During his State of the Union address, President Obama outlined dozens of ways he planned to right the economic ship this year, many of which were praised by a still ailing small-business community.
“Our government shouldn’t make promises we cannot keep, but we must keep the promises we’ve already made,” Obama said during the speech .
Six months later, has the president started delivering on his promises?
The Washington Post’s On Small Business examined some of the promises Obama made on the issues that matter most to business owners. The results are mixed, with some proposals falling flat and the Obama administration struggling to make progress on others. Below are theproposals the administration has started tackling and which ones have fallen by the wayside in Washington
Obama: “The American people deserve a tax code that helps small businesses spend less time filling out complicated forms and more time expanding and hiring. . . . Now is our best chance for bipartisan, comprehensive tax reform.”
Status: Progress, but challenges remain.
Overhauling the tax code has been a top policy priority for small-business groups for many years, fueled by complaints that rates are too high and rules are too confusing for the average employer. Many have also complained that tax loopholes and deductions help large corporations but provide little benefit to firms on Main Street.
Obama pledged to address those complaints, and there have been signs of bipartisan cooperation on the issue in the past few months. Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) are traveling the country together to build support for a sweeping rewrite of the code.
However, Obama’s plans could be derailed by his insistence on trading lower corporate rates for additional spending — a compromise Republicans quickly shot down when he pitched it this month.
Obama: “Let’s offer incentives to companies that hire Americans who’ve got what it takes to fill that job opening. but have been out of work so long that no one will give them a chance.”
Status: Not forgotten, but not likely.
Obama revisited the idea in his budget proposal in April, including a one-time tax credit for companies that pay less than $20 million in wages, hire more workers, or raise pay for their employees. His budget also would make permanent a temporary tax break for firms that hire returning veterans.
Business groups applauded both ideas, but the measures are not likely to pass through Congress — at least not as part of a budget. Republicans and Democrats are not close on their spending plans, and keeping the government running with continuing resolutions seems challenging enough, let alone passing a long-term budget.
Obama: “We intend to complete negotiations on a Trans-Pacific Partnership” and “we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union.”
Status: So far, so good.
Companies are increasingly looking to sell their goods and services in other countries, and the president has taken steps to make the process simpler and more affordable.
In July, U.S. and European officials launched formal talks to create a transatlantic trade agreement that would strip away many hurdles for exporters. Meanwhile, the administration is working on a Trans-Pacific Partnership with about a dozen Asia-Pacific nations, which would be the largest agreement of its kind.
Obama: “These sudden, harsh, arbitrary cuts . . . would certainly slow our recovery and cost us hundreds of thousands of jobs. . . . Let’s set party interests aside and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future.”
Status: Swing and a miss.
A budget was not approved in March and all efforts to avert sequestration failed. Consequently, the government is slated to bleed about $85 billion in spending this year and cut close to $1 trillion over the next decade.
While large contractors, particularly in the defense industry, haven’t been significantly effected by the budget cuts, small contractors have been hit hard as government agencies scale back spending. A number of ideas have been floated to replace the cuts with other cost-cutting or revenue-generating measures, but none have gained traction.
Obama: “Right now, leaders from the business, labor, law enforcement, faith communities — they all agree that the time has come to pass comprehensive immigration reform. Now is the time to do it. . . . Real reform means fixing the legal immigration system to cut waiting periods, reduce bureaucracy, and attract the highly-skilled entrepreneurs and engineers that will help create jobs and grow our economy.”
Status: Major steps forward, but big hurdles remain.
A bipartisan group of senators this year introduced and eventually pushed through one of the largest immigration overhaul bills in U.S. history.
On the whole, small-business and start-up advocates have supported the bill, which would help firms bring in more high-skill (think tech start-ups) and low-skill (think agricultural and seasonal firms) workers from around the world. However, some have complained that requiring employers to verify worker eligibility status through a new government portal would be too burdensome.
Despite its landslide passage in the Senate, the bill faces a much tougher road in the House, where Republican leaders want to tackle an immigration measure piecemeal, rather than in one large bill. Obama has said he won’t sign anything but a broad, comprehensive package.
Build a larger manufacturing network
Obama: “I’m announcing the launch of three more of these manufacturing hubs, where business will partner with the departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs. And I ask this Congress to help create a network of 15 of these hubs.”
Status: A more modest expansion
Obama’s 15 regional manufacturing hubs will cost about $1 billion, which requires congressional approval. The funding is included in the president’s proposed budget, but again, that plan is not likely to move through Congress.
Still, the administration has taken steps to deliver on its promise as much as possible without lawmakers’ approval. In May, the White House announced a competition for teams of businesses, universities and nonprofit organizations that want to link up to create manufacturing and innovation hubs. The administration will select three winners later this year, who will receive a combined $200 million from five federal agencies, including NASA and the Defense Department.
Raise the minimum wage
Obama: “Let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9 an hour.”
Status: Not much movement
One of the most controversial parts of the speech inside the small-business community, the president’s call to raise the minimum wage was met with boos from many employers, some of whom warned they would have to pull back hiring or cut workers.
The president renewed his proposal to raise the minimum wage rom $7.25 to $9 last month, but the proposal has failed gained traction. Identical bills have been introduced in the House and Senate that would raise it even higher, but neither has picked up many supporters.
Obama: “I propose a ‘Fix-It-First’ program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country.”
Status: Held up by bigger fights.
The Obama administration has long advocated for economic stimulus projects that serve the dual purpose of creating jobs and repairing the nation’s creaking infrastructure. In his latest compromise offering to Republicans late last month, he once again offered to trade tax cuts for their approval to spend more on programs to rebuild roads, bridges and other public-works projects.
Republicans balked at the offer, refusing to budge on more spending proposals. Already battling with an expanding debt, many of them say the government does not have the money for the president’s infrastructure plans.
Continue full steam ahead on overhauling health care
Obama: “I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny you coverage or charge women differently from men.”
Status: Not quite full steam
At the time of the State of the Union, the president’s signature law seemed on track to take full effect at the end of 2013, so it was not a surprise when health care was mentioned only sparingly in the speech.
Much has changed since then.
The health-care law has been riddled with setbacks in the past few months, especially the provisions that concern businesses. It began with a delay to the multiple-plan option for employers announced in April, followed by an even more consequential delay to the employer mandate piece of the law in July.
The administration says the law’s new health insurance marketplaces, called exchanges, will be up and running on time, but even those have suffered delays.
No, we are certainly not back to the days before Obamacare. However, compared with the night the president gave his address, critics have a lot more ammunition with which to attack the law as they continue to try to deprive it of funding before the end of the year.
Obama: “Let’s agree right here, right now to keep the people’s government open.”
Status: Check back soon.
When Obama uttered those words in February, he was referring to a short-term spending bill that was scheduled to expire at the beginning of March. Policymakers were able to avert that crisis at the last minute, kicking the can down the road until September.
Now, it is upon them again. Republicans have threatened not to approve another resolution in order to force a defunding of Obamacare, putting both sides in a precarious position. Some pundits have warned that a shutdown is more likely this time around.