By: David Shepardson and Kim Kozlowski
The Detroit News
President Barack Obama faces a full second-term agenda that will be critical to Michigan — fighting Asian carp in the Great Lakes, boosting struggling electric vehicles and staving off defense cuts that could cost thousands of jobs.
The biggest issue in the short term is addressing the “fiscal cliff” by Dec. 31.
Unless Congress acts, $1.2 trillion in mandatory defense and domestic spending over 10 years takes effect under an agreement reached last year to raise the debt ceiling. The Bush-era tax cuts will also expire as will a payroll tax cut unless Congress takes action.
The Center for Security Policy said last month the $50 billion to $63 billion in cuts in the first year could cost nearly 1.4 million jobs, including 14,641 jobs in Michigan.
The Obama administration will face dozens of big and small decisions that affect the state, from deciding when to sell the government’s remaining shares in General Motors Co., whether to award a stalled Detroit light rail project $25 million in federal funds and whether to mandate back-up cameras in new cars.
The administration also faces broad national questions including addressing the lingering housing crisis, implementing health care reform and boosting manufacturing employment.
At the same time, Obama plans to reshuffle his cabinet with new faces — who may take new approaches to regulatory issues that affect Michigan industries, including autos, agriculture and tourism.
The most important thing that will happen with Obama’s re-election is concerns are reduced over sequestration, said Jamie Schriner-Hooper, executive director of the Community Economic Development Association of Michigan, a Lansing organization that works to build communities.
Obama said at the final presidential debate last month the automatic spending cuts over 10 years will not happen.
“We’re hopeful that housing tax credits will stay in place,” Schriner-Hooper said. “It will mean that a vast number of nonprofits across the state will not have the majority of their funding cut, from programs (addressing) foreclosure prevention to affordable housing to weatherization to job training.”
Housing advocates are hoping that the re-election of Obama will lead him to fix the problem of the federal Housing and Finance Agency not allowing mortgage reductions for homeowners with underwater loans.
Neeta Delaney, director of the Michigan Foreclosure Task Force, said Romney had said he wanted the mortgage foreclosure crisis to hit bottom, but Obama has implemented some programs to help homeowners at risk of foreclosure. But the president’s attempts to assist struggling homeowners are being hampered by the federal housing agency that backs two-thirds of home loans, and she hopes he will address that during his second term.
In Michigan, 33 percent of homeowners owe more on their mortgage than their home is worth.
“That is a huge number of people that are at high risk of going into foreclosure,” Delaney said.
Health care advocates said Obama returning to office will mean health care reforms won’t be repealed, and benefit up to 2.5 million uninsured Michigan residents.
Romney said he thought the Affordable Care Act was too costly and had he been elected, he promised to repeal parts of the law and give states waivers from complying.
“That would have affected a lot of people in a very negative way,” said Karen Holcomb-Merrill, policy director of Michigan League for Public Policy. “Looking ahead to the future, the Affordable Care Act is going to provide health care access to all people here in Michigan.
“Without that, we could continue to have situations where people and children end up in the emergency room because they don’t have insurance coverage. There are also a number of things under the Affordable Care Act that are designed to make people healthier in general.”
Obama will have to decide when to sell the government’s 26.5 percent stake in GM.
The Treasury — after holding GM stock for 38 months — has offered no timetable for selling the shares.
The Obama administration avoided selling its remaining shares because at current share prices the government would lose about $15 billion on its GM bailout.
“We’ll be patient. So we’ll sell when we think the time is right,” Assistant Treasury Secretary Tim Massad said on CNBC.
The government put an IPO on hold for Ally Financial — of which it owns 74 percent as part of a $17.2 billion bailout — because of weak market conditions and has no plan for how it will sell its stake in the Detroit company that’s the nation’s largest new car lender.
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