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MADE IN AMERICA: INNOVATIONS IN JOB 

CREATION AND ECONOMIC GROWTH 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 3, 2011 

Serial No. 112–15 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chair 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JAN SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MARY BONO MACK, California 

Chairman 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

CLIFF STEARNS, Florida 

CHARLES F. BASS, New Hampshire 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

G.K. BUTTERFIELD, North Carolina 

Ranking Member 

CHARLES A. GONZALEZ, Texas 

JIM MATHESON, Utah 

JOHN D. DINGELL, Michigan 

EDOLPHUS TOWNS, New York 

BOBBY L. RUSH, Illinois 

JANICE D. SCHAKOWSKY, Illinois 

MIKE ROSS, Arkansas 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Mary Bono Mack, a Representative in Congress from the State of 

California, opening statement ............................................................................. 1 

Prepared statement .......................................................................................... 3 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 4 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 8 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 219 

WITNESSES

John Fernandez, Assistant Secretary of Commerce, Economic Development 

Administration, Department of Commerce ........................................................ 9 

Prepared statement .......................................................................................... 11 

Answers to submitted questions ...................................................................... 222 

Christopher Cummiskey, Commissioner, Georgia Department of Economic Development .............................................................................................................. 35 

Prepared statement .......................................................................................... 38 

Answers to submitted questions ...................................................................... 238 

Drew Greenblatt, President and Owner, Marlin Steel Wire Products, LLC, 

on behalf of the National Association of Manufacturers .................................. 46 

Prepared statement .......................................................................................... 48 

Answers to submitted questions 1 ...................................................................

Douglas Holtz-Eakin, President, American Action Forum ................................... 59 

Prepared statement .......................................................................................... 61 

Answers to submitted questions ...................................................................... 240 

Gregory Wilson, Special Advisor, The Financial Services Roundtable ............... 70 

Prepared statement .......................................................................................... 72 

Deborah L. Wince-Smith, President and CEO, Council on Competitiveness ..... 108 

Prepared statement .......................................................................................... 110 

Answers to submitted questions ...................................................................... 244 

Heather Boushey, Senior Economist, Center for American Progress .................. 151 

Prepared statement .......................................................................................... 153 

Rhone Resch, President and CEO, Solar Energy Industries Association ........... 174 

Prepared statement .......................................................................................... 176 

Answers to submitted questions ...................................................................... 248 

SUBMITTED MATERIAL

Executive Summary by Bortz Media & Sports Group on the cable industry’s 

economic impact, submitted by Mrs. Bono Mack .............................................. 208 

Statement of Matt Blunt, President, American Automotive Policy Council, 

submitted by Mrs. Bono Mack ............................................................................ 215 

Letter, dated March 3, 2011, from Mrs. Blackburn to Mr. Fernandez ............... 221 

1 Mr. Greenblatt did not answer submitted questions for the record. 

(1) 

MADE IN AMERICA: INNOVATIONS IN JOB 

CREATION AND ECONOMIC GROWTH 

THURSDAY, MARCH 3, 2011 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, COMMITTEE ON ENERGY AND COMMERCE

Washington, DC. 

The subcommittee met, pursuant to call, at 10:06 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Mary Bono Mack 

(chairwoman of the subcommittee) presiding. 

Members present: Representatives Bono Mack, Blackburn, Harper, Cassidy, Guthrie, McKinley, Pompeo, Kinzinger, Barton, 

Butterfield, Towns, Rush, Schakowsky and Waxman (ex officio). 

Staff present: Gib Mullan, Chief Counsel, Commerce, Manufacturing, and Trade; Brian McCullough, Professional Staff Member; 

Shannon Weinberg, Counsel; Robert Frisby, Detailee; and Paul 

Cancienne, Policy Coordinator, Commerce, Manufacturing, and 

Trade. 

Mrs. BONO MACK. The subcommittee will come to order. 

Good morning, and welcome to this hearing of the House Subcommittee on Commerce, Manufacturing, and Trade. 

Today, stubbornly high unemployment continues to have a 

chokehold on the American economy. In the months ahead, our 

subcommittee will be taking a close look at some of the impediments to progress and the keys to a more prosperous America. The 

chair will now recognize herself for an opening statement and officially come to order. 

OPENING STATEMENT OF HON. MARY BONO MACK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. BONO MACK. We have a unique opportunity to make ‘‘Made 

in America’’ matter again. If we as a Congress and as a Nation are 

truly serious about creating the kind of positive legislative and regulatory environment needed to create new jobs as well as to bring 

back jobs to the United States from abroad, there are some commonsense steps that we should take right now. As chairman of this 

subcommittee, which has jurisdiction over interstate and foreign 

commerce, I am hoping to make job creation one of our top priorities. 

After a record 20 straight months of unemployment above 9 percent, it is time to finally free American innovation and ingenuity 

long held hostage by a regulatory regime which is as great a threat 

to our prosperity as is any foreign regime. Today, U.S. businesses 

2 

are holding tight onto more than $1.8 trillion in cash reserves. Let 

us give them a reason to invest that money in America’s future. 

Here are some of the things we should do immediately. 

First, let us ensure regulatory fairness. Rules and regulations imposed by Washington cost Americans more than $1.75 trillion 

each year, or about $15,500 per household. Moving forward, we 

should complete a top-to-bottom review of all regulations, scrubbing 

every outdated and senseless regulatory requirement off the books. 

Next, place a moratorium on any job-killing regulations and establish a more fair and transparent review process. And finally, require Congressional approval for all major rules and regulations 

imposing significant new costs on the economy. 

Second, we need to make intellectual-property protection a top 

priority. By most estimates, the theft of U.S. intellectual property 

costs our economy hundreds of billions of dollars a year but the 

real damage, both in terms of lost jobs and stalled progress, is impossible to calculate. Most sinister, this is deflating to our Nation’s 

entrepreneurial spirit and psyche. Simply put, our Nation’s economy cannot thrive in a world of no-cost competitors. 

Third, let us incentivize and reward innovation. According to a 

recent report by the Information Technology and Innovation Foundation, the United States ranked sixth among 40 nations in innovation-based competitiveness but were dead last in progress made 

over the past decade—dead last. There are smart ways to use the 

U.S. Tax Code and patent laws to reward companies that create 

new jobs and keep those jobs here in America. 

Fourth, we need to open more foreign markets to U.S. products. 

We simply cannot sit on the sidelines while other nations sign freetrade agreements and gain a foothold in promising new markets. 

Long-stalled trade promotion agreements with South Korea, Colombia and Panama should move forward quickly. Years of lost opportunities have only resulted in thousands of lost jobs. It is time to 

quit playing politics with our trade policies. 

Fifth, we should embrace vigorous oversight of new laws and 

agencies. Aggressive oversight doesn’t have to be a political parlor 

game. Rather, we should see these as beneficial opportunities to get 

it right. Americans want and deserve our best efforts. Oversight 

hearings, which this subcommittee will be holding this year, are a 

unique opportunity to see what is working and what is not. And 

at the end of the day, we must have the political courage to embrace change that is not always popular but necessary. 

Finally, let us make in-sourcing in vogue. Frankly, I am tired of 

hearing people say the jobs are gone and they are not coming back. 

Outsourcing is not a one-way street. By providing a stable and predictable regulatory framework, by protecting intellectual property, 

by incentivizing and rewarding innovation and by opening more 

foreign markets to our products, we can not only end the exodus 

of jobs overseas but also begin the process of bringing some of those 

jobs back home to America. 

In fact, it has already started. GE, General Motors, Ford, Boeing, 

Delta Airlines, Master Lock and Caterpillar are just a few of the 

companies that are embracing in-sourcing. They should be applauded and other U.S. companies encouraged to follow suit. During the course of this entire week, ABC News has been taking an 

3 

in-depth look at how buying ‘‘Made in America’’ can translate into 

millions of new jobs across the United States. 

Today, we are at an important crossroads in our Nation’s history. 

The way forward is clear: creating new jobs and preserving existing 

jobs here at home should be our top priority. It will strengthen our 

economy, reduce the deficit, enhance U.S. competitiveness and restore pride in ’’Made in America.’’ For this subcommittee, there can 

be no greater legacy. 

[The prepared statement of Mrs. Bono Mack follows:] 

PREPARED STATEMENT OF HON. MARY BONO MACK

We have a unique opportunity to make ′′Made in America′′ matter again. If we, 

as a Congress and a nation, are truly serious about creating the kind of positive 

legislative and regulatory environment needed to create new jobs—as well as to 

bring jobs back to the United States from abroad—there are some common-sense 

steps that we should take right now. As Chairman of this Subcommittee, which has 

jurisdiction over interstate and foreign commerce, I am hoping to make job creation 

one of our top priorities. 

After a record 20 straight months of unemployment above 9 percent, it’s time to 

finally free American innovation and ingenuity—long held hostage by a regulatory 

regime which is as great a threat to our prosperity as any foreign regime. Today, 

U.S. businesses are holding tight onto more than $1.8 trillion in cash reserves. Let’s 

give them a reason to invest that money in America’s future. Here are some things 

we should do immediately. 

First, let’s ensure regulatory fairness. Rules and regulations imposed by Washington cost Americans more than $1.75 trillion each year or about $15,500 per 

household. Moving forward we should complete a top-to-bottom review of all regulations, scrubbing every outdated and senseless regulatory requirement off the books. 

Next.place a moratorium on any job-killing regulations and establish a more fair 

and transparent review process. And, finally, require Congressional approval for all 

major rules and regulations imposing significant new costs on the economy. 

Second, we need to make intellectual property protection a top priority. By most 

estimates, the theft of U.S. intellectual property costs our economy hundreds of billions of dollars a year, but the real damage—both in terms of lost jobs and stalled 

progress—is impossible to calculate. Most sinister, this is deflating to our nation’s 

entrepreneurial spirit and psyche. Simply put, our nation’s economy cannot thrive 

in a world of ′′no cost′′ competitors. 

Third, let’s incentivize and reward innovation. According to a recent report by the 

Information Technology and Innovation Foundation, the United States ranked sixth 

among 40 nations in ′′innovation-based competitiveness.′′ But we were dead last in 

progress made over the past decade. Dead last. There are smart ways to use the 

U.S. Tax Code and patent laws to reward companies that create new jobs and keep 

those jobs here in America. 

Fourth, we need to open more foreign markets to U.S. products. We simply can’t 

sit on the sidelines while other nations sign free trade agreements and gain a foothold in promising, new markets. Long-stalled trade promotion agreements with 

South Korea, Colombia and Panama should move forward quickly. Years of lost opportunities have only resulted in thousands of lost jobs. It’s time to quit playing politics with our trade policies. 

Fifth, we should embrace vigorous oversight of new laws and agencies. Aggressive 

oversight doesn’t have to be a political parlor game. Rather, we should see these 

as beneficial opportunities to ′′get it right.′′ Americans want—and deserve—our best 

efforts. Oversight hearings, which this subcommittee will be holding this year, are 

a unique opportunity to see what’s working and what’s not. And, at the end of the 

day, we must have the political courage to embrace change that’s not always popular but necessary. 

Finally, let’s make ′′insourcing′′ in vogue. Frankly, I am tired of hearing people 

say, ′′The jobs are gone, and they are not coming back.′′ Outsourcing is not a one 

way street. By providing a stable and predictable regulatory framework.by protecting intellectual property. by incentivizing and rewarding innovation. and by 

opening more foreign markets to our products—we not only can end the exodus of 

jobs overseas, but also begin the process of bringing some of those jobs back home 

to America. In fact, it has already started. General Electric, General Motors, Ford, 

Boeing, Delta Airlines, Master Lock and Caterpillar are just a few of the companies 

4 

that are embracing ′′insourcing.′′ They should be applauded and other U.S. companies encouraged to follow suit. 

In fact, during the course of this entire week, ABC News has been taking an indepth look at how buying ′′Made in America′′ can translate into millions of new jobs 

across the United States. 

Today, we are at an important crossroads in our nation’s history. The way forward 

is clear: creating new jobs and preserving existing jobs here at home should be our 

top priority. It will strengthen our economy, reduce the deficit, enhance U.S. 

competiveness and restore pride in ′′Made in America.′′ For this subcommittee, there 

can be no greater legacy. 

Mrs. BONO MACK. And now I would like to yield back my time 

and recognize the gentleman from North Carolina, the ranking 

member, Mr. Butterfield, for 5 minutes. 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Thank you, Madam Chairman. Thank you 

very much for convening this very important hearing today, and let 

me just say that this conversation is certainly very timely. 

Helping unemployed Americans get back to work must be our 

agenda of Democrats and Republicans. Millions of Americans are 

out of work through no fault of their own. They are unable to pay 

their bills, much less save for retirement or their children’s education. Some Americans are even forced to choose between feeding 

themselves or taking the medicines they deserve. This is unacceptable. Given the state of the economy, we must leave no stone 

unturned in our search for policies that can promote hiring and 

bring jobs to those who need them. 

The Recovery Act was a good first step. Some have questioned 

the wisdom of this investment. The country’s most respected economists, however, agree that there would have been significantly 

slower growth and higher unemployment if this investment had not 

been made. It is working. It is working in my district and I pray 

that it is working in your district. 

You will hear me say repeatedly while we serve together that I 

represent the fourth-poorest district in America. It is mostly a 

rural area in eastern North Carolina. Many of my constituents who 

are lucky enough to have a computer and Internet connection at 

home use dial-up service, and because of relatively low population 

density, there is little incentive for companies to build the necessary middle-mile infrastructure to reach these areas. In this day 

and age, how is someone in a rural area supposed to start or grow 

a successful business or learn high-tech skills in school without access to broadband Internet? The NTIA fortunately saw the need 

that existed and awarded two stimulus grants for broadband infrastructure that will bring high-speed Internet capacity to tens of 

thousands of my unserved and underserved communities. 

The economy is now beginning to create more jobs each month 

than it sheds. Certain parts of the economy have returned to profitability but this upturn has not resulted in America’s companies investing in new hires. I suppose they are waiting for market certainty and Congressional certainty. While they wait, too many 

Americans are still suffering. It is time for us to take the second 

step. The Federal Government must engage, not through another 

5 

stimulus but through targeted, strategic investments like rural 

North Carolina’s broadband grants that have the potential to create jobs in the short term, support long-term national priorities 

and provide a competitive business climate for the successful industries of the future. Investments in three particular areas stand out 

as building blocks. Research and development is certainly where 

we begin, infrastructure and education, especially STEM education. 

