Obama Administration Announces U.S. Manufacturing Plan
by admin on Dec.25, 2009, under Manufacturing
The Obama administration will announce a push today for a $5-billion boost to a tax credit for green manufacturing, along with a seven-point plan to slow job losses at U.S. manufacturers.
The plans come as Vice President Joe Biden hosts business leaders this afternoon to talk over ways to boost jobs in a sector that employs fewer Americans now than it did in World War II.
The administration’s plans tout U.S. manufacturing as a source of strength for the economy in areas such as fuel-efficient vehicles and biotechnology. But the plan faces several tough hurdles to taking effect, including international trade, government spending and relations with China.
“With the right policies, America can build competitive, domestic industries that once again support a vibrant middle class,” said Jared Bernstein, executive director of the administration’s middle-class task force.
The $5 billion would come in addition to $2.3 billion already set aside for the credit as part of the $787-billion stimulus plan. The credit for 30% of a project’s cost can be applied to technologies such as plug-in electric vehicles and batteries. The money isn’t automatic; federal officials choose which projects can get the credit based on several criteria, including how many jobs they create.
The administration’s plan suggests a variety of moves to boost manufacturing, from better training for factory workers to opening overseas markets and defending patents and copyrights. It also calls for government aid to areas where manufacturing has retreated, leaving no replacement for crippled local economies.
While job losses in manufacturing have slowed over the past few months, factories have steadily shed jobs in the past decade, thanks to a combination of off-shoring and rising productivity. Federal data show U.S. manufacturers employed 11.6 million people in November, well below the peak of 19.5 million in 1979, and the lowest level since the spring of 1941.
Manufacturers themselves have been divided in the past over ways the government could boost their output, with smaller firms calling for more aggressive action against China. By artificially holding down the value of its currency by up to 40%, China provides a subsidy to its exporters, one that’s increasingly under criticism from other nations.
While Obama pledged a tougher line with China during the election, and has slapped tariffs on Chinese tires, the administration has declined to declare China a currency manipulator, a move that would allow even tougher trade sanctions.
Biden is scheduled to meet this afternoon with 12 chief executives and three labor leaders to talk about the plan, including Dow Corning Chief Executive Stephanie Burns.
