Trump's speech hits on Michigan themes: Autos, cities, Obamacare

POTUS delivers address to joint session of Congress

WASHINGTON - In his first speech to a joint session of Congress, President Donald Trump on Tuesday night touched on a number of items that could potentially have a direct impact on Michigan, its businesses and its people. Here are some of them:

Taking steps to address urban problems

While Trump was far from specific, he again touched on promises made during his campaign to aid inner cities, mentioning children in Detroit specifically. Saying his plans for tax reform and rewritten trade deals will bring back millions of jobs, he said, “our neglected inner cities will see a rebirth of hope, safety and opportunity.” He also said specifically he will target crime and drugs.

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It remains to be seen, however, what the new president specifically has in mind for cities like Detroit. His plans to rewrite trade bills to create jobs in the U.S. haven’t yet become public and even when they do, tackling joblessness and poverty in inner cities could require an enormously expensive and targeted effort for which Congress would be expected to help pay. One specific he did mention was an “education bill that funds school choice for disadvantaged youth.” But while Trump’s new education secretary, west Michigan’s Betsy DeVos, has long advocated school choice programs and argued that they provide for better educational outcomes, there is also evidence in Detroit that charter schools haven’t been as effective as some supporters have claimed. Meanwhile, a school choice bill may have a difficult time passing a U.S. Senate anytime soon, given the level of Democratic opposition it could face.

Improving infrastructure could be a boon

Trump provided brief notice in his speech that he will ask Congress to approve legislation providing a $1 trillion investment in infrastructure. He wasn’t specific about details — he said the investment would be financed “through both public and private capital” — but if it happens, it could be a boon to Michigan.

Many in Detroit and across Michigan are already looking forward to the jobs that would be created by a new international crossing to be financed by Canada but a major infrastructure bill could generate even more help for other projects, such as the light rail line along Woodward Avenue or, perhaps more significantly, pay for a new super-sized shipping lock at Sault Ste. Marie in northern Michigan where a failure of the one aging lock available to the largest vessels could bring a large part of the economy to a halt. And, as always, there are a host of local road and bridge projects seeking funding.

The real question, again, will be whether Congress would be willing to put up the required funds. While an infrastructure measure could well see backing from Democrats in Congress, it remains to be seen whether fiscally conservative Republicans will embrace such a plan if it requires significant federal funding.

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Trump & UAW in sync on 'Buy American'

One thing about the proposed infrastructure program, however: The UAW and Trump appear to be on exactly the same page when it comes to putting America and American products first.

Trump said his infrastructure investment plan would “be guided by two core principles: Buy American, and Hire American.”

Trump’s “Buy American” slogan is consistent with his campaign promises to “put America first,” and also is in sync with UAW President Dennis Williams.

Earlier this month Williams said the UAW may soon launch a “Buy American” ad campaign urging Americans to buy cars made in the U.S. by union workers.

"We’re seeing a trend in this country — the boycott may be coming back," Williams said at the union's headquarters in Detroit, saying the "Buy American" push is gaining steam for the first time in "many, many years."

Military investment could help Michigan but at what cost?

Throughout the speech, Trump made mention of plans to lift caps on defense spending as he calls “for one of the largest increases in national defense spending in American history.” Recent media reports have said he wants to hike defense spending by some $54 billion.

If he is able to do so, it could potentially provide a boost for Selfridge Air National Guard Base in Macomb County — which is in the running to be home to a contingent of new F-35 fighter jets — as well as for numerous defense contractors that work with the U.S. Army Tank Automotive Command in Warren.

Trump is set Thursday to tout his defense spending plan in an auspicious place for Michiganders: In Norfolk, Va., aboard the U.S.S. Gerald R. Ford, an aircraft carrier named for the state’s only president.

Trump’s plans for military spending, however, apparently come with several caveats: In order to pay for them, he could propose slashing other non-defense programs, which would likely affect services provided to Michiganders, though the cut list is not yet known. Meanwhile, even with Republicans in the majority in both legislative chambers, Trump will have a hard time convincing enough Democrats – and at least some Republicans – to increase defense spending at all.

Fight to vet those from Muslim nations continues

Trump’s executive order halting or delaying refugee resettlement and immigration from certain majority Muslim nations has been suspended by a court order but the president said he will continue to fight to “keep out those who would do us harm.”

His administration is said to be working on a new version of the executive order that would withstand judicial scrutiny. And while he didn’t specifically mention the ongoing court fight, Trump said he still believes it’s necessary to stop “uncontrolled entry from places where proper vetting cannot occur,” presumably meaning the seven countries -- Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen – he targeted in his original order.

The suggestion that the U.S. allows “uncontrolled entry” from those countries is not true – current vetting programs last as long as a year and a half. But some law enforcement officials have argued that there is not enough documentation available on people fleeing some countries, such as Syria, to know they don’t pose a threat.

As long as Trump pursues the policy, however, it will resonate in Michigan and especially in metro Detroit. The state has received more Syrian refugees, for instance, than any state other than California since the beginning of 2015 and the Brookings Institution in Washington has said metro Detroit has more people born in the affected countries -- 64,300 – than any metro area other than greater Los Angeles.

Trump also talked about moving to what he called a “merit-based” system of immigration that would look to let in only those who could support themselves – a proposal that met with some immediate resistance in Michigan.

