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Chemical Industry Derides Obama’s Call For Tax Hikes But Backs Him On Trade

President also wants U.S. to lead international action on climate change

by Glenn Hess , Steven Gibb
January 22, 2015 | A version of this story appeared in Volume 93, Issue 4

Credit: AdMedia / Splash News/Newscom
President Obama urges action on climate change.
Photo of President Obama delivering his State of the Union message on Jan. 20, 2015.
Credit: AdMedia / Splash News/Newscom
President Obama urges action on climate change.

Some chemical industry executives are sharply criticizing President Barack Obama’s call during his State of the Union address on Jan. 20 for higher taxes on top earners, but they welcome his efforts to finalize two key trade agreements.

Obama is proposing tax increases on the wealthy totaling $320 billion over the next decade to pay for expanded tax credits, educational benefits, and other programs for the middle class.

But the “unfortunate reality is that the President’s proposal would ultimately increase an already heavy tax burden on our members,” says Lawrence D. Sloan, CEO of the Society of Chemical Manufacturers & Affiliates.

Obama’s plan for tax hikes may be dead on arrival with Republicans, who control both houses of Congress. But Sloan says he is encouraged that Obama pressed Congress for trade promotion authority (TPA). The process is essential for wrapping up agreements the U.S. is negotiating with Asia and Europe to eliminate tariffs and cut red tape.

TPA would allow the President to submit the deals to Congress for a yes-no vote without amendment. Proponents argue that TPA improves the U.S. bargaining position by assuring trade partners that the agreements they strike will not be altered by Congress.

Most Republicans support the expansion of free trade, but many Democrats argue that TPA leads to bad agreements that ship U.S. jobs abroad and circumvent environmental standards. TPA “surrenders the congressional authority that we may need to protect American workers and American consumers,” Rep. Rosa L. DeLauro (D-Conn.) says.

Obama also doubled down on his climate and energy policies, saying he is determined to see U.S. leadership drive international action on global warming. He struck an aggressive stance toward congressional Republicans who have criticized his executive actions. “I will not let this Congress endanger the health of our children by turning back the clock on our efforts,” Obama said.

A day after Obama’s address, the Republican-led Senate endorsed a statement in a 98-1 vote that “climate change is real and not a hoax.” The statement was added to legislation to approve the proposed Keystone XL pipeline that would carry oil from Canada to the U.S. However, the Senate rejected another statement saying that humans are responsible for climate change.

Energy industry leaders take issue with Obama’s stance. “America’s energy renaissance has profoundly strengthened our economy and is helping the President fulfill many of his policy goals,” says Jack N. Gerard, president of the American Petroleum Institute.

Environmental groups are backing the President’s position. “With each passing year, it becomes increasingly clear that the state of our union is inextricably connected to the state of our climate,” says Citizens’ Climate Lobby, a grassroots advocacy organization.

In response to Obama’s speech, American Chemical Society President Diane Grob Schmidt says, “We need to harness the power of science, in all its disciplines, to address massive problems such as climate change, eradication of disease and illness, developing sustainable energy sources, and providing safe and abundant food and water supplies.”


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