State of the Union Address Highlights Multiple Opportunities for Bipartisan Cooperation on Industry Public Policy Priorities
By Jamie Girard, SEMI
On Tuesday, January 20, President Obama once again stood before a joint session of Congress to deliver a State of the Union Address. With the newly seated Republican-controlled Congress and his Cabinet present, the President discussed topics ranging from the current state of the economy to foreign affairs and his ideas on how to move the nation forward. SEMI was pleased to hear that the President supported multiple policy goals including expansion of free trade, corporate tax reform, support for basic science research and development and others.
Bucking the orthodoxy of many in his own party, President Obama made a strong case for Congress to pass Trade Promotion Authority (TPA) legislation which give allows for a straight “up or down” vote by Congress of any trade deals the Administration has negotiated with trading partners. This is vital to ensure that deals made with foreign governments can be negotiated in good faith, without concern from partners that language will be changed by Congress, scrambling years’ worth of hard fought talks.
“Twenty-first century businesses, including small businesses, need to sell more American products overseas,” said Obama, “Today, our businesses export more than ever, and exporters tend to pay their workers higher wages…That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but are also fair. It’s the right thing to do.”
With outstanding trade agreements like the TransPacific Partnership (TPP) that will bring 12 Pacific Rim countries under a common trade regime trying to be finalized, TPA is a necessary tool that needs to be implemented to bring the talks to a close. Once agreed upon the TPP will bring 40% of world’s GDP under a single agreement. Similarly, the U.S. continues to work on the U.S.-EU trade agreement that combined with the TPP would represent a majority of the world’s economic output.
Corporate tax reform is something both the Congressional Republicans and the President agree on. Obama said as much, saying “Let’s simplify the [tax] system…We can achieve it together.” With the highest corporate tax rate of any OECD country the United States needs to address its corporate tax rate to be competitive and to continue the kind of growth that has been seen in the U.S. manufacturing sector in recent years. With a willing partner in House Ways and Means Chairman Paul Ryan (R-WI), this may be the best chance in many years for a tax reform bill to pass Congress and be signed by the President. Key issues for SEMI members in any tax package would be to lower the overall rate, switch to a territorial system more closely in line with the rest of the world, and preserve incentives for innovation like the R&D tax credit.
Obama also used the address to call for support of American innovation and research and development. The President acknowledged that “Twenty-first century businesses will rely on American science and technology, research and development…” in calling for increased cooperation on funding federal programs that support such work that is so important to SEMI members. SEMI supports full funding of programs at the National Science Foundation (NSF), the National Institutes of Standards and Technology (NIST), and other basic science programs as well as newly created program like the National Network for Manufacturing Innovation (NNMI) which SEMI members were instrumental in creating.
While Washington remains divided with Democratic control of the White House, and a new Republican Majority in both chambers of Congress, there is good reason to be optimistic that Washington will be able to tackle large issues facing the nation. SEMI will continue to work on the public policy issues most important to its members. If you have any questions regarding SEMI’s policy priorities or how you can be more involved, please contact Jamie Girard, senior director, Public Policy North America, at SEMI (firstname.lastname@example.org).