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NAM: SPECIAL REPORT: Manufacturing’s importance touted in State of the Union Address

Tuesday night in his State of the Union speech, President Obama emphasized his goal of sustaining the newly resurgent US economy. Regarding trade and other policies that affect the nation’s manufacturing base, Obama said: “Our manufacturers have added almost 800,000 new jobs” since 2010. “Some of our bedrock sectors, like our auto industry, are booming.” Explaining that “95% of the world’s customers live outside our borders,” the president said Americans “can’t close ourselves off” from opportunities in trade and international commerce.

Timmons: Bipartisan Reforms Could Unleash Manufacturing, Speed US Comeback. In an opinion piece for Real Clear Politics (1/20), NAM President and CEO Jay Timmons calls for bipartisan action for “a federal strategy that can unleash manufacturing and enable our nation’s job creators to accelerate America’s comeback.” He argues that “any reform strategy begins with tax policy,” but that lawmakers must also work toward “fair and transparent” regulations. These would enable manufacturing to thrive, through “an energy policy manufacturers can plan around” – one that taps all sources of “affordable energy” and promotes efforts to reach consensus on trade-promotion authority that would open up more foreign markets, Timmons writes. The NAM chief adds, “We need to renew the ideas, values and characteristics that have made our nation the envy of the world” because “manufacturers in America are, and must remain, the world’s leading innovators.”

Timmons: SOTU Sent Mixed Messages. In a news release following Obama’s speech, Timmons said the president “offered the country mixed messages.” The NAM president and CEO said that “manufacturers stand ready” to help develop policies that could “spur growth and create prosperity.” He praised Obama’s “swift action” on trade-promotion authority for the executive branch, as well as his focus on solutions for our “workforce issues and skills gap” and “long-term” infrastructure needs. But Timmons said Obama’s tax plan “sends the wrong signal” and fails to “encourage investment, entrepreneurship and success,” in contrast to the NAM’s “pro-growth” proposals.

Trade, Infrastructure Seen As Policy Goals Most Likely To Advance. Fortune (1/20, Newmyer), in a late Tuesdayblog post, says that of all the policy initiatives Obama covered in his speech, the one with “the best chance of a win” is international trade. Why? “It represents a rare point of agreement” involving the White House, the new Republican-controlled Congress, and the business community. Lately the administration has been “quietly pressing” for TPA, which could help finalize the Trans-Pacific Partnership and a pact with the European Union. Industry leaders have generally given high marks to Obama’s point people on trade, with NAM President and CEO Jay Timmons telling Fortune: “We’ve had a lot of conversations with [Commerce Secretary] Penny Pritzker and [Trade Representative] Mike Froman … and I can tell you they’re fully engaged, and I’m very pleased at their leadership on these issues.”

In a subsequent online piece, the same Fortune (1/20) (1/20) writer considers whether “infrastructure” was “the other winner” in Tuesday’s State of the Union address. Obama “exhorted” Republicans to “rally along with Democrats around an infrastructure spending plan that he said ‘could create more than 30 times as many jobs per year, and make this country stronger for decades to come’ while rebuilding crumbling roads, bridges and ports.” Fortune again cites Timmons, saying the NAM leader “brought it up, unprompted, earlier Tuesday in an interview … as an area of agreement between business interests and the AFL-CIO.”

Timmons: TPA Would Bolster US Credibility On Trade. Reuters (1/21), also reporting on the speech, cites Obama as saying the US and not China should write trade rules for Asia, and he urged Congress to give his administration the power to close trade deals through TPA, sometimes called fast-track authority. Timmons said TPA, which would leave Congress with only a yes-or-no vote on trade treaties in exchange for setting negotiating goals, would lead trading partners to take the US more seriously.

Timmons “Cautiously Optimistic” Congress Will Grant Obama TPA. The Washington Examiner (1/21, Higgins) reports that supporters of TPA and the Trans-Pacific Partnership, or TPP, believe “the time is ripe” to push the initiatives through Congress. Industry leaders have said the TPA is a necessary precursor to gaining congressional approval of the pan-Pacific trade pact, with Timmons stating that the US “cannot have trading partners wondering if deals will be undone by ‘535’ negotiators” in the House and Senate. He added, however, that he’s “cautiously optimistic that Congress will grant this president similar authority that every president since Franklin Roosevelt has had.” Obama has continued to lobby for the TPP by highlighting the various benefits that trade agreements can provide, and businesses are expected to help in that effort. According to Timmons, “We’re certainly going to remind members of Congress that 95 percent of the customers in the world exist outside the borders of the United States and we want to sell our stuff to them.”

