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“MAKE IT IN AMERICA: MANUFACTURING MATTERS” mentioning the U.S. Dept. of Commerce was published in the House of Representatives section on pages H554-H560 on Feb. 7, 2012.
The publication is reproduced in full below:
MAKE IT IN AMERICA: MANUFACTURING MATTERS
The SPEAKER pro tempore. Under the Speaker's announced policy of January 5, 2011, the gentleman from California (Mr. Garamendi) is recognized for 60 minutes as the designee of the minority leader.
Mr. GARAMENDI. Mr. Speaker, thank you very much for the opportunity to share with those folks that are watching C-SPAN--and hopefully there are many--some of the issues that really confront America today.
We just heard an hour discussion on the fate of the American family, and it comes at that issue from one specific point of view and one specific section of the total problem, and that has to do with the issue of marriage and how we define marriage here in the United States.
But there's also another way to, and other very, very important issues that define the fate of the American family. And I'd like to take that issue up tonight in the context of the economy.
The American family is faced with many, many challenges. One of the most significant challenges is income, jobs. How can the American family make it in America today? What does it take for an American family to make it?
One of the most compelling charts that I've seen over these last several months is this one, which really describes the fate of the American family compared to the fate of the top 1 percent of Americans. We've seen an enormous shift in the income and the wealth in America over the last 30 years, largely because of governmental policies.
This blue line indicates how well the superwealthy are doing. They've seen nearly a 370 percent increase in their annual income. Their wealth would see a similar enormous increase.
Down here on the bottom are the rest of Americans, the other 99 percent. If you took all of this together, you would see that the bottom 50 percent have seen very, very little increase in their annual income; and most of that increase is due to both husbands and wives working simultaneously.
This is the challenge for the American family. How do they make it in America when, in America, we've seen an enormous decline in the great American manufacturing sector, where the middle class really, really succeeded?
And so, tonight, what I'd like to talk about with my colleagues who will shortly be joining me is how we can make it in America by, once again,
``Making it in America.'' We can do this. In America, manufacturing matters.
American manufacturing has been in deep trouble for the last 20 years. That trouble has been caused by a variety of issues, some of which are beyond the control of anybody in this Nation, and certainly any Member of Congress or the Senate and the Presidency.
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But a far greater part of the American manufacturing issue has been governmental policy.
Let's see if we can lay the foundation for a discussion on what it takes to once again make it in America. This charts shows what has happened to American manufacturing since 1975. In the seventies, American manufacturing peaked out somewhere just under 20 million American jobs. Those were the good days. That's when the American middle class was at its peak, when more Americans were enjoying the greatest share of the wealth in this country. That was the time when America was at its ultimate strength, when we had the greatest economy anywhere in the world.
Beginning in that year in the mid-seventies, we've seen a steady decline of the American manufacturing base. We've seen that decline for a number of reasons. What we need to understand is that through the seventies and into the eighties, and even into the nineties, even though there was a slight decline from some 19 to 17 million manufacturing jobs, it was in the century of 2000-2010 that the great decline took place. We are now down to just over 11 million manufacturing jobs in this country. Why did this happen? Why did we see this great decline?
As we try to answer that question, we need to also understand that there was a great increase in one, two, and three sectors of the American economy, but it was not matched by the manufacturing sector. The manufacturing sector was headed downward from 19 million to just over 11 million jobs. At the same time, the American economy was on fire. The finance, insurance, and real estate economy took off in the United States.
I think all of us have heard the term ``financial engineering.'' I am a graduate of Harvard Business School. Financial engineering was their schtick. That's what they wanted to do. It wasn't over at the engineering or the nuclear engineering or the chemical engineering schools, it was across the river at the business school, and at every other business school in America. If you wanted to make it in America, you had to be a financial engineer.
We saw the economy grow in the areas of Wall Street finance, insurance, real estate. And throughout the nineties, it peaked out. The best and the brightest of America decided that they didn't want to be in manufacturing. After all, that was some sort of dirty, greasy job. They wanted to be financial engineers in real estate, insurance, and Wall Street finance. We know where that got us. What that did to us was get us into the great bubble of 2000-2007, and the great crash that occurred. Financial engineering turned out to be nothing but paper. We're not talking about dollars here; we are talking about worthless paper. That worthless paper nearly crashed the world economy. So there we have it. We became financial engineers rather than chemical engineers, manufacturing, and the rest. Where did our money go? Where did the American wealth go?
