[Congressional Record (Bound Edition), Volume 151 (2005), Part 17]
[Senate]
[Pages 22767-22772]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      KEEPING OUR COMPETITIVE EDGE

  Mr. ALEXANDER. Mr. President, in May, Senator Jeff Bingaman and I, 
with the encouragement of the Senate Energy Committee Chairman, Pete 
Domenici, asked the National Academies of Sciences and Engineering and 
the Institute of Medicine the following question: What are the top 10 
actions, in priority order, that Federal policymakers could take over 
the next decade to help the United States keep our advantage in science 
and technology? That was our question.
  To answer the question, the academies assembled a distinguished panel 
of business, government, and university leaders, headed by Norm 
Augustine, the former chair of Lockheed Martin. The panel also included 
three Nobel Prize laureates. The panel took our question seriously, and 
I intend to do everything within my power to take their recommendations 
seriously. Tomorrow, the Energy Committee will take the first step in 
that response by holding a hearing to hear from Mr. Augustine and the 
Academies. It will be the first opportunity Congress will have to hear 
their answer to our question.
  This hearing is primarily about brainpower and the relationship of 
brainpower to good American jobs. The United States produces almost 
one-

[[Page 22768]]

third of all the wealth in the world, in terms of gross domestic 
product but has only 5 percent of the world's population. We are a 
fortunate country indeed. The Academies explained this phenomenon in 
this way:

     . . . as much as 85 percent of measured growth in U.S. income 
     per capita is due to technological change.

  This technological change is the result, in the report's words, of an 
outpouring of:

     . . . well-trained people and the steady stream of scientific 
     and technological innovations they produce.

  The United States has taken extraordinary steps to help create this 
outpouring of trained people and new discoveries that have given us 
such a disproportionate share of the world's wealth. We have in our 
country almost all of the world's great research universities. We have 
a unique array of 36 Federal research laboratories. More Americans 
attend college than people in any other country, and the colleges they 
attend are the best in the world. We have had, until at least recently, 
a system of K-12 education unsurpassed in the world.
  Government support for all these enterprises has been massive. In 
2001, the Federal Government spent $22.5 billion for university-based 
research in science and engineering. This year the Government will 
provide 60 percent of American students with grants or loans to help 
them attend the college or university of their choice. The Federal 
Government will spend nearly $17 billion on grants and work-study 
programs and will provide an additional $52 billion in student loans.
  In my last year as Governor of Tennessee, and I am sure it must have 
been as true in Ohio as well, or nearly true, half of State dollars and 
a larger proportion of local tax dollars went to support education. Our 
free-market environment encouraged innovation and enterprise, as well 
as billions of dollars invested in corporate research. Finally, to top 
it all off, while we have been outsourcing jobs, we have been 
insourcing brainpower--572,000 foreign students attend our colleges and 
universities. One-half of the students in our graduate programs of 
engineering, science, and computing are foreign students.
  There are three reasons I put this question to the National 
Academies. First, Congress is facing huge budget challenges over the 
next decade as we grapple with restraining the growth of entitlement 
spending. I did not want tight budgets to squeeze out the necessary 
investments in science and technology that create good jobs. Second, as 
the Augustine report details, there are worrisome reports from all 
sides in the new competitive world marketplace that the United States 
will have to make an even greater effort to keep our high standard of 
living. To put it bluntly, people in India, China, Singapore, Finland, 
and Ireland know very well that since their brains work similar to our 
brains, if brainpower is the secret weapon to produce good jobs, then 
there is no reason they can't have a standard of living more similar to 
ours. They are working to develop better trained citizens and create 
their own stream of discoveries.
  Third, I wanted to ask this question to those who should know the 
answer. Members of Congress are not the best ones to guess what the 
first 10 things we should do are, in the next 10 years, to keep our 
science and technology edge. This panel represents the best of those 
brains. Congress is not efficiently organized to deal with broad 
recommendations such as these. I intend to work with my colleagues to 
see that all of the recommendations in the report are introduced and 
given a fair hearing in various committees that have jurisdiction. I 
see the senior Senator from Missouri and the Senator from Ohio. Both of 
them have been leaders in this body on this very question of how do we 
keep our secret weapon, our brainpower advantage, in order to keep good 
jobs.
  But what should happen is that President Bush should make this report 
the subject of his State of the Union Address and the focus of his 
remaining 3 years in office. This challenge cries out for executive 
leadership. This challenge is the real answer to most of our hopes and 
the solution to most of our big problems. From high gasoline prices to 
the outsourcing of chemical industry jobs, from the shortage of 
engineers to the growing number of lower wage jobs, from energy 
independence to controlling health care costs, this is the challenge 
that most Americans wish their Government would put up front.
  We have begun the discussion with a bipartisan question to the wisest 
Americans who know the answer. We have a remarkable opportunity now 
because of the Augustine report, upon which we will have our hearing 
tomorrow. We will have an opportunity now to act on the recommendations 
of that report in the same spirit.
  Mr. President, I ask unanimous consent to have printed in the Record 
the following items: A copy of the executive summary of the Augustine 
report entitled ``Rising Above the Gathering Storm.'' This is the 
report of the National Academy of Sciences, National Academy of 
Engineering, and the Institute of Medicine--4 recommendations with 20 
specific steps that we ought to take over the next 10 years to keep our 
brainpower advantage so we can keep good jobs. Second, I ask unanimous 
consent to have printed after that the article by Thomas L. Friedman in 
the New York Times, on October 14, called ``Keeping Us in the Race,'' 
which is his commentary on the Augustine report.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Rising Above the Gathering Storm


