Obama missed the mark on jobs – US chem, energy, business groups

09 September 2011 19:38  [Source: ICIS news]

President ObamaWASHINGTON (ICIS)--President Barack Obama missed an opportunity to jump-start US job creation in his speech to Congress, US chemical, energy and general business interests said on Friday, warning that yet another federal stimulus spending bill is not the answer.

In his speech before a joint session of Congress on Thursday night, Obama proposed a $447bn (€322bn) legislative package that would extend federal unemployment benefits, cut employer and worker payroll taxes still further, provide stimulus funding for infrastructure projects and send federal money to state governments to save jobs for teachers, police departments and fire-fighters.

Although a detailed legislative proposal was not released ­ that is supposed to come next week ­ the White House issued an outline of the president's proposals.

Obama promised that his plan would not add to the US national debt, saying that the nearly half-trillion dollar proposal should be offset by spending cuts elsewhere in the federal budget.

He called on the special bipartisan congressional committee that is charged with finding some $1,500bn in spending cuts by late November to come up with another $500bn or so in additional reductions to cover the cost of his jobs plan.

US business groups generally were not impressed and many were hostile to the president’s proposals.

Cal Dooley, president of the American Chemistry Council (ACC), said that some of Obama’s proposals could enhance the US economic recovery “on the margins”, but he said the president “missed an opportunity to build bipartisan support for fully developing our domestic energy resources, especially shale gas”.

He said that if unleashed, the newly abundant reserves of shale gas “could transform our nation’s energy security and revitalise our manufacturing sector, leading to hundreds of thousands of new jobs and a stronger, more competitive, resilient economy”.

Larry Sloan, president of the Society of Chemical Manufacturers and Affiliates (SOCMA), said he could support all of the proposals that Obama made, especially infrastructure spending that would serve to stimulate the US economy.

“But there is a lot of scepticism about how this is going to be paid for,” Sloan said, noting that Obama challenged the special congressional committee to add the $447bn to the $1,500bn in spending cuts the panel already is supposed to identify.

“There’s a lot of discussion of how it can be paid for and what the long-term impact will be on the nation’s economy,” Sloan said.

Sloan also noted that Obama did not use the word “stimulus” in his speech, as “stimulus has a bad connotation here in Washington”.

Critics of Obama’s nearly $800bn stimulus programme in 2009 charge that while it added significantly to the nation’s huge debt load, it failed to boost job creation and that unemployment actually rose following passage of that earlier measure.

Sloan also pointed out that Obama said nothing about energy or even one of his usual favourite topics, alternative energy projects. “It would have been nice to hear him call for an expansion of oil and gas drilling off our coasts and approval of the oil sands pipeline from Canada,” Sloan said.

Earlier on Friday, the National Petrochemical & Refiners Association (NPRA) slammed the Obama proposals, saying that the best thing the administration could do to boost jobs would be to lift regulatory burdens imposed on business and energy development.

But Dow Chemical chairman and chief executive Andrew Liveris applauded Obama’s proposals, saying he was pleased that the president put emphasis on trade and infrastructure spending.

“Both elements are essential to creating quality jobs here in the US,” Liveris said.

In the energy sector, the American Petroleum Institute (API) was sharply critical of the Obama jobs proposal, noting too that the president missed an opportunity to expand oil and natural gas development that could generate hundreds of thousands of jobs and add some $800bn in royalty revenue to federal coffers.

API president Jack Gerard also slammed Obama’s repeated call for elimination of tax credits and deductions for oil and gas producers.

“Raising taxes on an industry that already contributes more than $86m every day to the federal government takes us in the wrong direction,” Gerard said, “and it could put American jobs at risk, decrease oil and gas production and actually reduce revenue to the government.”

The American Energy Alliance (AEA), a US energy sector advocacy group, charged that Obama’s jobs proposal was “the same old wine in a new bottle” and would do no more to create jobs than the president’s earlier $800bn stimulus measure.

AEA president Thomas Pyle said that “We could be producing much more domestic energy, but the Obama administration’s policies are making it harder and harder”. He said that one-third of deepwater drilling rigs previously operating in US waters of the Gulf of Mexico have left for Brazil and Egypt and elsewhere “where the governments welcome oil and natural gas production”.

More broadly, the National Association of Manufacturers (NAM) also said that Obama “missed the mark” with his jobs proposal, saying that prompt presidential approval of the long-pending Keystone XL pipeline project for oil sands crude from Canada and removal of administration roadblocks to domestic energy production would do more to create jobs.

The US Chamber of Commerce said that Obama’s “ideas fall short” and that “a workable jobs plan must genuinely reduce regulatory uncertainty, unshackle promising American industries and not be overly reliant on government spending and subsidies”.

Additional reporting by Stefan Baumgarten

($1 = €0.72)

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