As we saw the decline of the jobs in manufacturing, we also saw the rise of imports. If you go back to the year 1976, you will see that we were running a very small trade deficit. We were importing and exporting approximately the same amount. What we were exporting was American-made equipment. We were exporting food that had been processed, food that had been grown. We were exporting machinery, machine tools, and airplanes. We were the great exporter of the world. Then Government policy began to shift, and we wound up here in 2008, the great exporters of American money, the great exporters of American wealth. We need to turn this around.
We've seen a slight improvement here in the most recent years, but all of this red is basically China. What's happened is that the United States has given up its manufacturing power to China, and to a few other countries. We can see this in certain industries, for example, the automobile industry. Thankfully, as a result of laws that were passed by the Democrats and signed by President Obama giving him the power, through the stimulus program, the American Recovery Act, to bail out the American automobile industry, he did. The President said, On my watch, I will not allow the American auto industry to die. And he took action. He bailed out General Motors and Chrysler. In so doing, he saved the American auto industry and the tens of thousands of small businesses that rely upon that industry for their jobs. However, that's only part of the story.
Here is the rest of the story. Other countries that are automotive manufacturers have been able to increase their supply chain. And while we still have an automobile manufacturing sector in the United States, we heavily depend upon imported parts for the assembly of automobiles here in the United States. So other countries actually manufacture the parts, and assemble the autos. But not in the United States. We assemble, but we also import many of the parts.
We can change this, and here is what the Democrats want to do: We want to change the trend line. We want to rebuild the great American manufacturing sector. And we can, with good, wise, public policies. We say make it in America so that America and Americans can make it once again. Manufacturing matters.
As my colleagues begin to join me, I want to share with you some of the ways in which we can do that. Here are the policies that we want to put in place: We want to seek manufacturing within the United States. We want jobs and income within the United States. We are targeting specific industries, and we want to align the trade and tax policies in the United States so that we can once again reignite the American Dream. We're going to go into these in somewhat more detail as my good friend from New York (Mr. Tonko) takes over for a moment.
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Mr. TONKO. I'm always willing to help a sore throat get soothed.
Mr. GARAMENDI. Thank you.
Mr. TONKO. Representative Garamendi, thank you for bringing us together in a manner that allows us to look closely at the American economy, the American Dream, and the decline of manufacturing, which represents a serious concern for workers across the country and which represents a serious concern for communities as we engage in this effort to grow jobs and retain jobs. It's important to look at the statistics out there.
Where was the focus? Where was the emphasis on job creation and job retention? Could we do a better sort of stewardship, if you will, of our resources and our policies? I believe the answer is a resounding, yes, we can do better.
As was made mention by Representative Garamendi, it is important for us to acknowledge that the work done here--the challenges, the crises that face us--can also be transformed into opportunities. The opportunity here for this great Nation--for the powerful force that we are in the global economy--is to reignite the American Dream, to reignite that dream with the underpinnings of support that come through three separate dynamics.
The first is engaging in a small business comeback, inspiring that comeback because small business, the pulse of American enterprise, is replete with a history of mom-and-pop operations, of ancestors that built their American Dreams into an ideas economy, into a service economy that enabled small business to become that very promising enterprise.
The second leg of the stool would be that of entrepreneurs--those movers and shakers, those builders, the dreamers, if you will--in our society who constantly inspire us with job creation that is driven by ideas and by the moving of ideas into a product and enabling us to again create that engine of ingenuity and creativity.
Then, finally, there would be a thriving middle class.
These are the basic principles: a thriving middle class that is driven to have additional purchasing power simply by policy that is done so that there is tax fairness, tax justice, in our outcome. Reigniting the American Dream is driven by those principles of small business, entrepreneurship and of a thriving middle class.
It is a basic, simple approach that we have embraced as Democrats in the House, driven by a set of policies and goals that will enable us to look at all sectors of the economy and to understand that the manufacturing sector was grossly ignored. We focused primarily on service as a sector of the economy--ignored agriculture, ignored manufacturing. When the focus was on the service sector, it was primarily on financial services, which, when they were given free rein--when we turned our backs and said ``do as you like''--we found that that drove America's economy to its knees.
Now we look at the results. We look at the history of the last decade or two. The precipitous loss of manufacturing jobs from 1997 to 2009--a 12-year run--produced a loss of 6 million jobs in manufacturing alone, Representative Garamendi. What that meant--indicated, reflected, personified--was the largest such loss in world history. That is unacceptable.
