Published on January 29, 2014

Trade, biz groups give State of Union mixed reviews

Miles Moore, Senior Washington Reporter
(State of Union address photos from video capture)
President Barack Obama addresses the joint bodies of Congress for his 2014 State of the Union address Jan. 28,

WASHINGTON (Jan. 29, 2014) — Some business associations and trade groups are holding their applause for President Barack Obama's State of the Union address.

The Tire Industry Association (TIA), the Rubber Manufacturers Association (RMA) and others gave mixed reviews to 60-plus-minute speech, while the United Steelworkers (USW) union generally praised the president's Jan. 28 speech, saying that both his actions and his priorities have made an important difference to American working people.

"President Obama made it clear that promoting economic growth and making sure everyone shares in it is his top priority," said USW International President Leo W. Gerard.

"His speech laid a road map for results and made clear that he will not wait for Republicans to stop protecting the top 1 percent while everyone else suffers," Mr. Gerard said.

(Crain News Service file photo)
Leo W. Gerard, International president of the United Steelworkers union, said the president “made it clear that promoting economic growth and making sure everyone shares in it is his top priority.”

Spokespersons for TIA and RMA told Tire Business that Mr. Obama's recommendations in his speech were either too vague—especially in his call for passage of a transportation funding bill in 2014—or too dismissive of the problems faced by business, especially small business.

Other business groups also faulted the president in certain areas such as job creation, although they gave him credit for mentioning issues important to business as key goals of the administration.

One of Mr. Obama's most forceful promises in his speech was to issue soon an executive order raising the minimum wage to $10.10 an hour for new employees of government contractors.

"Americans understand that some people will earn more than others, and we don't resent those who, by virtue of their efforts, achieve incredible success," Mr. Obama said.

In calling for an increase in the nation's minimum wage, President Barack Obama said "Americans overwhelmingly agree that that no one who works full time should ever have to raise a family in poverty."

"But Americans overwhelmingly agree that that no one who works full time should ever have to raise a family in poverty."

However, TIA Executive Vice President Roy Littlefield said Mr. Obama's remarks revealed a profound misunderstanding of small businesses and how they operate, not only on the issue of minimum wage but also on health care requirements.

"It's not like small businesses have a pile of money in the back room they can access whenever they want," Mr. Littlefield said. "A lot of small businesses are just hanging on, and it's unfair to demand so much of them."

Mr. Obama's call for a transportation bill was similarly disappointing, according to Mr. Littlefield.

"He really didn't offer any direction as to where he wants to go," Mr. Littlefield said. There are a number of proposals in Congress on how to proceed with transportation reauthorization, he said, but most of these contradict each other.

"Some proposals would raise the fuel tax, while others would leave the fuel tax alone and raise everything else," Mr. Littlefield said.

The transportation package passed two years ago was merely a stopgap measure, and Congress and the White House are in danger of creating a similar bill this year unless they can find a clear direction on how to fund transportation, Mr. Littlefield said.

(Tire Industry Association photo)
TIA Executive Vice President Roy Littlefield

Dan Zielinski, RMA senior vice president of public affairs, agreed with Mr. Littlefield that the president's remarks on transportation lacked focus.

"The administration continues to look at transportation as an opportunity for job creation and infrastructure improvement," Mr. Zielinski said. "But the big question is how to fund it."

What is likely to happen is what has happened in past years, Mr. Zielinski said: Congress will be so intent on the upcoming elections that it will pass a stopgap transportation bill this year and wait till after the election to do anything more substantive.

Bill Graves, president and CEO of the American Trucking Associations, was in total agreement with Messrs. Littlefield and Zielinski on the transportation issue.

"While we appreciate President Obama making reference to the need for infrastructure improvement, we remain disappointed in the continued lack of specificity when he discusses funding," Mr. Graves said.

"While it is critically important to the nation that Congress and the administration come together on a multi-year highway bill this year, we believe that until the administration puts forward a serious, user-based funding proposal we will risk going over the Highway Trust Fund 'fiscal cliff," he said.

One small business group that expressed support for raising the minimum wage was Small Business Majority (SBM).

(Small Business Majority photo)
John Arensmeyer, Small Business Majority founder

Polls show that two-thirds of small businesses support raising the minimum wage as a way of strengthening the economy and reducing reliance on taxpayer-funded assistance, according to John Arensmeyer, SBM founder and CEO.

"Consumer demand is key to small business success, and the best way to create that demand is to increase the amount of disposable income people have to spend," Mr. Arensmeyer said.

The Alliance for American Manufacturing (AAM) accused Mr. Obama of doing little more than paying lip service to job creation, especially in the manufacturing sector.

"This is the third consecutive State of the Union in which there has been a strong rhetorical focus on manufacturing, and that's welcome," said AAM President Scott Paul.

"But the progress, despite the rosy picture painted by the president, has been painfully slow," Mr. Paul said. "And in some cases, such as the trade deficit with China, we've been backsliding."

While praising the president's economic policies, the USW — a charter member of the AAM — also said the U.S. is still suffering from the loss of 5 million manufacturing jobs and 60,000 manufacturing facilities.

"We must ensure that reviving the manufacturing sector must be a top economic priority because, absent this, there is no long-term hope of creating the opportunities that Americans want and deserve," the union's Mr. Gerard said.

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To reach this reporter: mmoore@crain.com.

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