If you want to win a bet next Tuesday, wager your friends
that President Obama will say "Made in America" in the State of the Union
address. It's the closest you'll ever get to a sure thing.
"Made in America" is a wildly popular notion across thepolitical spectrum. The President has uttered the phrase dozens of times overthe past year. So, it shouldn't be shocking for him to say it on January 24.But, what's behind the rhetoric? Is there any "there" there? That's what I'llbe looking for on Tuesday evening.
It's fair to say that this administration has showered moreattention on American manufacturing than it has seen for a long time, and thatour sector of the economy has stabilized somewhat after years of serious decay.But, treading water simply isn't good enough while China passes us, and our highunemployment rate threatens to sink us.
What the President has proposed so far on advancedmanufacturing, insourcing, and skills is all positive, but it is also minor leaguecompared to the efforts of our global competitors. The administration's rescueof General Motors and Chrysler has been good for our economy and consumers (whonow have better cars from which to choose), but it was more akin to emergencyroom care than to a long-term strategy to regrow manufacturing. That's one ofthe reasons why America's share of global manufacturing has declined. It's also why Germany still has over 20percent of its economy in manufacturing while in the U.S. the number is closerto 11 percent.
We know the American people want the White House andCongress to go "all in" for manufacturing. That means better tax, investment,education, and trade policies. There is plenty that the President could do onhis own -- right now -- without having to wade through Congress. As the White Houseis fond of saying, "we can't wait." For instance, the White House could:
- Keep our trade laws strong and strictly enforced. Refocusthe trade agenda by giving American businesses new tools to counter China'scurrency manipulation, industrial subsidies, intellectual property theft, andbarriers to market access.
- Condition new federal loan guarantees for construction ofenergy projects on the utilization of domestic supply chains. Approveadditional applications for renewable and traditional energy projects,contingent on the use of American-made materials.
- Expedite small business loans through the Small BusinessAdministration and Treasury Department to help firms expand, retool, and hire.
- Convene a multilateral meeting to address global imbalancesand in particular Chinese mercantilism. If China doesn't agree to participate,designate it a currency manipulator. (China ships more than one-quarter of itsexports to the U.S. and finances less than 10 percent of our public debt, so wehave more leverage than some might suggest.)
- On the heels of the landmark agreement with automakers onfuel economy standards, secure an additional agreement from all foreign anddomestic car companies to increase their levels of domestic content by at least10 percent over the next three years.
- Direct the Department of Defense to leverage existingprocurement to contractors that commit to increasing their domestic content ofour military equipment, technology, and supplies.
- Promote energy conservation and security by promoting theretrofitting of public buildings with American-made materials and manufacturedgoods, and support private sector efforts to increase industrial energyefficiency.
There is also plenty that Congress can and should do, aswell. Quite honestly, failing to pass any of these proven, popular policies willresult in self-inflicted wounds for our economy.
- Work with congressional leaders to adopt a large-scale,long-term infrastructure plan of at least $500 billion over six years. Leveragecapital from private investors for large-scale transportation and energyprojects by using creative investment measures, such as the establishment of anational infrastructure bank that delivers low-cost loans or loan guarantees.
- Reshape the tax code in a revenue-neutral way to provideincentives for job creation and inward investment. Research and development taxcredits should help firms that not only innovate in America, but also maketheir products here. We should lower tax rates for manufacturing activity inAmerica and expand and renew incentives such as the 48(c) clean energymanufacturing tax credit and up-front expensing for plant and equipmentpurchases.
- Shift some education investment to rebuilding our vocationaland technical skills programs, which would address looming shortages ofqualified workers needed in the manufacturing sector.
These policies aren't partisan or ideological. Takentogether, they will make a real difference. A strong manufacturing base iscritical to many of our economic and strategic goals: rebuilding the middleclass, lowering our budget deficit and the debt we owe to China, and ensuringthat we have the ability to innovate. China's not waiting for us.
If the President really wants to see "Made in America"stamped on products shipped all over the world, he needs to be bold. We'll bewatching. And so will voters.