So, when we talk about reigniting the American Dream, there is work to be done. There is work to be done, and it's time for us to engage in a set of policies, of resource advocacy and goals that are established to create those ladders of opportunity and to enable people to climb up the economic ladder as we had done from our humble beginnings as a Nation, where rags-to-riches scenarios were commonplace and where immigrants saw this land as the promised land. That's history that ought to speak to us, and we can bring it back through the appropriate advocacy here--a climate that creates manufacturing jobs and makes us competitive in a global economy.
Mr. GARAMENDI. Mr. Tonko, thank you very much for joining me. I needed a break.
Mr. TONKO. Yes.
Mr. GARAMENDI. Beyond that, let's talk about the specific policies that we've been discussing here in the House--legislation that has been introduced--that will bring back the American manufacturing sector because, indeed, it was specific laws that were written here over the years that were largely, in my view, responsible for that outsourcing of jobs.
It's an interesting word, ``outsourcing.'' Until December of 2010, an American corporation could receive a tax cut for every job it outsourced. That's largely over. There is a little bit more to be done, but most of those tax breaks have been eliminated by a law that was passed by the Democrats--not one Republican voted for it--eliminating the tax break for the outsourcing of American jobs.
The President said it so very well in his State of the Union. He said that we should not reward companies for sending jobs overseas; rather, we should reward them for bringing those jobs back to the United States. That can be done by some of the policies that we're talking about. The President signed a bill, authored by Democrats and voted on by all Democrats and a few Republicans, that actually encouraged that by giving companies a 100 percent immediate expensing of all capital equipment that they would invest in the United States.
Those are two examples. I know you've got some that you've been interested in, that you're actually authoring, and you may want to talk about those. Then we'll come back and talk about the specific things that we can do.
Mr. TONKO. Absolutely.
I think my response to some of those changes that you just shared is that it creates this sea change. It creates the U-turn in the road, if you will, and it gets everyone's attention. People understand that.
Now we're operating under a different set of principles--you need to invest in America, invest in her workforce and in the job opportunities that will follow. That's what it basically says. When you look at machine tool operations and activity and when you look at it over the last, again, decade or so, you will find, in both categories, Representative Garamendi--of the consumption and production of machine tools--that we're not in the top three. That ought to be a flag that goes up that draws our attention, hopefully, expressing a dire sense of urgency. When you see Japan and China and Germany not only producing the machine tools but also consuming, it tells you where the activity is, and it is robust. That's all a matter of policy. Those are intentional outcomes that were driven by a very focused agenda in these nations, and America--the United States--needs to get back to that agenda.
I applaud the President for setting the tone in his recent State of the Union message. I applaud the leadership in this House, which is coming under the banner of the Democratic leadership, that has engaged in ``Make It In America'' as our mantra. Reigniting our American Dream is within our grasp if we begin to advocate a stand that brings back a robust quality to manufacturing opportunities in this country.
Mr. GARAMENDI. I'll give you another example of how policy can change what has happened.
For a long, long time, we would send our tax dollars overseas to buy buses, railcars, light rail, ferryboats, and the like. Every one of us who buys gasoline or diesel fuel pays a Federal tax on that--18\1/2\ cents for gasoline and 25 cents for diesel fuel. That money is used to build transportation systems--roads, bridges and the like.
And where does it go?
The Buy American laws were largely ignored. However, in the American Recovery Act, in the stimulus bill, money was provided for the additional purchase of railcars, buses, and ferryboats. Somehow, wisely, the Democrats, who authored the bill, put in a clause that said that that money could only be used--only be used--to buy American-made equipment. So what happened in Sacramento, California, is that Siemens, the large German manufacturing company, decided that they would like to have some of that stimulus money. They wanted to build streetcars, light-rail systems, so they opened and expanded their manufacturing plant in Sacramento to manufacture the streetcars for Austin, Texas, and San Diego--made in America because of a law that was passed. It is a prime example of what can be done when we pass the right law that says that our tax money must be used to buy American-made equipment.
