State of the Union addresses can be pretty far-flung affairs, with the president typically taking credit for achievements of the past year, putting a good spin on any policy flops, and laying out his or her agenda for the future.
And as far as this coming Tuesday's speech is concerned, President Obama will no doubt do all of those things--particularly, take credit for the economic recovery under way. He'll also present a broad array of initiatives that will affect business owners and the nation as a whole in the years ahead.
It will be the first time Obama addresses the nation and the joint branches of government following a Republican rout in November, which gives the GOP strong majorities in both the House and Senate. Already in recent months, Obama has done much to enrage conservatives and even surprise his own party faithful, including executive orders that restore diplomatic relations with Cuba, proposals to make community college education more affordable for the poor, and a new law to standardize the process for companies reporting security breaches to their customers.
Here's a look at some of the things President Obama is likely to cover on Tuesday night that will affect your business most.
The Trans-Pacific Partnership, being negotiated with 11 trading partners in Asia, and the Transatlantic Trade and Investment Partnership, with the European Union, are two big, pending agreements that are likely to come up for a vote this year. The trade agreements would reduce tariffs and other trade barriers between the participating nations, among other things, but they're also highly contentious. Opponents of such pacts say they cost jobs at home, or tend to contribute to unfair labor practices in developing countries, for example. Business people tend to favor such agreements, as they often lead to increased trade between the signatory countries. And trade agreements tend to be popular with pro-business lawmakers on Capitol Hill. So Obama may push to fast-track the pacts. "This really is about getting a regulatory structure that's more business-friendly than what is there," says Dean Baker, co-director of the Center for Economic and Policy Research, a policy think tank. "A lot of businesses would be very happy if President Obama can do this for them."
Taxes, or Maybe Not
Both Republicans and Democrats have been talking for years about the need to reform corporate taxes, and the general consensus has been that the two parties are not that far apart on passing new legislation. There's been agreement on the need for lowering corporate rates from the current top end of 35 percent, and for closing some loopholes, e.g., ending tax havens available through tactics such as corporate inversions. The departure of Representative Dave Camp (Republican, Michigan) from the House Ways and Means Committee may cause a hitch. His tax plan was widely seen as a starting point and had broad bipartisan support. With the relatively more doctrinaire Paul Ryan (Republican, Wisconsin) now in charge of the committee, movement on the issue is less certain. The president is likely to visit the issue in his speech, even if movement on it isn't possible in the next couple of years.
Say what you will about the Affordable Care Act, but it seems to be achieving at least some of its major goal, which is to provide health care coverage to the millions of uninsured Americans. Although challenges to the 2010 law will be heard again at the Supreme Court this year, the impact of the ACA on the economy has already been felt, some experts say. Data already suggests more older workers are leaving the work force because they can get cheaper health care without depending on their jobs to provide it, Baker says. That, in turn, is allowing more, younger workers to enter the work force. The president is likely to talk about how the ACA is succeeding and helping the economy.
The Minimum Wage and Sick Leave
The congressional debate about raising the minimum wage has been going on for years, with the House resisting bills to raise the federal minimum to $10.10 an hour. The president issued an executive order that raises the minimum wage for federal contractor workers to that amount in 2014. With a raft of additional states during the midterm elections voting to raise their own minimum wages above the federal rate of $7.25 an hour, Obama is likely to bring the minimum wage up again, as well as paid sick leave for employees. On Thursday, the president signed a memorandum authorizing six weeks of paid leave for new parents who are federal workers. He's expected to ask Congress to pass legislation requiring companies to give workers paid time off for illness, as well as $2.2 billion in grants to states to help support the initiative.
Falling bridges, decaying roads and highways, and aging dams are just a few problems plaguing the nation's infrastructure. The president is likely to push for upgrades during the State of the Union address. That's because a national bill for infrastructure improvement would likely get broad bipartisan support, says Robert Shapiro, a senior policy scholar at Georgetown's Center for Business and Public Policy, and former economic adviser to President Clinton. "Most members of Congress support spending on infrastructure, because they all have bridges and roads in their districts, and as an economic matter, spending in these areas generates very substantial economic benefits," Shapiro says.
Hardly a day goes by without news of a major hack attack against businesses, which potentially jeopardizes millions of customers by putting their financial and other personal information at risk. In December, the hack attack against Sony Corporation went a step further, creating an international event and spurring tense political brinkmanship between the U.S. and North Korea. The president has already discussed creating a national law that would map out a company's responsibilities for customer notification in such scenarios. (Currently there's a patchwork of different laws for all 50 states, each with its own requirements.) Tuesday night will likely serve as a scene setter for security changes to come.