                    Committee Biographic Information

       NORMAN R. AUGUSTINE [NAE] (Chair) is the retired chairman 
     and CEO of the Lockheed Martin Corporation. He serves on the 
     President's Council of Advisors on Science and Technology and 
     has served as undersecretary of the Army. He is a recipient 
     of the National Medal of Technology.
       CRAIG BARRETT [NAE] is chairman of the Board of the Intel 
     Corporation.
       GAIL CASSELL [IOM] is vice president for scientific affairs 
     and a Distinguished Lilly Research Scholar for Infectious 
     Diseases at Eli Lilly and Company.
       STEVEN CHU [NAS] is the director of the E.O. Lawrence 
     Berkeley National Laboratory. He was a cowinner of the Nobel 
     prize in physics in 1997.
       ROBERT GATES is the president of Texas A&M University and 
     served as Director of Central Intelligence.
       NANCY GRASMICK is the Maryland State Superintendent of 
     Schools.
       CHARLES HOLLIDAY JR. [NAE] is chairman of the Board and CEO 
     of DuPont.
       SHIRLEY ANN JACKSON [NAE] is president of Rensselaer 
     Polytechnic Institute. She is the immediate past president of 
     the American Association for the Advancement of Science and 
     was chairman of the U.S. Nuclear Regulatory Commission.
       ANITA K. JONES [NAE] is the Lawrence R. Quarles Professor 
     of Engineering and Applied Science at the University of 
     Virginia. She served as director of defense research and 
     engineering at the U.S. Department of Defense and was vice-
     chair of the National Science Board.
       JOSHUA LEDERBERG [NAS/IOM] is the Sackler Foundation 
     Scholar at Rockefeller University in New York. He was a 
     cowinner of the Nobel prize in physiology or medicine in 
     1958.
       RICHARD LEVIN is president of Yale University and the 
     Frederick William Beinecke Professor of Economics.
       C.D. (DAN) MOTE JR. [NAE] is president of the University of 
     Maryland and the Glenn L. Martin Institute Professor of 
     Engineering.
       CHERRY MURRAY [NAS/NAE] is the deputy director for science 
     and technology at Lawrence Livermore National Laboratory. She 
     was formerly the senior vice president at Bell Labs, Lucent 
     Technologies.
       PETER O'DONNELL JR. is president of the O'Donnell 
     Foundation of Dallas, a private foundation that develops and 
     funds model programs designed to strengthen engineering and 
     science education and research.
       LEE R. RAYMOND [NAE] is the chairman of the Board and CEO 
     of Exxon Mobil Corporation.
       ROBERT C. RICHARDSON [NAS] is the F.R. Newman Professor of 
     Physics and the vice provost for research at Cornell 
     University. He was a cowinner of the Nobel prize in physics 
     in 1996.
       P. ROY VAGELOS [NAS/IOM] is the retired chairman and CEO of 
     Merck & Co., Inc. He serves as chairman of New Jersey's 
     Commission on Jobs, Growth, and Economic Development.
       CHARLES M. VEST [NAE] is president emeritus of MIT and a 
     professor of mechanical engineering. He serves on the 
     President's Council of Advisors on Science and Technology and 
     is the immediate past chair of the Association of American 
     Universities.
       GEORGE M. WHITESIDES [NAS/NAE] is the Woodford L. & Ann A. 
     Flowers University Professor at Harvard University. He has

[[Page 22769]]

     served as an adviser for the National Science Foundation and 
     the Defense Advanced Research Projects Agency.
       RICHARD N. ZARE [NAS] is the Marguerite Blake Wilbur 
     Professor of Natural Science at Stanford University. He was 
     chair of the National Science Board from 1996 to 1998.
       FOR MORE INFORMATION: This report was developed under the 
     aegis of the National Academies Committee on Science, 
     Engineering, and Public Policy (COSEPUP), a joint committee 
     of the three honorific academies--the National Academy of 
     Sciences [NAS], the National Academy of Engineering [NAE], 
     and the Institute of Medicine [IOM]. Its overall charge is to 
     address cross-cutting issues in science and technology policy 
     that affect the health of the national research enterprise.
       More information, including the full body of the report, is 
     available at COSEPUP's Web site, www.nationalacademies.org/
 cosepup.


