Obama Proposes Tax Incentives for Returning Jobs to U.S.
President Barack Obama says he will propose new tax incentives to reward companies that invest in U.S. expansion or bring back jobs from overseas and elimination of tax breaks to companies that move jobs outside the country.
At a White House forum this afternoon with representatives from more than a dozen companies, including Ford Motor Co. and Intel Corp., Obama said more must be done to encourage business investment and job creation.
The tax initiatives will be part of the fiscal 2013 budget plan that is set to be sent to Congress the first week of February. The White House didn’t release details. Obama also plans to propose adding $12 million for a program to promote foreign direct investment in the U.S. and work with state and local governments to attract businesses.
The companies at the event are among those that have decided to return jobs from overseas or increase their U.S. operations.
“We are in a unique moment, an inflection point, a period where we’ve got the opportunity for those jobs to come back,” Obama said in his remarks to the group at the White House. “The business leaders in this room, they’re ahead of the curve. They recognize it.”
Economic growth and job creation are expected to be the main issues in the presidential campaign this year. Mitt Romney, a former Massachusetts governor and the front-runner for the Republican nomination, is making criticism of Obama’s stewardship of the economy a prime focus of his stump speeches.
The unemployment rate has declined for four straight months to 8.5 percent in December, and the Labor Department has reported six consecutive months of jobs gains of 100,000 or more. Still, the rate has been above 8 percent for almost two years, and little headway has been made in recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009.
Only one U.S. president, Ronald Reagan, has been re-elected since World War II with a jobless rate above 6 percent. Reagan won a second term with the rate on Election Day 1984 at 7.2 percent, having dropped almost three percentage points in the previous 18 months.
According to the administration, manufacturing production has risen at its fastest pace in a decade, with 334,000 manufacturing jobs created over the last two years and manufacturing production having risen by 5.7 percent on an annualized basis since reaching a low in the summer of 2009.
Obama said the U.S. is becoming more competitive for businesses because of productivity gains and rising costs for doing business in other countries.
“I don’t want America to be a nation that’s primarily known for financial speculation and racking up debt buying stuff from other nations,” Obama said. “I want us to be known for making and selling products all over the world stamped with three proud words: ‘Made in America.’”
With wages in China rising between 15 percent and 20 percent a year, “the economics are favoring the U.S.” for moving jobs back, Hal Sirkin, an outsourcing expert and senior partner at Boston Consulting Group, told reporters after Obama spoke.
Ford plans to add 12,000 jobs in the U.S. by 2015 and has brought additional production back to the U.S. from China, Japan and Mexico, according to the administration. The statement highlighted Intel’s participation in a $4.4 billion investment to build a semiconductor research and development facility in New York.
Along with Dearborn, Michigan-based Ford and Santa Clara, California-based Intel, companies taking part in the forum include Wilmington, Delaware-based DuPont Co., the largest U.S. chemicals company by market value; Otis Elevator Co. of Farmington, Connecticut, a unit of United Technologies Corp. (UTX); and the North American unit of London-based Rolls-Royce.
One of the business leaders at the White House for a roundtable discussion with administration officials this afternoon is Angela Selden, co-chairman of Arise Virtual Solutions Inc., based in Miramar, Florida, which recruits workers for call centers.
Selden said in a telephone interview that she will urge the administration to appoint a special White House adviser to focus on bringing more virtual or web-based jobs back to the U.S.
There already has been a surge in U.S.-based new call centers as companies move them from India, Philippines or Jamaica, according to Selden. U.S. workers’ familiarity with American culture results in greater customer satisfaction and cuts the number of calls needed to resolve issues.
“If I’m trying to get service for a snow blower, odds are very high” someone in India has never seen a snow blower, Selden said.
Arise, which expects $200 million in global revenue this year compared with $150 million last year, recruits workers to act as representatives of American companies from their own homes. Its clients include cruise line Carnival Corp., Walgreen Co., Time magazine and the American Automobile Association.
About 22,000 of its agents are located throughout the U.S., and Arise is hiring as many as 10,000 people this year in the U.S., Canada and the U.K., Selden said.
To contact the reporter on this story: Roger Runningen in Washington at email@example.com
To contact the editor responsible for this story: Steven Komarow at firstname.lastname@example.org
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.