State of the Union: President Obama Addresses Many SEMI Issues in Annual Speech
On Tuesday, January 24, President Obama gave his third State of the Union Address to the traditional joint session of Congress. While his campaign opponent is still being decided, the President used the State of the Union platform to lay out his case for re-election. In doing so, he addressed many areas of interest to the SEMI membership including domestic manufacturing, trade, immigration, innovation, and energy policy.
The cornerstone of the President’s argument was linked to the need for increased domestic manufacturing. Hinged on reforms to the U.S. tax code, Obama put special emphasis on the need for more high-tech manufacturing saying, “… if you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making your products here.” While such a tax incentive would be welcome to our industry, the President did not elaborate in his speech on how such a tax cut would be paid for. With no indication of an offset in the federal budget, it is hard to determine the likelihood of such a policy being able to be passed into law.
Obama also trumpeted his previously announced plan to double American exports over a five-year period. The President remarked that with the recently passed trade agreements with Korea, Colombia, and Panama, the U.S. is ahead of schedule to meet this goal. While the Korea Free Trade agreement has been ratified by both nations, the two countries are still working on the implementation. The President also addressed concerns with unfair trade practices and announced the formation of a Trade Enforcement Unit that will be charged with investigating questionable trading practices in countries like China.
Obama reinforced his support for continued federal assistance for solar energy and energy efficiency saying that the government needs to “…double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits.” He also urged Congress to pass a Clean Energy Standard and announced further government actions to promote clean energy development on public lands as well as to increase demand by the Department of Defense, which is the biggest consumer of energy in America. SEMI has been working with Congress to extend the clean energy tax credits mentioned by the President and has supported the creation of a clean energy standard. The SEMI Government Leadership Award winner for 2010, Sen. Jeff Bingaman (D-NM), is the Congressional leader on this effort, and he plans to bring up a clean energy standard bill for consideration this year.
Another important issue to SEMI is federal funding of basic research. On this issue, Obama specifically mentioned the industry saying: “Innovation also demands basic research…Don’t gut these investments in our budget. Don’t let other countries win the race for the future. Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries.”
In addition, the President talked about the need for comprehensive immigration reform, specifically mentioning the need to allow more highly skilled workers to stay in this country after earning degrees in the STEM (science, technology, engineering and math) fields. While comprehensive immigration reform is unlikely in an election year, there are two high-skill immigration reform bills with considerable support working their way through the Congressional process. With Presidential support, they may get signed into law this year.
While Democrats currently control the “bully pulpit,” 2012 will be a contentious election year in which Republicans, Democrats, and possibly even a third-party candidate vie for the position of leader of the free world for the subsequent four years. SEMI will continue to press for the policies that are most meaningful to our industry and work with any policymakers who support the needs of our industry, regardless of political affiliation.
February 6, 2012