                           EXECUTIVE SUMMARY

       The United States takes deserved pride in the vitality of 
     its economy, which forms the foundation of our high quality 
     of life, our national security, and our hope that our 
     children and grandchildren will inherit ever-greater 
     opportunities. That vitality is derived in large part from 
     the productivity of well-trained people and the steady stream 
     of scientific and technical innovations they produce. Without 
     high-quality, knowledge-intensive jobs and the innovative 
     enterprises that lead to discovery and new technology, our 
     economy will suffer and our people will face a lower standard 
     of living. Economic studies conducted before the information-
     technology revolution have shown that even then as much as 
     85% of measured growth in U.S. income per capita is due to 
     technological change.
       Today, Americans are feeling the gradual and subtle effects 
     of globalization that challenge the economic and strategic 
     leadership that the United States has enjoyed since World War 
     II. A substantial portion of our workforce finds itself in 
     direct competition for jobs with lower-wage workers around 
     the globe, and leading-edge scientific and engineering work 
     is being accomplished in many parts of the world. Thanks to 
     globalization, driven by modem communications and other 
     advances, workers in virtually every sector must now face 
     competitors who live just a mouse-click away in Ireland, 
     Finland, China, India, or dozens of other nations whose 
     economies are growing.


                        CHARGE TO THE COMMITTEE

       The National Academies was asked by Senator Lamar Alexander 
     and Senator Jeff Bingaman of the Committee on Energy and 
     Natural Resources, with endorsement by Representatives 
     Sherwood Boehlert and Bart Gordon of the House Committee on 
     Science, to respond to the following questions: What are the 
     top 10 actions, in priority order, that federal policy-makers 
     could take to enhance the science and technology enterprise 
     so that the United States can successfully compete, prosper, 
     and be secure in the global community of the 21st Century? 
     What strategy, with several concrete steps, could be used to 
     implement each of those actions?
       The National Academies created the Committee on Prospering 
     in the Global Economy of the 21st Century to respond to this 
     request. The charge constitutes a challenge both daunting and 
     exhilarating: To recommend to the Nation specific steps that 
     can best strengthen the quality of life in America--our 
     prosperity, our health, and our security. The committee has 
     been cautious in its analysis of information. However, the 
     available information is only partly adequate for the 
     committee's needs. In addition, the time allotted to develop 
     the report (10 weeks from the time of the committee's meeting 
     to report release) limited the ability of the committee to 
     conduct a thorough analysis. Even if unlimited time were 
     available, definitive analyses on many issues are not 
     possible given the uncertainties involved.
       This report reflects the consensus views and judgment of 
     the committee members. Although the committee includes 
     leaders in academe, industry, and government--several current 
     and former industry chief executive officers, university 
     presidents, researchers (including three Nobel prize 
     winners), and former presidential appointees--the array of 
     topics and policies covered is so broad that it was not 
     possible to assemble a committee of 20 members with direct 
     expertise in each relevant area. Because of those 
     limitations, the committee has relied heavily on the judgment 
     of many experts in the study's focus groups, additional 
     consultations via e-mail and telephone with other experts, 
     and an unusually large panel of reviewers. Although other 
     solutions are undoubtedly possible, the committee believes 
     that its recommendations, if implemented, will help the 
     United States achieve prosperity in the 21st century.


                                FINDINGS

       Having reviewed trends in the United States and abroad, the 
     committee is deeply concerned that the scientific and 
     technical building blocks of our economic leadership are 
     eroding at a time when many other nations are gathering 
     strength. We strongly believe that a worldwide strengthening 
     will benefit the world's economy--particularly in the 
     creation of jobs in countries that are far less well-off than 
     the United States. But we are worried about the future 
     prosperity of the United States. Although many people assume 
     that United States will always be a world leader in science 
     and technology, this may not continue to be the case inasmuch 
     as great minds and ideas exist throughout the world. We fear 
     the abruptness with which a lead in science and technology 
     can be lost--and the difficulty of recovering a lead once 
     lost, if indeed it can be regained at all.
       This Nation must prepare with great urgency to preserve its 
     strategic and economic security. Because other nations have, 
     and probably will continue to have, the competitive advantage 
     of a low-wage structure, the United States must compete by 
     optimizing its knowledge-based resources, particularly in 
     science and technology, and by sustaining the most fertile 
     environment for new and revitalized industries and the well-
     paying jobs they bring. We have already seen that capital, 
     factories, and laboratories readily move wherever they are 
     thought to have the greatest promise of return to investors.


