Hoyer Delivers Keynote Remarks at the National Journal Insiders Conference

For Immediate Release:

March 28, 2011

Contact:

Katie Grant, 202-225-3130

WASHINGTON, DC - House Democratic Whip Steny H. Hoyer (MD) delivered keynote remarks today at the National Journal Insiders Conference. He discussed the Democrats' Make It In America agenda, a plan to spur innovation and grow the middle class by boosting American manufacturing and making investments to ensure the middle class can succeed. Below are his remarks as prepared for delivery:

“Democrats’ overwhelming priority in the 112th Congress is job creation. In the last Congress, we took important steps to pull our country back from the brink of a depression and create as many as 2 million jobs—but we also know that millions of Americans remain out of work. So it’s surprising and disappointing that, almost three months into this new Congress, Republicans have failed to even propose a single job-creating bill. The people we represent deserve better.

“I want to focus today on something that is at the heart of Democrats’ job-creating efforts: the Make It In America agenda. I believe in restoring America’s role as a nation that makes things, in order to restore the middle-class opportunity on which this country was built. In America, making things is also a question of pride. Manufacturing, and the middle-class jobs that come with it, are a part of the American character that we cannot and must not give up. Democrats’ Make It In America agenda is founded on this basic belief: when we make more products in America, more families will be able to Make It In America.

“America became a world power, in part, because so much of what made the world run was made here. And along with that success came an historically large and prosperous middle class. But today, as National Journal told us last winter—in an insightful article by Bruce Stokes called ‘Act II for American Manufacturing?’—fewer Americans are engaged in making things than at any point since World War II.

“Making it in America will require a renewed commitment to our long-term economic and fiscal health. Making It In America is crucial to our economic future for at least three reasons: competitiveness, the middle class, and innovation.

“First, Making It In America matters because competitiveness matters. Every American understands the importance of maintaining our world leadership. I believe, like President Obama believes, in out-innovating, out-educating, and out-building our competitors—especially because countries like Germany, South Korea, and China are investing in their growth just when so many in America want to cut back our own investments. As part of the Administration’s recovery efforts, President Obama has set a goal of doubling American exports over five years. To meet that goal, we have to fight for a fair playing field for our companies and workers—and we have to strengthen our economy with smart investments.

“As Bruce Stokes wrote in the National Journal article I mentioned, ‘exports of goods account for three-fifths of all U.S. sales abroad, paying the bill for imports of consumer products and oil.’ However, he continues, ‘the nation’s share of the world’s manufacturing trade has been shrinking.’ In fact, according to estimates recently published by IHS Global Insight, last year China surpassed America in total dollar value of manufacturing output. And if we follow an ideological plan of reckless cuts to investments in our growth, the gap will continue to widen.

“Second, Making It In America is crucial to the future of the middle class. The decline in manufacturing employment and the decline of our middle class have been closely linked. And both declines were dramatically accelerated under President Bush. From February 2001 to February 2009, nearly one-third of manufacturing jobs in America disappeared. What kind of jobs were they? Unfortunately, they were especially well-paying and attractive to middle-class families: while average total compensation is about $58,000 across all jobs, manufacturing workers receive an average of nearly $71,000, or 22% more. And what happened to the middle class during the Bush years? Median household income fell even as the economy as a whole expanded—the first time in our history that that has happened! When we talk about a ‘lost decade for the middle class,’ we are talking, to a great extent, about a lost decade for manufacturing employment.

“The decline of these well-paying jobs has been an important source of our middle class’s struggles. But not the only source: the skyrocketing costs of higher education and health care have made it increasingly difficult for families to Make It In America. Again, the contrast is stark. Democrats cut out the middleman in college lending and made the largest investment in student lending in history; Republicans unanimously opposed it, and they went on to propose cutting Pell Grants, which would put college even further out of reach. Democrats passed a health care bill that nonpartisan experts agree will help control rising health care costs; Republicans are working to return us to the era of faster-increasing costs and insurance company control.

“Let me point out one more contrast: Democrats agree with President Eisenhower, who said, ‘Workers have a right to organize into unions and to bargain collectively with their employers. And a strong, free labor movement is an invigorating and necessary part of our industrial society.’ We’ve all seen, in recent weeks, what Republicans think of the right to collectively bargain.

“Third and last, Making It In America is crucial to the future of American innovation. Some argue that America can remain an innovation leader while American-invented goods roll off of assembly lines overseas. But that model is failing us.

“Take the example of Amazon’s Kindle 2 e-reader: it originally retailed for $359, approximately $185 of which went to manufacturing costs. As Harvard business professor Wally Shih has observed, the Kindle may have been designed in California—but of those $185 in manufacturing costs that went into every unit, only $40 to $50 of that value, only about 25%, was added in America. Why should that worry us? Because, as Shih writes, missing out on manufacturing the Kindle’s advanced screen means that ‘the U.S. will miss out on the future industries that spring from it—things like large flexible displays, future generations of electronic signage, and plastic electronics….This same story has played out in high-tech industry after high-tech industry.’