I am fully committed to getting our fiscal house in order. I think 

we all are. And I believe the President has made clear that he is 

as well. But reducing the deficit will come only through a serious 

look at the government’s long-term obligations, not through rapid 

across-the-board cuts. It is not inconsistent to make tough choices 

about necessary cuts at the same time that we identify critical 

strategic investments in our country’s future. 

And so I look forward to a robust discussion and receiving the 

testimony of the Assistant Secretary, whom we welcome today, and 

the witnesses on the second panel. The fact remains and it is very 

clear, we must create the opportunity for business and industry to 

create 7 million jobs to get the economy back where it was before 

the recession. It will take innovative approaches to get there. We 

will not get there if we continue to be mired in partisan 

brinksmanship. The American people are demanding, they are demanding bipartisan solutions to these complex American problems, 

and that is why I congratulate the chairman for convening this 

hearing today. I welcome all of the witnesses and I look forward 

to their testimony. 

I yield back, Madam Chairman. 

Mrs. BONO MACK. Thank you. 

Chairman Upton, he yielded his 5 minutes for his opening statement to me in accordance with committee rules, and as his designee, I would like to recognize Ms. Blackburn, the vice chairman 

of the subcommittee, for 2 minutes. 

Mrs. BLACKBURN. Thank you, Madam Chairman. I thank you for 

that well-stated opening statement that sets the playing field for 

this hearing. 

The other night, I was watching a documentary on Ronald 

Reagan. We have all been looking at the centennial of his birth, 

and I was reminded of a statement that he said during the 1980 

campaign, and it was that a recession is when your neighbor loses 

his job, a depression is when you lose your job and recovery is 

when Jimmy Carter loses his job. Now, unfortunately, we can’t sit 

around and wait for a change in Administration to begin this recovery. So Madam Chairman, as you said in your statement, it is time 

for us to do some things differently and to make some well-placed 

changes. 

I have to disagree with my colleague from North Carolina that 

the stimulus bill was a good first step. When you talk to people in 

my district, which I do every single week, they are telling me that 

there is a lot wrong, and when you have a stimulus bill that has 

unemployment above 9 percent over 21 months of this, when you 

have got underunemployment even higher up in 15, 17, 20 percent, 

depending on where you are, it says things are not right. What we 

hear from our constituents and what I am hearing in the listening 

sessions that I am holding every week in my district, what I hear 

6 

from people is that the long arm of government with regulation is 

killing the incentives to create jobs. What I am hearing is uncertainty on tax and regulatory policy is a killer when it comes to creating and retaining or expanding jobs. What we are hearing is that 

they want government to get out of the way, to provide some certainty, and they want us to focus on creating the environment that 

will allow job growth to take place 

I thank the chairman. I yield back my time. 

Mrs. BONO MACK. I thank the gentlelady. 

Now I would like to recognize the chairman emeritus of the committee for 2 minutes, Mr. Barton. 

Mr. BARTON. Thank you, Madam Chairwoman. We appreciate 

you holding this hearing. We welcome our witnesses, the Hon. Assistant Secretary Fernandez and our witnesses on the private sector panel after that. 

Downstairs we are having a food fight on health care with the 

Secretary of Health and Human Services. There is quite a disagreement between the Republicans and the Minority on that issue. But 

on this issue, there should be agreement on both sides of the aisle 

that we actually do all support the creation of jobs and the creation 

of a robust economy. 

We tend to be gloomy and doomy when we talk about the ability 

of our economy to create jobs, and it is true that we have been in 

a recession the last several years. Having said that, on the positive 

side, unless one of our expert witnesses corrects me, my understanding is that our manufacturing sector produced more goods 

and services last year than any year in history. My perception is 

that in terms of productivity per worker, the American worker is 

still the most productive worker in the world. My perception is that 

in terms of productivity increase, we have doubled and perhaps tripled the productivity of the average American worker in the last 

20 to 25 years. 

So we do have an economy that has a robust manufacturing capability. Having said that, we have the ability in Washington by 

high taxes, by regulatory overkill to stifle and threaten that productivity. So hopefully this hearing will give us some roadmaps 

about how to increase productivity, how to unleash the economic 

entrepreneurship of America and how to keep us number one and 

make us more competitive in the world markets. 

With that, Madam Chairwoman, I yield back. 

Mrs. BONO MACK. I thank the gentleman. 

Mr. BUTTERFIELD. Madam Chairman? 

Mrs. BONO MACK. Before we go to your side, I would like to recognize for the last minute a new member of the committee, Mr. 

Guthrie from Kentucky. 

Mr. GUTHRIE. Thank you, Madam Chairwoman. 

I come from a small business and manufacturing background and 

know firsthand what is needed to allow job creators to remain competitive. We cannot be a country that does not make things. As a 

manufacturer, I am familiar with the very serious uncertainty that 

our job creators face today, many of which we will be discussing in 

this committee. 

Today we live in the world’s most productive economy but we 

can’t take it for granted. The United States faces greater competVerDate Nov 24 2008 10:30 Aug 01, 2011 Jkt 037690 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\112-015 JOB CREATION-PDF MADE\112-015 PDF MADE WAYNE
7 

itor as our business sees every day from China, India, Brazil and 

the EU, and I applaud the chairwoman’s willingness to reopen the 

book on our economic policy with an eye towards innovation and 

job creation. I look forward to reevaluating the related policies 

within the committee’s jurisdiction. It is fitting that Congress does 

the same, although I do hear mostly from people and from businesses I am familiar with is not just concern about what Congress 

is doing but the excess regulatory burden that is coming from the 

Administration. They say didn’t we just have an election but we 

are still hearing these things are coming forward after they felt 

like they made a correction in the election. 

So we look forward to discussing where the Administration is 

going with that, and I yield back. 

Mrs. BONO MACK. I thank the gentleman. 

Mr. BUTTERFIELD. Madam Chairman? 

Mrs. BONO MACK. Yes? 

Mr. BUTTERFIELD. Madam Chairman, it appears that the 

gentlelady from Illinois has arrived, and in the absence of the 

ranking member of the full committee, I would ask unanimous consent that she be allowed to use the time that Mr. Waxman would 

have otherwise used. 

Mrs. BONO MACK. Without objection, the gentlelady is recognized 

for 5 minutes. 

Ms. SCHAKOWSKY. Thank you, Madam Chairman and Ranking 

Member. 

I am so glad that we are here today to talk about jobs because 

frankly, from my point of view, from my perspective, the new Majority has done absolutely nothing to create jobs for the American 

people since they have been in charge. Quite to the contrary, instead, they want to gut federal programs in a way that economists 

say will eliminate jobs, slow our economic growth and put hardship 

on the American people and spend time doing things like conducting a radical social campaign against women and family planning. 

Yesterday, Ben Bernanke said that under Republicans’ Continuing Resolution, we could lose ‘‘a couple hundred thousand jobs.’’ 

Economist Mark Zandi, who was an advisor to John McCain, has 

said the bill could cost us 700,000 jobs. And even Goldman Sachs, 

not that I am a fan of Goldman Sachs, but they have estimated 

that it could cut our gross domestic product by 2 percent. And the 

Republican response so far has been so be it. And Americans deserve better than that. We need to make investments in our Nation 

by building a strong infrastructure, educating our kids, supporting 

industries like nanotechnology, which is really great in my district, 

partnerships with the private and the public sector with Northwestern University and spin-off companies and renewable energy 

which have the potential to create millions of good jobs. 

So now I see that our ranking member of the full committee has 

arrived and I would like to yield the rest of my time to him. 

8 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much. I appreciate your taking the 

opportunity to talk about the hearing for today. 

Job growth must be our number one priority but I am concerned 

that the policies being pursued by the House would have the opposite effect. They would eliminate jobs, not create them. 

A recent analysis from Goldman Sachs concluded Republican 

spending cuts in the C.R. could significantly reduce U.S. economic 

growth, thereby decreasing job growth and further slowing down 

the recovery. An analysis from Moody’s Analytics concluded that 

the Republican spending cuts could result in up to 700,000 fewer 

jobs by the end of the fiscal year. Slower growth and fewer jobs are 

clearly steps in the wrong direction for this country. 

American families are facing real economic pain. For millions, 

their jobs are gone, their savings depleted, their home values down, 

and their belief in the promise of the American dream diminished. 

We have a responsibility to these Americans to not only keep moving along a path of job growth, but to act reasonably and responsibly to accelerate the growth of recent months. 

So how do we get there? The President has called for the United 

States to out-educate, out-innovate and out-build our competitors, 

and I believe we are up to that challenge. In order to meet that 

challenge we need targeted public and private investments in key 

sectors that will grow our economy and create jobs. 

One key sector is education. The United States is near the bottom of industrialized nations in math and science literacy. We 

must invest in science, technology, engineering and math to compete with the rest of the world. 

Another key sector is research and development. In order to retain America’s competitive edge, we must always be planning for 

the future. Basic research must be advanced in all areas including 

manufacturing, biomedical, clean energy, cyber security and information technologies. 

And finally, we must invest in our infrastructure, both our physical infrastructure like crumbling roads and bridges and our virtual 

infrastructure encompassing computing, networking and wireless 

spectrum. 

I agree we need to put our Nation’s fiscal house in order but we 

should not choke our economic recovery. That would be profoundly 

counterproductive. We are facing revenue shortfalls because we 

have fewer people working and contributing to the federal treasury. 

Boosting job growth and boosting consumer spending leads to increased federal revenues as more people return to the tax rolls. All 

of this leads us to the long-term goal that we all share of protecting 

our fiscal future. We must spend responsibly, but most importantly, in the short and mid term, we must focus on growing our 

economy and creating jobs. We must focus on investing in education, innovation and modern infrastructure to ensure we stay 

ahead of our competitors around the world. 

Madam Chairman, I am glad we are having a hearing on job 

growth and I look forward to working in a bipartisan way to solve 

our pressing fiscal issues. I yield back the balance of my time. 

9 

Mrs. BONO MACK. I thank the gentleman. 

We are going to have two panels before us today. Each of the witnesses has prepared an opening statement. As is customary, they 

will be placed in the record. Each of you will have 5 minutes to 

summarize that statement in your remarks. 

On our first panel today, we are very pleased to have the Hon. 

John Fernandez, Assistant Secretary of Commerce, Economic Development Administration. Thank you for being here today, Mr. 

Secretary, and you have 5 minutes. 

STATEMENT OF JOHN FERNANDEZ, ASSISTANT SECRETARY 

OF COMMERCE, ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE 

Mr. FERNANDEZ. Thank you very much, Chairman Bono Mack 

and Ranking Member Butterfield and members of the subcommittee. I appreciate the opportunity to be here today on behalf 

of the Economic Development Administration. I applaud the leadership for the subject of this hearing. I think it is near and dear to 

all of us and it is a critically important time in our country’s history. 

A few weeks ago, President Obama released his proposed budget 

for fiscal year 2012. It represents a fiscally responsible plan to rebuild our economy and win the future by out-innovating, out-educating, out-building our global competitors and creating the jobs 

and industries of tomorrow. 

The budget focuses our federal resources in critical areas of education, innovation, clean energy and infrastructure. It proposes to 

reform how Washington does business, putting more federal funding up for competition, cutting waste and reorganizing government 

so it can better serve the American people. 

You know, all of us know that economic development is not easy, 

even in better times, and we certainly know that the reality is that 

economic development has changed significantly in the 45 years 

since EDA was created. We can no longer count on ‘‘build it and 

they will come’’ economy development strategies of the 20th century. These strategies don’t work on today’s global economy. 

The Department of Commerce and EDA are providing leadership 

to the Administration’s efforts to build a more innovation-driven, 

more entrepreneurial economy. In particular, to spur innovation, 

we must cultivate competitive, high-performing regional economies 

as the foundation for national growth. EDA’s Jobs and Innovation 

Partnership puts a premium on regional innovation cluster strategies as a platform for linking multiple initiatives across the Administration and the Nation’s metropolitan areas and rural communities. The Jobs and Innovation Partnership is designed to cultivate public-private partnerships and support strategies that capitalize on regional assets to create jobs and encourage business expansion. 

Importantly, the investments we make support bottom-up strategies developed by local and regional leaders. This orientation that 

the best ideas bubble up from regional and small business leaders 

is a critical element in our ship. 

Here are a few examples of the kinds of investments we have recently made. EDA invested a little over $2 million in JumpStart, 

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which is a venture development organization in Cleveland, Ohio, to 

promote innovation and small business development in six Midwest 

cities. EDA provided a small but catalytic grant to the city of 

Nashwauk, Minnesota, to build critical infrastructure that was 

needed to secure the development of the new Essar Steel plant, 

which was a $1.6 billion project which was projected to create 

about 2,800 jobs. EDA helped fund the Water and Energy Technology Incubator in Central Valley, Fresno County, to nurture and 

grow water and energy technology businesses. Since its opening, 

more than 15 companies have been formed and leveraged over $17 

million in private capital, creating jobs for central Californians. 

I wanted to also make a note about American COMPETES, 

which was reauthorized by Congress last year. I really appreciate 

the strong bipartisan support for that piece of legislation. It provides the tools that EDA needs to encourage and support more of 

this kind of regional innovation strategy. 

We work hand and hand with many of other federal agencies to 

promote and advance such regional strategies. In 2010, the White 

House Interagency Task Force for the Advancement of Regional Innovation Clusters launched the first-ever joint federal funding opportunity to involve six other federal agencies. Included in this 

partnership are the Department of Energy, the National Institute 

of Standards and Technology, the Department of Labor, Department of Education, the SBA and the National Science Foundation. 

We are currently working through this interagency process to identify even additional opportunities to accelerate regional innovation 

clusters 

There should be no doubt in today’s global economy that regions 

matter. Our most serious competitors don’t come from the town 

just down the road or across the State line. They come from around 

the world, from India, Germany, Singapore, China and too many 

other countries to name. 

So Chairman Bono Mack and members of the subcommittee, I 

certainly do appreciate the opportunity to be here today to talk 

about our efforts at our agency to support competitiveness of America’s regions as we continue to provide the kinds of opportunities 

for the people throughout the country, and I look forward to answering your questions today and working closely with Congress to 

help strengthen our communities and small businesses. Thank you. 

[The prepared statement of Mr. Fernandez follows:] 

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Mrs. BONO MACK. I thank the Secretary, and the chair will recognize herself for the first 5-minute round of questions. 

So Secretary Fernandez, thank you very much for being here 

today. It is a pleasure to meet you. Some of my questions are going 

to be tough and to the point. My goal isn’t to assign blame for our 

Nation’s economic problems; my goal is to find solutions. As the 

ranking member said, all of us here want the same thing: a very 

strong and vibrant, prosperous America. 

