[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[Senate]
[Pages 3127-3128]
[From the U.S. Government Publishing Office, www.gpo.gov]




                GROWING OUR MANUFACTURING EMPLOYMENT ACT

  Ms. COLLINS. Mr. President, few issues are as important to the 
American people than the availability of good jobs in their 
communities. Manufacturing jobs have long provided quality employment 
for generations of Americans. Today, however, we are losing these jobs 
at a terrible rate, and no State has been hit harder than my home State 
of Maine.
  According to a study by the National Association of Manufacturers, on 
a percentage basis Maine has lost more manufacturing jobs in the past 3 
years than any other State in the Nation. We have lost nearly 18,000 
manufacturing jobs during that period, good jobs that once provided 
lifelong employment to Mainers in towns such as Millinocket, Wilton, 
Waterville, Fort Kent, Dexter, Westbrook, and Sanford.
  In response to this loss of manufacturing jobs, I have introduced 
legislation, the Growing Our Manufacturing Employment Act, which is 
aimed at reinvigorating the domestic manufacturing sector, boosting the 
level of domestic manufacturing, and preventing the further loss of 
these important jobs.
  Mr. President, I know this is a major problem in your State as well, 
and we have had many conversations on what we might do to help.
  At the national level, we are finally beginning to see the economic 
recovery for which Americans have been longing. Third and fourth 
quarter gross domestic product figures are up dramatically, the best 
two quarters since 1984, and analysts expect the gross domestic product 
to grow by 5.7 percent this year, which would make 2004 the best year 
in the past 20 years.
  But even so, I don't have to tell you that parts of our economy 
simply are not sharing in this good news. Nowhere is this more true 
than in the manufacturing sector, where we have seen a steady erosion 
of good jobs. The number of American manufacturing jobs has declined 
each year since the end of 1997. In fact, if you look at the past 84 
months, since March of 1997, the number of manufacturing jobs has 
declined each and every month, except for 7.
  This loss of jobs has occurred under both Democratic and Republican 
administrations, so this is not a partisan issue. The final 3 years of 
the Clinton administration saw 27 months of manufacturing job losses, 
and the greatest single monthly decline in manufacturing jobs occurred 
in July of 1998 when 219,000 American manufacturing jobs disappeared.
  As I mentioned, nowhere is the reality of this job loss in the 
manufacturing sector more acute than in my home State of Maine. The job 
losses during the past 3 years in the manufacturing sector in Maine 
represent more than 22 percent of my State's total manufacturing 
employment, a higher percentage of manufacturing jobs lost than in any 
other State.
  Why are American manufacturing jobs disappearing? According to a new 
study conducted for the National Association of Manufacturers, one 
answer is the disparity in manufacturing costs in the United States 
versus other countries. In fact, compared to other countries, it costs 
an average of 22 percent more to manufacture goods here.
  While it would surprise no one that American manufacturers face 
higher costs of doing business than manufacturers in countries such as 
China or Mexico, it would be a mistake to assume that wage rates alone 
explain those differences. They do not. In fact, the productivity of 
the American worker is unrivaled, allowing American workers to receive 
more value in wages for the goods they produce.
  As the NAM study indicates, if wages were the only factor, then U.S. 
manufacturers would be far more dominant in the global markets than the 
current trade situation suggests.
  It is other structural costs, such as the high corporate tax rate we 
impose on manufacturers, that make it more expensive to manufacture 
goods in the United States relative to the costs elsewhere. Indeed, the 
NAM study shows it is significantly cheaper to produce goods, even in 
high-wage industrialized countries such as Japan and France. This fact 
illustrates the critical impact these high structural costs have on 
manufacturers in the United States.
  In essence, these costs have the same effect as a tax, as imposing a 
22-percent additional tax on the cost of making goods here rather than 
overseas. To compete, American manufacturers must somehow do more with 
less, move operations overseas, or get out of manufacturing altogether. 
The end result is fewer jobs, a weaker economy, and a manufacturing 
sector in crisis.
  I believe a healthy manufacturing base is essential to our Nation's 
future. Not only is manufacturing a key source of skilled high-paying 
jobs, but it is also critical to our economic and national security 
that we have the ability to manufacture the goods we need in this 
country.
  For all of these reasons, I am proposing the Growing Our 
Manufacturing Employment Act. This bill would eliminate that 22-percent 
cost differential that American manufacturers face by providing a 
variety of tax incentives. For example, a jobs tax credit would be 
provided to manufacturers that employ displaced workers who are 
receiving trade adjustment assistance. That would help get those 
workers back to work.
  In Maine alone, nearly 60 manufacturers are currently TAA-certified, 
and more than 4,200 Maine workers have been deemed eligible for 
benefits under TAA since the beginning of 2002. The credit would only 
be available to manufacturers that increase their employment level. The 
availability of this credit would be a powerful incentive to hire 
workers who are receiving benefits because they have been displaced.
  As important as it is to assist workers who are eligible for benefits 
under trade adjustment assistance, however, this alone is not 
sufficient to address the crisis facing America's manufacturers. That 
is why my bill also includes a 2-year, across-the-board deduction of 9 
percent on domestic manufacturing income, a tax break that would not be 
available for income earned on overseas operations. This, too, would be 
a powerful incentive, a powerful tax break, to help encourage 
manufacturers to keep their operations in America. It would help offset 
that disparity in costs.
  In Maine, the sector that provides the most manufacturing jobs is the 
forest products industry, an industry that is struggling. Paper plant 
after paper plant in Maine has been laying off workers or closing down 
altogether, hurting our economy and leaving thousands of hard-working 
skilled workers without jobs.
  My proposal includes provisions to encourage the recovery of the 
forest products industry, which is critically important not only to my 
State but to many other States, as well.
  My bill, for example, provides a tax credit for reforestation 
expenses and changes the tax treatment for wood harvested on 
nonindustrial woodlots. These changes would both encourage sound 
forestry stewardship practices and also increase the wood supply by 
removing artificial barriers to sound woodlot management. Taken 
together,

