How Congress can start creating jobs in the U.S.
This op-ed by Alliance for American Manufacturing (AAM) Executive Director Scott Paul is crossposted from its original publication today on The Hill: Congress Blog.
Last Thursday, President Obama suggested that voters give Congress an earful on the horrible state of the economy. He was right to do that. There is plenty that Congress can do to spur private sector job creation that would not swell our federal budget deficit.
Taken together, these steps would provide a significant boost to the productive sector of the American economy. Creating one manufacturing job will support four or five other jobs in the economy, which is why it makes sense to adopt a coordinated manufacturing policy, including:
• Establish a National Infrastructure Bank to leverage capital for large-scale transportation and energy projects.
• Reshape the tax code in a revenue neutral way to provide incentives for job creation and inward investment. R&D tax credits should help firms that not only innovate in America, but make their products here. Lower tax rates for manufacturing activity in America, and eliminate tax shelters for hedge funds or financial transactions that have no real value.
• Apply "Buy America" provisions to all federal spending to ensure that American workers and businesses get the first shot at procurement contracts. (Nothing says "please, steal our jobs" like using subsidized Chinese steel in construction projects.)
• Shift some education investment to rebuilding our vocational and technical skills program, which would address looming shortages in the manufacturing sector.
• Refocus the trade agenda by giving American businesses new tools to counter China's currency manipulation, industrial subsidies, intellectual property theft, and barriers to market access.
• Condition new federal loan guarantees for energy projects on the utilization of domestic supply chains for construction.
Focusing on manufacturing will also lower our trade deficit, which will make it easier for America to pay its bills. But that's only half the story. There is plenty that President Obama could do on his own right now:
• Expedite small business loans through the Small Business Administration and Treasury Department to help firms expand, retool, and hire.
• Convene a multilateral meeting to address global imbalances, and in particular Chinese mercantilism. If China doesn't agree to participate, designate it a currency manipulator. (China ships fully one-third of its exports to the U.S. and finances less than 10 percent of our public debt, so we have more leverage than some might suggest.)
• On the heels of the landmark agreement with automakers on fuel economy standards, secure an additional agreement from all foreign and domestic car companies to increase their levels of domestic content by at least 10 percent over the next three years.
• Direct the Department of Defense to leverage existing procurement to contractors that commit to increasing their domestic content of our military equipment, technology, and supplies.
• Approve additional applications for renewable and traditional energy projects, contingent on the use of American materials in construction.
• Kick any CEO off of federal advisory boards or jobs councils who has: (1) not created net new American jobs over the past five years, or (2) is expanding the company's foreign workforce at a faster rate than its domestic workforce. Replace them with CEOs who are committed to investing in America. (Shame is a good motivator.)
Many of these steps are common sense ways to refocus existing federal programs, policies and investment on what we sorely need the most right now: job creation. Of course, there are major investments in infrastructure, innovation, and education that must be bolstered to prepare America for global competition and provide sustained job growth. If the recommendations of the "supercommittee" fail to include these investments, Congress truly will be dooming the next generation to a lower standard of living.
All of our global competitors leverage their trade policies and public investment this way. America stands alone in protecting an old philosophy rather than our jobs. That must change because our trade deficit leads to a jobs deficit, which contributes mightily to our budget deficit.
Congress, please get to work. Mr. President, please do the same. Stop blaming each other and do your jobs. Otherwise, you might all be looking for work after next November.
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