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Mr. TONKO. I agree that those are great incentives. If we can provide for employment-linked investments in R&D, in tax credits, that's a feather in the cap; that is a catalyst that draws a great response, a great reaction. Your indications here of procurement, with regard to Buy America, is very important as one of the cornerstones of our agenda. But also, I think we need to focus on the investments in infrastructure and energy and the investments in a different order of infrastructure, the human capital, the human infrastructure, making certain that we move forward with the training and retraining of the American worker, advancing higher education, certainly looking at pre-K through 12, and providing career path opportunities.
Now I mention that because the employment-linked investments in R&D--
bringing back R&D here because where research is, manufacturing follows. So I mention that. But I will use the real-life example of Wynn Kintz, and I have mentioned this before on the floor, but it's a recent example that is worth repeating.
Wynn Kintz of Kintz Plastics in Schoharie County in the 21st Congressional District in New York State----
Mr. GARAMENDI. Who represents that district? It is Tonko?
Mr. TONKO. Oh, I think it's Paul Tonko.
But I use that as an example because in order for Kintz Plastics to compete effectively in a global market, they needed to move to an automated portion of their assembly operations. They worked with the local higher ed infrastructure. And we have the partnerships in this country that have existed for a long time. There is this intellectual exchange of creative genius coming from campuses, working with the private sector, public sector. It happens. It happens to a great degree.
And while they developed this automated assembly process for his industry, they also needed to train the workers on this new equipment so that it brought with it an employment link. And it did that through one of the local community colleges, did an RPI automation design, and then did a Hudson Valley Community College-driven training process so that you developed the workers you needed.
Now, these are the investments that then produce these very tangible results and very lucrative dividends that enable us to prosper. And that's just one small example, but I see it over and over again in the 21st Congressional District. We're a hub of innovation jobs that are coming: green collar, high-tech jobs, clean energy jobs. That's happening because there is a partnership with government, a partnership where government assumes some of the risk, as we do with ARPA-E, a Department of Energy program which has advanced research project moneys. They expedite some of the ideas, innovation concepts, move them along in much quicker stead so that we can develop the jobs associated with that.
So when you talk about the toolkit here, it's an investment in employment-linked R&D and tax credits; and it's an investment in procurement procedures that link themselves with Buy America; and then it's the work investing in infrastructure of a routine kind: wiring communities, wiring the businesses, making certain that our roads, bridges, and rail are state of the art; and then the human infrastructure: creating programs that train, retrain, and educate workers of the future. You need that in a cutting-edge fashion where we can maintain world leadership.
It takes investment. Other nations have shown us that when they invested, they were able to be the giants in the machine operations, the machine tool operation. So it's possible. It's within our reach, and it's all about reigniting the American Dream.
Mr. GARAMENDI. Well, that reigniting of the American Dream will be dependent upon two factors, that is, the public, the small businesses, the entrepreneurs putting together their businesses. And at the same time, it's going to be dependent upon public policies.
You mentioned education. For the last 2 years, the Democrats have been proposing and pushing a series of pieces of legislation to enhance the ability of Americans to go to school. The Workforce Investment Board, very, very important. I suspect that that was one of the programs that your plastics company took advantage of in retraining. Our Republican friends last year, in the budget and in the appropriations, tried to reduce the workforce investment, but we wouldn't have that, and we've been able to at least maintain it.
We were able, on the Democratic side, to increase the Pell Grants so that kids can go to college. Now, I would hope they would go to college to be chemical engineers, process engineers, and not financial engineers, which I discussed early on. But I think that if we can just continue to support the educational system, including such things as vocational education--we used to do vocational education in America. We let it go. And as it went, we saw more and more dropouts. So supporting the educational system.
You mentioned--and I think we need to drive this point home tonight--
the research side of it. This is something, Mr. Tonko, that you know a great deal about. You headed up, as I recall, an organization in the State of New York that was specifically looking at how to enhance the research within the State. Share that and then also share about our policies, as Democrats, for enhancing research.
Mr. TONKO. Sure. Before my involvement here in the House of Representatives, I served as president and CEO of NYSERDA, the New York State Energy Research and Development Authority. And it was there that I got to see policy put into action. I had worked in the State assembly. I had represented the 105th Assembly District in the State of New York for nearly 25 years, the last 15 of which I served as Energy chair. So I got to see that energy policy put into action at NYSERDA where there were very meaningful partnerships with the private sector, where they would retrofit machine operations, manufacturing assembly lines with energy-efficiency outcomes.
