Obama vows action on energy, climate, higher wages and manufacturing hubs — with or without Congress
Bruised after several years of congressional inaction on some of his top legislative priorities, Obama laid out plans in his fifth State of the Union address to go it alone on issues like combating climate change, speeding up transportation infrastructure projects and hiking the minimum wage for federal contractors.
Obama did ask Congress for some big-ticket legislation like transportation infrastructure and water resources bills, the repeal of $4 billion in annual subsidies to the oil industry and policies aimed at shifting vehicles from using oil to natural gas.
But with Democrats unlikely to gain more power in Congress anytime soon, the president made it clear that he’s planning to bypass the legislative branch where he can during the remainder of his second term. And that go-it-alone rhetoric wasn’t limited to climate and energy — he mapped out executive actions he plans to take on everything from education to manufacturing and job creation.
“Wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do,” Obama told both chambers of Congress during his speech last night, which was peppered with partisan jabs.
Congressional Republicans, unsurprisingly, weren’t thrilled about Obama’s plans to go around them.
House Speaker John Boehner (R-Ohio) shot back in a statement, “With few bipartisan proposals, Americans heard a president more interested in advancing ideology than in solving the problems regular folks are talking about. Instead of our areas of common ground, the president focused too much on the things that divide us — many we’ve heard before — and warnings of unilateral action
Most of the Cabinet officials charged with carrying out his efforts were on hand last night to applaud their boss’s policies. Energy Secretary Ernest Moniz, however, missed out. Moniz was sequestered in an undisclosed location as the designated survivor in the event of an attack or catastrophe. He followed in the footsteps of his predecessor, Steven Chu, who missed out on last year’s speech as the designated successor.
Call for ‘more urgency’ on climate
Obama had plenty to say about energy policy and the Climate Action Plan that Moniz and other Cabinet officials are charged with implementing.
When it came to climate change, the president’s tone was forceful. “We have to act with more urgency — because a changing climate is already harming Western communities struggling with drought and coastal cities dealing with floods,” he said.
He touted his administration’s efforts to set new standards for power plants’ greenhouse gas emissions and new fuel efficiency standards for trucks, eliciting applause from U.S. EPA chief Gina McCarthy — who has been charged with overseeing out those efforts.
“The debate is settled. Climate change is a fact,” Obama said. “And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”
The president’s pledge to circumvent Congress on climate won the praise of many Democrats — including Rep. Jim Moran of Virginia, who plans to retire after nearly four years as the top Democrat in charge of EPA and Interior Department spending.
“Everything that he has the authority to do, he ought to do it,” Moran said in an interview after the speech, “because clearly, this Congress is not going to cooperate.”
Domestic energy ‘booming’
Obama’s speech also featured a big plug for domestic energy production, bragging that the United States is producing more oil domestically than it’s buying from the rest of the world for the first time in nearly two decades.
He said an “all of the above” energy strategy is working, which riled some critics who want to see him put more emphasis on renewable sources (see related story). And he touted natural gas as a “bridge fuel” that can power the economy with less greenhouse gas emissions. He promised efforts to continue production but suggested beefed-up environmental rules for natural gas extraction.
In addition to “oil and natural gas production that’s booming,” Obama pointed to the growth of the domestic solar power industry.
House Natural Resources Chairman Doc Hastings (R-Wash.) accused Obama of taking credit for an increase in domestic production that’s happening in spite of his administration’s policies.
“Despite President Obama’s repeated claims of making job creation and economic growth a priority, the reality is that he has actively chosen to ignore the economic potential and job opportunities that come with expanding American energy production and responsibly managing our nation’s natural resources,” Hastings said. “The only increase in American energy production is taking place on state and private lands. Energy production on federal lands has declined over the past five years, meaning we are losing out on countless opportunities for job growth.”
Renewed call to end oil tax breaks
The president provided a brief call for corporate tax reform in the speech but stopped well short of outlining any detailed proposals. And he mentioned only in passing tax incentives to support clean energy industries, many of which expired at the end of last year, such as the wind production tax credit (PTC).
White House energy adviser Dan Utech, speaking at the U.S. Conference of Mayors’ annual meeting just last week, reiterated the administration’s position that clean energy incentives like the PTC should be made permanent and refundable.
