President Obama will deliver his State of the Union message to millions of working people who have lost their jobs or their homes or both. It's essential that he show that he has workable solutions to these dire problems that are plaguing so many Americans.
I would emphasize four solutions: fair trade, financial reform, pension reform and infrastructure modernization.
We desperately need to rebuild our manufacturing base. We won't be able to do it unless we stop sending our jobs and our factories to countries with cheaper labor costs and lower environmental standards. We need to protect our growth industries, such as clean and efficient energy technology. We need to enforce existing trade laws so we can sell such products as beef and cars to countries like Korea, China and Japan. Finally, our government needs to think about buying American products first.
But to do this, we need to reform trade policy and review existing trade agreements. A bill introduced by Rep. Mike Michaud in the House and Sen. Sherrod Brown in the Senate would go a long way to achieving that goal. It's called the TRADE Act. It sets the foundation of how a trade agreement should be negotiated, requiring the protection of workers' rights and of citizens' rights over foreign investors' rights. The bill would also prevent future trade deals from banning 'Buy American' policies.
President Obama should tell the American people that he wants swift passage of the TRADE Act.
Financial reform is another essential element of job creation. We currently have a financial system that allows investors to make money by destroying jobs. They do it using complicated financial products traded in the shadow banking market. We need stricter regulation of that irresponsible behavior now.
The Teamsters have seen firsthand how a handful of reckless investors can nearly kill tens of thousands of jobs overnight.
Earlier this year, they almost killed 30,000 good Teamster jobs at YRC Worldwide Inc. (YRCW), the country's largest trucking company. These investors were making markets in credit default swaps -- basically, betting that the company would default on its debts.
When YRCW needed to exchange its bonds for stock to avert a bankruptcy, a handful of investors with credit default swap coverage held on to their bonds to prevent the exchange from happening. They put at risk 30,000 families so they could make a few profit on the insurance that pays when a company defaults on it loans. Ultimately we prevailed -- the bond exchange was successful and YRCW continues to provide employment for 30,000 Teamsters. But it's a situation that never should have arisen in the first place. And it's a situation that could have been prevented with effective financial regulation under the previous administration. I applaud President Obama for pursuing the necessary financial reforms.
Many people are not aware that Wall Street's recklessness threatens jobs in another way. Wall Street's financial collapse placed a strain on pension funds, causing them to lose billions of dollars. Unrealistic funding requirements may force employers to divert money to pension that they might otherwise use to keep and create jobs. Without funding relief, many jobs will be lost and the economic recovery will be significantly slowed.
Reps. Earl Pomeroy and Pat Tiberi have introduced a bill that will go a long way to solving that problem: The Preserve Benefits and Jobs Act. Enacting this legislation will help many Americans keep their pensions - and many more keep their jobs. President Obama should urge Congress to quickly pass this bill.
Finally, there's a way to create 125,000 jobs a year without adding to the deficit: reauthorizing spending for the Federal Aviation Administration. A bill to do just that has been languishing in Congress for almost three years now.
The FAA, which manages aviation in this country, helps pay for airport construction. FAA reauthorization would allow $34.5 billion to be spent on upgrading and expanding airports throughout the country. What's more, the funding comes from user fees - including taxes on jet fuel and airplane tickets - not from the federal budget.
Fair trade, financial reform and infrastructure modernization are all workable solutions to this country's jobs crisis. Tonight, President Obama needs to rally Republicans and Democrats around these solutions to turn our economy around.
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