Number one, we're the most gluttonous user of energy, as a commodity. It is so important for us to become more resourceful. That should be a social economic goal that is embraced by the Nation. But beyond that, it saves money when we enable these companies to embrace these new technologies in a way that creates a more competitive outcome for them, especially as we move more and more to a global marketplace that is the competing ground.
Also, in so doing, there were opportunities to invest in research. Now, not every story in research is a success story; but the wonderful outcomes, when they are a success story, produce the sort of savings of the environment, savings of our energy supply, and savings of the green, the dollars. Those are quantifiable benefits that ought to be encouraged by policy. And here, what I see is us walking away.
We had a hearing the other day on ARPA-E, on the Energy Department's programs that model themselves after DARPA, with the Defense Department, that gave us a lot of strength for our military, that brought about the application of science and technology, high tech.
Mr. GARAMENDI. The Internet came directly from DARPA. DARPA is a defense research agency.
Mr. TONKO. Exactly. Right. And ARPA-E is the mimicking of that in an advanced research area of energy.
Now we're going to sit there and battle over--perhaps denying dollars to concepts like this when we found out at the hearing that it is expertly managed, very tight-fisted, very laser-sharp in its focus, and has outstanding results.
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We should produce additional resources for a program like that that enables us to stay ahead of the curve, and that ought to be government's mission. If we are going to reignite the American Dream, if we're going to do it through the support of small business, which is the economic engine of our recovery and our comeback scenarios, if we're going to do it by partnering with entrepreneurs, who are the dreamers who develop the ideas for the future that grow into job opportunities, if we're going to do it through a thriving middle class, that takes investment. It takes focus, it takes policy, and it's what we're asking to have done here--reignite the American Dream, create the ladders of opportunity, the ladders that build us to success. It happened in generations past. We saw it driven by groups that came here seeing this Nation as the land of opportunity, a promised land. Why not bring that pioneer spirit back into the front line of our thinking, front and center of our thinking so that what we witnessed in the 21st Congressional District in the humble beginnings of this Nation--my district was the donor area to the Erie Canal that inspired the birth of a necklace of communities called mill towns that became epicenters of invention and innovation, inspired a westward movement--that's what we can achieve here if we stay focused and we believe in reigniting the American Dream.
Mr. GARAMENDI. The reigniting of the American Dream is going to depend upon, once again, those small businesses out there, the entrepreneurs who are willing to take the risks, willing to take their concept and their idea and put it into a business.
Along the way, the history of America, as you well described it with the Erie Canal, we can look at all of the other great industrial advances that have been made. There has always been a partnership between the government and the individual companies and the entrepreneurs that are out there.
For example, the oil industry has enjoyed for more than a century over $13 billion a year of tax subsidies to encourage the production of oil. And there is an incredibly successful partnership between the government, not only with tax subsidies but making the public lands available for the exploration and the extraction of oil over the last 100 years, creating the wealthiest industry in the world.
Now once an industry has matured, as has the oil industry, we should remove those subsidies and use those subsidies for the new industries that we need.
We've been discussing since Carter and the first oil embargo the need for American energy security. Most people now believe that American energy security is going to be based upon the continuation of the oil industry and the coal industry at some level, using the natural gas that we now find is more plentiful than we once thought as a bridge, let the oil and the coal industries wane while we build the renewable industry.
So if we took those tax subsidies that the oil and coal industry have enjoyed for a century, shifted them to the new industries, we could then see a blossoming of the green industries.
In California today, the solar and wind and biofuel industries employ some 320,000 people. It is a growing sector of the American policy. The policies that emanate from Washington, D.C., can either help or hinder that growth. That growth is not only new jobs here in the United States, but it's also energy independence.
The sun shines on the United States. Well, not at night, but it does shine during the day in most parts of the United States. So solar. The wind blows--and I'm not just talking about the wind in this Chamber, but across the Nation. Now, we have to couple that with public policies, and I want to speak to one specific policy, and that is shifting the subsidies that the oil industry has had for a century, shifting those subsidies over to the renewable side of it. Here again on the renewable side, this bill, H.R. 487, I happen to be the author, I'm kind of pleased with this piece of legislation. This bill would require that the subsidies be used to buy American-made solar and wind and other renewable energy equipment.