But Obama did not get quite so specific in the speech, instead reiterating his call to end tax breaks for oil companies as a way to promote booming industries like solar.
“Every four minutes, another American home or business goes solar, every panel pounded into place by a worker whose job cannot be outsourced,” the president said. “Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it, so we can invest more in fuels of the future that do.”
Solar’s primary incentive, the investment tax credit, is in place through 2016, although industry boosters say its ability to spur development of utility-scale projects already is waning without an expansion of the credit (Greenwire, Jan. 23).
The wind industry, which also is lobbying for an extension of the already-expired PTC, did not merit a mention in the speech, a break from recent years, but industry supporters were encouraged by the general call to support renewable energy.
Obama also made no mention of nuclear power or coal — omissions that did not go unnoticed by those industries or their advocates on Capitol Hill.
“We need an all-in energy policy — we talk about it, but it takes everything,” said Sen. Joe Manchin (D-W.Va.), one of the coal industry’s biggest congressional boosters. “And I know they are a little hard on carbon. The bottom line, we’re dependent on it. If we’re going to use it, let’s use it in the best fashion we can.”
The oil industry predictably panned Obama’s call to eliminate its suite of incentives, a proposal that Obama presents every year only to see it go nowhere in Congress.
“Punishing energy companies by raising taxes is not sound energy policy and could lead to less energy, less government revenue, and fewer jobs,” American Petroleum Institute CEO Jack Gerard said in a statement.
Shutdown shaming, minimum wage hike
Obama hammered Congress for the 16-day government shutdown last year that brought work at many agencies to a halt.
“For several years now, this town has been consumed by a rancorous argument over the proper size of the federal government,” he said, adding that he thinks it’s an important debate.
“But when that debate prevents us from carrying out even the most basic functions of our democracy — when our differences shut down the government or threaten the full faith and credit of the United States — then we are not doing right by the American people,” he said, referring to the ongoing battle over raising the federal debt limit.
Obama also announced an upcoming executive order to boost federal contractors’ minimum wage to $10.10 per hour from the current rate of $7.25, but it’s unclear how much success he and congressional Democrats will have in advancing a bill to raise the federal minimum wage to that level (Greenwire, Jan. 29). He applauded state efforts to raise the minimum wage.
Manufacturing innovation, patent ‘trolls’
Obama also buttressed his focus on job creation by announcing an additional four new manufacturing innovation institutes — private-public partnerships aimed at boosting U.S. future competitiveness in advanced technology that are seen by many experts as key to the U.S. clean energy industry.
Obama said he plans to create six of these institutes by the end of 2014 — without the help of Congress.
“We also have the chance, right now, to beat other countries in the race for the next wave of high-tech manufacturing jobs,” he said. “Bipartisan bills in both houses could double the number of these hubs and the jobs they create. So get those bills to my desk and put more Americans back to work.”
Last year, Obama asked for $1 billion to fund 15 such collaborations in his State of the Union speech. The president has since asked for 45 National Network for Manufacturing institutes over the next decade — often noting that Germany already has 60 such institutes.
Earlier this month, Obama announced the first of the NNMI institutes — to be based in Raleigh, N.C., and overseen by the Energy Department — which will focus on accelerating the next generation of semiconductors for slashing the size and energy consumption of electronics (E&ENews PM, Jan. 15).
The White House is expected to announce two other institutes shortly, which will be spearheaded by the Defense Department and will focus on lightweight metal and digital design. A pilot institute that is working on advancing 3-D printing technology, set up in Youngstown, Ohio, in 2012 — also noted in Obama’s speech — now has partnerships with about 100 companies, universities and government agencies (E&ENews PM, Sept. 4, 2013).
Obama did not provide any details on how the four new institutes would be funded. The first three institutes, announced last year, have been funded by $200 million drawn from DOE, DOD, the Commerce Department, NASA and the National Science Foundation under existing budget authority, so potentially the administration could fund these next four institutes in a similar fashion.
There is bipartisan support for NNMI in Congress, but its path forward is not clear in the tight fiscal environment. There are companion bills in the House and Senate that would provide $600 million to the NNMI effort but neither has passed committee yet, and there was no funding for the initiative in the just-released bipartisan 2014 spending bill.