A group of executives advising President Barack Obama on jobs is recommending an effort to attract $1 trillion in foreign direct investment within five years and upgrade the nation’s transportation and energy infrastructure.
The President’s Council on Jobs and Competitiveness, headed by General Electric Co. Chairman and Chief Executive Officer Jeffrey Immelt, released its 52-page report today during a meeting with Obama in Pittsburgh, where the president also is promoting his $447 billion jobs plan.
Obama told the panel that the legislation he’s proposed “incorporates a lot of the ideas” in the report. Still he said he recognized that opposition from Republicans may block passage of his full plan and if it fails to get through “we’re going to have to break it up” into parts.
With the U.S. jobless rate at 9.1 percent in September -- the sixth consecutive month it’s been at 9 percent or higher -- Obama is pressing Congress to act on his jobs plan. Senate Majority Leader Harry Reid, a Nevada Democrat, has scheduled a procedural vote this evening on the legislation, which faces resistance from Republicans and some Democrats on its tax and spending provisions.
Democrats have 53 seats in the Senate with 60 votes needed to move forward. Maryland Representative Steny Hoyer, the second-ranking Democrat in the House, urged fellow party members in the Senate to stay united on tonight’s vote even if they disagree with portions of the legislation. Failure to do so risks “undermining the president’s message,” he said at his weekly news conference.
Administration officials said they expect to get almost unanimous support from Democrats even as the total falls short of the 60 needed to proceed.
The president met with his jobs council while visiting the International Brotherhood of Electrical Workers Local No. 5 Training Center.
He called the report “outstanding” without endorsing specific recommendations.
The jobs council report, published on its website, calls for more extensive initiatives than the president has proposed, touching on immigration, tax policy, business regulation and worker training. It contains recommendations that support Obama’s proposals, such as infrastructure spending, as well as those that Republicans back, including relaxing some regulation.
“There is no ‘silver bullet’ to create jobs,” the report says.
One way is to get more investment from overseas, according to the council. The report says the U.S. attracts 18 percent of global direct investment, down from nearly 26 percent in the late 1990s.
That trend can be reversed as the wage gap between the U.S. and China falls and ocean freight and Chinese real estate prices rise, the report says. The council’s goal of $1 trillion in foreign direct investment in the next four to five years would be a 20 percent to 25 percent increase over current trends, it says.
The council backs Obama’s call for spending on infrastructure improvements both to spur hiring in the short term and improve the nation’s long-term competitiveness by making the economy more productive. It also recommends steps to encourage private investment in advanced energy technology.
The U.S. is falling behind economic competitors such as China in infrastructure, such as roadways, ports, rail links and airports, according to the report.
The report says roads, schools, electric grids and other infrastructure projects are “two-fers” because they create short-term jobs and promote competitiveness in the long term.
“If Washington can agree on anything, it should be this,” the council said.
The council calls for a reauthorization of surface transportation funding legislation rather than repeated extensions that Congress has passed. The panel also endorsed Obama’s proposal to create an infrastructure bank that would leverage private funds to projects.
To get construction under way, the council said federal regulatory and permitting reviews should be streamlined and speeded up. Increasing infrastructure projects is “not just a question of money” and the government should “simplify regulatory review” to avoid “unnecessary delays.”
In order to reduce barriers for firms to make initial public offerings, the council recommended modifying the 2002 Sarbanes-Oxley law to let shareholders of public companies with market valuations of less than $1 billion opt out of compliance requirements.
Obama said alterations to the law should be examined for their impact on smaller companies and asked the council to recommend specific “tweaks.”
Among the other recommendations: eliminate capital gains taxes on investments of up to $25 million in privately held companies as long as the investment is held for at least five years; give accredited angel group investors a refundable 30 percent tax credit; further streamline the patent process and access to Small Business Administration financing; speed visas and expand immigration opportunities for highly skilled workers; train more engineers and health care workers; and require independent regulatory commissions to conduct cost-benefit analyses on any “economically significant” regulatory actions with an annual impact of $100 million or more.
“Bipartisan action on this agenda in Washington -- even on modest issues, to start -- would boost confidence at this juncture and have a positive effect on our economy,” the report said.
Along with Immelt, the 27 members of the jobs council include Steve Case, Revolution LLC CEO and AOL Inc. co-founder, Ursula Burns, chairman and CEO of Xerox Corp., Sheryl Sandberg, chief operating officer of Facebook Inc., Jim McNerney, CEO of Boeing Co., and Richard Parsons, chairman of Citigroup Inc.