We should never use our tax dollars to buy a solar panel made in China. We should never use our tax dollars to buy a wind turbine manufactured in Germany. If somebody wants to go out and buy a solar panel using their own money, buy whatever you want. But if it's our tax dollars, buy American. Use our tax dollars to buy American-made equipment. Use that to reignite the American Dream, to build those machines, those solar panels, in the United States. Use our tax money to buy American-made equipment, whether it's a bus, a train, a plane, or a solar panel or a wind turbine. These are public policies that emanate from this House. We can change what's going on in the American manufacturing sector.
Mr. TONKO. Representative Garamendi, as you toss out pieces of the puzzle there, it conjures up all sorts of responses that I think we need to provide and share.
You talk about the intermittent nature of renewables. The sun not shining at night, the wind ceasing to blow, you name it. The hydro facilities perhaps if you have a dry season, whatever. We need to advance the notion of the battery as the linchpin to move forward aggressively with a sustainable agenda which renewables can provide. And so the advanced battery manufacturing that I see taking hold in the 21st Congressional District in Schenectady with the GE operation.
Mr. GARAMENDI. Mr. Tonko, why do we keep coming back to the 21st Congressional District?
Mr. TONKO. It seems to be the one that I know the best. But what I see happening there is, again, a great intellect being poured into design and the concepts of advanced batteries. Not only can these batteries move heavy freight, heavy equipment, they can also deal with storage of renewable, intermittent power. Once you do that, now you've solved the reliability issue, which is so important for our operations of energy.
But to your point, not only is it sustainable and not only does it create energy independence, it speaks to our policies from a national security perspective. We are purchasing from some of the most troubled spots in the world. If we're not doing that at the moment, we inspire, we cause the world market to do that, and a cartel controls our destiny. Is that smart? We are sending hundreds of billions of dollars into treasuries of unfriendly nations that can then use that to train troops against our own American forces. So it speaks eventually and very directly to our national security issues.
And beyond that, when you talk about job creation, when we go energy independent, when we become more resourceful, which we ought to pledge to do simply because no matter how it's generated, no matter what the mix of our supply of energy resources, we need to steward those resources in a very, very deliberate fashion, in a way that is resourceful and not wasteful. So we build alternative technologies, we build into a renewable market, and we do the linchpin activity with the advanced battery design and manufacturing all in the U.S., and then we also provide for the training of the workforce.
When we at NYSERDA had invested in our annual conference on workforce development, green collar job development, in one seminar we had the presentation of how they were training plumbers in Germany in a solar hot water agenda where they were able to put together the training that enabled homes in a very aggressive fashion to use solar panels on their house simply for their hot water purposes. What that could do for a State like California or a State like New York, and en masse cumulatively for the Nation, is an incredible savings to our environment, to our job creation, and to energy costs. Absolutely important. Households will do well. Jobs will be created. The environment will be better addressed, and isn't that the goal of a think tank like the House of Representatives?
Instead, why did we ignore manufacturing for a decade and a half? Why did we avoid dealing with agriculture? Why did we not get into sound energy policy?
I ran for this seat simply driven primarily by the lack of a comprehensive energy plan for this Nation. How can a Nation as great as the United States with all of its small business, all of its manufacturing, its industrial sector, its households demanding a better outcome for energy, how could we not develop a comprehensive energy plan?
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It's what the President has asked us to do. He has challenged us, he's challenged us with fairness in the Tax Code, he has challenged us in a way that will inspire the reigniting of the American Dream driven by that notion of small business support, entrepreneur nurturing, and a thriving middle class. It's achievable, and what I would say, we have the format out there, we have the plan, we have work to do. Let's move forward.
Mr. GARAMENDI. There are so many pieces to this puzzle. You've talked about the research; you've talked about the support of new businesses, particularly in the clean energy sector. As we discuss those things, I keep thinking about what is happening, I think very unfortunately, in this debate. It's a political year, and we've got our elections. We have the election of the President and the Senate, all of those things are up, and so we take issues, and we may take a specific problem and drive that problem to the point of destroying other good programs that are under way.
This is happening right now. The Solyndra case, three times on the floor today I heard the word Solyndra come up. This was a problem, this was a company that was supported by a loan guarantee, and it failed. It largely failed because of China's policy of dumping--dumping on to the American market underpriced solar cells. That's why the company failed.
Now we have the opportunity to deal with this; but before I get to how we can deal with that China problem, I want to just ask my Republican colleagues to be very, very careful as they drive this political issue because they may succeed in making this a big political issue for this country; but by doing so, they may cause America to turn its attention away from renewable energy--the very issue you raised, Mr. Tonko.
