AISI Says Obama Budget Proposal 'Needs Actual Action'

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For Immediate Release
April 10, 2013

WASHINGTON, D.C. -- The President’s Fiscal Year 2014 Budget released today emphasizes the importance of energy security, infrastructure investment and American manufacturing to the U.S. economy-- all of which are top priorities for the steel industry.  Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), says the focus on these areas by the Administration “sounds promising, but we need actual action by Congress and the Administration on policies that promote a pro-manufacturing agenda.” 

“Given the fiscal constraints currently facing our country, it is imperative that the federal budget strike a balance between eliminating unnecessary discretionary spending, reforming our unsustainable mandatory spending programs and continuing a necessary level of investment, all the while ensuring job creators are not stymied by unnecessary tax increases or burdensome regulations,” Gibson said. 

He added that AISI has concerns that some of the tax provisions included in the President’s budget could ultimately cause a net tax increase on manufacturers.  For example, provisions to eliminate fossil fuel tax preferences, like percentage depletion and intangible drilling costs, are important to the steel industry and many of our suppliers and customers.  Eliminating them could trigger a negative economic impact.  “While we are still assessing how all of the tax proposals in the President’s budget would ultimately impact manufacturers, for any rewrite of the tax code to produce real economic growth and job creation it cannot simply be a statutory rate reduction that results in an increase in the effective tax rate on manufacturing and triggers a redistribution of wealth from manufacturers to other sectors of the economy,” Gibson added.  

Gibson noted that AISI continues to review the specifics of the budget proposal; however, he said the infrastructure and energy aspects are also crucial to the steel industry.  He lauded the proposed $50 billion for upfront infrastructure investments, including $40 billion for “Fix it First” projects, to invest immediately in repairing highways, bridges, transit systems, and airports nationwide.

“Implementing a long-term, sustainable transportation plan has the possibility of putting thousands of Americans back to work, while improving the safety of our transportation infrastructure.  The Department of Transportation last year reported that every $1 billion of Federal public transportation funding that is similarly matched supports nearly 37,500 jobs.  An efficient infrastructure directly impacts the competiveness of the manufacturing sector, and is critically important to the steel industry as a provider of critical infrastructure materials.”

Gibson concluded that AISI is also supportive of the President’s proposed investments “in manufacturing R&D and the production of domestic natural gas.”

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice.  AISI also plays a lead role in the development and application of new steels and steelmaking technology.  AISI is comprised of 24 member companies, including integrated and electric furnace steelmakers, and 124 associate members who are suppliers to or customers of the steel industry.  AISI’s member companies represent over three quarters of both U.S. and North American steel capacity.  For more news about steel and its applications, view AISI’s Web site at www.steel.org .

Contact: Lisa Harrison
202.452.7115 / lharrison@steel.org

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