“Those industries include everything from computer chips to precision optics to photovoltaic cells. Another example is the production of the advanced batteries that will soon power electric vehicles. Here’s how Intel’s Andy Grove explained it: ‘the U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices….U.S. companies didn’t participate in the first phase and consequently weren’t in the running for all that followed. I doubt they will ever catch up.’ Technologies like these aren’t just important because of their potential to create jobs and growth—but because of their contribution to American energy independence, which, as we’ve all been reminded by events in the Middle East, remains one of our most pressing challenges.

“When we failed to value manufacturing, Grove concluded, ‘we broke the chain of experience that is so important in technological evolution.’ When manufacturing migrates overseas, innovation follows it. America has fallen behind Japan in patent applications, and we’re on pace to be surpassed by China there, as well—and again, one of the causes is a failure to Make It In America. And even if America maintains its innovation edge, without producing goods here we face a future of ever-widening inequality: a growing gap between the ‘creative class’ and the service sector.

“Although I believe the problem is stark, not all the news is bad. Today, under President Obama, manufacturing is leading our economic recovery: in fact, that sector has grown every month for nineteen straight months. This month, we learned that the Institute for Supply Management’s Manufacturing Index, which measures the strength of the sector, is at its highest point in almost three decades.
We’ve also seen success stories about manufacturers bringing jobs back to America—such as Ford’s decision to move 2,000 back to the U.S. from Japan, Mexico, and India. Ford is also planning on adding another 7,000 jobs here in the U.S.

“The Make It In America agenda is about building on that record, creating the conditions that help businesses large and small invent new products here, make them here, and create jobs here. And it’s an agenda that has won support from both business and labor leaders alike.

“President Obama has already signed seven Make It In America bills into law: bills that speed up the patent process for American inventors; support our growing energy sector; create tax cuts and loans for small businesses; support science, technology, engineering, and math education, and more. Many of those bills won bipartisan support.

“And in this new Congress, Democrats and Republicans ought to stand together for smarter job-training, for a fair playing field for American exporters, and for efforts to hold China accountable for its unfair currency manipulation, its labor practices, government ownership of production capacity, and lax environmental controls.

“Next week, in fact, I look forward to joining members of the Democratic Caucus to introduce an expanded Make It In America agenda. It will include a bill to extend the research and development tax credit, which we should make permanent. An extended R&D tax credit will create a stronger incentive for thousands of American companies to invest in new technologies. Extending the R&D tax credit will also help us reclaim our world leadership in innovation, which has fallen off in recent years. In fact, the OECD recently found that the United States ranked a disappointing 24th out of 38 industrialized and developing countries offering R&D tax incentives.

“I will also introduce my own Make It In America bill, which builds job-training partnerships between advanced manufacturing businesses, community and technical colleges, and local workforce investment boards. These partnerships will help meet American businesses’ need for skilled employees—and they will bring new skills and new opportunities to American workers. Advanced manufacturing businesses have already been some of the most successful participants in federal job-training partnerships, and the new legislation I’m introducing will build on that success. Workers with 21st-century skills don't just give individual businesses the talent they need to grow. When the communities with the greatest potential for the growth of advanced manufacturing create links between educators and manufacturers they build what Stokes calls ‘an industrial ecosystem...a local network of companies and resources that help one another survive.’

“Frankly, whenever I speak about Democrats’ priorities for our country, nothing gets the response that Make It In America gets. I think that’s because Making It In America hits a deep chord with Americans, in both senses: in the sense of the pride we take in making things; and in the sense of restoring the culture of opportunity, the expectation of success, and the will to win the future. Make It In America is a much-needed response to the joblessness and displacement felt in communities across our country. But it is also something else: it is an attempt to confront defining challenges that were with our country long before the recession and threaten to stay with us long after.

“If we fail to keep up with our competitors then we won’t simply see the consequences on the news or on lists of international rankings. We’ll see the consequences in every community in America: in vanished jobs, narrower opportunity, and shrunken futures. But with smart policies today, we can avoid that outcome. The best days of American industry and American innovation cannot be, and must not be, behind us. Wise investments, strong partnerships between business and government, and our tradition of making things here all helped build the world’s strongest middle class. As we seek to rebuild and strengthen the middle class, we must turn to those policies again.

“I believe that the values that created America’s middle class—the energy, the hopefulness, the drive to compete and win that built up our country—are more than things of the past. Those values are our inheritance and must be our legacy, as well. They must be the foundation of our future and the success of our children’s country.”

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