[Congressional Record Volume 149, Number 75 (Tuesday, May 20, 2003)]
[House]
[Page H4259]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              LOSING MANUFACTURING AND OUR HIGH-TECH JOBS

  The SPEAKER pro tempore. Pursuant to the order of the House of 
January 7, 2003, the gentleman from Michigan (Mr. Smith) is recognized 
during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I would like to talk about a 
couple of issues that concern me a great deal. One, of course, is the 
growing debt and our unwillingness to deal with the problem of solvency 
for Social Security.
  Social Security is going to run out of money roughly in the next 10 
to 15 years, and we are putting off the problem of solving what do we 
do to keep the program solvent until later. Social Security is probably 
one of our better programs that we have in the United States, and we 
should not put off a solution to keep it going.
  The other issue, of course, that concerns me is our mounting debt and 
overspending. This country is now 227 years old. In the first 200 
years, we mounted a debt of $500 billion. Now at $6.7 trillion we are 
amassing an additional debt of $500 billion every year. We have to 
control overspending. I think it is unconscionable for us to think that 
our problems today are so great that it justifies borrowing from funds 
that our kids are going to have to earn.
  One reason that we have got the problem right now is revenues are 
down, and that brings us to jobs and the economy. I want to speak for a 
moment about losing our manufacturing and our high-tech jobs in this 
country.
  I have been meeting with workers, as I am sure many of my colleagues 
in Congress have been. All of us should be troubled about the 
continuing decline in manufacturing in this country. Products from 
China and other countries are now taking away our business. The 
manufacturing sector accounted for 41 percent of non-farm employment in 
1946. Forty-one percent in 1946, 28 percent in 1980, 18 percent in 1990 
and just 12 percent of our total economy today is manufacturing jobs.
  What does this mean? This means that millions of people are being 
pushed out of manufacturing jobs into service sector jobs that often 
pay less and are less reliable. With other sectors of the economy 
weakening, we have been depending on high-tech jobs with our research 
and technology, but Mr. Speaker, in the last 2 years we have lost 
560,000 high-tech jobs. We need those manufacturing jobs and we need 
those high-tech jobs if we are going to continue to be competitive, if 
we are going to continue to increase our productivity.
  Manufacturing is important to the economy because it is a leader in 
innovation. Manufacturing contributes 57 percent of total U.S. research 
and development funding. Manufacturing has made up almost a constant 
share of total U.S. GDP since the forties, but over that period it has 
varied between 20 and 23 percent of U.S. output.
  With aggressive improvements in efficiency, we would expect the 
manufacturing sector to be growing faster in the international market, 
but it has been under attack from foreign competition, much of which 
seems to be unfair.
  I have spoken with constituents who say that the Chinese companies 
sell products for less than the raw materials cost here. Many suspect 
that Chinese companies are receiving covert subsidies from the Chinese 
Government. It has been suggested that a variety of other governments 
use similar underhanded methods to boost their sales here and reduce 
sales in their home markets.
  What can we do? One thing that we are going to be talking about in 
the next several weeks is should we reduce our overzealous taxation and 
our overzealous regulation on manufacturing. We now tax our 
manufacturers in the United States approximately 18 percent more than 
what they would be taxed if they are located in a foreign country. I 
think we have got to look at the excessive regulation and the excessive 
taxation. As we approach a tax bill, it would be my suggestion, Mr. 
Speaker, that we concentrate on those tax issues that are going to 
allow our manufacturing sector and our business sector to be more 
competitive in an international market.
  One especially harmful action has been the steel tariff imposed by 
the administration. Though the increased price of steel has protected 
some steel workers from foreign competition, it has also resulted in 
more layoffs in the steel-using industries than the total employment of 
the steel making industry. With prices rising by 50 percent or more, 
hundreds of manufacturers that use steel have simply let workers go or 
have transferred production out of the country where steel is cheaper.
  It isn't healthy to have too much of a service economy where we 
import most of our goods and fewer and fewer people actually build 
products. One way to improve things for our manufacturers is to do a 
better, more careful job of negotiating trade treaties and then 
enforcing them. Another is to end counterproductive tariffs like the 
one on steel. We need to make sure our taxes and regulations avoid 
putting our manufacturers at a significant disadvantage. If we don't do 
something, we could weaken our economy and lose our productive 
capacity.

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