[Congressional Record Volume 152, Number 51 (Wednesday, May 3, 2006)]
[Senate]
[Pages S3979-S3980]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE HAMILTON PROJECT
Mr. BAUCUS. Mr. President, America has never lacked challenges, nor
has it lacked the determination and ingenuity to resolve them.
In our Nation's very first hours, we faced stark realities.
Revolutionary War debts put the Treasury $79 million in the red. States
could not retire their debt. Our young Nation had no public credit. We
also had no source of revenue--much less a means to collect it. And
many Americans were as indebted as their Government. The future held
promise, but the present was bleak.
America's first Treasury Secretary, Alexander Hamilton, embraced
these challenges. The day after his appointment--a Saturday--he put in
motion a plan to get our economy on its feet. In his first weeks, he
created a customs service to generate income, established a rudimentary
coast guard for enforcement, and laid the foundation for fruitful trade
relations with Britain.
These first weeks in office proved Hamilton a man of action. The
years that followed showed him a man of vision. The Treasury Secretary
authored the legendary Report on Public Credit, the blueprint for
America's fiscal system. Not without controversy, his plan consolidated
debt and issued new bonds. He raised taxes and set up a national
central bank. The legacy of Hamilton's plan endures today.
Hamilton's action and vision launched our Nation's early prosperity.
But today, we again face mounting challenges.
Using accrual accounting, the 2005 Financial Report of the United
States Government reported that the Government is running a net
operating deficit of $760 billion--more than 6 percent of our economy.
Our foreign debt to GDP ratio has not been this high since Grover
Cleveland was President in the late 19th century.
We face the largest current account deficit in history--more than
$800 billion. A rising China and India are testing our innovative
capacity and the robustness of our manufacturing sector.
We are also neglecting education and the young minds that will define
our future successes. We have forgotten our research institutions that
generate ideas and spur innovation. We are abandoning the basic
infrastructure that buttresses our economic growth. We have let health
care become a burden rather than an asset. We have emptied our saving
accounts and neglected investment.
Like newly independent America, the United States today demands
vision and action.
I have put forward a comprehensive competitiveness initiative to
address these challenges. I have introduced trade competitiveness
legislation to make sure our trading partners play by the rules and
give our companies and workers a fair shot a success. I have introduced
energy competitiveness legislation to promote innovation and research
and reduce our dependence on fossil fuels.
I have also proposed savings competitiveness legislation to close the
fiscal gap and encourage Americans to save. Savings boosts investment
and innovation. This week I will introduce legislation to boost
innovation by revamping and making permanent the R&D tax credit. In the
coming weeks, I will introduce ambitious legislation on education,
health care, and international tax competitiveness.
But I do not pretend to have all of the answers. That is why today I
would like to recognize another initiative that embraces these
competitiveness challenges. It is an initiative that invokes the vision
and action of Alexander Hamilton. This namesake initiative--the
Hamilton Project--led by some of America's brightest minds, is clear in
its vision and bold in the action it promises.
Based on principles--not politics--the Hamilton Project recognizes
that broad-based economic growth in America is stronger and more
sustainable than growth that accrues to a small segment of the
population. The Hamilton Project recognizes that our Nation can pursue
economic security for American workers and economic growth
simultaneously--and that both can be mutually reinforcing. The Hamilton
Project recognizes that effective government plays a critical role in
facilitating our Nation's prosperity and enhancing economic growth.
These principles inform four pillars of action: education and work,
innovation and infrastructure, savings and insurance, and effective
government. Under each pillar, the project promises innovative ideas
and a clear blueprint to realize them. Already, the project has
proposed reducing the skills gap of underprivileged school children and
improving the effectiveness of our teachers. They have put forward
clear proposals to boost savings in America and simplify taxes for the
majority of Americans.
In the coming months, the Hamilton Project will continue to roll out
specific policy proposals in each pillar. The project's work so far
promises clear-eyed, detailed plans for our most pressing challenges. I
look forward to evaluating each proposal. I recommend that my
colleagues take the time to do the same.
Once again, I applaud those at the Hamilton Project for their
initiative. Our challenges may be daunting, but we must all welcome the
challenge.
Upon accepting his nomination as Treasury Secretary centuries ago,
Hamilton understood the hugeness of his task, saying: ``I conceived
myself to be under an obligation to lend my aid towards putting the
machine in some regular motion.'' Let us follow his lead. And let us
lend our aid, and keep this great machine in motion.