But here is my first question. In this week’s Bloomberg Business 

Week, one of our Nation’s smartest minds, Mary Meeker, looks at 

the United States as a business and asked, ‘‘Would you invest in 

a company that lost $2 trillion last year and has a net worth of a 

negative $44 trillion?’’ So Secretary Fernandez, how would the Administration answer that question and how do we make ‘‘Made in 

America’’ matter again? 

Mr. FERNANDEZ. Well, I think the Administration would absolutely respond with a resounding ‘‘yes.’’ I mean, there are clearly 

challenges that we have had to face following the financial meltdown and some of the transformational things that are happening 

in the global economy. But I think America is incredibly well positioned to build on the leadership we have had in innovation. As 

Chairman Barton mentioned, we have some of the most productive 

workers in the world. We have some of the most innovative companies in the world. 

But there is certainly, and I think we would all agree, that there 

are areas where we need to seriously tackle some of these challenges. The President has been clear that he supports reforming 

our corporate tax structure so that we can be more competitive 

globally. We are serious about looking at the kinds of regulatory reform that can help spur innovation. 

Mrs. BONO MACK. On that note, let me jump in. Five minutes is 

so quick, Mr. Secretary. 

Small, successful businesses in America all have good business 

plans and usually they are flexible. They are flexible enough to 

evolve over time as market conditions change. What would you say 

are the essential elements of the Administration’s business plan 

when it is on the—I am asking the same question that you are answering but if you could continue, I guess, in that vein. 

Mr. FERNANDEZ. What I could say, Madam Chairman, is that I 

think, candidly, your opening comments laid out a large range of 

issues that are critically important that I think there are tremendous opportunities for bipartisan support. The tax structure has to 

be competitive. We have to invest in innovation. We have to support education, 21st century infrastructure. I think there are many 

places where the Congress and the Administration can work together because, again, the whole notion of this hearing about making in America is essentially important to all of us and we embrace 

that objective and I think we can work together on it. 

Mrs. BONO MACK. Well, we all agree and we are all saying we 

want to together but something clearly isn’t working. Unemployment has been stuck at more than 9 percent for a record 20 

straight months. 

I was a small-business owner. I owned a small restaurant, and 

I knew on a firsthand basis that for me to have succeeded as a resVerDate Nov 24 2008 10:30 Aug 01, 2011 Jkt 037690 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\112-015 JOB CREATION-PDF MADE\112-015 PDF MADE WAYNE
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taurateur, the government needed to get out of the way, and I 

think that, as the vice chairman, that is what we are all looking 

for is government to get out of the way and let the private sector 

lead the way. Can you speak to that a little bit? Are you hearing 

the same thing that we are hearing, that the vice chair talked 

about, that the government needs to get out of the way and actually help by getting out of the way, by removing the impediments 

to growth? 

Mr. FERNANDEZ. What I hear and what my experience has been 

is that certainly the private sector is going to be the driver and 

source of innovation and job creation. There is no dispute about 

that. But the government has a critical role to play as well. 

Mrs. BONO MACK. But right now there are rules and regulations 

that are imposed that cost Americans more than $1.75 trillion a 

year. So how does that reconcile? Those two don’t reconcile at all. 

To put it in some perspective, the federal budget deficit is projected 

to be $1.4 trillion. So if we are going to create jobs, how do we provide a more fair and sensible predictable regulatory regime? What 

we are saying and what we are doing are not reconciling at all. 

Mr. FERNANDEZ. Well, as the President has said, and he said it 

in the State of the Union, he said it in since then, is that we absolutely do support regulatory review. We want to weed out the kind 

of regulations that are outdated and aren’t productive or necessary, 

but finding and maintaining those that actually do serve a valid 

public good. 

Mrs. BONO MACK. Can you name a quick two or three that you 

have already found? 

Mr. FERNANDEZ. Well, I can’t. For me, no. We are currently—at 

the EDA, in fact, we have published an RFI and we are reviewing 

all of our regulations as well. We are a small agency. But we think 

that are probably rules within our own system that are obstacles 

and slow down the process, particularly as we want to build publicprivate partnerships. 

Mrs. BONO MACK. Well, I look forward to working with you on 

that in the future. 

I would like to yield back my time and recognize the ranking 

member for 5 minutes. 

Mr. BUTTERFIELD. Thank you very much, Madam Chairman. 

Let me spend my time, Mr. Secretary, talking about infrastructure. My district in North Carolina will never recover unless we 

can invest in infrastructure and invest significantly in infrastructure, so this is very dear to me. We have heard time and time 

again that private investment drives the economy, and certainly 

that is true. We have heard it is time for the Federal Government 

to stop spending money, and we all hear that when we go home 

and to a certain extent that is also true. We also hear that it is 

time for the Federal Government to just get out of the way. We 

heard that from the vice chair of the committee this morning and 

we hear it from time to time. 

While I agree that the private sector is and should remain the 

driver for economic growth and prosperity, public investments can 

indeed can help fuel private sector growth by lowering costs for 

American businesses. As the Association of Manufacturers suggests, investments in infrastructure can help manufacturers more 

20 

efficiently move people, products and ideas. And so my question to 

you, sir, is, can you please explain to this subcommittee and to all 

who are interested how investments in modern infrastructure like 

roads and railroads and ports can improve the efficiency and competitive capacity of America’s businesses? 

Mr. FERNANDEZ. Well, let me just say this. I think generally 

there is no silver bullet that is going to address all of the economic 

challenges we face but you have to have a holistic approach. Twenty-first-century infrastructure that is efficient, that can move product, can move digital products as well as hard products, those are 

essential to having the kind of climate where companies can be 

successful and create jobs and provide opportunities. But today’s 

infrastructure has to, in my judgment, certainly include some of 

the traditional basic infrastructure but it also includes a lot of innovation infrastructure. It means STEM education, investments in 

research and development that can be commercialized to create 

whole new industries that we haven’t even thought of, and looking 

at how we create the kind of ecosystem, if you will, in regions 

where the private sector can flourish and I think infrastructure in 

a broad way is a very important part of—— 

Mr. BUTTERFIELD. What about broadband infrastructure and the 

power grid? 

Mr. FERNANDEZ. Absolutely. Sure, I mean, smart grid, we have 

made significant investments as part of the Recovery Act to enable 

the development of smart grid to more effectively distribute energy 

but also enable whole new lines of products to be developed around 

energy-efficient manufacturing, new appliances, etc. So I think 

there is tremendous opportunities in smart grid, in broadband, 

wireless technology. Those are all the essential infrastructures that 

are really growing an effective global economy. 

Mr. BUTTERFIELD. And having said all of that, can the private 

sector be economically profitable without any public assistance 

whatsoever, in your opinion? 

Mr. FERNANDEZ. Well, as I said before, I think there is a strong 

critical role for the private sector and there is a strong critical role 

for the public sector, and I think my experience as a mayor and 

working at the local level is that our economy works best when we 

have those kind of strong public-private partnerships. There is a 

role for both sectors to play that are critically important, and we 

do best when we work together. 

Mr. BUTTERFIELD. On the subject of manufacturing, and I have 

a minute and a half left, although the dominance of the American 

manufacturing sector has been chipped away for some time, our 

country remains the world’s largest manufacturing economy. According to the manufacturers again, we produce 21 percent of global manufactured products. Japan and China follow at 13 and 12 

percent. Our continued dominance shows that America is still a 

place where we can do and make things, and our financial security 

along with our long-term national security demand that we continue to do so. For years, even before the recession, we heard about 

the offshoring and loss of jobs from the United States, but as we 

continue to recover from the recession, it is the manufacturing sector that has proven to be among the bright spots in a slow recovery. 

21 

The manufacturing sector has been growing for the last 19 

months, make no mistake about it, and this past January manufacturing activity turned in its best performance since May of 2004. 

Even more surprising, companies like GE and Ford, among others, 

have announced that they are moving jobs out of China, Japan and 

other countries and back to our country. To use the words that the 

chairman used in her opening statement, they are beginning to insource. These aren’t just jobs but the sort of good-paying jobs that 

we need more of right now and in the long term. Do you know what 

is driving the growth in the manufacturing sector in just a few seconds? Do you know what is driving the growth? 

Mr. FERNANDEZ. I think what is driving it is the ingenuity and 

productivity of the leadership in our companies and the workers 

that help build our companies. 

Mr. BUTTERFIELD. Thank you. 

Mrs. BONO MACK. I thank the gentleman. 

The chair recognizes the vice chair, Ms. Blackburn, for 5 minutes. 

Mrs. BLACKBURN. Thank you, Mr. Secretary, and a question for 

you, because I have got some counties that we have some unemployment problems. The countries where you have given grants, is 

there any statistically significant difference in the unemployment 

rate between the counties that you have had grants in the last 5 

years and those that you have not? 

Mr. FERNANDEZ. We have not engaged in any kind of detailed 

analysis that could answer that question. 

Mrs. BLACKBURN. So you don’t know if what you are doing is 

working or not? 

Mr. FERNANDEZ. I believe your question is one that we can’t answer with the studies we have done but I can tell you that the investments we make have very direct leverage. Our grants are tied 

to specific partnerships where there is immediate private sector leverage, there is public matched dollars, and they have certainly 

made an impact on the communities where we make those investments, yes. 

Mrs. BLACKBURN. OK. So but you have not had a serious study 

to look at this to make a determination if the taxpayer is getting 

their dollar’s worth? 

Mr. FERNANDEZ. We are confident the taxpayers are getting their 

money’s worth. We report out findings on a 3-, 6-, 9-year basis following our investments. There have been two independent studies 

that were done to look at the accuracy of the reporting out, one by 

Rutgers in 1997, another by Grant Thornton in 2008, and they validated the measures that were used by the EDA and by our grantees that report out the economic impact of the grants we made. 

Mrs. BLACKBURN. OK. Well, I have got—let us take this as a for 

instance because I think it concerns me when you all don’t do the 

kind of evaluation of what you are getting for this money, and as 

I said in my opening statement, you can look at what is happening 

with unemployment and see something is not working right, and 

that is what frustrates the American people, and as I mentioned, 

I have been working with my chambers of commerce and local communities and we are doing job creation listening sessions, and 

22 

there is a laundry list of things that they think are being done inappropriately. 

Let me talk about two of my counties, Wayne and Perry counties. 

Unemployment has hovered around 20 percent. If you look at your 

EDA eligibility requirements, then you could say that much of the 

country is going to qualify for EDA assistance. So tell me what 

processes are in place to ensure that projects are created in the 

most severely economically depressed counties. How are you all 

making that evaluation? 

Mr. FERNANDEZ. Well, as you know, the way our grants are made 

are through a competitive grant system and so as a baseline there 

has to be some eligibility criteria that are met. But then our decisions are based on the strength of the applicants and the proposals 

that they make, and as we evaluate those applications, we look at 

the extent of the—— 

Mrs. BLACKBURN. Have you ever been to Tennessee, to Wayne or 

Perry counties? 

Mr. FERNANDEZ. I am not familiar with the counties. I have certainly been to Tennessee, yes. 

Mrs. BLACKBURN. What part? 

Mr. FERNANDEZ. To Memphis, to Nashville. 

Mrs. BLACKBURN. OK. All right. Your agency has photos posted 

on your Web site of international travel to Lyon, to Brussels in November and December of 2010. Your Web site indicates that EDA 

officials are going to go to Hanover, Germany, April 3 through 8, 

2011. So please submit to this committee in writing all past international travel over the past 2 years, the purpose of that international travel including the itineraries and the cost of that international travel and name some positions of the federal status of the 

staff attending all international trips. I would also like to know if 

attendees traveled in coach or business class and specific flights. 

Additionally, please detail with similar information the Hanover, 

Germany, trip and all planned future international trips, and I 

would love for you to explain to me the purpose of EDA’s participation in these international trips. 

Mr. FERNANDEZ. I would be happy to. 

Mrs. BLACKBURN. If the EDA is promoting U.S. competitiveness 

in export abroad, I would say maybe that is the role of the Foreign 

Commercial Service, and during the State of the Union address, 

the President singled out export.gov as government waste and duplication, so do you believe one more agency’s presence in promoting U.S. exports abroad is necessary? And if so, do you believe 

the FCS is unable to do its job effectively? 

Mr. BUTTERFIELD. Reserving the right to object. 

Mr. FERNANDEZ. Well, I would be happy to provide all the information that you requested. 

Mrs. BLACKBURN. Thank you. I look forward to it. 

I yield back. 

Mr. BUTTERFIELD. May I be heard for a point of order, Madam 

Chairman? 

Mrs. BONO MACK. The gentleman may be heard. 

Mr. BUTTERFIELD. I have asked the staff if it is appropriate for 

a member of the subcommittee to posit this type of question to a 

witness, and I am told that it is an appropriate ask, but I would 

23 

ask the gentlelady if she would be so kind as to make the same 

request in writing so there would be some clarity about the request? 

Mrs. BLACKBURN. I will be happy to submit the request in writing. I think that as we look at the purpose of the EDA, and I appreciate the ranking member’s question, that this is information 

that we want to know. We are looking at why we are not getting 

jobs creation in this country. We are hearing from our listening 

sessions that there is a problem and a disconnect between the Federal Government and local communities, and I would suggest to the 

gentleman and to the Secretary that we may be looking at one of 

the disconnects and a place we can go over some redundancy. 

Yield back. 

Mr. RUSH. Will the gentleman yield, please? Will the ranking 

member yield? 

Mr. BUTTERFIELD. I believe it may still be my time. If it is on 

the point of order, I yield to the gentleman. 

Mr. RUSH. Madam Chairman and members of the committee, it 

seems to me that this line of questioning should appropriately be 

addressed in the Subcommittee on Oversight. I think that the energy and time and efforts of this committee should be more focused 

on looking at policy issues rather than looking at travel itineraries 

for members of the Administration, and I strongly concur with the 

position with the ranking member that I think it is just a waste 

of our time and a waste of the Secretary’s time to have his staff 

dedicated to these purposes. If the author of the request, if she 

really wanted to be—I am not sure if she is a member of the Oversight Subcommittee but maybe that is the appropriate place 

where—— 

Mrs. BONO MACK. If the gentleman will yield? 

Mr. RUSH [continuing]. This should actually take place. 

Mr. BUTTERFIELD. Yes, I will yield to the chairman. 

Mrs. BONO MACK. I appreciate the ranking member yielding to 

me, and I would just like to say that this committee does have 

oversight, and I believe the questions are relevant and she has offered to present them to you in writing, which is customary, and 

I would like to know if the ranking member is comfortable with 

that. 