                            RECOMMENDATIONS

       The committee reviewed hundreds of detailed suggestions--
     including various calls for novel and untested mechanisms--
     from other committees, from its focus groups, and from its 
     own members. The challenge is immense, and the actions needed 
     to respond are immense as well.
       The committee identified two key challenges that are 
     tightly coupled to scientific and engineering prowess: 
     Creating high-quality jobs for Americans and responding to 
     the nation's need for clean, affordable, and reliable energy. 
     To address those challenges, the committee structured its 
     ideas according to four basic recommendations that focus on 
     the human, financial, and knowledge capital necessary for 
     U.S. prosperity.
       The four recommendations focus on actions in K-12 education 
     (10,000 Teachers, 10 Million Minds), research (Sowing the 
     Seeds), higher education (Best and Brightest), and economic 
     policy (Incentives for Innovation) that are set forth in the 
     following sections. Also provided are a total of 20 
     implementation steps for reaching the goals set forth in the 
     recommendations.
       Some actions involve changes in the law. Others require 
     financial support that would come from reallocation of 
     existing funds or, if necessary, from new funds. Overall, the 
     committee believes that the investments are modest relative 
     to the magnitude of the return the Nation can expect in the 
     creation of new high-quality jobs and in responding to its 
     energy needs.


  10,000 TEACHERS, 10 MILLION MINDS AND K-12 SCIENCE AND MATHEMATICS 
                               EDUCATION

       Recommendation A: Increase America's talent pool by vastly 
     improving K-12 science and mathematics education.
       Implementation Actions. The highest priority should be 
     assigned to the following actions and programs. All should be 
     subjected to continuing evaluation and refinement as they are 
     implemented:
       Action A-1: Annually recruit 10,000 science and mathematics 
     teachers by awarding 4-year scholarships and thereby 
     educating 10 million minds. Attract 10,000 of America's 
     brightest students to the teaching profession every year, 
     each of whom can have an impact on 1,000 students over the 
     life of their careers. The program would award competitive 4-
     year scholarships for students to obtain bachelor's degrees 
     in the physical or life sciences, engineering, or mathematics 
     with concurrent certification as K-12 science and mathematics 
     teachers. The merit-based scholarships would provide up to 
     $20,000 a year for 4 years for qualified educational 
     expenses, including tuition and fees, and require a 
     commitment to 5 years of service in public K-12 schools. A 
     $10,000 annual bonus would go to participating teachers in 
     underserved schools in inner cities and rural areas. To 
     provide the highest-quality education for undergraduates who 
     want to become teachers, it would be important to award 
     matching grants, perhaps $1 million a year for up to 5 years, 
     to as many as 100 universities and colleges to encourage them 
     to establish integrated 4-year undergraduate programs leading 
     to bachelor's degrees in science, engineering, or mathematics 
     with teacher certification.
       Action A-2: Strengthen the skills of 250,000 teachers 
     through training and education programs at summer institutes, 
     in master's programs, and Advanced Placement and 
     International Baccalaureate (AP and IB) training programs and 
     thus inspires students every day. Use proven models to 
     strengthen the skills (and compensation, which is based on 
     education and skill level) of 250,000 current K-12 teachers:
       Summer institutes: Provide matching grants to state and 
     regional 1- to 2-week summer institutes to upgrade as many as 
     50,000 practicing teachers each summer. The material covered 
     would allow teachers to keep current with recent developments 
     in science, mathematics, and technology and allow for the 
     exchange of best teaching practices. The Merck Institute for 
     Science Education is a model for this recommendation.
       Science and mathematics master's programs: Provide grants 
     to universities to offer

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     50,000 current middle-school and high-school science, 
     mathematics, and technology teachers (with or without 
     undergraduate science, mathematics, or engineering degrees) 
     2-year, part-time master's degree programs that focus on 
     rigorous science and mathematics content and pedagogy. The 
     model for this recommendation is the University of 
     Pennsylvania Science Teachers Institute.
       AP, IB, and pre-AP or pre-IB training: Train an additional 
     70,000 AP or IB and 80,000 pre-AP or pre-IB instructors to 
     teach advanced courses in mathematics and science. Assuming 
     satisfactory performance, teachers may receive incentive 
     payments of up to $2,000 per year, as well as $100 for each 
     student who passes an AP or IB exam in mathematics or 
     science. There are two models for this program: the Advanced 
     Placement Incentive Program and Laying the Foundation, a pre-
     AP program.
       K-12 curriculum materials modeled on world-class standards. 
     Foster high-quality teaching with world-class curricula, 
     standards, and assessments of student learning. Convene a 
     national panel to collect, evaluate, and develop rigorous K-
     12 materials that would be available free of charge as a 
     voluntary national curriculum. The model for this 
     recommendation is the Project Lead the Way pre-engineering 
     courseware.
       Action A-3: Enlarge the pipeline by increasing the number 
     of students who take AP and IB science and mathematics 
     courses. Create opportunities and incentives for middle-
     school and high-school students to pursue advanced work in 
     science and mathematics. By 2010, increase the number of 
     students in AP and IB mathematics and science courses from 
     1.2 million to 4.5 million, and set a goal of tripling the 
     number who pass those tests, to 700,000, by 2010. Student 
     incentives for success would include 50% examination fee 
     rebates and $100 mini-scholarships for each passing score on 
     an AP or IB mathematics and science examination.
       The committee proposes expansion of two additional 
     approaches to improving K-12 science and mathematics 
     education that are already in use:
       Statewide specialty high schools. Specialty secondary 
     education can foster leaders in science, technology, and 
     mathematics. Specialty schools immerse students in high-
     quality science, technology, and mathematics education; serve 
     as a mechanism to test teaching materials; provide a training 
     ground for K-12 teachers; and provide the resources and staff 
     for summer programs that introduce students to science and 
     mathematics.
       Inquiry-based learning. Summer internships and research 
     opportunities provide especially valuable laboratory 
     experience for both middle-school and high-school students.