"Tonight, Donald Trump doubled down on the deportations, and the hateful, divisive attacks on immigrant families and our Muslim neighbors," said Ryan Bates, of Michigan United. "His proposal to eliminate our tradition of family-based immigration is a radical vision straight from the playbook of the far-right.”

A new VOICES office aimed at illegal immigrants

Trump also spoke at length — as he has in the past — about the victims of crimes committed by people in the country illegally, this time proposing the creation of a Victims of Immigration Crime Engagement, or VOICE, office in the Department of Homeland Security. He also invited some victims to attend the speech in the U.S. House chamber, mentioning them by name.

It wasn’t clear from his remarks what his VOICE office would be tasked with doing but it sparked some negative reactions. While much support has gone out to the victims of crimes committed by people in the country illegally, there is no statistical evidence that immigrants are more prone to violent crime than the native-born population — in fact the opposite is true — leading some of Trump’s critics to argue that his rhetoric stigmatizes all immigrants rather than responding to an actual societal problem.

Wait and see on Obamacare

There are more than a million people in Michigan who have insurance coverage under the Affordable Care Act — otherwise known as Obamacare — that Trump again said Tuesday must be repealed to thunderous applause by Republicans in Congress.

While there continues to be a lot of anxiety about what repeal could look like, however, we’re still in the dark as to what Republicans will ultimately replace it with, if anything.

Many Republican leaders, Trump included, say replacement must occur and, on Tuesday, Trump said a “stable transition” is needed to whatever is coming next.

As for the replacement, Trump said Americans with pre-existing conditions must have access to coverage, keeping with a key Obamacare tenet. He also said he would put forward reforms that “expand choice, increase access, lower costs, and, at the same time, provide better health care,” all while apparently getting rid of rules that require all Americans to have coverage.

That could be tricky: The mandate all along was intended to ensure that healthier Americans get coverage to balance out the cost of people needing more expensive care. But the real question when it comes to costs may be who is doing the paying: While Obamacare premiums in many markets have jumped significantly, the government provides subsidies to help low- and some moderate-income people afford them.

Will a replacement plan — providing tax credits so people can purchase their coverage as Trump suggested — be as generous or guarantee there are affordable plans to cover those who want them? We’ll have to wait and see. But Trump did say states should be given “the resources and flexibility they need with Medicaid” — which is something Gov. Rick Snyder has been asking for in support of his Healthy Michigan program.

Ode to automakers through tax reform

Automakers and auto suppliers in Michigan were likely pleased to hear Trump restate his desire to reduce corporate taxes as part of a comprehensive tax reform package.

“We must restart the engine of the American economy — making it easier for companies to do business in the United States, and much harder for companies to leave,” Trump said. “My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone.”

Trump, who wants to renegotiate the North American Free Trade Agreement, has promised to lower taxes on companies doing business in the U.S., which currently are as high as 35%.

Automakers view corporate tax reform as an essential element of a package of pro-business policies that would be necessary to counterbalance the potentially damaging impact of imposing any import tax on goods from Mexico after spending two-and-a-half decades building plants and infrastructure there.

Earlier Tuesday, General Motors CEO Mary Barra expressed reservations about Trump’s proposed border tax, even as the nation's largest automaker continues to back overall corporate tax reform.

Barra told the Economic Club of Washington, D.C., that the tax “if not done very thoughtfully could be very problematic.”

Seeking credit for new auto jobs

Trump once again sought to take credit for new automotive jobs and U.S. investments announced in recent months by the Detroit Three even though most of those jobs were in the works long before Trump was elected.

“Since my election, Ford, Fiat-Chrysler, General Motors, Sprint, Softbank, Lockheed, Intel, Walmart and many others, have announced that they will invest billions of dollars in the United States and will create tens of thousands of new American jobs,” Trump said.

Ford said in January it decided to cancel the construction of a new, $1.6 billion plant in San Luis Potosi, Mexico, where it was going to build the Ford Focus and simultaneously said it would invest $700 million at its plant in Flat Rock.

However, Ford is still going to move production of the Focus to Mexico and will build it at its Hermosillo, Mexico, plant. At the time, Ford CEO Mark Fields said the “pro-business policies” proposed by Trump were among the factors for the decision but said the primary reason for the decision was a changing business environment that reduces the demand for small cars.

In January, Fiat Chrysler Automobiles announced plans to spend $1 billion to retool plants in Toledo and Warren to build more Jeep SUVs and create 2,000 jobs. But all of the jobs Fiat Chrysler announced have been in the works at least since 2015 when the company negotiated a new four-year agreement with the UAW.

The only possible exception is that Fiat Chrysler said it might move some jobs from Mexico to Warren to build heavy duty pickups at some point in the coming years if market demand is strong enough.

On Jan. 17, GM said it would invest $1 billion to upgrade several U.S. plants and said it would create a total of 7,000 new jobs in the U.S. But GM also said the investments had been in the planning stages for some time — denying it was in response to pressure from Trump — while also saying "this was good timing" to make the announcement.

Contact Todd Spangler at 703-854-8947 or at tspangler@freepress.com. Follow him on Twitter at @tsspangler. Staff writer Niraj Warikoo contributed to this story.

© 2017 Detroit Free Press


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