Mr. BUTTERFIELD. I will continue to reserve my right to object 

until we can see the written document, and then I will probably 

withdraw it. Thank you. I yield back. 

Mrs. BONO MACK. All right. The chair would like to recognize 

Ms. Schakowsky for 5 minutes. 

Ms. SCHAKOWSKY. Thank you, Madam Chairman. 

Our chairwoman has said that what the businesses that she is 

familiar with and business in general just want government to get 

out of the way. Secretary, I wanted to ask you if you have ever 

seen a business lobbyist who was here not to get rid of government 

or perhaps to get government to weigh in on the side of business. 

Have you ever seen that? 

Mr. FERNANDEZ. I am sorry. The question is, have I seen—— 

Ms. SCHAKOWSKY. Yes, the assertion was that all that business 

wants is for government to get out of the way. I am wondering if 

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ally want something from government, would like something done 

for business by government. Have you ever seen that? 

Mr. FERNANDEZ. Sure. 

Ms. SCHAKOWSKY. Let us just be clear and honest about that, 

that it works both ways, that there are things that the business 

community through its legion of lobbyists are all on the Hill all the 

time for things not to get government out of the way but actually 

to get government involved. I am not objecting to that. I am simply 

making that point. 

And there has also been some suggestions that the—well, I am 

wondering if you could describe the way in which the President’s 

budget, which does cut $41 billion from spending, how it actually 

would have more success in job creation in your view or not than 

what the Majority has suggested in terms of its Continuing Resolution. 

Mr. FERNANDEZ. Thank you. The President’s budget strikes the 

right balance, which is, we have got to get our fiscal house in order. 

He has made a proposal for a 5-year freeze in non-defense discretionary spending, which will save about $400 billion, and in the 

meantime, though, we have to prioritize the investments that are 

going to make us strong and create an economy that can compete 

and compete effectively internationally. And the idea that investments in education and STEM and R&D and 21st century infrastructure, I think those are things that frankly I hear from the private sector as well as are essentially important to provide the right 

kind of environment where their companies can be successful. So 

I think the notion that everyone, I think, can find agreement on 

is that we have to make these kinds of foundational investments 

that create the conditions where you can have competitive industries that can innovate and grow and provide jobs for our people, 

and you have to have the right balance so that you are making 

tough choices on the budget to get our fiscal house in order, and 

that is the President’s proposal and obviously we think it is sound 

one to move the country forward. 

Ms. SCHAKOWSKY. Thank you. Let me just make one other comment about rules and regulations, that going back to what the 

President had said in his State of the Union address and that you 

verified, that there is a regulatory review. Let us be clear. We 

should all be clear that the American people do want some rules 

of the road and they don’t want to have their children suffer from 

asthma from bad air and from bad water. They want safe food. In 

fact, 81 percent of Americans say they want safe food. I would 

imagine that there would be businesses in the States that would 

want to make sure that there is some regulatory framework to protect them from perhaps unsafe items that are coming from another 

country. Can you just speak to that in the minute that is remaining? 

Mr. FERNANDEZ. Well, I am not sure what I can add to the statement other than that again I think the President’s proposal is to 

have a serious, honest review of the regulations that are currently 

in place, weed out those that are unnecessary and overly burdensome that really don’t maximize the public good, and I think we 

can strike a balance on the kinds of regulations that actually serve 

25 

the public well but do protect it while we enable the businesses to 

grow and the economy to flourish. 

Ms. SCHAKOWSKY. Thank you. I yield back. 

Mrs. BONO MACK. The gentlelady yields back. The chair recognizes the gentleman from Mississippi, Mr. Harper, for 5 minutes. 

Mr. HARPER. Thank you, Madam Chair. 

And Mr. Fernandez, thank you for being here. I know you have 

looked forward to this day for a long time. 

Mr. FERNANDEZ. Well, at least since Friday when I was asked to 

do this. 

Mr. HARPER. Yes. I understand. And look, I appreciate the fact 

that you have a responsibility to present and represent the Administration’s views, but when we sit here and talk about the President’s budget, you say it strikes the right balance and you mention 

the 5-year freeze, but that is at current levels, the 5-year freeze, 

correct? 

Mr. FERNANDEZ. Correct. 

Mr. HARPER. And so after we have spent the last 2 years running 

those numbers up, would it not make more sense to you that perhaps we are better off if we roll back, scale back that and then 

freeze at a lower level? Would that not have a better impact on job 

creation in this country? 

Mr. FERNANDEZ. I think reasonable people are going to have different opinions about that. 

Mr. HARPER. And I understand. I am putting you in a little bit 

of a spit here, and I understand the team concept on how you have 

to do that. I understand that. But when you talk about that, and 

I know you didn’t mention but the President and the Administration has said that under his plan I believe that by the year 2017 

that it would cut the annual deficit in half, I think it my understanding. But when we hear those things and perhaps a 30-second 

sound bite, when we look at those real numbers, that half is still 

more than 50 percent of former President Bush’s highest year of 

the deficit, and so what we want to do is, we just want the truth. 

Whatever that is, let us deal with it and try to work. 

There is no doubt we have a common goal here, which is to create jobs and improve the economy. When I look at my State in Mississippi, I haven’t found a business yet or an industry yet that says 

we are underregulated. Have you identified any business that you 

have worked with that says hey, we need more regulations? Have 

you found one in your journeys so far? 

Mr. FERNANDEZ. Let me just say that I think what I hear the 

most, honestly, is that the people I work with are looking for the 

right balance. They want a partnership that is effective and they 

respect the roles the public and the private sector can play but I 

think people genuinely want to work together to move the economy 

forward. 

Mr. HARPER. If you were looking across the board as you look at 

the idea of job creation, is there any particular agency that you 

hear the most complaints about from the businesses that you talk 

to, not judging those complaints but is there any one that you hear 

more of out of than another? 

Mr. FERNANDEZ. There is none that I hear more about than any 

of the others. 

26 

Mr. HARPER. You talked about the competitive grant situation, 

and we just got a little bit of time left, but when you are looking 

at that, do you have a ratio or an amount that you look at as far 

as the management costs or the administration costs versus, say, 

a percentage of what that is as to what is done by grant, the 

amount of the grant? Is there some rule of thumb that you use or 

anything of that nature as to how you keep those in balance or in 

check? 

Mr. FERNANDEZ. Just to be clear, the administrative costs to the 

agency or—— 

Mr. HARPER. Yes. 

Mr. FERNANDEZ [continuing]. To the grantee? We don’t look at 

the agency cost directly because the truth is, it is a pretty modest 

budget. So the administrative cost to the EDA of any particular 

grant versus another is going to be really de minimis. What we 

look at are, is there a strong partnership, is there a good strategy 

in place, are they building on the assets that are going to enable 

sustainable economic growth, is there a commitment of leadership 

from the private sector as well as the public sector in that community around that strategy. 

And I should note that, when it comes to EDA, and this was part 

of the question earlier, it is not free money. A very important part 

of the way our agency works is that people have to put skin in the 

game so by statute we have a minimum match requirement of 50 

percent, and in many cases, since it is a competitive system, folks 

come in with more, and it is that kind of leverage bottom-up strategy that I think actually does produce very real results. 

Mr. HARPER. And when you are looking at that competitive grant 

situation, how do you balance or eliminate or disregard, say, political interests that might be a part of who the grantee or the recipient might be? 

Mr. FERNANDEZ. Well, we do it in a couple of ways. One is that 

it is a transparent competitive process. Secondly, the money that 

is appropriated to the EDA gets disbursed out and allocated across 

our six regional offices. There are no political appointees in any of 

those six offices and they make the decisions about where the grant 

dollars go, and I think the bipartisan support that has been strong 

over the years for EDA—— 

Mr. HARPER. Thank you, Mr. Fernandez. I am afraid we are out 

of time, but thank you very much. 

Yield back. 

Mrs. BONO MACK. I thank the gentleman and recognize the gentleman from Illinois for 5 minutes, Mr. Rush. 

Mr. RUSH. Thank you, Madam Chairman. 

There is a global demand for greener, sustainable economies 

which include a global demand for clean energy technologies. The 

United States used to dominate the field for the invention and 

manufacturing of clean energy technologies. Today, our Nation lags 

behind other nations for clean energy investments, innovation and 

manufacturing. China spends roughly $12 million monthly, that is 

per month, on new energy technologies and export expansions. In 

2006, U.S. public investment in renewable energy was less than 

one-fourth of that for the entire year. A venture capitalist who was 

an early investor in Google sized up America’s investments in its 

27 

energy future in the following way: ‘‘America spends more on potato chips than we do on new energy research and development.’’ 

I mean, we all like potato chips but the price of gas has shot up 

20-plus cents in the last week so we might be wise to spend more 

money on finding an alternative for a such a volatile energy source 

than we do on our consumption of potato chips. 

If we want to stay globally competitive, we want to secure our 

energy future, we must invest in research and development of 

clean energy technologies, and President Obama acknowledged this 

fact, stating, ‘‘We can make the investments that will allow us to 

become the world’s leading exporter of renewable energy. We can 

let the jobs of tomorrow be created abroad by some other nation or 

we can create those jobs right here in America and lay the foundation for our lasting prosperity, prosperity for our children and for 

our grandchildren.’’ 

I have three questions. What is the Department of Commerce 

doing to help U.S. companies become leaders in clean energy technology? What is the Commerce Department doing to ensure that 

the United States is at the forefront of energy and resource efficiency? And lastly, do we have the highly skilled workforce needed 

to fill these technological and green jobs right now? 

Mr. FERNANDEZ. Well, the agenda to drive clean energy and the 

sustainable development, the green economy, if you will, is broad 

and covers a lot of departments throughout the Federal Government. Commerce is certainly engaged in it. You know, the work 

that is happening in the United States Patent and Trade Office 

around protecting IP is an essential part of the innovations in the 

green economy. Our export agencies are certainly engaged. EDA, 

we work with communities, particularly on building the partnerships between the workforce component to have the kind of skills 

and the capacity to work in those industries, and we certainly are 

involved in some of the investment decisions through our competitive grant systems that have enabled communities either to build 

as I mentioned in the opening testimony the incubators around 

clean technology, other investments in infrastructure for some of 

the large manufacturing plants that are part of the clean technology economy. So there is a wide range of activities that Commerce is involved in, but overall, I mean, clearly President Obama 

and this Administration have made clean technology, clean manufacturing a very important centerpiece of the recovery programs as 

well as ongoing economic development priorities. 

The Recovery Act had significant investments that have paid off, 

frankly, in terms of the tax credits that encourage manufacturing 

in the green energy-efficient areas. So there is clearly a big commitment and it is a big priority for this Administration. 

Mr. RUSH. The President has called for the doubling of exports 

in the next 5 years. Can you tell us what you believe are the manufacturing sectors with the highest potential for increasing exports 

and what can we do to improve growth in these sectors and to help 

them remain globally competitive? 

Mr. FERNANDEZ. Well, clearly exports are an essential part of the 

manufacturing economy and the U.S. manufacturing sector is a 

major exporter. It is one of the largest export components of the 

American economy. I couldn’t tell you the specific industries but I 

28 

would be happy to get that information from our colleagues at ITA 

or somewhere else within the department. 

Mr. RUSH. Thank you. I yield back the balance of my time. 

Mrs. BONO MACK. I thank the gentleman. 

The chair recognizes Mr. Guthrie of Kentucky for 5 minutes. 

Mr. GUTHRIE. Thank you, Madam Chairwoman, and thank you, 

Mr. Secretary, for being here. I appreciate it, and I am glad that 

you are focused on job creation as well. 

One of the struggles that I have seen in my time in Congress is 

just the astounding array of regulations that are coming, that are 

prepared, that are being put forth, and businesspeople are concerned. Yesterday, the Kentucky Farm Bureau, not the insurance 

agent but the farmers from my area were in town and they talked 

about the Farm Bill in passing. Their biggest concern was what 

EPA was going to do to the farm, and just concern from making 

milk a biohazard. I mean, those are different things that are coming forward that we see, and it is the same in manufacturing. 

I am from Kentucky, a manufacturing State. Ninety-three percent of our energy is from coal. Coal makes it cheaper. We have 

a vast if you go and down the Ohio River just across from where 

you guys are, where you are from, not too far where you from, you 

see manufacturing plants, and we are really concerned and we are 

concerned about the job loss so my question is, is the Commerce 

Department which is the voice of business working with these 

agencies to at least say I know you have got a plan, I know you 

are going in this direction but this is what is going to do to American business and American manufacturing? Is there any interagency dialog about what they are doing? 

Mr. FERNANDEZ. Well, there is certainly a significant amount of 

interagency dialog and the Commerce Department among others 

has opportunities to weigh in on proposals that are coming through 

the Administration. 

Mr. GUTHRIE. And somebody said it, and I will say it tongue in 

cheek because they said it but it has some truth to it. They said 

just like we have the Trade Adjustment Act, maybe we should have 

the Regulation Adjustment Act for dislocated workers for what the 

regulatory environment is going to be doing, and I mean, that is 

a real concern out there. I know you know it because you probably 

hear it from people that are there. But what about the energy 

prices that we are seeing? I mean, I know we have an offshore 

drilling ban that was lifted but the permitting process is going forward. It is difficult to get a permit in Appalachia today. I know it 

is not your area or group, but is there discussion in the Administration about what this is actually going to be doing to our economy, maybe we are seeing some recovery if we see it turn backwards because of high energy prices? I know there is some issues 

with the Middle East and oil prices. I understand that. But also I 

think energy prices were rising prior to what we have seen over the 

last month in the Middle East. If you could just talk about what 

is happening here, I would appreciate that. 

Mr. FERNANDEZ. Well, you are right. That is usually a subject 

matter that I am not as engaged in as others might be within the 

Administration, so I would be happy to follow up with you with 

some responses from of my colleagues. 

29 

I can say that having sound, affordable clean energy is important 

to our economy and that is certainly the kind of investments that 

the Administration wants to make. But again, I come back to my 

opening point about how the President and this Administration are 

genuinely committed to looking at our current regulatory structure, 

weeding out unnecessary regulations that do get in the way and 

don’t necessary serve the purpose they might have when they were 

first promulgated and coming up with a reasonable balanced structure that can enable innovation to survive and thrive and grow and 

protect public interest at the same time. 

Mr. GUTHRIE. Thank you, Mr. Secretary. 

I yield back. 

Mrs. BONO MACK. The gentleman yields back. 

