Obama vs. Romney on Improving U.S. Manufacturing

President Barack Obama and Mitt Romney each have detailed plans to strengthen the U.S. economy and revitalize business activity. How do their differing roadmaps for growth affect the manufacturing industry, which has been one of the key pillars of the economic rebound in recent years, and what can manufacturers expect once this pivotal election is over?


The United States economy is facing significant challenges, with sluggish job growth, mounting debt, instability in international markets and gridlock among lawmakers in addressing major financial issues, such as the looming fiscal cliff. These issues mean that the upcoming presidential election will be a pivotal one for the country’s future, as either Barack Obama or Mitt Romney will have to work to overcome major obstacles to get the U.S. back on track.

Although Obama and Romney both have roughly the same economic goals – stimulate job creation, boost American competitiveness in the global market and drive down the deficit – their plans for reaching these objectives differ greatly. One key area where the candidates distinguish themselves is in their approach to manufacturing, which has been a key driver of the economic recovery since 2009 and will play a major role in U.S. economic success in the future – if it gets the right support.

“As the U.S. presidential campaign heats up and the candidates hit the debate stage in full force, it seems that the future of manufacturing and energy is high up on the agenda,” Advance Staffing Solutions notes. “While the manufacturing industry is still rebounding from years of recession, there is a renewed focus on how those involved in the management of energy resources and re-building of America will become a critical factor in the coming administration.”

Part of Obama’s platform is the stated goal of doubling U.S. exports by 2015 through the National Export Initiative and to create 1 million new manufacturing jobs domestically. To that end, U.S. manufacturing has added 459,000 jobs since January 2010, the highest growth rate in the past decade, though much of that growth was a rebound from historic lows.

In terms of boosting American manufacturing, President Obama emphasizes research and development, workforce training and education, clean energy and infrastructure. The White House recently introduced a program to provide $30 million in federal funding for the National Additive Manufacturing Innovation Institute, a public-private partnership designed to boost U.S. manufacturing competitiveness. The Obama administration has also dedicated $20 million for 10 additional manufacturing public-private partnerships across America.

Obama plans to cut the top corporate tax rate on manufacturing income down to 25 percent as part of an overall tax restructuring and to lower the rate further for income from advanced manufacturing as a form of added support to high-tech production. He seeks to lower all corporate taxes to 28 percent from their current top rate of 35 percent by closing loopholes and exemptions.

On the other hand, Romney plans to lower corporate tax rates down to 25 percent not just for manufacturers but for all corporations. Part of this would be accomplished through the closing of loopholes and exemptions, as the president has proposed. Unlike the president’s plan, Romney has also stated he would cut numerous regulations (as yet unspecified) to lower operational costs for businesses and would work to make North America energy independent by 2020.

“Romney founded Bain Capital, a private equity fund that backed start-up companies and sought to buy and turn around failing businesses. Bain invested in scores of companies in a range of sectors…Romney has said that the companies that Bain invested in have created a net gain of more than 100,000 jobs – a figure that news outlets have not been given enough information to confirm,” the Milwaukee Journal Sentinel reports. “Romney says his years in the business world prove that he knows what companies and their workers need to succeed and that it would give him an edge in boosting the national economy.”

Romney’s strategy for the manufacturing workforce centers on two key principles: additional training/retraining for existing workers and creating conditions that attract more skilled foreign talent to the U.S. According to Plant Engineering, he plans to accomplish these goals through six key measures:

  • Cutting redundancy in federal retraining programs by consolidating programs and funding streams, centering as much activity as possible in a single agency;
  • Granting states greater authority to manage retraining programs by block-granting federal funds;
  • Switching from unemployment insurance benefits to a system of personal reemployment accounts;
  • Promoting more private sector involvement in government retraining programs;
  • Raising the visa cap for highly skilled foreign-born workers; and
  • Providing permanent residency to eligible foreign graduates with advanced degrees in math, science and engineering.

Meanwhile, Obama’s manufacturing workforce plan is focused on eliminating incentives for outsourcing and encouraging more companies to shift production back to the U.S. The key points in his approach include:

  • Removing tax deductions for shipping jobs overseas and introducing income tax credits for bringing back domestic jobs;
  • Making the current deduction for domestic production focused specifically on manufacturing activities and doubling the deduction for advanced manufacturing;
  • Providing a new credit for qualified investments that help finance projects in communities that have suffered major manufacturing job losses;
  • Extending tax credits to provide $20 billion of investment in domestic clean energy manufacturing;
  • Extending a provision that allows businesses to expense the full cost of their equipment purchases; and
  • Closing a loophole that allows companies to shift profits overseas from intangible property created in the U.S.

