[Congressional Record Volume 149, Number 95 (Wednesday, June 25, 2003)]
[Senate]
[Pages S8551-S8553]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




CREATING AN ASSISTANT SECRETARY FOR MANUFACTURING IN THE DEPARTMENT OF 
                                COMMERCE

  Mr. VOINOVICH. Mr. President, I rise today to ask my colleagues' 
support for legislation I have introduced creating the new position of 
Assistant Secretary for Manufacturing in the Department of Commerce.
  In America we are blessed with ingenuity, gumption, and a can-do 
spirit that is recognized around the world. At the turn of the last 
century we helped lead the world into the Industrial age. American 
inventors gave electricity and air travel to the world.
  As we enter the 21st century, American manufacturing has as much 
potential as it has ever had at any time in our Nation's history. 
Accomplishments in the high-tech industry have been rapidly integrated 
into manufacturing to make our factories and our workers more 
productive, reduce costs, and save time.
  At the same time, substantial new trade, training, energy, labor, and 
foreign competition challenges have arisen. Helping our manufacturing 
interests deal with these challenges is something that private sector 
organizations such as the National Association Manufacturers have done 
well for years. It only stands to reason that we focus resources in the 
Government sector in support of manufacturing as well.
  I am concerned about the slow economic recovery and our Nation's 
declining position in the global marketplace, particularly for 
manufacturing, which is the backbone of our economy, both in Ohio and 
the Nation. There is a genuine panic by the manufacturing community 
over their future and the jobs created from manufacturing. They feel 
they are under siege from environmental regulations, rising health care 
costs, litigation, escalating natural gas costs, and the prospect of 
dramatically higher electricity costs if energy reform legislation is 
not passed.
  First, health care costs continue to rise. Nationwide, we have seen 
double-digit increases in health care premiums over the last 2 years 
alone. In

