared remarks. “China and Europe aren’t standing on the sidelines. Neither should we.”
The speech contained energy, transportation and tax proposals that if carried out would affect a variety of U.S. companies. Obama plans to encourage corporate executives to hire long-term unemployed workers, and the administration will announce partnerships with Apple Inc., Microsoft Corp., Sprint Corp. and Verizon Communications Inc. to connect schools to broadband technology.
In the speech, Obama reprised initiatives he has failed to move through the divided Congress in prior years and then promoted less ambitious policies he can achieve with executive action or narrower legislation.
He supports lowering the corporate tax rate and curtailing tax breaks, then using any one-time revenue generated by those changes to pay for bridges, transit and other infrastructure.
“Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad,” Obama said. “Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs here at home.”
That plan has stalled in Congress, stymied by a partisan dispute over whether wealthy individuals should pay more and whether the one-time money should be used for rate cuts.
“I just can’t think of anything that would move this needle faster and to a greater extent than business tax reform,” Randall Stephenson, the chief executive officer of AT&T Corp., told analysts on a conference call today.
Obama said he would begin a retirement-savings program for Americans without access to 401(k) savings plans at work. Under the initiative, workers would be allowed to regularly deduct a portion of their pay for deposit into a Treasury account invested in U.S. bonds that would be treated for tax purposes as an Individual Retirement Account.
“It’s a new savings bond that encourages folks to build a nest egg,” he said.
He also asked Congress to expand the earned income tax credit so low-income workers without children could benefit.
The president, beginning his sixth year in office, called for increasing the federal minimum wage to $10.10 per hour. Republicans have shown little support for such a plan, and business groups such as the National Retail Federation oppose it. That roadblock prompted Obama to announce an executive action to raise the wage to $10.10 per hour for federal contract workers.
On trade, Obama said he will work with Congress to pass fast-track authority to help secure trade deals with 11 other Pacific-rim nations and the 28-member European Union. If completed, the deals -- which would be the largest trade pacts in U.S. history -- would link regions with about $45 trillion in annual economic output, about 62 percent of the world total.
The privilege lets Congress sets guidelines for trade accords while preventing lawmakers from adding amendments to the deals. Members of both parties have said they oppose granting the president such authority, which expired in 2007, saying they want more input in the trade pacts.
Senator Ron Wyden, an Oregon Democrat, said today he isn’t ready to back a bill written by Senate Finance Chairman Max Baucus and House Ways and Means Chairman Dave Camp. Obama didn’t address the specific proposal he would like to see.
Wyden cited concerns over digital trade issues and the speed at which the process is moving. Wyden is next in line to lead the Finance Committee if Baucus is confirmed to be the next U.S. ambassador to China, which could happen as soon as next month.
A coalition of industry groups and companies, including the U.S. Chamber of Commerce, Business Roundtable, Boeing Co. and Wal-Mart Stores Inc. have been pushing for swift approval of the fast-track trade authority.
“The president says he wants to make this year a year of action,” House Speaker John Boehner, an Ohio Republican, said today. “Well, sounds good, but if he wants to make it a year of action, let’s work together to pass Trade Promotion Authority that would expand exports and create more jobs in America.”
The White House is seeking to boost annual U.S. exports to $3.1 trillion -- double the level from 2009 -- by the end of the year, a goal the president set in his 2010 State of the Union speech. While U.S. exports have reached record levels, exceeding $2 trillion each year since 2011, they aren’t on pace to reach Obama’s original goal.
Obama also said he will increase the number of U.S. workers tasked with recruiting foreign companies to invest in the U.S.
On immigration, Obama has called on Congress to pass legislation to change the nation’s “broken” system, allowing companies to better access labor resources.