In State of the Union Speech, Obama Targets Jobs, Energy

 

President Obama proposed new hubs for manufacturing, billions in repairs for aging infrastructure and hiking the minimum wage in his State of the Union Address Tuesday (February 12).

With much of his focus on jobs and the economy, the president called for policies aiming to resurrect a “rising, thriving middle class” and quicken the country’s slow climb from recession. But in the wide-ranging speech, he left plenty more for states to chew on — particularly in energy and environmental issues.

Here’s a look at a few proposals likely to catch the attention of state officials:

Manufacturing Focus

“Our first priority is making America a magnet for new jobs and manufacturing,” Obama said, highlighting recent gains in the sector, including the return of some jobs from overseas following a decade of steady losses. As Stateline has reported, several Rust Belt states, led by Michigan, fueled that resurgence.

Obama proposed creating a $1 billion network of manufacturing hubs — 15 public-private institutes modeled on a program in rusty but recovering Youngstown, Ohio, where a once-shuttered warehouse has become a high-tech lab for teaching 3D printing.

The president said three hubs are already on the way, and he called on Congress to fund the rest.

Aiming to make the country more attractive to businesses, Obama also proposed to invest as much as $50 billion to fix the country’s aging infrastructure. The plan would largely focus on jobs to fix deteriorating bridges and roads that need urgent attention. But it would also seek private investment to upgrade ports and pipelines to accommodate a shifting energy market and new climate threats, while fitting schools with new technology.

“Let’s prove that there is no better place to do business than the United States of America. And let’s start right away,” he said.

Congressional Republicans are likely to resist such major nondefense discretionary spending, but many experts argue there is no better time than now to patch the nation’s crumbling infrastructure, with interest rates near record lows.

Minimum Wage Hike

Obama also proposed a dramatic hike in the federal minimum wage, from $7.25 to $9 per hour, with periodic adjustments for inflation, designed to lift low-income Americans out of poverty and spur spending to help kick-start the economy,

“This single step would raise the incomes of millions of working families,” he said. “It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead.”

Nineteen states and the District of Columbia currently require wages higher than the federal minimum, according to the National Conference of State Legislatures, with half of those including periodic cost-of-living adjustments. Several states are considering further wage hikes, including Illinois, California and New Jersey.

But like supporters at the state level, Obama’s proposal will encounter strong resistance from business leaders and Republican lawmakers who argue the change will increase employer costs, forcing them to cut workers or hours.

Economists are split on the issue.

Energy

Obama had plenty to say about energy, giving supporters of oil, natural gas and the renewable sector much to like.

“After years of talking about it, we are finally poised to control our own energy future,” he said.

To stoke the country’s oil and gas boom, Obama said he would speed up approval of wells — a process lawmakers in energy-producing states, particularly those with large swaths of public lands, have criticized as too slow.

He also proposed using oil and gas revenues to fuel more research on natural gas-powered vehicles, a topic that’s caught the attention of state lawmakers hoping to broaden demand for the abundant resource.

A growing list of governors, led by Colorado’s John Hickenlooper and Mary Fallin in Oklahoma,  have signed onto a pact promising to gradually replace state fleets with vehicles powered by compressed natural gas — a move projected to save on fuel costs. The governors have also called for more research on how to broaden the market.   

The president also unveiled an ambitious agenda for renewable energy, calling for the U.S. to double its output by 2020. His proposal would help boost a sector that has grown significantly in recent years, but has seen recent layoffs, driven by uncertainty as federal funds dried up.

Obama called for a permanent renewable energy tax credit, something experts say has been essential to the sector’s growth. Governors in states with growing wind and solar industries, who have clamored for incentives to be renewed, will likely welcome the call.

Climate Change

Picking up where he left off in his inaugural address, Obama also directly addressed the growing threat of extreme weather  —  to economic stability and public health. It comes as states are struggling to recover from 2012’s slate of costly — and deadly — climate disasters

Obama called on Congress to pursue a market-based solution such as a cap-and-trade system, an initiative Northeast states have carried out for five years and which California has recently launched on a broader scale. But the proposal has virtually no chance of winning support from congressional Republicans who, despite the overwhelming scientific consensus, still largely consider human-made climate change an unproven theory.

If that resistance holds steady, Obama promised to use his executive authority to address climate change, which beyond launching renewable energy initiatives, would likely include cracking down on power plant emissions. That would fuel further angst and anger in coal-producing states, such as West Virginia, where Patrick Morrisey, the new Attorney General, recently threatened legal action.

 
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