       sowing the seeds through science and engineering research

       Recommendation B: Sustain and strengthen the nation's 
     traditional commitment to long-term basic research that has 
     the potential to be transformational to maintain the flow of 
     new ideas that fuel the economy, provide security, and 
     enhance the quality of life.
       Action B-1: Increase the federal investment in long-term 
     basic research by 10% a year over the next 7 years, through 
     reallocation of existing funds or if necessary through the 
     investment of new funds. Special attention should go to the 
     physical sciences, engineering, mathematics, and information 
     sciences and to Department of Defense (DOD) basic-research 
     funding. This special attention does not mean that there 
     should be a disinvestment in such important fields as the 
     life sciences (which have seen growth in recent years) or the 
     social sciences. A balanced research portfolio in all fields 
     of science and engineering research is critical to U.S. 
     prosperity. This investment should be evaluated regularly to 
     realign the research portfolio--unsuccessful projects and 
     venues of research should be replaced with emerging research 
     projects and venues that have greater promise.
       Action B-2: Provide new research grants of $500,000 each 
     annually, payable over 5 years, to 200 of our most 
     outstanding early-career researchers. The grants would be 
     made through existing Federal research agencies--the National 
     Institutes of Health (NIH), the National Science Foundation 
     (NSF), the Department of Energy (DOE), DOD, and the National 
     Aeronautics and Space Administration--to underwrite new 
     research opportunities at universities and government 
     laboratories.
       Action B-3: Institute a National Coordination Office for 
     Research Infrastructure to manage a centralized research-
     infrastructure fund of $500 million per year over the next 5 
     years--through reallocation of existing funds or if necessary 
     through the investment of new funds--to ensure that 
     universities and government laboratories create and maintain 
     the facilities and equipment needed for leading-edge 
     scientific discovery and technological development. 
     Universities and national laboratories would compete annually 
     for these funds.
       Action B-4: Allocate at least 8% of the budgets of Federal 
     research agencies to discretionary funding that would be 
     managed by technical program managers in the agencies and be 
     focused on catalyzing high-risk, high-payoff research.
       Action B-5: Create in the Department of Energy (DOE) an 
     organization like the Defense Advanced Research Projects 
     Agency (DARPA) called the Advanced Research Projects Agency-
     Energy (ARPA-E). The director of ARPA-E would report to the 
     under secretary for science and would be charged with 
     sponsoring specific research and development programs to meet 
     the nation's long-term energy challenges. The new agency 
     would support creative ``out-of-the-box'' transformational 
     generic energy research that industry by itself cannot or 
     will not support and in which risk may be high but success 
     would provide dramatic benefits for the nation. This would 
     accelerate the process by which knowledge obtained through 
     research is transformed to create jobs and address 
     environmental, energy, and security issues. ARPA-E would be 
     based on the historically successful DARPA model and would be 
     designed as a lean and agile organization with a great deal 
     of independence that can start and stop targeted programs on 
     the basis of performance. The agency would itself perform no 
     research or transitional effort itself but would fund such 
     work conducted by universities, startups, established firms, 
     and others. Its staff would turn over about every 4 years. 
     Although the agency would be focused on specific energy 
     issues, it is expected that its work (like that of DARPA or 
     NIH) will have important spinoff benefits, including aiding 
     in the education of the next generation of researchers. 
     Funding for ARPA-E would start at $300 million the first year 
     and increase to $1 billion per year over 5-6 years, at which 
     point the program's effectiveness would be evaluated.
       Action B-6: Institute a Presidential Innovation Award to 
     stimulate scientific and engineering advances in the national 
     interest. Existing presidential awards address lifetime 
     achievements or promising young scholars, but the proposed 
     new awards would identify and recognize persons who develop 
     unique scientific and engineering innovations in the national 
     interest at the time they occur.


