Obama touts State of the Union plan to spur US manufacturing

President Obama on Wednesday argued that White House proposals to boost American manufacturing would keep the nation's middle class "growing" and "thriving" by spurring the launch of new factories across the country.  

At the start of a three-day road trip to sell initiatives included in his State of the Union address, Obama told workers at an auto parts plant in Asheville, N.C., his plan would spur economic growth by creating good-paying jobs in struggling communities. 

“I believe in manufacturing,” Obama said at the plant, speaking without his suit jacket, and with his sleeves rolled up. “I believe it makes our economy stronger.”

“Our middle class, when it's growing, when it's thriving … that's the American dream. That's what we have we have to fight for," he added.

Even before Obama touched down in North Carolina on Wednesday, the White House began fleshing out the president’s plan — including the proposal for a $6-billion manufacturing tax credit in the administration's upcoming budget. 

That credit is aimed at helping communities that are hurting after the departure of manufacturing facilities that once anchored and stabilized the local economy.

In his speech, Obama said the departure of these facilities has “a ripple effect” on communities. But he credited companies like Apple for starting to make Mac computers in the U.S. again.

Obama also used the speech to highlight perhaps the most surprising element of his speech on Tuesday night: a call to raise the minimum wage to $9.

“If you work full time, you shouldn’t be in poverty,” Obama said.

On a call with reporters on Wednesday, National Economic Council Director Gene Sperling said that the manufacturing tax credit is intended to insure that a community, "when they're in the process of a major loss doesn't have to wait for the downward spiral."

Sperling said the administration saw Linamar Corp. — which operates the plant Obama spoke at on Wednesday — as an example of how "manufacturing punches above it's weight" by having a positive effect on both the factory workers and the region as a whole.

"When we let our manufacturing supply base be degraded, it's not just that it costs us jobs now, it costs us our ability to compete," Sperling said.

In his remarks on Wednesday, Obama said the country is seeing trends of insourcing.

Still, he acknowledged, it would be impossible to bring back every job lost overseas. 

“I want to be honest with you,” he said. “We’re not going to bring back every job that was lost to outsourcing.”

The White House will also call for a permanent extension — and 20 percent increase — of the research and experimentation tax credit that aims to incentivize new products and manufacturing techniques for American companies.

Those credits will pair with a set of smaller initiatives the president hopes will bring manufacturing back to American shores. The administration is asking for $1 billion for 15 "manufacturing innovation institutes" that would pair the government with local industries and universities in an effort to develop and implement new manufacturing technologies.

The White House is also planning to spend $113 million that would provide planning grants to local communities attempting to lure new businesses. 

And the the president is asking for $20 million to hire 100 federal employees to recruit overseas businesses to the United States. According to Sperling, the effort would match similar programs other nations run to recruit manufacturing to their shores.

The administration has also pledged a stricter enforcement of trade agreements in rules to protect American manufacturers.

"I think one of the very important things that we tried to do from the start is make clear that we are not going to sit by while we are playing by the rules and others are not playing by the rules when it comes to manufacturing," Sperling said. 

This post was updated at 1:57 p.m.