State of the Union Address Emphasizes Job Creation, But Not Organized Labor

President Obama’s State of the Union Address may be more notable for its omissions than its content. Not once in the hour and ten minute speech did Obama mention organized labor, even though a large portion of the Address was dedicated to job creation efforts. Claiming that jobs must be the “number one focus of 2010,” Obama outlined a number of initiatives to advance this aim, none of which directly promoted union membership.

Specifically, Obama proposed using $30 billion repaid funds that financial institutions received through the Troubled Asset Relief Program (TARP) to increase the ability of small businesses to obtain loans. In addition, Obama called for a new small business tax credit for small businesses that hire new workers or raise wages, the elimination of capital gains taxes on small business investment, and tax incentives for businesses to invest in new plants and equipment. Moreover, Obama praised the House of Representatives for passing a jobs bill in December which contained some of these proposals, and encouraged the Senate to do the same. It is uncertain whether the Senate plans to introduced a comprehensive jobs bill, or will consider a series of jobs-related legislation.

As for healthcare overhaul, Obama acknowledged the complexity of this issue, but was adamant that Congress not “walk away” from healthcare reform. The President, however, did not recommend a way for Congress to proceed with this task, such introducing piecemeal health-related legislation or through the budget reconciliation process.

With respect to other employment-related issues, Obama briefly mentioned the need for improving the immigration system in this country, and ensuring that equal pay laws are enforced.

Another main theme of the President’s Address is finding ways to increase the financial stability of the middle class. Earlier this week, the White House proposed the creation of a system of workplace individual retirement accounts (IRAs) that would require all employers to give employees the option of enrolling in a direct-deposit IRA. According to a fact sheet (pdf) provided by the White House, this proposal would require employers that do not currently offer a retirement plan to enroll their employees in a direct-deposit IRA unless the employee opts out. The contributions would be voluntary and matched by the Savers Tax Credit for eligible families. In addition, the Administration would take measures to streamline the process for employers to automatically enroll workers in 401(k) plans. A new tax credit to be proposed would help pay employer administrative costs, while the smallest firms would be exempt.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.