     best and brightest in science and engineering higher education

       Recommendation C: Make the United States the most 
     attractive setting in which to study and perform research so 
     that we can develop, recruit, and retain the best and 
     brightest students, scientists, and engineers from within the 
     United States and throughout the world.
       Action C-1: Increase the number and proportion of U.S. 
     citizens who earn physical-sciences, life-sciences, 
     engineering, and mathematics bachelor's degrees by providing 
     25,000 new 4-year competitive undergraduate scholarships each 
     year to U.S. citizens attending U.S. institutions. The 
     Undergraduate Scholar Awards in Science, Technology, 
     Engineering, and Mathematics (USA-STEM) would be distributed 
     to states on the basis of the size of their congressional 
     delegations and awarded on the basis of national 
     examinations. An award would provide up to $20,000 annually 
     for tuition and fees.
       Action C-2: Increase the number of U.S. citizens pursuing 
     graduate study in ``areas of national need'' by funding 5,000 
     new graduate fellowships each year. NSF should administer the 
     program and draw on the advice of other Federal research 
     agencies to define national needs. The focus on national 
     needs is important both to ensure an adequate supply of 
     doctoral scientists and engineers and to ensure that there 
     are appropriate employment opportunities for students once 
     they receive their degrees. Portable fellowships would 
     provide funds of up to $20,000 annually directly to students, 
     who would choose where to pursue graduate studies instead of 
     being required to follow faculty research grants.
       Action C-3: Provide a Federal tax credit to encourage 
     employers to make continuing education available (either 
     internally or through colleges and universities) to 
     practicing scientists and engineers. These incentives would 
     promote career-long learning to keep the workforce current in 
     the face of rapidly evolving scientific and engineering 
     discoveries and technological advances and would allow for 
     retraining to meet new demands of the job market.
       Action C-4: Continue to improve visa processing for 
     international students and scholars to provide less complex 
     procedures and continue to make improvements on such issues 
     as visa categories and duration, travel for scientific 
     meetings, the technology-alert list, reciprocity agreements, 
     and changes in status.
       Action C-5: Provide a 1-year automatic visa extension to 
     international students who receive doctorates or the 
     equivalent in science, technology, engineering, mathematics, 
     or other fields of national need at qualified U.S. 
     institutions to remain in the United States to seek 
     employment. If these students are offered jobs by United 
     States-based employers and pass a security screening test, 
     they should be provided automatic work permits and expedited 
     residence status. If students are unable to obtain employment 
     within 1 year, their visas would expire.
       Action C-6: Institute a new skills-based, preferential 
     immigration option. Doctoral-level education and science and 
     engineering skills would substantially raise an applicant's 
     chances and priority in obtaining U.S.

[[Page 22771]]

     citizenship. In the interim, the number of H-1B visas should 
     be increased by 10,000, and the additional visas should be 
     available for industry to hire science and engineering 
     applicants with doctorates from U.S. universities.
       Action C-7: Reform the current system of ``deemed 
     exports''. The new system should provide international 
     students and researchers engaged in fundamental research in 
     the United States with access to information and research 
     equipment in U.S. industrial, academic, and national 
     laboratories comparable with the access provided to U.S. 
     citizens and permanent residents in a similar status. It 
     would, of course, exclude information and facilities 
     restricted under national-security regulations. In addition, 
     the effect of deemed-exports regulations on the education and 
     fundamental research work of international students and 
     scholars should be limited by removing all technology items 
     (information and equipment) from the deemed-exports 
     technology list that are available for purchase on the 
     overseas open market from foreign or U.S. companies or that 
     have manuals that are available in the public domain, in 
     libraries, over the Internet, or from manufacturers.


        incentives for innovation and the investment environment

       Recommendation D: Ensure that the United States is the 
     premier place in the world to innovate; invest in downstream 
     activities such as manufacturing and marketing; and create 
     high-paying jobs that are based on innovation by modernizing 
     the patent system, realigning tax policies to encourage 
     innovation, and ensuring affordable broadband access.
       Action D-1: Enhance intellectual-property protection for 
     the 21st century global economy to ensure that systems for 
     protecting patents and other forms of intellectual property 
     underlie the emerging knowledge economy but allow research to 
     enhance innovation. The patent system requires reform of four 
     specific kinds:
       Provide the Patent and Trademark Office sufficient 
     resources to make intellectual-property protection more 
     timely, predictable, and effective.
       Reconfigure the U.S. patent system by switching to a 
     ``first-inventor-to-file'' system and by instituting 
     administrative review after a patent is granted. Those 
     reforms would bring the U.S. system into alignment with 
     patent systems in Europe and Japan.
       Shield research uses of patented inventions from 
     infringement liability. One recent court decision could 
     jeopardize the long-assumed ability of academic researchers 
     to use patented inventions for research.
       Change intellectual-property laws that act as barriers to 
     innovation in specific industries, such as those related to 
     data exclusivity (in pharmaceuticals) and those which 
     increase the volume and unpredictability of litigation 
     (especially in information-technology industries).
       Action D-2: Enact a stronger research and development tax 
     credit to encourage private investment in innovation. The 
     current Research and Experimentation Tax Credit goes to 
     companies that increase their research and development 
     spending above a base amount calculated from their spending 
     in prior years. Congress and the administration should make 
     the credit permanent, and it should be increased from 20% to 
     40% of the qualifying increase so that the U.S. tax credit is 
     competitive with that of other countries. The credit should 
     be extended to companies that have consistently spent large 
     amounts on research and development so that they will not be 
     subject to the current de facto penalties for previously 
     investing in research and development.
       Action D-3: Provide tax incentives for United States-based 
     innovation. Many policies and programs affect innovation and 
     the nation's ability to profit from it. It was not possible 
     for the committee to conduct an exhaustive examination, but 
     alternatives to current economic policies should be examined 
     and, if deemed beneficial to the United States, pursued. 
     These alternatives could include changes in overall corporate 
     tax rates, provision of incentives for the purchase of high-
     technology research and manufacturing equipment, treatment of 
     capital gains, and incentives for long-term investments in 
     innovation. The Council of Economic Advisers and the 
     Congressional Budget Office should conduct a comprehensive 
     analysis to examine how the United States compares with other 
     nations as a location for innovation and related activities 
     with a view to ensuring that the United States is one of the 
     most attractive places in the world for long-term innovation-
     related investment. From a tax standpoint, that is not now 
     the case.
       Action D-4: Ensure ubiquitous broadband Internet access. 
     Several nations are well ahead of the United States in 
     providing broadband access for home, school, and business. 
     That capability will do as much to drive innovation, the 
     economy, and job creation in the 21st century as did access 
     to the telephone, interstate highways, and air travel into 
     the 20th century. Congress and the administration should take 
     action--mainly in the regulatory arena and in spectrum 
     management--to ensure widespread affordable broadband access 
     in the near future.