We have to have energy security, and renewable energy of all kinds is going to be part of that. So we must be very careful. Whatever political advantage there may be to the Solyndra case, be aware, America, that underlying this is an extremely important policy in the United States to achieve energy independence, to free ourselves from the slavery of the oil barons and dictators around the world so that we can have a secure energy system in the United States.
It will, by necessity, involve renewable energy. Solyndra is a problem. Make it into a political problem, okay, but don't turn Americans' view and hopes away from the renewable, clean energy sector. It is vital, and we have to have policies in place to support that, just as we have supported the oil industry for more than a century.
Put that same support behind the batteries that you talked about, Mr. Tonko; put that same support behind the bio-fuel industry; put that same support behind the solar, wind, and also the smart grid. Right now, in my district, Lawrence Livermore Labs is looking at developing a research program on how to integrate these renewable and variable energy systems into the grid so that they all mesh and provide the energy that is needed by America as it changes hour by hour across the United States--a very, very important research project. All of these things come back to government policy and support. So we must be very careful about that.
I do want to take up the China currency issue and the dumping of, in this case, solar cells on the American market. Would you like to start that discussion, Mr. Tonko?
Mr. TONKO. Just on the grid thing, I would like to make a comment because sometimes it's like we're challenged so that we can walk away from the challenge of the moment, and it's not the best thing for us. In 2003, this Nation witnessed the blackout from Ohio right through southern Canada into the great Northeast, New England, New York and some of the eastern sea coast, all driven by failure in the grid system.
Now, never in that year that elapsed was there much discussion about public policy, and that was a Presidential year that befell the Nation. And it just does not get talked up. Now, finally, historic amounts of investment through the Recovery Act were made in the grid system and challenging us to step it up, do what's required to use state-of-the-
art opportunities for smart grid, smart thermostats, and smart meters enabling people to have more control, more destiny over their energy usage and over their energy bills, making certain that, again, we pour ourselves into an investment of a unique type, a historic investment that enables us to go forward with the sorts of responses that we need.
We need the arteries and veins: the transmission and distribution system to wheel the electrons to the workplace and the home place as it's required. And in New York, again, in our bordering of Canada, if we want to import hydropower from another nation and wheeling now, we've moved well beyond the monopoly setting where you had regional situations. Now you wheel from region to region, State to State and nation to nation. We need upgrades in the system just to transport the electrons that are required.
It's not if we're going to do it; it's when we're going to do it. And the chance that we have right now is to move us forward in a way that strengthens this economy, cuts energy costs, provides for more wise use of those energy supplies, enables us to produce the energy ideas if it's alternative technology or energy efficiency or what have you, but this Nation is replete with a history of invention that has come through very thoughtful application of what is needed out there by society.
For us to have walked away from those challenges is unacceptable. And that's what the grid is telling us right now. You can lay back and say, hey, you don't need an upgraded train system, you don't need an upgraded grid system, you don't need broadband, you don't need all this technology, and you don't need the investment in R&D. Well, that complacency or the contentment that people might feel with the status quo will get us nowhere. In fact, it will push us farther behind as nations bulk up, invest and stretch their opportunities simply by committing to a progressive agenda. And that's what we call for here, to reignite the American Dream.
Mr. GARAMENDI. Well, that American Dream is going to be held back by unfair trade policies that are seriously harming the American economy. Early on, I put this up. I don't know that you were here at the time. This is the American trade deficit. Much of this deficit is a deficit in trade with China. A lot of that deficit is caused by Chinese currency manipulation. The Chinese currency is undervalued somewhere around 20 to 25, maybe 27, percent, which gives their manufacturing sector a 20, 25 percent advantage because of the currency manipulation.
Mr. TONKO. Representative Garamendi, would you yield to a point? I believe I saw earlier a chart that you had on manufacturing jobs. Could you just put that one up on the easel over that pattern there and point to the '97 to 2009 curve? And it's a startling mimicking; those two graphs absolutely mimic each other. I think you can draw a correlation there that deals with the loss of manufacturing jobs as it relates to the trade deficit. I think that is something that ought to guide our discussions, guide our policy development and actually address the sort of response we need in terms of job creation and job retention.
Mr. GARAMENDI. Thank you. I really hadn't noticed, but they almost parallel. One is right on top of the other. You can put that blue line, and it copies the red line that is the growth in the American trade deficit.