The chair recognizes Mr. Pompeo from Kansas for 5 minutes. 

Mr. POMPEO. Thank you, Madam Chairman, and thank you, Mr. 

Fernandez, for coming out today. We had a chance to speak just 

briefly before this hearing commenced and I have spent until 8 

weeks ago my life in the manufacturing world, and I was looking 

at your prepared testimony in preparation for today. I have to 

share with you, I had never heard of EDA until that moment in 

time. I would guess that when I went back to Kansas and talked 

to manufacturers there, they likely would not have heard of it either, and if I asked them what would be most important to them 

growing their business, they would not talk to me about rolling the 

roulette wheel and catching a grant from EDA but rather would 

talk to me about regulations and taxes and that kind of thing. So 

I thought I would share that with you before I sort of dug into a 

couple of specific questions. 

So in here you talk about a $1.4 million grant to Nashwauk, 

Minnesota, that leveraged a $1.6 billion plant. Do I have that 

right? 

Mr. FERNANDEZ. We were part of that plan, yes. 

Mr. POMPEO. Is it your testimony that absent your $1.4 million grant, that that $1.6 billion investment would not have been made? 

Mr. FERNANDEZ. No. What I would say is that the grant we made 

was critically important to—— 

Mr. POMPEO. When you say ‘‘critical,’’ that is the key word. So 

if you had not made your grant, would that project have proceeded? 

Mr. FERNANDEZ. It would have made it more challenging. 

Mr. POMPEO. One point four million dollars as a part of a—I 

just—I am skeptical that that was the $1.4 million—you have used 

the words ‘‘critical’’ or ‘‘catalytic’’ before. I am skeptical that a federal grant of $1.4 million is catalytic to a $1.6 billion investment. 

Mr. FERNANDEZ. No, and we try and be careful about that as 

well. But if I can, let me just—— 

Mr. POMPEO. And they are critical. Those—— 

Mr. FERNANDEZ. Yes, absolutely. 

Mr. POMPEO [continuing]. Are the justification for your agency’s 

existence. 

Mr. FERNANDEZ. Let me answer the question, though, maybe give 

you a little bit more background on that specific project. You know, 

the plant is not located in that particular town. That town’s entire 

budget is barely over a million dollars a year but the water lines 

and the infrastructure that needed to connect up to this new plant 

30 

went through that little town and they needed to come up with the 

resources, and it was essential and it was a tremendous opportunity for them to be able to get an EDA grant to fund that. They 

would have had a very difficult time connecting this infrastructure 

to the plant because it was their responsibility. 

Mrs. BONO MACK. Excuse me, Mr. Secretary. The time is expired. 

The chair recognizes Mr. Towns for 5 minutes. 

Mr. TOWNS. Thank you very much. I want to thank you for having this hearing as well. 

We all agree that we need to get our fiscal house in order. We 

agree. But there are major differences of degree about how to accomplish these goals. Some argue that the Federal Government 

should simply stop spending money. This notion makes no sense in 

the short term during which the recovery hasn’t fully taken hold 

nor in the long term if we expect to raise enough revenue to pay 

down our debts. Completely halting our investments in R&D, education and infrastructure would be devastating in the short and 

long term. Moreover, this suggested approach by government ignores how much of the rest of the world operates. 

As much we might like, we aren’t living in a world defined by 

completely free and open competition. For example, at a hearing in 

the last Congress on growing U.S. trade and green technology, we 

learned that many countries place tariff and non-tariff trade barriers on green goods. Denmark, for one, has essentially mandated 

the use of Danish manufactured wind turbines. In addition, other 

countries are investing huge resources into new technologies. The 

United States now ranks 11th among the G–20 countries for the 

intensity of its investments in clean energy and technology. My 

question to you: Can you please describe some of the other barriers 

to access that United States manufacturers face when trying to 

enter the clean energy market of other countries? What can be 

done to reduce or to eliminate those barriers? 

Mr. FERNANDEZ. You know, let me just—it is probably going to 

get a little bit beyond my portfolio but let me just say that I would 

be happy to get more information to you on that. I think the biggest barriers, we are looking for fair trade agreements where we 

can enable exports from our country to have access to these growing markets. I think in terms of the clean energy, I mean, the barrier here frankly there is uncertainty about the market in the 

United States, uncertainty about having a comprehensive energy 

policy and some of those issues that create impediments to private 

sector and other financial institutions making big investments 

here, and until we resolve some of those issues, I think that is 

going to be a drag on our ability to invest more and become more 

competitive in the clean tech space. 

Mr. TOWNS. Well, what is the Commerce Department doing to 

help ensure that the United States is in the forefront of energy and 

resource efficiency? That is your pay grade. 

Mr. FERNANDEZ. Well the Department of Commerce certainly 

under Secretary Locke’s leadership has been very aggressive about 

enforcing trade agreements and going after some of the tariff barriers that create an uneven playing field for American companies. 

The Energy Department and others throughout the Administration 

have made significant investments in new innovation, in research 

31 

and development, in commercialization around clean technology opportunities, so we are investing I think in a significant way to grow 

that part of the economy. 

Mr. TOWNS. Do we have people skilled enough to be able to handle these jobs? Do we have people qualified to do it? 

Mr. FERNANDEZ. I believe so, yes. 

Mr. TOWNS. You don’t think we need to do anything special to 

prepare the workforce needed for these jobs? 

Mr. FERNANDEZ. The workforce to support the clean technology 

industry? 

Mr. TOWNS. Yes. 

Mr. FERNANDEZ. I think that there is plenty of evidence that one 

of the challenges we have in our economy is there is a disconnect 

between the skills of some of the workforce and some of the jobs 

that are actually available. So yes, we need to do more to improve 

the linkage in our workforce investments, to build those opportunities to support these innovative new companies. 

Mr. TOWNS. Thank you very much. 

On that note, I yield back. 

Mrs. BONO MACK. The gentleman yields back. 

And before I recognize the next colleague of mine, I just want to 

point out to the newer members that we recognize for questioning 

in the order of appearance at the hearing, and that is protocol for 

the committee and it is standard, so to everybody in the room, if 

it seems that I am skipping over somebody, it is just the order of 

appearance, and looking down at my young colleagues on the front 

dais, if I ever had to be behind an offensive line, I would want to 

be behind all of you guys, hopefully offensive and not defensive 

line. 

The chair recognizes next Mr. Kinzinger of Illinois for 5 minutes. 

Mr. KINZINGER. Thank you, Madam Chairwoman, and thank you, 

sir, for coming out. You are doing a great job. Maybe we will have 

you back sometime. How do you like that idea? 

Mr. FERNANDEZ. I would welcome the opportunity. 

Mr. KINZINGER. You know, I think everybody agrees, when we 

talk about getting government out of the way of small business, we 

don’t mean government disappears completely. We understand that 

there is a strategic partnership in some ways that needs to occur. 

I think where the concern is, from our part, is we have just seen 

a major overstep of that, to go from almost a partnership to—what 

is the word—a big brother, father role that the government plays. 

And I think that frankly is negative to what we see in small business. In fact, what I have seen is as I have traveled around the districts is businesses large and small, in many cases they have the 

capital, they have the capital to invest and expand, but what they 

are concerned about is when they have to plan 10, 20, 30 years out 

in determining where to invest assets and determining where to go. 

They see an environment that just is continually shifting. It is like 

being on a waterbed. It is never stable. And so as they look out and 

say well, I can either hang on to the money I have now or I can 

make a risk, a risk in investing in the future, which frankly those 

risks and investment in the future is what drives this economy, 

they see an uncertain environment. So I think that is what is kind 

of the key is, not that there is no role for government but that the 

32 

role for management needs to be stable in the long term as people 

try to plan things out. 

One of the other things that I hear a lot, especially, I come from 

a heavy agricultural and manufacturing district, is, and I have 

seen too is the Administration’s failure to lead in the area of trade. 

You know, I am happy that we are starting to talk about potentially approving a trade agreement with South Korea. I think that 

is important, but we have pending trade agreements with Colombia 

and Panama, and given that 95 percent of the world’s consumers 

live outside of the United States, I think in order to see manufacturing spark back to life, which I would love it to do, we do have 

to create a level playing field and that level playing field is done 

through setting up some of these trade agreements. 

So as the Administration’s representative to business, have you 

discussed the regulatory environment which we have talked about 

a little bit but also a lot of that trade burdens and kind of the focus 

on getting us to where we can be competitive and not lose market 

share to China and India? 

Mr. FERNANDEZ. Sure. You know, the Administration agrees with 

you that there are a number of pending trade agreements that we 

think would open up opportunities for American companies to export into a much fairer, freer system so we support a number of 

those agreements, and one of them is—— 

Mr. KINZINGER. Are we going to expect to see that in the very 

near future the Administration take a leadership role then in getting those trade agreements through including Panama, Colombia 

and South Korea? 

Mr. FERNANDEZ. The Congress certainly has a role in moving 

those forward as well. 

Mr. KINZINGER. OK. All right. So from what you are hearing, 

though, it is not necessarily—because I have heard them lead on 

or talk about South Korea, which I am appreciative of. I think that 

is important. But I haven’t heard much lately on Colombia. I 

haven’t much on Panama. And again, we are losing not just from 

the economic perspective but there is a national defense and strategic advantage to having these trade agreements, especially when 

we deal with enemies like, you know, folks to the east. 

Another question, obviously the GAO report that came out found 

52 programs and four agencies that fund entrepreneurial efforts, 

and I have seen little evidence of your department’s ability or I 

guess efforts to really work with some of these other agencies to 

find out areas of duplicative programs and figure out how to 

streamline it and make it to where we don’t have all this overadministration. We are no longer in an age, unfortunately, where 

we can afford this kind of waste. I mean, we have kicked the can 

down the road. We need to cut our spending, and this is an easy 

area to do it. So what is your plan to provide corrective action to 

ensure that the EDA is leveraging its assets to promote growth and 

limit duplicative process and waste? 

Mr. FERNANDEZ. I think it is a very fair question, and the work 

we do, as I mentioned in my opening statement, there is a tremendous amount of interagency collaboration going on right now. While 

there are a number of programs with the titles of economy development or community development, entrepreneurship, many of them 

33 

are complementary but what is essential is that we get alignment 

and leverage so we are not duplicating and wasting taxpayer 

money. We work very closely with our partners in the SBA and 

these other agencies to come together and build strategies that do 

look for that linkage and alignment so that we accelerate the rate 

of return and don’t just create duplication. 

Mr. KINZINGER. Thank you. 

Mrs. BONO MACK. The gentleman yields back. 

The chair recognizes Mr. McKinley of West Virginia for 5 minutes. 

Mr. MCKINLEY. Thank you, Madam Chairman. 

I was curious about some of the opening remarks that were made 

about Goldman Sachs. I don’t necessarily think they—I think they 

were bit of a poster child about the problems on Wall Street but 

their numbers are being used now, and about 700,000 jobs being 

lost if we continue this mission of being fiscally responsible. But 

then Chairman Bernanke came out and said that wasn’t right, 

those were gross misrepresentations. I am just curious. Was 

Bernanke right? 

Mr. FERNANDEZ. I didn’t watch his testimony so I am not prepared to give you a good answer on that. 

Mr. MCKINLEY. Just curious. I have always held the Commerce 

Department in high esteem because I think it has less of an agenda 

than some of the other departments, and I have seen in West Virginia the northern district that I represent, we have lost 24,000 

manufacturing jobs in the last 10 years, and in the State in the 

last 25 years we have lost over 100,000 manufacturing jobs to a 

point now where when we can try and characterize it, that manufacturing at one time with 150,000 manufacturing jobs, now if you 

put all the remaining manufacturing jobs that are left in West Virginia throughout all three districts, it wouldn’t even fill Mountaineer Stadium with 50,000 people. I feel threatened for our economy and I hoping the Commerce Department will really address 

that. 

I am concerned because I spoke with one of our senators he said 

the fact that we have 15 million people in America out of work, he 

said but they are getting unemployment insurance. Do you think 

senators, other people don’t get it, that people want a job and it 

is our responsibility to be more definitive about getting those jobs 

rather than continuing it? On Saturday will be my 60th day for me 

to be in Congress. I have been to so many hearings, I have read 

so many reports, I have heard so much dialog but I haven’t seen 

the plan that is going to put these people back to work. Someplace 

we have to do that, and it concerns me. Earlier this week in another meeting, another hearing, you were praising him unfortunately. Someone came in with—you were praising the regulatory 

bodies but this regulatory body had the gall to say that the greenhouse gas emissions regulated under the Clean Air Act is going to 

create jobs, and in West Virginia we know that it not accurate but 

yet that is what happens here in Washington is no one outside 

Washington believes that more government is going to create more 

private sector jobs. Only in the Beltway am I getting any sense 

that government is the solution. 

34 

So I am curious, given your opening statement that you said it is a fiscally responsible budget to have $1.4 trillion deficits and we 

are still sitting with 9 percent unemployment, how can you defend, 

how can the Commerce that I held in high regard, how can you sit 

and defend that your policies are the right policy, big government 

is better than reducing expenditures? Can you share that? 

Mr. FERNANDEZ. Sure. Again, I think that the challenges we 

have today didn’t happen overnight, and it is our judgment that 

you have to have a measured response. The President’s proposal for 

deficit reduction based on the freeze on discretionary non-defense 

money is serious. We are not going to solve the entire fiscal situation in this country just looking at the discretionary part of nondefense part of federal budgets. There is a whole wide range of 

issues that will be addressed, I am sure—— 

Mr. MCKINLEY. In the budget, does he have reductions in the entitlement? 

Mr. FERNANDEZ. I don’t know off the top of my head. I would 

have to get back to you. 

Mr. MCKINLEY. Could you get back to me? I would like to know. 

Mr. FERNANDEZ. But I think that there is a very strong recognition that a lot of these tough issues are going to have to be addressed in a bipartisan way, and the Administration is committed 

to doing that. 

Mr. MCKINLEY. Can you provide something giving an indication 

of what the—has the EDA, with your group, have they done any 

proactive positions or assistance in West Virginia in the last 2 

years in the northern district? 

Mr. FERNANDEZ. My light is lighting up—— 

Mr. MCKINLEY. Proactive, not responding but you are trying to 

help to lead the charge, and if you can’t today, can you send that 

to me? 

Mr. FERNANDEZ. Sir, we have been very active in West Virginia. 

Mr. MCKINLEY. I would like it for the northern district of West 

Virginia, all that employment, 10.3 percent unemployment. If you 

could send that to me, I would like to have it. 

Mr. FERNANDEZ. I would be glad to. 