Media Analyses Of Obama’s SOTU Focus On “Middle-Class Economics.”

The AP (1/21, Pace) reports that Obama “declared … that the ‘shadow of crisis’ has passed America and urged Congress to build on economic gains by raising taxes on the nation’s wealthiest to pay for reductions for the middle class,” which the AP says is “more likely to antagonize the new Republican majority than win its approval.”

According to USA Today (1/21, Jackson), Obama “trumpeted job growth and other signs of recovery from the ashes of the 2008 economic crisis while pitching a tax hike on the wealthy, new tax breaks for child care, and programs that include two free years of community college, lower interest rates on mortgage insurance and new requirements for paid sick leave.” But USA Today (1/21, Davis) also reports that Republicans “made it clear that the proposals the White House revealed in the days leading up to the address are non-starters in the new, fully GOP-controlled Congress.”

In the lead sentence of its report on Tuesday’s speech, McClatchy (1/20, Clark, Subscription Publication) says Obama is “positioning himself as a champion of a middle class that has yet to feel the effects of a recovering economy.” The story adds that the president “urged Congress to raise taxes on the wealthy and spend the proceeds on helping middle-class Americans with a long list of new government help, including paid family leave, free community college, and new tax breaks for working couples and parents.” The Wall Street Journal (1/21, A1, Lee, Nelson, Subscription Publication) covers the address in a similar front-page story headlined “Obama Makes Middle-Class Pitch.”

In another front-page article, the Washington Post (1/21, A1, Nakamura) reports that Obama “declared unequivocally … that the nation had clawed its way out of … dire straits, praising Americans for their resilience but also pointedly taking credit for leading the way.” The Post says Obama’s remarks “at times sounded like a victory lap” as he “asserted that the brightening economic picture … had proved that he was right, and his adversaries misguided, all along.”

AP Fact-Check Analysis: Obama’s Characterization Of Recovery Is Debatable. In a “fact-check” piece headlined “Obama Claims Credit For An Incomplete Recovery,” the AP (1/21, Rugaber, Woodward) says the country “may not have ‘risen from recession’ quite as rousingly” as the president “suggested” in his speech. According to the AP, “Seven years after that severe downturn began, household income hasn’t recovered and healthy job growth is complicated by the poor quality, and pay, of many of those jobs.”

Republicans Dismiss Obama’s Tax Proposal. The New York Times (1/21, A15, Peters, Huetteman, Subscription Publication) cites Republicans as saying they were “caught off-guard by a major component of the president’s 2015 agenda … to raise taxes and fees on the wealthiest taxpayers and the largest financial firms to pay for, among other things, tax breaks for the middle class and free community college.” The Times says GOP members acknowledge that “these programs may prove popular with many Americans,” but “hope … the American public would see them as a ploy from a president who knows Congress will never pass them.”

The Wall Street Journal (1/21, Subscription Publication), in an editorial, makes the case that Obama was previously unwilling to acknowledge that middle-class wages were falling because it would be an admission that the economic recovery was not benefiting many Americans who are neither wealthy nor poor.

Sen. Ernst Emphasizes Her Modest Upbringing In Iowa. The Los Angeles Times (1/21, Memoli, Mascaro) reports that in the Republicans’ SOTU response, “rather than respond directly to the president’s speech,” Sen. Joni Ernst of Iowa “began what she called a conversation with the nation about her party’s agenda, framing it as aimed at boosting the middle-class families like the one she grew up in.” The Times notes that Ernst “recalled that while growing up she had to put plastic bread bags around her one good pair of shoes to keep them dry in the rain.”

GOP Chose Immigration-Reform Proponent To Deliver Spanish-Language Response. The New York Times(1/21, Stolberg, Subscription Publication) profiles Rep. Carlos Curbelo (R-FL), “34 and a son of Cuban exiles,” who delivered the Republican response in Spanish. The Times says Curbelo “disagrees with the Republican leadership on at least one core issue,” enforcement of US immigration laws, and “is well aware that his job Tuesday was to showcase diversity in a caucus that is overwhelmingly white and male.”



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