I want to just deal with this China thing quickly. We only have another 7 minutes here before we yield the floor. A year ago, this House, with both Republican and Democrat support, passed the China currency legislation that would require the Department of Commerce to put a countervailing tariff on imported Chinese goods if that currency manipulation were to continue.
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It went over to the Senate. It did not pass the Senate. This year--I should say, this session, in 2011, the Senate passed a similar bill that would impose a countervailing tariff on Chinese goods as long as China maintained its currency manipulation. It came over to the House nearly 7 months ago. The Speaker and the Republicans have refused to take up that bill--the very same bill that a previous year we voted on bipartisan.
This is an important piece of legislation because it would deal with two issues: the loss of American manufacturing jobs and the extraordinary trade deficit, that is, the export of American money to China.
It is the policy behind many of the problems in the manufacturing sector, and it is policy changes that we have the power to put in place to reignite the American manufacturing sector, to rebuild it, and, simultaneously, put in place the ladders of success--education, research, entrepreneurship, support of the small businesses--all of those things that actually do reignite the American Dream.
Mr. Tonko, why don't you take the last 2 minutes and then we can wrap up.
Mr. TONKO. Right.
Well, what I hear here is that an election outcome is more important than the outcome for the American worker. And when political party benefit trumps the American worker or trumps America's manufacturing base and trumps hope into the future, that's a regrettable outcome.
What we need to focus on is the big picture. If there is upset and upheaval because we're coming back from what was a very long and deep and painful recession, if that's upsetting news to a political scene, then we have lost the spirit that is required right now to bring America back and to reignite the American Dream.
That reigniting of the American Dream I believe is what people want to see in action. They keep asking Washington to work together in a bipartisan, bicameral, spirited way, work in a way that will engage the policies and advocate for the resources that will build the hope back into the fabric of America's families, her individuals. And it's within our grasp.
These ladders of success, these rungs of opportunity, they are a very achievable goal. We saw what happened when you ignore manufacturing. We saw what happened when you avoid sound agriculture policy. We saw what happened when you didn't get aggressive about an innovative agenda for energy generation, energy alternatives, energy efficiency. These are the things that people are asking us to do as leaders. They say, We asked you to lead, not to sit content with the status quo, not to watch others pass us by.
Our best days lie ahead of us. I'm filled with optimism about reigniting that American Dream. I saw what happened in my district when there was a commitment. You know, the Erie Canal itself, that came about in response to tough economic times. The leadership then said, Let's do this. Let's wed the waters. Let's build a port on the coast out of New York. Let's wed it to the Great Lakes. Let's inspire progress.
And look what happened. That response to troubling economic times drew upon the leadership. It produced the leadership. It gave it a face and it gave it a voice. The message was: We're going to build. We're not going to cut our way to prosperity, cut our way to opportunity, cut hope. We're going to build hope. We're going to build and invest in America, her workers.
Our best days lie ahead of us, Representative Garamendi. Thank you for the chance of joining you this evening.
Mr. GARAMENDI. Thank you, Mr. Tonko.
I notice that we still have a minute. I see my Republican colleagues are going to take the floor in a few moments. If I recall last week when they did this, they said the answer lies in doing away with regulations. Clearly, regulations are a piece of the issue.
Mr. TONKO. Were those regulations the same regulations we wanted to take away from Wall Street?
Mr. GARAMENDI. I would hope that they don't want to eliminate the regulations that we put in place to bring Wall Street under control. But regulations are a small part of the overall problem.
There is a large number of other issues, some of which we've talked about today, others of which we will bring up as we discuss, for example, infrastructure, which will be our next piece. But those regulations that are in place today are there for the protection of key parts of the American economy--worker safety, the pollution regulations so that our streams and rivers are not polluted, our air is not polluted, so there's not mercury and other carcinogens in the air, and regulations dealing with the way in which business operates. Now, they can be modified; but be very, very careful if that is your only solution to the demise of the manufacturing sector, because it is but a small part of the overall issue.
We've discussed many of the other parts here today. We ought to be, all of us, Democrat and Republican, alike in dealing with the twin problems: the trade deficit, and the extraordinary and disastrous loss of manufacturing jobs. This is where the American middle class lost it when the American manufacturing sector declined. We can rebuild it with wise public policies. Wise public policies are what we ought to be doing, rebuilding the American manufacturing sector and reigniting the American Dream as we do that.
Mr. Speaker, I yield back the balance of my time.
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