Mr. MCKINLEY. Thank you very much. 

Mrs. BONO MACK. Mr. Secretary, per Ms. Blackburn’s comments, 

we now have her letter to you outlining her earlier request for the 

record. If you could just have your staff grab it from the clerk to 

your right before you leave and you will also get a copy of that electronically after the hearing, and we would also like to state that 

we have other questions for the record which we will submit to you, 

and we would appreciate your prompt responses in writing. 

With that, I just would like to thank you very much for your appearance today, and to say to you, I think we want to work together along with Secretary Locke in making ‘‘Made in America’’ 

work again, and I look forward to it. And as my colleague, Mr. 

Kinzinger, said, we hope you are back here often in the good spirit 

that you were here with today, so thank you. 

Mr. FERNANDEZ. Thank you. 

Mrs. BONO MACK. And at this point we are going to take about 

a minute break while we change the panels out and then get started again. So thank you again, Mr. Secretary. 

35 

And for some reason we are doing it flipped the way we ordinarily go left to right but today we are doing stage right to left, 

but we have the seven witnesses. Our first witness is Chris 

Cummiskey, Commissioner of the Georgia Department of Economic 

Development and Chairman of the Georgia Centers of Innovation 

Board of Directors. Our second witness is Drew Greenblatt. Mr. 

Greenblatt is president of the Martin Steel Wire Products of nearby 

Baltimore, Maryland, and represents the National Association of 

Manufacturers. Also testifying before us today is no stranger to us 

all, Douglas Holtz-Eakin. Mr. Holtz-Eakin is president of American 

Action Forum. Our fourth witness is Gregory Wilson, Special Advisor to the Financial Services Roundtable. Our fifth witness is Ms. 

Deborah L. Wince-Smith. Ms. Wince-Smith is president and CEO 

of the Council on Competitiveness. Also testifying is Heather 

Boushey. Welcome, Heather. She is the Senior Economist at the 

Center for American Progress. And last but not least, Mr. Rhone 

Resch, welcome. He is the president and CEO of the Solar Energy 

Industries Association. Welcome to all of you. You are each recognized for 5 minutes, and to help keep track of the time are those 

nice little lights in front of you, and I would ask that when you see 

the red you try to sum up as quickly as you possibly can. There 

are a lot of us to get through today and votes on the floor eventually. So we are going to start with Mr. Cummiskey. You are recognized for 5 minutes. 

STATEMENTS OF CHRISTOPHER CUMMISKEY, COMMISSIONER, GEORGIA DEPARTMENT OF ECONOMIC DEVELOPMENT; DREW GREENBLATT, PRESIDENT AND OWNER, MARLIN STEEL WIRE PRODUCTS, LLC, ON BEHALF OF NATIONAL 

ASSOCIATION OF MANUFACTURERS; DOUGLAS HOLTZ– 

EAKIN, PRESIDENT, AMERICAN ACTION FORUM; GREGORY 

WILSON, SPECIAL ADVISOR, THE FINANCIAL SERVICES 

ROUNDTABLE; DEBORAH L. WINCE–SMITH, PRESIDENT AND 

CEO, COUNCIL ON COMPETITIVENESS; HEATHER BOUSHEY, 

SENIOR ECONOMIST, CENTER FOR AMERICAN PROGRESS; 

AND RHONE RESCH, PRESIDENT AND CEO, SOLAR ENERGY 

INDUSTRIES ASSOCIATION 

STATEMENT OF CHRISTOPHER CUMMISKEY, COMMISSIONER, 

GEORGIA DEPARTMENT OF ECONOMIC DEVELOPMENT 

Mr. CUMMISKEY. Thank you, Ms. Chairwoman, and Ranking 

Member. I want to thank the subcommittee for this invitation to 

speak to you today and for taking the time to address these very 

important issues. 

The topic at hand, innovation in manufacturing, is one that is 

very close to our hearts in Georgia. We are a State that cultivates 

innovation and creativity in this very strategic industry. Like most 

States, we have lost manufacturing jobs during the recent economic 

downturn but our recovery is coming. Our sector of employment in 

Georgia has increased for the fourth consecutive month and confidence levels remain high. 

This isn’t your grandfather’s manufacturing we are talking 

about. We are particularly strong in advanced manufacturing sectors like aerospace and automotive, both part of our strategic inVerDate Nov 24 2008 10:30 Aug 01, 2011 Jkt 037690 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 F:\112-015 JOB CREATION-PDF MADE\112-015 PDF MADE WAYNE
36 

dustry focus. The Georgia aerospace manufacturing sector accounts 

for approximately 28,000 workers in the State, and our aerospace 

exports in 2010 grew 23 percent to an all-time high of $4.4 billion, 

seventh in the United States. Industry giants like Lockheed, Boeing and Gulfstream are part of our corporate aerospace community. 

Georgia’s automotive industry began in 1909 with a small Ford 

plant. Today, Kia has invested approximately $1 billion in its first 

United States auto facility. Kia is just one of our more than 300 

auto- and vehicle-related companies, employing 20,000 workers. 

Other prominent automotive names are Pirelli Tire, Toyo Tire, ZF 

Industries and Johnson Controls. 

The men and women who comprise Georgia’s manufacturing 

workforce are highly motivated, skilled and eager to embrace new 

ways of doing things. This is an attitude and an aptitude that we 

have deliberately cultivated in our workers in response to the challenges of the new world economy. We in Georgia realized very early 

that we would not be able to compete with other countries, particularly emerging economies, solely on the basis of wages. We are not 

just about low-cost manufacturing; we are about high-quality manufacturing. We enabled this through three key ways. 

First, Georgia stepped up early to ensure we had the most creative approach to workforce development in the Nation. Education 

and training is the most critical part of the manufacturing innovation process in Georgia. We accomplish this through economic development partnerships with our universities and our 26 technical 

colleges. Our Georgia Quick Start program was the first of its kind 

in the United States and has become a national model for customized workforce training. Offered to qualified companies free of 

charge to the State since 1967, Quick Start is part of the technical 

college system of Georgia. It is a soup-to-nuts process. Quick Start 

personnel will travel to a company’s home State or home country, 

see how they do their processes, replicate them through a variety 

of technologies and then bring them back here. The program gives 

hands-on training to new hires, trains existing workers on new 

processes as well as staying with the company after it begins operation to continue to find trends and how to be more efficient. Quick 

Start has delivered more than 5,800 projects for client companies 

and prepared more than three-quarters of a million trainees. 

Possibly the best example of Quick Start’s importance is its role 

in Kia’s decision to locate in Georgia. Quick Start build a $22 million state-of-the-art training facility that has trained each of the 

currently 2,200 Kia employees and is about to train another 800, 

helping the company reach its full operational capacity ahead of 

schedule. The chairman of Hyundai-Kia has called Quick Start’s 

training center a global benchmark, and the training center for 

Hyundai’s new plant in Brazil is being modeled after the one here 

in Georgia. 

The concept has many imitators but we are proud to have instituted the original program in the United States and to see it grow 

into something that for many companies is the deciding factor in 

their choice to locate or expand to the State of Georgia. Georgia 

Quick Start is a powerful solution to develop a skilled workforce for 

innovative manufacturers. 

37 

Another way Georgia is strengthening our manufacturing sector 

is through out Centers of Innovation program, which is unique in 

the United States. We saw the need that entrepreneurs and small 

companies with the potential for high growth were often having difficulty moving products and services into commercialization, so in 

2003 then-Governor Sonny Perdue created the State-run program 

to connect them to Georgia’s intellectual capital as universities as 

well as industry expertise they needed to jump-start their growth. 

The Center of Innovation for Manufacturing is one of six such centers in Georgia. It provides expertise in advanced manufacturing 

processes as well as customized training programs with the latest 

advanced robotics and PLC and CIM equipment, helping manufacturing companies develop a healthy bottom line. 

The center’s friendly environment for research and development 

includes the latest prototyping equipment, allowing companies to 

test new ideas before investing the money. The center has worked 

with approximately 80 companies in the last 2 years, partnering 

frequently with Georgia Institute of Technology to design innovative manufacturing processes and equipment and thus expand production. 

Suniva, for instance, is a great example of Georgia innovation 

blossoming from the ground up. This solar manufacturing company 

grew from successfully commercialized research at Georgia Tech. It 

manufactures the most efficient, low-cost photovoltaic cells on the 

market. The company is rapidly expanding its production capacity, 

and its new plant will open in 2011 with 400-plus-megawatt capacity. Suniva was ranked last year by Wall Street Journal as the 

number two venture capital-backed clean technology company in 

the United States and received the Renewable Energy Exporter of 

the Year award from the Export-Import Bank of the United States. 

Suniva was assisted along the way by the Georgia Center of Innovation for Energy. It is exactly the sort of company our Centers of 

Innovation program was created for. 

Another fact that sets us apart is our pro-business environment. 

Over the years, elected officials in Georgia have worked extremely 

hard to make sure the State regulatory and tax environment is 

such that it fosters business growth. Am I out of time? 

Mrs. BONO MACK. Sum up very briefly. Yes. 

Mr. CUMMISKEY. Our corporate income tax rates are incredibly 

low and conducive to business and our regulatory is very, very limited, which helps us thrive in this environment. 

Thank you for your time, and I will be happy to answer any 

questions at the end of the round of statements. 

[The prepared statement of Mr. Cummiskey follows:] 

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Mrs.BONO MACK. Thank you. 

Mr. Greenblatt, you are recognized for—yes? 

Mr. GREENBLATT. Chairman Bono Mack, in the witness’s defense, 

our timer is not working. 

Mrs. BONO MACK. Then I apologize. 

Mr. CUMMISKEY. That is OK. I will get over it. 

Mrs. BONO MACK. I apologize. 

Mr. Greenblatt, you are recognized for 5 minutes. When the light 

turns yellow, I will make some funny faces at you, I guess, or 

something. 

STATEMENT OF DREW GREENBLATT, PRESIDENT AND OWNER, 

MARLIN STEEL WIRE PRODUCTS, LLC 

Mr. GREENBLATT. Good morning. My name is Drew Greenblatt. 

I am the president of Marlin Steel Wire. We are based in Baltimore, Maryland. I appreciate the opportunity to testify today on behalf of the National Association of Manufacturers. We represent 

some 11,000 factories in all 50 States, all industries, all sizes. 

The title of today’s hearing raises an issue that is close to my 

heart. Marlin Steel Wire produces custom wire baskets like this 

and wire forms like this, precision sheet-metal fabrication assemblies, all manufactured 100 percent in the U.S.A. and we sell them 

all over the world. We export to over 34 countries including this 

week, Holland, Japan, Sweden, Ireland and Canada. Twenty-five 

percent of our employees are mechanical engineers or designers. Innovative and dedicated employees have helped expand sales and 

jobs since I bought the company in 1998. We achieved record sales 

4 years in a row. 

Manufacturers are seeing signs of economic recovery but we have 

a long way to go. Manufacturing lost 2 million jobs in the recession, 

and unemployment remains unacceptably high. Meanwhile, our 

competitors over in Europe, Asia and South America aggressively 

seek new customers and new opportunities. Their countries 

strategize for success in manufacturing. 

Manufacturers believe the United States must also embrace a 

comprehensive approach, one that we outlined last year in our policy guide, Our Manufacturing Strategy for Jobs in a Competitive 

America. 

First, we want to be the best country in the world to headquarter 

a company. Second, we want to be the best country in the world 

to do the bulk of our R&D, our research and development. Third, 

we want to be a great place to manufacture good and exports. 

We start with the goal that the United States will be the best 

country in the world to headquarter a company. It is critical that 

our national tax climate does not place manufacturers in the 

United States at a competitive disadvantage in the global marketplace. This week, my company shipped wire baskets for General 

Motors’ assembly line in Canada, where the corporate tax rate is 

less than half of what we pay. It is easier for my Canadian competitor since his taxes are lower. He has no health insurance. This is 

bad for me. This is bad for my workers. It means less jobs in the 

U.S.A. A pro-manufacturing tax policy must first acknowledge that 

when Congress raises taxes, it makes manufacturing in the United 

States less competitive. Congress should lower the corporate rate 

47 

to 25 percent or even lower like Canada at 18 percent without imposing offsetting tax increases. Congress must pass permanent 

lower taxes for the over 70 percent of manufacturers that are S corporations and file as individuals like Marlin. 

Our health care costs also are constantly increasing, double digits, year in, year out. We provide all of our employees with health 

insurance. The cost problem has not been solved by recent legislation. Congress needs to revisit the solutions they proposed, and it 

is a problem and it is holding us back. 

Our second goal is that the United States should be the best 

country in the world to innovate, performing the bulk of their company’s global research and development. We want those R&D jobs 

here. The R&D tax credit is important to achieve this goal. Congress extended it recently. However, it has passed and expired 

more than a dozen times. A little more permanence and certainty 

in all tax policy would be a good thing. 

Finally, our last goal is for the United States to be a great place 

to manufacture both to meet the jobs of the American market and 

serve as an export platform for the world. This means more U.S.A. 

middle-class jobs. Manufacturers rely on overseas markets. Ninetyfive percent of the world’s consumers are overseas, and most of our 

exports are manufactured goods. One of Marlin’s main core niches 

is selling custom stainless-steel material-handling baskets to Japanese automakers. As a matter of fact, this week we shipped to 

Mazda. Korean automakers have steadily increased their market 

share, offering a similar promising market. The U.S.-Korean free 

trade agreement if enacted will help Marlin Steel compete on a 

level playing field. I want to sell to Hyundai. I want to sell to 

Samsung. I want to sell to Kia. 

Rising energy costs also continue to hold back growth and job 

creation. Soaring oil prices have again stirred alarm. 

Mrs. BONO MACK. Mr. Greenblatt, excuse me. You are down to 

30 seconds. 

Mr. GREENBLATT. Thank you. Even as the recovery takes hold, 

manufacturers temper our optimism with caution, whether it is the 

soaring price of oil or the Administration’s aggressive regulatory 

agenda. We believe the best way to ensure jobs and economic 

growth is to enact a strategy with comprehensive and consistent 

policies that allow manufacturers to compete in the global marketplace. 

[The prepared statement of Mr. Greenblatt follows:] 

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Mrs. BONO MACK. I thank the gentleman. 

Before we move on, we are going to do a highly technical fix to 

this. We are going to slide that clock down to the center and that 

is our technological answer to it. 

Dr. Holtz-Eakin, you are recognized for 5 minutes. 

