VOL. 129 | NO. 99 | Wednesday, May 21, 2014
Obama Hosts CEOs Whose Firms are Investing in US
JIM KUHNHENN | Associated Press
WASHINGTON (AP) – It's the yin and the yang of the U.S. corporate climate.
At the White House, President Barack Obama played the role of business pitchman Tuesday, saluting executives whose companies have chosen to gain or expand their footprint in the United States.
In Congress the same day, a group of 14 Democratic senators introduced legislation to keep U.S. firms from going in the other direction, using foreign acquisitions to avoid paying higher U.S. corporate tax rates.
Obama welcomed leaders of 11 foreign and U.S.-based firms that have opened new plants in the United States or brought back overseas operations.
The president cited low energy costs, a productive workforce and a "dynamic economy" as major U.S. attractions for corporate investment.
"We want folks to know this is a great place to do business," he told the executives, including Ericsson North America CEO Angel Ruiz, Lufthansa chairman and CEO Carsten Spohr, who met just outside the Oval Office in the White House Roosevelt Room. "We don't always do what it takes to go after business around the world and make sure that they know the benefits of investing in the largest market on Earth."
The roundtable discussion by the executives and top White House officials was part of a week devoted to promoting foreign investments in the United States.
Obama is showcasing the effect of an improving economy on job growth during a congressional election year that finds the public still anxious about employment and financial wellbeing.
Obama's attention to the influx of foreign business coincided with new concern in Congress with a trend of U.S. companies seeking to set up overseas headquarters in part to avoid U.S. tax rates. The Senate legislation, which faces long odds in a divided Congress, would set a two-year moratorium on the ability of corporations to acquire offshore companies in order to shift their addresses to low-tax foreign countries.
The practice, which drew recent prominence when Pfizer Inc. sought to take over British drugmaker AstraZeneca, can cost the U.S. government billions of dollars in lost tax revenue.
"These transactions are about tax avoidance, plain and simple," said Sen. Carl Levin, the main sponsor of the Senate legislation and the chairman of the Senate Permanent Subcommittee on Investigations.
Levin's bill is similar to an Obama administration proposal in its 2015 budget to dissuade companies from making such transactions. The Treasury estimated that the change would generate $17 billion in tax revenue over 10 years.
Seeking to attract business to the U.S., White House advisers said an effort by Obama to streamline U.S. outreach to foreign companies has resulted in $18 billion in new business investments in the United States in 17 different states and territories. They said the program, called SelectUSA, has helped nearly 500 businesses since October.
Foreign direct investments last year rebounded, from $166 billion in 2012 to $193 billion in 2013, still far short of the $310 billion in 2008.
The executives invited to Tuesday's White House round-table discussion were from Ford, chip manufacturer GlobalFoundries, toy maker K'nex, South Korea's Hankook Tire, German airline Lufthansa, Swedish technology firm Ericsson, Danish biotechnology company Novozymes, Canadian apparel maker Richelieu, Belgian materials technology company Umicore, French high-tech company Safran and Switzerland-based Zurich Insurance Group.
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