Obama State of the Union Calls for a “Year of Action”— Highlighting Multiple Industry Priorities
By Jamie Girard, senior director, North America Public Policy, SEMI
On January 28, 2014, President Obama used the occasion of his 5th State of the Union address to Congress to call for a “Year of Action.” The President touched on many different policy areas during his talk, and specifically mentioned a number of issues that are of top concern in the industry and with SEMI member companies. Among these are funding for federal R&D, including public-private partnerships, trade, high-skilled immigration reform, and solar energy. With 2013 being a year that set the mark for futility in numbers of bills passed into law in the modern era, lawmakers of both parties will need to boost their standing with the public if they hope for a successful outcome in the mid-term elections to be held in November of this year.
“We also have the chance, right now, to beat other countries in the race for the next wave of high-tech manufacturing jobs.…”
Although the President failed to name his program in his speech, he was referring to the National Network for Manufacturing Innovation (NNMI). This program aims to create public-private partnerships which bring together industry, government, academia, economic development agencies to focus on challenges that are faced in advanced manufacturing. Because SEMI members are at the forefront of some of the most advanced manufacturing imaginable, there is great potential seen in this program.
Even though the administration has been rolling out some of the manufacturing hubs, to make the program truly successful, Congress needs to pass legislation to authorize the program. That’s why SEMI has been supporting H.R. 2996/S.1428, the Revitalize American Manufacturing and Innovation (RAMI) Act, which will do just that. This bill has been introduced in both houses, has by partisan support, and has been considered in multiple Congressional hearing, including one in which SEMI testified. In addition to SEMI, the bill is supported by SIA, numerous colleges and universities, and the National Association of Manufacturing (NAM)
Federal R&D Funding
“Listen, China and Europe aren’t standing on the sidelines; neither should we. We know that the nation that goes all-in on innovation today will own the global economy tomorrow. This is an edge America cannot surrender. Federally-funded research helped lead to the ideas and inventions behind Google and smartphones. And that’s why Congress should undo the damage done by last year’s cuts to basic research so we can unleash the next great American discovery.”
Because of the mandatory government spending cuts known as “sequestration”, the federal government cut funding for research and development funding by $10 billion in 2013, or 7 percent. SEMI opposed these cuts, and will work with policymakers to try and reinstate greater levels of funding for basic research at the National Science Foundation (NSF), the National Institutes for Standards and Technology (NIST), and the Department of Energy (DoE) Office of Science. The good news out of the December bipartisan budget deal is that these cuts are beginning to be reversed, with an increase of $4 billion for FY2014. SEMI will continue to educate our elected officials to make them fully aware of the need for federal R&D spending and the great return on investment that taxpayers get from those investments.
High-skilled Immigration Reform
“Finally, if we’re serious about economic growth, it is time to heed the call of business leaders, labor leaders, faith leaders, law enforcement — and fix our broken immigration system.”
Although the Senate passed a comprehensive immigration reform bill in July 2013 by a vote of 68-32, much work remains to be done in the House of Representatives to makes those changes in the Senate bill into law. While SEMI takes no position on the other issues surrounding immigration reform, we are in strong support of reforming the high-skilled immigration statutes that currently exist. The Senate bill would raise the number of H1-B visas in the US to 185,000 per year in good economic times, and also allow those who earn a Ph.D. in a STEM field to obtain a green card. SEMI supports the needs of its members to higher qualified individuals to meet the needs of the market, and keep U.S.-educated talent in the U.S. to strengthen the economy and seed innovation.
“…[W]hen 98 percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create more jobs. 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.” China and Europe aren’t standing on the sidelines. Neither should we.”
SEMI applauds the President’s pledge to work with Congress to pass Trade Promotion Authority legislation and his remarks on the importance of advancing U.S. trade agreements to support American growth and jobs. Passage of the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), and the Information Technology Agreement (ITA) remain key priorities for SEMI as we work to expand market access for SEM products around the world. It is our hope that the Administration’s support for these free trade deals will provide the impetus for bipartisan Congressional backing in the coming year. SEMI remains closely engaged in the negotiation of each of these agreements to promote the best possible outcomes for our members upon implementation.
“It’s not just oil and natural gas production that’s booming; we’re becoming a global leader in solar, too. Every four minutes, another American home or business goes solar; every panel pounded into place by a worker whose job can’t be outsourced. Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it, so that we can invest more in fuels of the future that do.”
Following a year of unprecedented growth in domestic solar installations, the President’s reaffirmation of support for solar comes as welcomed news. SEMI has been a strong advocate in Washington for federal tax incentives supporting solar manufacturing and adoption. Of particular note are two pieces of legislation that closely align with the President’s State of the Union comments. Having partnered with the broader renewable energy coalitions, SEMI has pushed for consideration of the Renewable Energy Parity Act (HR 2502) to allow solar projects to qualify for the Investment Tax Credit (ITC) as soon as they break ground, rather than at the time of project completion. Similarly, we have engaged a host of Congressional officials to discuss the merits of the Master Limited Partnerships Parity Act (HR 1696), a bill that would extend to solar the same tax-free investment structure available to the fossil fuels industries. Along with other important solar initiatives, SEMI plans to work with the Administration and Congress in the coming year to see these provisions signed into law.
While SEMI supports many of the policy objectives put forward by President Obama, there were some issues on which the President did not touch. SEMI also supports the renewal and making permanent the Research & Development tax credit, which expired at the end of 2013, and should be renewed by Congress immediately. In addition, SEMI member companies continue to face burdensome regulations like the need to obtain export licenses on many of their products, which hinders U.S. companies’ ability to be competitive internationally.
SEMI continues to support the needs of its members in Washington, D.C. with federal lawmakers and welcomes any thoughts our members have with regards to their interactions with federal policy. If you have any input regarding SEMI’s U.S. public policy, please contact Jamie Girard, senior director, Public Policy, at firstname.lastname@example.org.