Obama and Romney also differ on the issue of China. In a recent ad, President Obama claimed he is “challenging China’s unfair trade practices that hurt American autoworkers” by filing a considerable number of trade complaints against the Chinese. However, the Alliance for American Manufacturing points out that so far he has passed up seven opportunities to label China a currency manipulator.

“Romney is pledging, on his first day in office, to designate China a currency manipulator, a step no U.S. administration has taken against any country for 18 years,” the Associated Press notes. “That could lead to tariffs punishing China for policies that Americans believe unfairly keep Chinese products cheap, hurting U.S. manufacturers. Tariffs could trigger a trade war with a country that is the fastest-growing market for U.S. exports. Even if they don’t, the designation would instantly set back relations with Asia’s emerging superpower.”

 

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Resources:
Manufacturing on the Agenda: Presidential Campaign
by Advance Staffing Solutions, Oct. 5, 2012
Jobs and the Economy
by BarackObama.com, 2012
Commerce Secretary Gary Locke Unveils Details of the National Export Initiative
by U.S. Department of Commerce, Feb. 4, 2010
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Comments:
  • Anton Murphy
    October 16, 2012

    Typical liberal mentality. I thought you guys were a professional organization.

    Obama had complete control of the house, senate, and executive and what did he do? None of the things you are suggesting. He is a liar who will say anything but we need to look at what he has done.

    He has divided the country with racial and economic bias. He has almost bankrupted the country with tax and spend legislation.

    He is not a patriot. He is unacceptable to the American Public. He gave 1/3 ownership of GM to the unions instead of letting GM survive through an administrative reorganization that would have made it a stronger company.

    This is a bad guy with bad instincts, who is getting our diplomats, intelligence agents, and soldiers killed. He has to go!


    • Colin Dean
      October 16, 2012

      And the republicans main goal was what?? No, not to improve the econony but to do whatever it takes to get rid of Pres. Obama. How you do that? by making the economy as bad as possible. Republicans are responsible for getting the country in this mess and now they are the obstructionists that slowing our country’s progress out of this recession. I don’t understand how anybody in their right mind would vote for Romney!!!


      • J.C.G.
        October 16, 2012

        Mr. Dean, how do you figure that the republican’s main goal was to do whatever it takes to get rid of Obama? Are you suggesting that the evil boogey-men republicans who hide in your closet and under your bed at night, the same evil, money-grubbing, faceless, nameless, people-less corporations decided to destroy the economy just to spite Pres. Obama? Really? That’s like saying that everyone who’s out of work is that way because they’re doing it so spite their former employers…

        Are Republicans blameless for this economic mess? Partially… Are Democrats… Partially (although I’d tend to think more so).

        There are several major factors that helped contribute to the current death-spiral of our economy, and I’ve only seen our current administration trying to speed the descent.

        Probably one of the largest contributing factors has been the housing bubble with the sub-prime mortgage debacle… Democratic legislators pushed the mortgage industry to lower lending standards, to the point of stupid, over industry objections, to allow anyone to buy a home, even if they had no means to pay it off… this resulted in a number of toxic loans that were bundled and traded off, often deceptively to other financial institutions… the eventual meltdown, known to be coming for almost a decade before it hit, resulted in a major blow to the financial markets… This started under Slick Willy, and if you cite his ‘balanced budget’ and surplus, I’ll cite the Republican-controlled legislature, specifically the House, which controls the purse strings of the government and created the budget and held Bill to it (more or less).

        Everyone likes to blame “W” for the financial crisis… Does anyone remember 9/11? Apparently Slick Willy’s ‘fire-and-forget’ tomahawk diplomacy of destroying some long-abandoned Al-Quaeda camps didn’t work as well as he thought, did it? “W” had been in just over half a year and our entire nation was hamstrung for YEARS due to the economic fallout of that event… On top of that, we had bipartisan support in Congress to conducted two overseas theaters of war, in Afghanistan and Iraq, which didn’t help our economy much. During this same time, other economic problems were already evident in Europe, and currency manipulation by China was causing major trade problems here at home, having accelerated a movement to source offshore. One of “W”s biggest mistakes was the knee-jerk reaction stimulus for the financial sector… bad decision for everyone, except maybe the ‘favorites’ who received the bailout funds as ‘too big to fail’, since Lehman Bros. wasn’t a favorite, but others were… Did the republicans do things to hurt the economy? You bet… they and the democrats were profiteering off the government in the theaters of war… I hesitate to categorize businesses, even financial institutions as “republican” or “democrat”, because they represent both sides… AARP is a large, left-leaning insurance company and lobbying group for leveraging discounts for seniors… Obama made a large amount of campaign contributions from large corporations, even some in the U.S., like on Wall Street… some of the Occupy organizers were financiers from California, sleeping nights in a four star hotel and then grunging it up to head down to Zucotti park…