[[Page 3128]]

 these provisions will help to ensure an affordable, reliable wood 
supply upon which so many manufacturing jobs in Maine depend.
  Finally, this bill is designed to ensure that only companies that are 
helping to build America's manufacturing base obtain its benefits. It 
has both a carrot and a stick approach. Companies that move jobs 
offshore will see their benefits reduced. For example, they will not be 
able to claim that 9-percent deduction on operations that are located 
in the United States. Companies that choose to invert their corporate 
structure altogether in order to avoid U.S. taxes will not be eligible 
for this credit at all.
  The crisis in the manufacturing sector demands our attention. It did 
not start yesterday, and it will not be resolved tomorrow. Solutions 
can and should be sought today.
  The bill I have introduced is a good start, but additional remedies 
are needed. Manufacturing jobs arise in part because some of our 
trading partners simply do not play by the rules. The Presiding Officer 
has been a leader in this area. Our Nation's manufacturers can compete 
against the best in the world, but they cannot compete against nations 
that provide huge subsidies and other help to their manufacturers.
  I hear from manufacturers in my State time and again whose efforts to 
compete successfully in a global economy simply cannot overcome the 
practices of the illegal pricing and subsidies of nations such as 
China. That is why I will soon be introducing a second bill that will 
help ensure that nations such as China are held fully accountable for 
their actions by our trade remedy laws. Unfair market conditions cannot 
continue to cause our manufacturers to hemorrhage jobs.
  I am hopeful that working together on this and other legislative and 
administrative proposals, we can take the important steps needed to 
strengthen American manufacturers, to preserve our manufacturing 
capacity, and most of all, to help ensure that hard-working Americans 
have the jobs they need and deserve.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. I thank the Chair.
  (The remarks of Mr. Wyden pertaining to the introduction of S. 2160 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. WYDEN. Mr. President, I yield the floor.

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