Mr. President, I ask unanimous consent to have printed in the Record
the Executive Summary of the Hamilton Project's strategy paper.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Executive Summary
We believe in America's promise: that education and hard
work can provide each individual with the opportunity to
advance and allow each generation to do better than the one
before. Today, however, that promise is in jeopardy because
our nation is neither paying its way nor investing adequately
in its future. Our nation has failed to make the tough
decisions required to advance opportunity, prosperity, and
growth over the years and decades ahead.
The Hamilton Project's economic strategy reflects a
judgment that long-term prosperity is best achieved by making
economic growth broad-based, by enhancing individual economic
security, and by embracing a role for effective government in
making needed public investments. The Project's strategy--
strikingly different from the theories driving current
economic policy--calls for fiscal discipline and for
increased public investment in key growth-enhancing areas.
The Project will put forward innovative policy ideas from
leading economic thinkers throughout the United States--ideas
based on experience and evidence, not ideology and doctrine--
to introduce new, sometimes controversial, policy options
into the national debate with the goal of improving our
country's economic policy.
Many options for addressing the fiscal problem have been
identified; the most pressing need now is not new ideas, but
greater political will and a bipartisan political process.
The president and the leaders of both parties in both houses
need to come together in a special process that recognizes
the critical importance of these issues, acknowledges
differences in views, and works to reach common ground with
joint political accountability.
[[Page S3980]]
The failure to invest wisely in sound policies to promote
economic growth is particularly problematic in light of the
growing competition U.S. workers and firms face as the people
of China, India, and other nations rapidly enter the global
economy. Significant new intellectual work is needed to
identify evidence- and experience-based policies to promote
individual opportunity and strengthen America's economy.
The Project will therefore reach across the country to
encourage many of the nation's leading thinkers to put
forward new proposals and will help bring those ideas to bear
on policy debates in a relevant and effective way.
Economic evidence and experience suggest three principles
on which the Project's economic strategy is premised:
Broad-based economic growth is stronger and more
sustainable: Broad-based growth will be stronger and more
sustainable than growth accruing disproportionately to a
small segment of the population. When public policy
excessively favors relatively few, the economy misses out on
opportunities for innovation and productivity by the many.
Economic security and economic growth can be mutually
reinforcing: Not only does economic growth increase economic
security, but economic security in turn can increase economic
growth--by enabling people to take the risks that promote
growth (such as starting a new business or investing in their
own education), by getting families back on their feet
quickly after unexpected shocks, and by lessening calls for
growth-diminishing policies like closing our markets to
competition.
Effective government can enhance economic growth: Markets
are the cornerstone of economic growth, but government must
invest in critical needs that market forces will not
adequately meet--such as education, infrastructure, and basic
research. Government must rigorously seek efficiency,
increased productivity, and internal reform so that it can
most effectively target its policies to provide necessary
services.
To achieve the goal of strong, sustainable, and broad-based
economic growth, the Project will identify and advance sound
policy ideas that rest upon four pillars:
Education and work: The productive power of the U.S.
economy lies heavily with its people. The Project will
explore ways to improve education--from prekindergarten
through graduate school--to equip America's youth to succeed
in the knowledge-based economy; reform the nation's job
training and vocational education system; and increase work
incentives for low-skilled workers.
Innovation and infrastructure: Innovation fuels growth,
creates jobs, and expands economic opportunity. With global
economic activity becoming increasingly dependent on
technology, the Project will propose ways of making more
workers literate in science and engineering; adopting smarter
incentives for private firms to undertake R&D and removing
barriers to private-sector innovation; increasing the federal
commitment to fundamental scientific research; achieving
energy independence; and improving our nation's physical
infrastructure.
Savings and insurance: The more security that people can
achieve in their personal finances--through both savings and
social insurance--the more confidence they can place in the
future, making them more likely to seize opportunities and
bounce back from adverse events. The Project will be
examining topics such as shoring up health-care coverage and
reducing health-care costs; cushioning the economic shocks of
job dislocation; and increasing retirement security--all in
an effort to provide people with the economic security they
need to be entrepreneurial and invest in their own skills.
Effective government: Government has a limited but
essential role in creating the conditions for growth in which
all Americans can share. The Project will propose ways to
increase government productivity and efficiency; realign
government's activities in response to changing
circumstances; reform government regulation so that it
efficiently guides private firms when necessary without
unduly hampering them; and take measures to make the
Project's proposals budget-neutral.
____________________