As President Obama delivers his State of the Union tonight, he does it against the backdrop of a contracting economy and rising unemployment. As the nation tunes in to hear him chart a path for our nation's prosperity, there are three policy prescriptions the President has already endorsed that, if fully implemented, could provide hope for growing the economy in the near-term. They are comprehensive corporate tax reform, unleashing a powerful broadband information sector, and pursuing unabashedly free and open trade that includes the exporting of domestic natural gas.
These ideas together, and even individually, have the power to unleash American investment and productivity.
First, the United States has the highest corporate tax rate of any developed nation in the world. We know that rate has had a demonstrable and deleterious effect on economic growth. As American companies pile up cash overseas, the corporate tax rate here at home dampens investment, stifles ingenuity, and diminishes the competitive standing of American business in the global market.
The 35 percent marginal tax rate on corporate profits must be reduced, certainly. However, the real, fundamental reform that President Obama has consistently sought requires more than a rate reduction -- it requires simplifying the code itself. And when doing that, the guiding principle for both Democrats and Republicans should be ensuring that our tax code is "uniformly and fairly applied" throughout business.
The U.S. tax code should not be wielded as a means of choosing winners and losers, nor should it be used to penalize companies that have achieved success. Reform that ignores these principles would fall short of the President's goals and would represent no real reform at all.
Second, beyond reforming the tax code we should look to our past for clues as to what can help our economy in the future. A prime example is the global Internet economy - and U.S. dominance of the critical information technology sector from the beginning of its existence. This U.S. dominance is the result of massive private sector investment, which proved to be an irresistible force pulling the Internet from campus laboratories and propelling it around the world -- illuminating discovery, perpetuating freedom, education and fostering enterprise in all corners of the Earth.
President Obama often discusses the importance of getting more Americans online and at faster speeds. To do that, we must maintain our leadership by devising a regulatory model that is as advanced and as dynamic as our 21st century information economy itself. This means eliminating old policies and rules which have no relevance to the dynamic and competitive Internet ecosystem we have today. Modernizing our regulatory structure will encourage continuing private sector investment - and with it, the continuing innovation required for expanding digital opportunity to all Americans regardless of education, income or geographic location.
And third, the President's commitment to increasing domestic energy production -- and the attendant opportunities for exports -- will help form the foundation of an expanding economy.
Natural gas production has led to the creation of thousands of private sector jobs and resurgent investments in U.S. manufacturing. Clean, abundant and already in great demand, American natural gas has been appropriately called a "game-changer" for the U.S. economy.
A recent study commissioned by the Department of Energy demonstrated that the economic benefits from natural gas exports are significant. As more markets worldwide are opened to the sale of American-produced natural gas, growth in international demand will spur growth in both investment and production here at home. In other words, the age-old math about free trade means tremendous opportunities for the American energy industry:
More trade = more supply = more jobs = greater economic expansion = increased government revenues.
Even constrained by outdated policies, American enterprise remains the envy of the world. Now imagine the possibilities if Congress gets behind President Obama's efforts in the areas of tax reform, broadband expansion, and energy production. As Congress and the White House fight over where to cut budgets and where to raise more revenue, it's worth remembering that these three concepts won't cost a dime, but would lead to significant tax revenue and new jobs in short order.
Mr. Ford, a former Democratic congressman from Tennessee, is a professor of public policy at New York University.