STATEMENT OF DOUGLAS HOLTZ–EAKIN, PRESIDENT, 

AMERICAN ACTION FORUM 

Mr. HOLTZ-EAKIN. Thank you, Chairman Bono Mack and Ranking Member Butterfield and members of the committee. It is a 

privilege to be here today. You have my written statement. Let me 

briefly make three key points. 

The first is the obvious, that jobs are the central consideration 

at this point in time. The second is that we need to shift the policy 

focus from so-called stimulus efforts toward genuine pro-growth 

policies that will enhance the trend in growth rate of the U.S. economy and thus provide those workers with the jobs they need. And 

then the third is some suggestions that such an agenda would 

begin with controlling spending to take off the table a looming 

sharp rise in the deficits and debt, tax reform that would make our 

Nation the best place to headquarter a company and to enhance 

our international competitiveness. The third would be the jurisdiction of this committee and trade, enhance our engagement in opening markets abroad. And the fourth, a regulatory review to really 

temper the large-scale increase in regulation we have seen in a 

wide variety of policy areas in recent years. 

Jobs is obvious. Despite the recent news that we have seen this 

week, a good ADP report, very good Institute for Supply Management report, this morning’s report on lower UI claims, it still remains the case that with so many Americans out of work, it is far 

more likely that we see the unemployment rise before permanently 

declining than simply getting better on a sustained basis. So we 

have to keep a focus on this. 

Related to that, it is true that the economy is growing. It has 

been growing for six straight quarters. But that pace of growth, 

under 3 percent, is far too slow to sustain the kinds of job increases 

we need to get the 7 million workers who are out of work back into 

jobs and to provide for our children a standard of living that is better than the one that we have inherited. This is in fact typical of 

economies recovering from a financial crisis. We need to recognize 

that there will not be any quick fixes and instead focus on the 

kinds of policies that will allow us to grow more rapidly on a sustained basis and thus accelerate the possibilities even in the midst 

of a tough recovery. 

For such an agenda, I have lots in my written testimony. Here 

I want to just talk about two. First is the absolutely essential problem of taking on the projected debt in the United States. If one 

looks at any reasonable projection, either the Administration’s 

budgets or those by the Congressional Budget Office, one sees that 

over the next decade we face perilous times. Despite the fact that 

either such projection would actually count on a recovery to full 

employment, a fact that a financial crisis will be a distant memory, 

would presume that we are no longer fighting overseas operations 

in Iraq and Afghanistan, and that we would be raising well above 

60 

historically typical levels of taxes, 19, 20 percent of GDP. Despite 

all of that, deficits are projected to be over a trillion dollars 10 

years from now. Something close to $900 billion of that will be interest on previous borrowing. In the interim, the United States will 

have crossed the technical line for downgrade as a sovereign borrower, and we will have debt-to-GDP ratios that are associated 

with the typical levels where financial crises occur. In short, we are 

on a path to disaster. The President’s own Fiscal Commission described this as a national moment of truth where we had to put 

aside political budgetary gains and deferring of tough decisions to 

take on this problem. 

If you are a businessman trying to make a decision about the future, this is a recipe for either higher interest rates or higher taxes, 

or both, and there can be no more pro-growth move by this Congress and this country than to take off the table those kinds of 

threats and allow businesses to make investments in their workers 

and in their technologies and plants in order to grow more rapidly. 

So I think that it is imperative that this be the top agenda item. 

The only way to do it is to control spending. This is not a revenue 

problem in all those projections, and I would deeply and professionally disagree with the kinds of reports that have been mentioned earlier in this hearing from either Mark Zandi, who was one 

of my assistants on the McCain campaign, for the record, and not 

a chief policy advisor, and Goldman Sachs. Those reports are fundamentally flawed in two ways. First are technical. They make assumptions about the pace at which spending is cut down and the 

way it impacts the economy, which overstate their impact, and the 

second is just fundamental. There is no way in their analyses for 

forward-looking expectations to enter. There is no one in their analysis who is looking to next year or even 10 years from now. They 

are fundamentally myopic analyses. Everyone in this room gets up 

every day and tries to see the future, are we coming out of this recession, can we see better times ahead, and they are doing their 

analysis on the assumption that no one looks past next week. They 

are deeply flawed and overstate the impacts. 

The last thing I want to close with is trade. The United States 

has given up its historic leadership in trade. It has been on the 

sidelines far too long with three pending trade agreements, some 

of which are crucial and irrational not to ratify and this committee 

has the jurisdiction to push that agenda forward. I would encourage them to do so. Thank you. 

[The prepared statement of Mr. Holtz-Eakin follows:] 

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Mrs. BONO MACK. Thank you. 

Mr. Wilson, you are recognized for 5 minutes. 

STATEMENT OF GREGORY WILSON, SPECIAL ADVISOR, THE 

FINANCIAL SERVICES ROUNDTABLE 

Mr. WILSON. Thank you, Chairman Bono Mack, Ranking Member 

Butterfield and members of the committee. My name is Greg Wilson. I serve as a Special Adviser to the Financial Services Roundtable and its new Financial Stability Industry Council. On behalf 

of the roundtable, I am pleased to be invited to discuss the potential impact of new U.S. financial regulations on the economy and 

the implications for innovation and jobs. The Roundtable is a trade 

association of the largest, diversified financial services firms in the 

United States. 

Mrs. BONO MACK. Excuse me, Mr. Wilson. Would you please just 

pull the microphone—we can hear you clearly but I guess the TV 

audience cannot. Perhaps a little closer. 

Mr. WILSON. I have got a green light here. Here we go. 

Mrs. BONO MACK. Thank you. 

Mr. WILSON. So we need to be very mindful about the impact of 

the Dodd-Frank Act. So let me go over some solutions. What can 

we do as the Administration, the Congress and the financial services industry to make sure there is no negative impact of the new 

financial rules? 

Let me start with the Administration. President Obama should 

be commended for two recent actions but his actions need to be expanded and applied to the financial services sector. First, ensure 

that the President’s new Council on Jobs and Competitiveness 

chaired by GE’s Jeff Immelt also focuses on the financial services 

industry, not just manufacturing and trade. 

Second, ensure that the President’s new order on regulation ‘‘promoting economic growth, innovation, competitiveness and job creation’’ applies to the new Financial Stability Oversight Council and 

other financial regulators. Secretary of Treasury Geithner, this 

should be his major responsibility under the new Dodd-Frank Act 

and his role as chair of the council. 

Let me turn to what Congress can do, and I want to pick up on 

some of the statements in your opening remarks, Madam Chairman. I think there are some immediate initiatives that can be 

taken. In the consulting world, we would call these quick wins. 

First, demand that an economic impact assessment be made for all 

the critical regulations and rules coming out of particularly Title I 

of the Dodd-Frank Act, which affects the largest, most systemically 

important institutions and has the biggest potential impact on our 

economy, as I lay out in table one in my testimony on page 10. 

Second, legislate new requirements for full economic impact assessments for all future financial regulations. You could this bill on 

the suspension calendar in the next 30 days and begin to have a 

good bipartisan initiative to get to the facts and the diagnostics 

that I think need to be on the record as the Dodd-Frank Act rolls 

forward. 

Third, analyze the full impact of the new, more stringent restrictions for financial activities and practices on economic growth as 

required by Dodd-Frank. This is the only time in Dodd-Frank that 

71 

the words ‘‘economic growth’’ are used. You won’t find words like 

‘‘innovation’’ and ‘‘jobs’’ anywhere particularly in the first title of 

Dodd-Frank. 

Fourth, ensure that the oversight council and the Office of Financial Research actually establish industry advisory councils as the 

Dodd-Frank already permits in order to have a more balanced dialog between regulated firms and regulators. I think this will result 

in more balanced outcomes and be good. The Secretary of the 

Treasury already has that in his sights and on his timeline. He just 

needs to follow through and appoint those committees. 

Fifth, hold the Treasury Secretary strictly accountable in the annual oversight council report for the impact on economy and jobs. 

Title I uses the words ‘‘efficiency’’ and ‘‘competitiveness’’ and that 

is the closest you are going to get in Dodd-Frank. Again, you won’t 

find the words ‘‘innovation’’ and ‘‘jobs’’, even though they may be 

implied. So that is close enough for government work from my perspective. Even better, you could go back and amend the DoddFrank Act to put the words ‘‘innovation’’ and ‘‘jobs’’ in there as part 

of this mandate to review going forward. 

Finally, Congress should review the regulatory burden of 187 

separate regulatory reports going to 16 different agencies to make 

them more streamlined and useful in the spirit of the new GAO report on government inefficient. 

Mrs. BONO MACK. I know the light is again not working but that 

concludes your time. Do you need to sum up with a sentence or 

two? 

Mr. WILSON. No, just that I have other remarks in there about 

what the financial services industry should be doing on its own and 

is starting to do, but thank you for your time. 

[The prepared statement of Mr. Wilson follows:] 

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Mrs. BONO MACK. Thank you very much. 

Ms. Wince-Smith, you are recognized for 5 minutes, and I will 

give you a 1-minute warning. 

STATEMENT OF DEBORAH L. WINCE–SMITH, PRESIDENT AND 

CEO, COUNCIL ON COMPETITIVENESS 

Ms. WINCE-SMITH. Thank you, Chairman Bono Mack, Ranking 

Member Butterfield and members of the subcommittee. I appreciate the opportunity to testify today. 

The U.S. manufacturing sector is a key engine of innovation, 

wealth generation, job growth and national security. America cannot retain its geopolitical leadership and economic vitality without 

a robust, vibrant, deep industrial basis driven by the design and 

production of high-value goods coupled to high-value services. 

The Council on Competitiveness is celebrating its 25th anniversary year. We are a nonpartisan group of CEOs, university presidents and labor leaders formed at the time when were concerned 

about the trade and technology challenges with Japan. Our unique 

membership looks at the issues that impact the Nation, not what 

is in the interest of any one sector or constituency. 

Recognizing the challenges facing American manufacturers in the 

global economy and the imperative for job creation and job retention, the council formally launched the U.S. Manufacturing Competitiveness Initiative last year, building on our pioneering work on 

innovation capacity, energy security and sustainability. We are 

very pleased that this initiative is led by one of our dynamic CEOs 

in America, Sam Allen, the chairman of John Deere. 

Our end goal, which will be presented at a national manufacturing strategy summit on December 8th, is to really give a comprehensive roadmap of what the government, the private sector 

and broader constituencies in our society need to do to take us to 

what we call the third millennium manufacturing opportunity. Just 

yesterday, we took a first step in this journey with the announcement of a first-ever public-private partnership where four large 

American enterprises—Deere, Lockheed Martin, GE, and Proctor 

and Gamble—are teaming to bring the power of modeling and simulation technology into the hands of our small- and medium-sized 

manufacturers, and this is a public-private partnership sponsored 

with support from the Economic Development Administration but 

with over $2 million in commitment from the private sector. 

Today, I really want to highlight Ignite 1.0, the voices of American CEOs on manufacturing competitiveness. This is the first of 

four reports we will be issuing this year, and I want to emphasize 

four points that have come from the voices of over 40 American 

CEOs. The first is that creative destruction of businesses and jobs 

is at the very core of competition. Policymakers have to stimulate 

new business creation and job creation by ensuring that we have 

the most vibrant and dynamic enabling conditions, the optimal capital cost structure, regulatory environment and access to the markets of the future. Let us not forget 95 percent of all consumers in 

the years ahead will live outside the United States. 

Two: Global economic competition is not a zero-sum game. Our 

global trading partners, yes, they are our competitors but they are 

also our partners. 

109 

Three: Freedom of movement is a central driver of national competitiveness. Movement of capital, labor, scientists, engineers and 

ideas is critical. No great nation looks inward. 

Four: Manufacturing is much broader and diverse and has a 

higher multiplier in the economy than at any other previous time 

in history. It is an extended values system and it goes beyond just 

the making of the thing. 

Our CEOs have conveyed an unwavering belief that the United 

States has the resources, the capabilities and the will to be the 

most competitive manufacturing nation in the 21st century. While 

they have applauded recent agreements in the areas of tax policy 

and global trade, we have so much more to do. Let us not compete 

on the cost of capital or who has the best regulatory system. Let 

us level the playing field there and compete on ideas, talent and 

the game-changing innovation in industries that will reshape our 

world. Thank you very much. 

Mrs. BONO MACK. You will have one minute. 

Ms. WINCE-SMITH. Well, let me just conclude by saying that if we 

don’t take the leadership on manufacturing, the rest of the world 

will and it is ours to lose. 

[The prepared statement of Ms. Wince-Smith follows:] 

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Mrs. BONO MACK. Thank you. 

Dr. Boushey, you are recognized for 5 minutes, and again, I will 

give you a 1-minute signal. 

STATEMENT OF HEATHER BOUSHEY, SENIOR ECONOMIST, 

CENTER FOR AMERICAN PROGRESS 

Ms. BOUSHEY. I appreciate that. Thank you, Chairman Bono 

Mack and Ranking Member Butterfield for inviting me here to testify today. My name is Heather Boushey and I am a senior economist with the Center for American Progress Action Fund. 

Until we fill the demand gap, we will have continued unemployment, which in turn will continue to drag down economic growth. 

Today’s high unemployment was caused by the mismanagement of 

the economy in the 2000s, a financial sector only in service of its 

own profit rather than fostering productive investments, and a 

housing bubble, and we must address these root causes. The policies that will create jobs now are those that will make investments 

that not only boost employment in the short term but lay the foundations for long-term economic growth. 

The private sector has been adding jobs every month for nearly 

a year now and at a faster rate than in the 2000s economic recovery. Even with the success of the Recovery Act in boosting job 

growth, at this pace we will reach 5 percent unemployment for 

many decades, and unemployment has stood at or above 9 percent 

for a record 21 months, and there is growing evidence that many 

workers may never find jobs at the level that they had prior to the 

great recession. Job losses have been widespread and not only concentrated in the sectors hardest hit by the bursting of the housing 

bubble. This directly contradicts the notion that the jobs crisis is 

a structural problem. 

The continuing slow pace of the jobs recovery stems from insufficient aggregate demand in the overall economy. Gross domestic 

product grew at an annual rate of 2.8 percent in the fourth quarter 

of 2010, the sixth quarter of positive growth in a row. Much of this 

was due to the Recovery Act and other policies aimed at addressing 

the fallout from the financial crisis. Yet our economy continues to 

have a gap between what it currently produces and what it would 

be producing if workers and the economy’s productive assets were 

to be used at full employment. 