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Ohio, the business community tells me they are seeing 20 to 50 percent 
increases in their health care costs. These increases raise labor 
costs, decreasing capital that otherwise would be available to make 
investments, and, ultimately, negatively impact our global 
competitiveness. In addition, these costs are being passed on to 
employees, limiting their take-home pay and increasing the number of 
uninsured.
  Second, high natural gas prices are also having a detrimental effect 
on industry in Ohio and across the Nation. Many industries cannot 
compete internationally because of these high prices. Over the last 10 
years, the average price for natural gas has been less than $3.00 per 
million cubic feet (Mcf). This year, companies in Ohio have been paying 
almost $10.00 per Mcf, more than a threefold increase. These price 
spikes are felt the hardest by Ohio's agriculture, chemical, and 
manufacturing industries. In order to be competitive, we cannot afford 
to hamper American companies in this manner.
  Additionally, I have heard from companies in both the manufacturing 
and the chemical sectors that they cannot survive with these high 
prices. In particular, two chemical companies in Ohio have informed me 
that they are considering moving their operations not only out of Ohio, 
but outside of the United States because of these high costs. At the 
same time, suppliers of these companies are considering temporary 
shutdowns because they cannot afford to operate. Ohio's companies have 
not been able to budget and plan sufficiently because these prices have 
been so unpredictable this year.
  As natural gas prices continue to rise, the President's National 
Energy Policy Task Force projects that over 1,300 new power plants will 
need to be built to satisfy America's energy needs over the next 20 
years. As a result of the emissions limits and regulatory uncertainty 
triggered by the Clean Air Act, the Department of Energy currently 
predicts that over 90 percent of these new plants will be powered by 
natural gas. Further, analysis by EIA and the EPA shows that a large 
percentage of coal-fired plants are likely to be replaced by natural 
gas-fired plants in the near future.
  Third, manufacturers need reliable transportation infrastructure to 
bring in supplies and ship out their products. We are a ``just in 
time'' economy and we are falling behind in our national investment in 
highways and bridges. According to the U.S. Department of 
Transportation, for each $1 billion of Federal spending on highway 
construction, 47,500 jobs are created annually. Furthermore, the 
Department estimates that every dollar invested in our highways yields 
$5.70 in economic benefits due to reduced delays, improved safety and 
reduced vehicle operating cost. Clearly, transportation investment in 
needed ``ready-to-go'' projects could go a long way in getting the 
economy back on track.
  Finally, manufacturing companies are distressed by the surge in 
foreign competition, particularly from China. As a matter of fact, if a 
vote were taken today among Ohio manufacturers, many would oppose 
normal trade relations with China.
  These are only a few of the challenges facing American manufacturers. 
Their profitability and survivability is impacted by virtually every 
policy and/or agency within the Federal Government. Moreover, the fact 
that there has been limited coordination of Government policies and 
agencies that impact manufacturing has contributed to a prolonged, 
steady decline of what I believe is the most critical sector of our 
economy.
  According to USA Today, U.S. manufacturers laid off 95,000 workers in 
April--the 33rd consecutive month of decline and the largest drop in 15 
months. Since July 2000, manufacturing has lost 2.6 million jobs. My 
own State of Ohio has lost 154,500 manufacturing jobs, over a 15-
percent decline. New orders for manufactured goods in April decreased 
by $9.4 billion, or 2.9 percent, to $320 billion. This was the largest 
percent decline since November 2001. Shipments decreased by $7.1 
billion or 2.2 percent to $320.6 billion. This was the largest percent 
decline since February 2002.
  According to the National Association of Manufacturers, ``If the U.S. 
manufacturing base continues to shrink at its present rate and the 
critical mass is lost, the manufacturing innovation process will shift 
to other global centers. Once that happens, a decline in U.S. living 
standards in the future is virtually assured.''
  Unfortunately, up to now, there has been no senior level policymaker 
responsible for examining prospective and existing Government policies 
to determine their potential impact on manufacturing. This is more than 
an unfortunate oversight; it is a potential economic disaster. 
Government policies are often developed without regard to their impact 
on manufacturing. Too many Government decisionmakers view manufacturing 
as a ``dying sector'' that is better transferred overseas so Americans 
can focus on the more profitable service sector. What these people fail 
to realize is that manufacturing is the foundation of the service 
sector.
  There is no retail industry without manufactured products to sell. 
There is no transportation industry without manufactured products to 
transport. There is no repair industry without manufactured products to 
repair. Even services such as accounting, financial management, 
banking, and information technology sell their services to 
manufacturers and could not remain profitable without a vibrant 
manufacturing sector.
  Manufacturing growth spawns more additional economic activity and 
jobs than any other economic sector. Every $1 of final demand for 
manufactured goods generates an additional 67 cents in other 
manufactured products, and 76 cents in products and services from 
nonmanufacturing sectors.
  In fact, manufacturers are responsible for almost two-thirds of all 
private sector Research & Development--$127 billion in 2002. In 
addition, spillovers from R&D benefit other manufacturing and 
nonmanufacturing firms.
  Manufacturing productivity gains are historically higher than those 
of any other economic sector. For example, over the past two decades, 
manufacturing averaged twice the annual productivity gains of the rest 
of the private sector. These gains enable Americans to do more with 
less, increase our ability to compete, and facilitate higher wages for 
all employees.
  Manufacturing salaries and benefits average $54,000, which is higher 
than the average for the total private sector. Two factors in 
particular attract workers to manufacturing: one, higher pay and 
benefits, and, two, opportunities for advanced education and training.
  Manufacturing has been an important contributor to regional economic 
growth and tax receipts at all levels of government. During the 1990s, 
manufacturing corporations paid 30 to 34 percent of all corporate taxes 
collected by State and local governments, as well as Social Security 
and payroll taxes, excise taxes, import and tariff duties, 
environmental taxes and license taxes.
  Furthermore, manufacturing is a secure foundation for future economic 
prosperity. Capital investments in factories and equipment tend to 
anchor businesses more securely to a community, a State or a nation. 
When a corporation owns property in a community, they are more likely 
to be an active participant in helping improve the quality of life, 
stability, and economic vitality of that community.
  Our competitors recognize this and are moving rapidly to claim the 
manufacturing preeminence that once characterized the U.S. economy. 
While America's industrial leadership is being squeezed by rising 
health care costs, runaway litigation, excessive regulation and some of 
the highest taxes on investment in the industrialized world, our 
foreign competitors are taking a larger market share with less 
expensive products that make it difficult to raise prices. The result 
is a dramatic decline in manufacturing cashflow that forces firms to 
cut back on R&D and capital investment, and to reduce employment. The 
U.S. manufacturing base is receding--and with it the all-important 
innovation that is the seedbed of our industrial strength and 
competitive edge.
  Unfortunately, while many countries support their manufacturing 
sector with favorable government policies, tax incentives, and even 
financial subsidies, the United States does not even coordinate 
government initiatives that

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might impact our own manufacturers. Within the U.S. Government, 
however, we do have Cabinet level Departments to represent the 
interests of agriculture, transportation, and energy. These three 
sectors combined do not generate as much economic activity, nor employ 
as many individuals as manufacturing. Nevertheless, there is no senior 
level policymaker anywhere in the Federal Government whose sole 
responsibility is the health and growth of manufacturing. Is it any 
wonder we are losing market share to foreign competition?
  The bill I am introducing today will help rectify this unfortunate 
situation. It will establish an Assistant Secretary in the Commerce 
Department who will: one, represent and advocate for the interests of 
the manufacturing sector; two, aid in the development of policies that 
promote the expansion of the manufacturing sector; three, review 
policies that may adversely impact the manufacturing sector; and, four, 
assist the manufacturing sector in other ways as the Secretary of 
Commerce shall prescribe.
  The new Assistant Secretary of Commerce for Manufacturing will also 
submit to Congress an annual report that contains: one, an overview of 
the state of the manufacturing sector in the United States; two, 
forecast of the future state of the manufacturing sector in the United 
States; and, three, an analysis of current and significant laws, 
regulations, and policies that adversely impact the manufacturing 
sector in the United States.
  It is a small step forward but an important one. I look forward to 
working with my colleagues to enact this important legislation.

                          ____________________