                               conclusion

       The committee believes that its recommendations and the 
     actions proposed to implement them merit serious 
     consideration if we are to ensure that our nation continues 
     to enjoy the jobs, security, and high standard of living that 
     this and previous generations worked so hard to create. 
     Although the committee was asked only to recommend actions 
     that can be taken by the federal government, it is clear that 
     related actions at the state and local levels are equally 
     important for U.S. prosperity, as are actions taken by each 
     American family. The United States faces an enormous 
     challenge because of the disadvantage it faces in labor cost. 
     Science and technology provide the opportunity to overcome 
     that disadvantage by creating scientists and engineers with 
     the ability to create entire new industries--much as has been 
     done in the past.
       It is easy to be complacent about U.S. competitiveness and 
     pre-eminence in science and technology. We have led the world 
     for decades, and we continue to do so in many research fields 
     today. But the world is changing rapidly, and our advantages 
     are no longer unique. Without a renewed effort to bolster the 
     foundations of our competitiveness, we can expect to lose our 
     privileged position. For the first time in generations, the 
     nation's children could face poorer prospects than their 
     parents and grandparents did. We owe our current prosperity, 
     security, and good health to the investments of past 
     generations, and we are obliged to renew those commitments in 
     education, research, and innovation policies to ensure that 
     the American people continue to benefit from the remarkable 
     opportunities provided by the rapid development of the global 
     economy and its not inconsiderable underpinning in science 
     and technology.


                       SOME WORRISOME INDICATORS

       When asked in spring 2005 what is the most attractive place 
     in the world in which to ``lead a good life'', respondents in 
     only one of the 16 countries polled (India) indicated the 
     United States.
       For the cost of one chemist or one engineer in the United 
     States, a company can hire about five chemists in China or 11 
     engineers in India.
       For the first time, the most capable high-energy particle 
     accelerator on Earth will, beginning in 2007, reside outside 
     the United States.
       The United States is today a net importer of high-
     technology products. Its share of global high-technology 
     exports has fallen in the last 2 decades from 30% to 17%, and 
     its trade balance in high-technology manufactured goods 
     shifted from plus $33 billion in 1990 to a negative $24 
     billion in 2004.
       Chemical companies closed 70 facilities in the United 
     States in 2004 and have tagged 40 more for shutdown. Of 120 
     chemical plants being built around the world with price tags 
     of $1 billion or more, one is in the United States and 50 in 
     China.
       Fewer than one-third of U.S. 4th grade and 8th grade 
     students performed at or above a level called ``proficient'' 
     in mathematics; ``proficiency'' was considered the ability to 
     exhibit competence with challenging subject matter. 
     Alarmingly, about one-third of the 4th graders and one-fifth 
     of the 8th graders lacked the competence to perform basic 
     mathematical computations.
       U.S. 12th graders recently performed below the 
     international average for 21 countries on a test of general 
     knowledge in mathematics and science. In addition, an 
     advanced mathematics assessment was administered to U.S. 
     students who were taking or had taken precalculus, calculus, 
     or Advanced Placement calculus and to students in 15 other 
     countries who were taking or had taken advanced mathematics 
     courses. Eleven nations outperformed the United States, and 
     four countries had scores similar to the U.S. scores. No 
     nation scored significantly below the United States.
       In 1999, only 41% of U.S. 8th grade students received 
     instruction from a mathematics teacher who specialized in 
     mathematics, considerably lower than the international 
     average of 71%.
       In one recent period, low-wage employers, such as Wal-Mart 
     (now the nation's largest employer) and McDonald's, created 
     44% of the new jobs, while high-wage employers created only 
     29% of the new jobs.
       In 2003, only three American companies ranked among the top 
     10 recipients of patents granted by the United States Patent 
     and Trademark Office.
       In Germany, 36% of undergraduates receive their degrees in 
     science and engineering. In China, the figure is 59%, and in 
     Japan 66%. In the United States, the corresponding figure is 
     32%.
       The United States is said to have 10.5 million illegal 
     immigrants, but under the law the number of visas set aside 
     for ``highly qualified foreign workers'' dropped to 65,000 a 
     year from its 195,000 peak.
       In 2004, China graduated over 600,000 engineers, India 
     350,000, and America about 70,000.
       In 2001 (the most recent year for which data are 
     available), U.S. industry spent more on tort litigation than 
     on R&D.
                                  ____


