Obama Proposes Tax Incentives for Returning Jobs to U.S.
January 12, 2012, 6:47 PM EST - Businessweek
By Roger Runningen
(Updates with Obama quotes, reaction from participants beginning in fifth
paragraph.)
Jan. 11 (Bloomberg) -- 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
didnft 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.
gWe are in a unique moment, an inflection point, a period where
wefve got the opportunity for those jobs to come back,h Obama said in his
remarks to the group at the White House. gThe business leaders in this room,
theyfre ahead of the curve. They recognize it.h
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 Obamafs stewardship of the economy a prime focus of his
stump speeches.
Employment Gains
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.
More Competitive
Obama said the U.S. is becoming more competitive for businesses
because of productivity gains and rising costs for doing business in other
countries.
gI donft want America to be a nation thatfs primarily known for
financial speculation and racking up debt buying stuff from other nations,h
Obama said. gI want us to be known for making and selling products all over the
world stamped with three proud words: eMade in America.fh
With wages in China rising between 15 percent and 20 percent a
year, gthe economics are favoring the U.S.h for moving jobs back, Hal Sirkin, an
outsourcing expert and senior partner at Boston Consulting Group, told reporters
after Obama spoke.
Adding Jobs
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 Intelfs 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.; 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.
Moving Back
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. workersf familiarity with American culture results in greater customer
satisfaction and cuts the number of calls needed to resolve issues.
gIf Ifm trying to get service for a snow blower, odds are very
highh 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.
--Editors: Joe Sobczyk, Laurie Asseo
To contact the reporter on this story: Roger Runningen in Washington at
rrunningen@bloomberg.net
To contact the editor responsible for this story: Steven Komarow at
skomarow1@bloomberg.net