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Obama promotes economic plan; Boehner says no to $9 minimum wage

The president kicks off a tour to push his proposals to bolster the middle class, but the GOP says his ideas won't help.

February 13, 2013|By Christi Parsons and Kathleen Hennessey, Washington Bureau
  • President Obama visits Linamar Corp. in North Carolina.
President Obama visits Linamar Corp. in North Carolina. (Charles Dharapak, Associated…)

ASHEVILLE, N.C. — From a factory floor at a recently reopened vehicle parts plant, President Obama on Wednesday set out to sell the economic proposals he unveiled in his State of the Union address, while Republicans in Washington objected to his ideas.

"Our job as Americans is to restore that basic bargain that says if you work hard, if you're willing to meet your responsibilities, you can get ahead," Obama told factory workers, repeating a key theme of his Tuesday night speech.

The president's stop in North Carolina was the first on his three-day tour to promote his priorities. To Congress, Obama ticked off broad aims for his second term, including executive action to slow climate change, steps to control Medicare costs and restrictions on guns. But at the factory, he focused on his economic plan to revitalize the middle class after years of falling wages.

One notable element, however, hit an early roadblock. House Speaker John A. Boehner (R-Ohio) declared that he opposed raising the federal minimum wage from $7.25 an hour to $9.

"When you raise the price of employment, guess what happens? You get less of it," Boehner told reporters. "At a time when the American people are still asking the question, 'Where are the jobs?,' why would we want to make it harder for small employers to hire people?"

Boehner's opposition was a quick reminder of what Obama omitted from his State of the Union speech: how he planned to get his ideas through the GOP-led House. Although Republicans have warmed to some of Obama's agenda — notably immigration reform — they've shown little inclination to give on other areas.

That is clearly the case in the clash over automatic budget cuts set to take effect March 1. Both Republicans and Democrats want to replace the across-the-board cuts that are to be divided between military and domestic programs with a carefully thought-out deficit reduction plan less likely to harm the economy. Obama made little reference to the standoff Tuesday night, instead outlining his broad approach to curbing the deficit.

Republicans accused him of shirking his responsibility.

"We need the president to lead. We need him to come forward with his proposals," said Rep. Cathy McMorris Rodgers (R-Wash.). "The Republicans stand ready. We want to be part of the solution."

But in North Carolina, the president steered clear of the conflict on Capitol Hill and talked about programs more likely to capture the attention of Americans worried about their economic prospects.

On Thursday, he will travel to Decatur, Ga., to discuss expanding access to preschools and encouraging states to adopt all-day kindergarten programs. On Friday, Obama will visit Hyde Park Academy in Chicago, a high school that focuses on technical education and career preparation.

Obama on Wednesday focused on his hopes to ignite a "renaissance" in American manufacturing and pointed to the Linamar Corp. plant in Asheville as an example.

After Volvo closed the factory in 2010, laying off more than 200 workers, Linamar chose the location for a new production site. The Canada-based company has since hired 160 people at the plant and plans to add 40 more by the end of the year, Obama said.

Obama told a crowd of workers and customers that Linamar's decision to open the plant is part of a jobs migration that the federal government should support.

"Ford is bringing jobs back from Mexico. Intel is opening its most advanced plant here in the United States," Obama said on the factory floor. "So we're seeing this trend of what we call in-sourcing."

The manufacturing sector has added about 500,000 jobs since early 2010, the low point in Obama's tenure. But there are still about 600,000 fewer such jobs than when Obama took office.

Obama called on the government to invest in manufacturing institutes to foster innovation. His budget will seek $1 billion to create 15 such centers. He also plans to use already appropriated money to set up three institutes.

An overhaul of the federal tax code would help, Obama said, by lowering the overall tax rate for corporations and offering incentives for companies that bring plants to the U.S.

Obama pitched these ideas last year in his reelection campaign. But the proposals stalled in Congress.

The minimum wage dispute revived a familiar fight between those who contend that mandating higher wages will raise the standard of living and, as Obama said, create a ladder to the middle class, and those who say it will only discourage companies from hiring more employees.

"I believe we reward effort and determination with wages that allow working families to raise their kids and get ahead," Obama said Wednesday to light applause. "That's part of the reason why I said last night that it's time for an increase in the minimum wage, because if you work full time you shouldn't be in poverty."

Boehner too said he was concerned about lower-income earners.

"Listen, I've got 11 brothers and sisters on every rung of the economic ladder," the speaker said. "I know about this issue as much as anybody in this town. And what happens when you take away the first couple of rungs on the economic ladder, you make it harder for people to get on the ladder. Our goal is to get people on the ladder and help them climb that ladder so they can live the American dream."

Parsons reported from Asheville and Hennessey from Washington.

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