                [From the New York Times, Oct. 14, 2005]

                         Keeping Us in the Race

                        (By Thomas L. Friedman)

       What if we were really having a national discussion about 
     what is most important to

[[Page 22772]]

     the country today and on the minds of most parents?
       I have no doubt that it would be a loud, noisy dinner-table 
     conversation about why so many U.S. manufacturers are moving 
     abroad--not just to find lower wages, but to find smarter 
     workers, better infrastructure and cheaper health care. It 
     would be about why in Germany, 36 percent of undergrads 
     receive degrees in science and engineering; in China, 59 
     percent; in Japan, 66 percent; and in America, only 32 
     percent. It would be about why Japanese on bullet trains can 
     get access to the Internet with cellphones, and Americans get 
     their cellphone service interrupted five minutes from home.
       It would be about why U.S. 12th graders recently performed 
     below the international average for 21 countries in math and 
     science, and it would be about why, in recent years, U.S. 
     industry appears to have spent more on lawsuits than on R.&D. 
     Yes, we'd be talking about why the world is racing us to the 
     top, not the bottom, and why we are quietly falling behind.
       And late in the evening, as the wine bottles emptied, 
     someone at the national dinner table might finally say: 
     ``Hey, what if we were really thinking ahead? What if we 
     asked some of the country's best minds to make a list of the 
     steps we could take right now to enhance America's technology 
     base?''
       Fortunately, two senators, Lamar Alexander and Jeff 
     Bingaman, asked the National Academy of Sciences, the 
     National Academy of Engineering and the Institute of Medicine 
     to form a bipartisan study group to produce just such a list, 
     which was released on Wednesday in a report called ``Rising 
     Above the Gathering Storm.''
       Because of globalization, the report begins, U.S. ``workers 
     in virtually every sector must now face competitors who live 
     just a mouse-click away in Ireland, Finland, India or dozens 
     of other nations whose economies are growing. Having reviewed 
     the trends in the United States and abroad, the committee is 
     deeply concerned that the scientific and technical building 
     blocks of our economic leadership are eroding at a time when 
     many other nations are gathering strength. We are worried 
     about the future prosperity of the United States. We fear the 
     abruptness with which a lead in science and technology can be 
     lost and the difficulty of recovering a lead once lost--if 
     indeed it can be regained at all.''
       The report's key recommendations? Nothing fancy. Charles 
     Vest, the former president of M.I.T., summed them up: ``We 
     need to get back to basic blocking and tackling''--educating 
     more Americans in the skills needed for 21st-century jobs.
       Among the top priorities, the report says, should be these:
       (1) Annually recruiting 10,000 science and math teachers by 
     awarding four-year merit-based scholarships, to be paid back 
     through five years of K-12 public school teaching. (We have 
     too many unqualified science and math teachers.)
       (2) Strengthening the math and science skills of 250,000 
     other teachers through extracurricular programs.
       (3) Creating opportunities and incentives for many more 
     middle school and high school students to take advanced math 
     and science courses, by offering, among other things, $100 
     mini-scholarships for success in exams, and creating more 
     specialty math-and-science schools.
       (4) Increasing federal investment in long-term basic 
     research by 10 percent a year over the next seven years.
       (5) Annually providing research grants of $500,000 each, 
     payable over five years, to 200 of America's most outstanding 
     young researchers.
       (6) Creating a new Advanced Research Projects Agency in the 
     Energy Department to support ``creative out-of-the-box 
     transformational energy research that industry by itself 
     cannot or will not support and in which risk may be high, but 
     success would provide dramatic benefits for the nation.''
       (7) Granting automatic one-year visa extensions to foreign 
     students in the U.S. who receive doctorates in science, 
     engineering or math so they can seek employment here, and 
     creating 5,000 National Science Foundation-administered 
     graduate fellowships to increase the number of U.S. citizens 
     earning doctoral degrees in fields of ``national need.'' (See 
     the rest at www.nationalacademies.org <http://
www.nationalacademies.org>.)
       These proposals are the new New Deal urgently called for by 
     our times. This is where President Bush should have focused 
     his second term, instead of squandering it on a silly, 
     ideological jag called Social Security privatization. 
     Because, as this report concludes, ``Without a renewed effort 
     to bolster the foundations of our competitiveness, we can 
     expect to lose our privileged position.''

                          ____________________