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Restaurants and the State of the Union

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This post is by Restaurant SmartBrief contributor Janet Forgrieve.

President Barack Obama’s State of the Union address Tuesday night was in many ways more somber than previous years, especially when he spoke about the horrific shooting rampage in Arizona and the serious long-term challenges the country faces as it works to recover from the recession.  But there were a few laughs, including the big one that erupted after the President told his one and only joke of the evening, a food funny that came after his comments on the need to cut government spending, illustrated by the fact that the federal government has two different agencies devoted to overseeing the nation’s salmon supply – one for saltwater, one for freshwater. And I hear it gets even more complicated once they’re smoked,” he riffed.

The speech also included pleas meant to inspire members of Congress to work together to make needed change, much of it on policies that affect the business community. Obama didn’t single out the restaurant industry in any of his comments about the need to balance the budget, cut federal spending and invest in innovation, but some of his proposals are likely to affect eateries if they come to pass.

Tweaking the health care bill

Obama alluded to Republicans’ attempts to overturn health care reform policy enacted last year, before saying that he’s open to any and all ideas for cutting costs and improving care. He also asked Congress to address an unintended consequence of the massive bill that puts an onerous burden on small business owners. That comment referred to a new requirement that forces all businesses to submit IRS 1099 forms for any vendor to whom they pay more than $600 in any given year, a provision that nobody on either side of the aisle really thinks is a good idea and is likely to become history before any companies are required to comply.

Job growth and immigration

The most recent numbers from the Bureau of Labor Statistics show restaurants added jobs for five consecutive months last year, reversing a recession-era trend of declines and capping the gains with a 24,500-job increase in December. Obama’s speech focused largely on investing in tech innovation and education to both create the high-wage jobs of the future and prepare the workforce to fill them, but he also spoke about the need to reform immigration policies that result in U.S. universities training foreign students to become the next generation of innovators and highly skilled workers, only to lose them as potential job creators here when they’re sent back home after graduation. And his immigration remarks also included a plea to change policies that force the children of undocumented workers to live outside the mainstream, unable to contribute to the country’s workforce and economic growth, despite their American upbringings.

Lowering the corporate tax rate

The President’s proposal to cut the corporate tax rate across the board and do away with exemptions that only apply in specific situations won praise from the business community. A plan put forth in November by a commission appointed by the administration recommended cutting the rate to 28% from 35%, while eliminating a slew of exemptions including research tax credits and tax breaks for domestic manufacturers in order to keep from adding to the deficit.

Restaurant blogger

On the eve of Obama’s speech, FohBoh restaurant blogger Michael L. Atkinson offered his statement on the State of the Restaurant Industry. The industry is strong, he writes, and the players began 2011 on a much more optimistic note than they did last year. Individuals and companies throughout the industry food chain are working together more than ever and using social media to drive innovations in marketing and other aspects of the business.  “What I see has changed is attitude and a growing willingness, by all stakeholders in this industry, to work together.”

Photo credit: CrackerClips via iStock