[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.

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