        Then we have our inexperienced but charismatic freshman senator from Illinois, radical leftist, no real-life job experience, sheltered life in fancy schools with unknown benefactors and a life in academia with a small legion of lawyers protecting certain aspects of his veiled past… He outcampaigned the democrat power-broker Clintons, and won the heart of the media as well as an uninformed constituency. Our new president, who squeaked by to win the election, took his election as a mandate by the masses to do whatever he wanted… so that resulted in a wholesale attack on the private sector, entire industries, unbridled seizure of one sixth of our economy, promoting a corporatist agenda with his one hand out to lobbyists with his other hand in a fist beating the bully pulpit against the rich and corporations… With his end runs around the other branches of government, his non-elected ‘czars’ controlling aspects of his administration’s interactions with the private sector, he has demonstrated, repeatedly his contempt for business… As an example, Jeffrey Imelt, job ‘czar’, who’s company (GE) paid no corporate income tax and was busy moving his company’s x-ray division from the Midwest to China… So the American people didn’t know he was meeting with lobbyists, because the Secret Service log book for the Oval Office was considered public, he meets with them across the street in a government building… With his divisive rhetoric, this demagogue has done everything he can to destroy our economy… how many quantitative easements do we need? Our currency is being devalued, our country’s credit rating has been degraded… twice in his administration… he’s added at least $6 trillion more in government debt… Can you name one thing that his administration has done to support business in general? I don’t mean funding ‘green’ jobs by giving government loans and stimulus money to his campaign contributors and bundlers… or stimulus money to colleges and universities for research studies… or continuing to fund Planned Parenthood and Acorn with taxpayer money… Please, explain Obama’s pro-business steps that he’s taken during his first term as president? He’s had nearly four years and he’s still blaming Bush… he campaigned for it, fought for it, and won the presidency… he owns it… He’s given out more stimulus funds, extended the Patriot Act, extended the wars, renovated Guantanamo (didn’t he promise to close that his first day in office?), and signed the NDAA (after he insisted on the verbiage about imprisoning citizens indefinitely, although he originally threatened to veto the legislation since he wanted his own private police force to have that authority, seeing how, as CnC of the military, he didn’t trust the military)… But he made that ‘gutsy’ call to take out Osama Bin Laden… ‘gutsy’ after months that he knew of Osama’s location, but Valerie Jarrett waived off twice before the final go because it wasn’t politically expedient yet… because you know that the republicans would never have given the order to take Osama out and that Obama deserves all the credit… because our military was sitting on it’s hands overseas until Obama took office… And then, to top things off, we don’t defend the informant who lead us to Osama, and the White House leaks classified information (again) to make itself look good. Let’s not forget Fast and Furious, our dead border agents and 300 dead Mexican citizens, our dead ambassador and his small security detail with a couple volunteer SEALS… or all our men and women in uniform getting killed overseas… These are things people were upset at “W” for going, but since he’s Obama, it must be okay, because he makes them ‘better’, right? How can anyone not vote for Obama?


      • DeeBarry
        October 16, 2012

        Pres. Obama is not a \”bad\” guy/person; he just has his own agenda which gets in the way of good policies. He surrounds himself with people that think conservatives are bad people (such as wanting the economy to be \”bad as possible\”). Thus, he won’t entertain honest debate, won’t negotiate with republicans, because \”elections has consequences,\” he said. With no opposition in his first two years, he shut out half of America (even many who voted for him) and their representatives, and spent his time on policies that got no input from those \”bad/evil\” Americans. Was he wise enough to know that such arrogance would be the root of national conflict? Apparently not. His worldview is obviously one that is aligned with socialist Europe — even while socialist Europe is failing. We need to turn around as we are heading for the misfortunes and the social unrest and losses we see Europe sliding into. Pres. Obama wants less financially successful Americans (except for himself and his friends), while Mitt Romney wants more financially successful Americans. This way, only the government will be able to care for needy people. Conservatives, including black Americans like me, want citizens and government to address the needs of the poor, not just government. And all should be helped to aim for becoming wealthier. Americans should not be made poorer across the board so that we need more and more government to take care of us. We expect communist or socialist societies to have elite governments; we don’t want this in the most generous country in history, the USA. A president’s worldview and governing style will dictate his policies. We can’t trust Mr. Obama anymore to look out for everyone in America.


  • J.L. Graham
    October 16, 2012

    Another example of “balanced” reporting – evidently Romney required quotations from obscure publications to “reinforce” his business freindly agenda – how niave of you…


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