Investment is the key to creating jobs now and building the foundation for a higher-productivity future. Even though corporate 

America is flush with cash, investment is at its lowest level in 

more than four decades yet the cost of capital continues to be at 

lows not seen since the 1960s. Small businesses continue to point 

to a lack of customers, a lack of demand as their single most important problem. The National Federation of Independent Businesses 

reports that regulations are not nearly as important as poor sales. 

In our economy, we need to spend at least $2.2 trillion over the 

next 5 years just to repair our crumbling infrastructure. This 

doesn’t even include things like high-speed rail, mass transit and 

renewable energy investments we need to free ourselves from foreign oil and address climate change. Infrastructure has been a traditionally bipartisan issue and one that hopefully this Congress can 

build a bridge across to address. 

152 

I live here in the District of Columbia, and across the street from 

me, a small business opened up a couple of years ago, a restaurant. 

This small-business owner has had to deal with not one, not two 

but three water main breaks because of the aging infrastructure 

here in the District of Columbia, and each time that business 

owner has had to close shop and not see customers, costing them 

money. 

We should not repeat the mistakes of the Great Depression with 

austerity policies that will not create jobs. There has been much 

talk this morning about the recent report from Goldman Sachs that 

estimates that the House-passed federal bill will decrease economic 

growth, and I would like to note that this was as reported by ABC 

News, these were estimates for their clients. These are people that 

are investing in America and they are trying to tell them how the 

policies here in Washington are going to affect economic growth, 

and I think that we should take their estimates very seriously. At 

the same time, we have heard Mark Zandi estimate that these policies that were implemented in the budget passed by the House will 

lead to fewer jobs here in the United States, an estimate of 700,000 

by the end of 2012. 

I want to note that the most important reason for the rise in the 

deficit was rising unemployment and falling incomes. Economists 

estimate that had Congress done nothing, the deficit would have 

ballooned to more than two and a half times as large as it actually 

will. 

And let us remember, it was deregulation that was brought us 

today’s excruciatingly high unemployment. Last month the Financial Crisis Inquiry Commission clearly placed the blame for the crisis on the lack of oversight and regulation of the financial sector. 

As we move forward in terms of thinking about regulation, we need 

to make sure that it not only works for business but that we don’t 

end up right back here in a few years because we are not focused 

on making sure that business also works for America. 

Finally, we need to make sure that if our goal of our trade policies is job creation, then we need to evaluate whether or not these 

policies will indeed create jobs here in the United States and 

whether or not they will reduce our trade deficit and on net create 

jobs. Recent empirical research shows that local labor markets that 

have seen increased exposure to Chinese imports have had higher 

unemployment, lower labor force participation and reduced wages. 

We need jobs now and we need the kind of investments that will 

transform our economy and renew long-term prosperity. Thank 

you. 

[The prepared statement of Ms. Boushey follows:] 

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Mrs. BONO MACK. Thank you, Dr. Boushey. 

Mr. Resch, you are recognized for 5 minutes. 

STATEMENT OF RHONE RESCH, PRESIDENT AND CEO, SOLAR 

ENERGY INDUSTRIES ASSOCIATION 

Mr. RESCH. Madam Chairwoman Bono Mack, Ranking Member 

Butterfield and members of the subcommittee, thank you for the 

opportunity to testify today. I am testifying on behalf of our 1,000 

member companies and the 100,000 American citizens employed by 

the solar industry. 

In the last 2 years, during one of the worst economic downturns 

in our Nation’s history, the solar industry has thrived, becoming 

the fastest-growing industry in the energy sector and one of the 

fastest-growing industries in any sector in the United States. In 

2010, the solar industry grew at a rate of 67 percent and now employs over 100,000 Americans across all 50 States. From 2009 to 

2010, we doubled employment in the United States, creating almost 50,000 new jobs while most other industries were contracting. 

We are putting plumbers, electricians and carpenters that lost 

their jobs due to the collapse of the housing industry back to work. 

We are building new factories and providing existing manufacturers with new large customers, and we are providing opportunities 

for small businesses to reinvent themselves and become part of one 

of the most exciting changes to our economy to occur in a generation. 

As you can see by this chart, the U.S. solar industry is expanding 

at a consistent 50 percent annual growth rate over the last 4 years. 

Photovoltaic installations fully doubled in 2010 in the United 

States while construction began on dozens of massive utility-scale 

solar power plants that will be completed over the next several 

years, employing thousands of Americans and bringing billions of 

dollars of economic investment to the southern half of the United 

States. Things are bright for solar today, but that will not last unless the right policies are adopted. 

The U.S. solar industry has created opportunities for over 

100,000 Americans. Take, for example, Justin Cox, a technical support rep at Sungevity, a company that is expanding and will soon 

operate in eight States. Up until 2 years ago, Justin was a soldier. 

When he came back after serving in Iraq, he found a job in the 

solar industry and now applies the leadership and technical skills 

he gained in the Army to expand his company. The U.S. solar industry is welcoming back thousands of veterans like Justin with 

new opportunity, and these aren’t just jobs, these are careers. 

The growth of the industry and the creation of jobs is evident in 

all of your districts and all of your States. For example, in Chairwoman Bono Mack’s district, there is a 21-megawatt solar photovoltaic project near Blythe, California. This is one of the largest PV 

projects operating in the United States. The project developer and 

module supplier for the project is an American company that manufacturers in the Midwest with over 1,000 American workers. Also 

in Blythe, a new 1,000-megawatt concentrating solar power plant, 

the Solar Trust of America-Blythe, is under development. It will be 

the largest solar project in the world, producing enough clean energy to power 300,000 American homes. Unfortunately, the Blythe 

175 

project has been placed at risk by provisions of H.R. 1, which eliminate the funding for the project’s pending Department of Energy 

loan guarantee application. 

Solar’s reach goes far beyond California. Unfortunately, Congressman Barton isn’t here but the next two slides show facilities 

in Texas. This is a massive polysilicon manufacturing plan in Pasadena, Texas, which provides feedstock material for the solar industry. And the next slide shows a state-of-the-art solar power plant 

in San Antonio, Texas. 

And in Clarksville, Tennessee, located in Representative 

Blackburn’s district, Hemlock Semiconductor is building a $1.2 billion polysilicon manufacturing facility to supply the solar industry. 

This plant will employ up to 1,500 workers during construction and 

over 1,000 workers for permanent operations when completed at 

the end of this year. Also in Tennessee is Sharp Solar’s panel factory located just south of Representative Blackburn’s district. The 

factory expanded in 2010 and now has over 500 employees. 

So how do we keep this kind of solar job growth going? To succeed, we need stable tax policies. We need tax policies such as the 

section 1603 treasury program to be continued and incentives for 

solar manufacturing to be restored. We also need policies that facilitate financing for clean energy technologies that cannot be obtained in the commercial marketplace. To support these industries, 

Congress should consider a variety of financing mechanisms including the Clean Energy Development Administration. But what is 

most important today is for Congress to restore funding to the DOE 

loan guarantee program. 

Unfortunately, measures such as the provisions in H.R. 1 Continuing Resolution that eliminate all funding for the pending renewable and other non-nuclear loan guarantee applications are a 

step in the wrong direction. In its current form, H.R. 1 would likely 

kill as many as 30 clean energy projects representing tens of billions of dollars of economic development. With that, it will kill jobs 

like Jim Amadeo’s, who is in Illinois, a solar plant operator. SEIA 

respectfully requests that in the C.R. negotiations with the Senate 

that the House reverse the cuts to the section 1705 loan guarantee 

program. 

In conclusion, SEIA, our 1,000 member companies and our workforce of 100,000 strong is eager to work with Congress on important policy initiatives to continue to grow the solar industry and 

solar jobs. 

Once again, I deeply appreciate the opportunity to testify before 

the subcommittee and I would be happy to answer any of your 

questions. 

[The prepared statement of Mr. Resch follows:] 

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Mrs. BONO MACK. Thank you, Mr. Resch. 

The chair will recognize herself for the first 5 minutes of questioning, and I would like to begin with Ms. Wince-Smith. 

In your written testimony, you state that—you call something 

the creative destruction of jobs and say it is at the very core of 

competition and that policymakers should not try to restore jobs or 

industries that have become uncompetitive. Can you explain what 

you mean by creative destruction and provide examples? 

Ms. WINCE-SMITH. Well, a very simplistic example is back at the 

turn of the century when there was an effort to keep the buggy 

business in place when we were moving to automobiles. So as part 

of the whole technological innovation that goes throughout human 

history. So let us focus on, the jobs and industries of the future, 

recognizing that there is going to be tremendous productivity gains 

coming from the intersections of biotech, nanotech, information 

technology and not the jobs really that are more commoditized and 

really can be performed at a lower cost and more efficiency elsewhere. 

Mrs. BONO MACK. In it, though, you say policymakers shouldn’t 

try to restore those jobs but can you sympathize or understand 

what Members of Congress do go through when they see industries 

fleeing their districts for whatever reason? Can you speak to that 

a little bit further? Because as a Member of Congress when this 

happens, it is very painful. But can you explain why you think it 

is still beneficial? 

Ms. WINCE-SMITH. Absolutely. In fact, if you look at the textile 

industry, which is an industry where we led the world in the 19th 

and 20th century, there are tremendous opportunities to use modern technology to revitalize that industry. So rather than focus on 

competing with Pakistan on certain types of cloth, let us focus on 

the industry that is going to embed smart intelligence into the 

needs of the military in textiles. So I think what we really need to 

look at is, how do we take these industries to the next level and 

have a skilled workforce to go with that as opposed to just the status quo. 

Mrs. BONO MACK. So what you are saying is, we are actually preventing the growth by sort of dumbing down technologies? 

Ms. WINCE-SMITH. Absolutely. 

Mrs. BONO MACK. And you testified that manufacturing today 

has a much higher multiplier in the economy than at any time in 

past history. Can you quantify that multiplier, and how does it 

compare in past times? 

Ms. WINCE-SMITH. Yes, I can actually give you the data for the 

multiplier right now. It is about $1.4 in output versus 58 cents for 

any other sector. And we will submit that complete data set for 

you, but it is very, very significant, and also, it is beyond the traditional view of manufacturing. You have to look at the whole value 

system around that including the services that support the manufacturing. 

Mrs. BONO MACK. Thank you. 

Mr. Greenblatt, today’s Washington Post reports that Maryland 

Governor Martin O’Malley wants to double the State’s surcharge on 

electric bills. That is to pay for construction of offshore wind farms. 

Can you talk about how that would affect your competitiveness? 

193 

And I am a Californian. I believe that is going to increase your energy costs and that is going to affect you in a big way. Can you 

talk about it? 

Mr. GREENBLATT. It is not a good idea. We are in favor of having 

low energy—we should eliminate taxes for manufacturing on energy because we are creating jobs when we build in the State of 

Maryland, and when you make it harder for us to compete with 

Virginia or Pennsylvania or China or Mexico, we are going to lose 

jobs in our State. It is very shortsighted. 

Mrs. BONO MACK. Thank you. Would you talk a little bit—the 

free trade agreements, you specify that they would be very helpful. 

Can you go into that, why they would be helpful for you? 

Mr. GREENBLATT. Because it will give us almost 100 million new 

consumers we could shoot for, we could sell to. For example, Korea, 

Panama, Colombia have almost 100 million consumers, and we 

want to compete, we want to grow, we want to hire more people 

in Baltimore and export to Korea, for example. Right now when I 

ship a wire basket to Korea, there is an 8 percent tax against me. 

Once the Korean trade agreement is approved and enacted by the 

Congress, that 8 percent will go away. So we will be much more 

competitive and we are going to hire more people in Baltimore that 

are unemployed now so we can improve our economy. 

Mrs. BONO MACK. Thank you. 

Mr. Resch, are you now or have you ever been a Californian? 

Mr. RESCH. No, but I have always wanted to be. 

Mrs. BONO MACK. Have you ever been to Blythe? 

Mr. RESCH. No, I have not yet. 

Mrs. BONO MACK. Can you say—you talk about the loan guarantee program but can you say that the solar projects in my district have never had regulatory impediments that have stopped the 

development? Have there been sort of cross policies that have intersected where you all have found the development slowing down because of regulation? 

Mr. RESCH. Absolutely, land-access policies, siting and permitting 

policies. We face the same kinds of impediments that any large industrial face would in siting in America today. 

Mrs. BONO MACK. Have you ever scratched your head about why 

the government does things the way they do? 

Mr. RESCH. Of course, and—— 

Mrs. BONO MACK. I mean, you spent your time talking about the 

loan guarantee program but it is my hope that we talk about regulations that are slowing down prosperity in our country, and if you 

can spend 10 seconds—I am over my time, so 5 seconds talking 

about if the truth is regulation has impacted you as much as any 

loan guarantee program, correct? Yes or no is fine. 

Mr. RESCH. The answer is yes, and we have the ability to deploy 

very, very rapidly thousands of megawatts here in the United 

States, much faster than you will see in clean, coal, natural gas or 

even new nukes, but without removing some of those regulatory 

impediments, we will never see that happen. 

Mrs. BONO MACK. The chair will recognize Mr. Butterfield for 5 

minutes. 

Mr. BUTTERFIELD. Thank you, Madam Chairman. 

194 

Dr. Boushey, the Republican C.R. that was put forth a couple of 

weeks ago to fund the government through the end of this fiscal 

year takes what I call a ‘‘whack and hack’’ approach to spending 

cuts. The approach taken in the proposal put forth by the President 

is a bit more surgical and strategic, to say the least. In particular, 

the Republicans have proposed cuts of $8 billion from infrastructure, $5.5 billion from R&D, $5.1 billion from education, $26.7 billion in cuts to Pell grants for low-income college students. The 

President, on the other hand, has proposed increases in these 

areas. These are also three areas that the manufacturers and the 

Competitive Council and all of us on this side seem to agree are 

key to our long-term economic competitiveness and stability. 

Dr. Boushey, if we follow the approach to federal spending cuts 

put forward by our friends on the Republican side and the Republicans promise of job growth through spending cuts fails to materialize, will these cuts do anything really to cut the deficit, in your 

opinion? I have looked at your r AE1sum ́ and you have a very impressive background and you are an economist. What is your opinion on this? Will it affect the deficit in any way? 

Ms. BOUSHEY. Well, two comments. First of all, there are two 

sides to the deficit, right? There is revenue and there is spending, 

and one of the challenges of the great recession and where we are 

right now is that revenues are down because people don’t have incomes because we have nearly 14 million people out of work. Those 

people without incomes, without jobs, they don’t pay as much in 

taxes, if any, and then that of course leads to a growing deficit. You 

also have more people who need services, who don’t have jobs and 

so they need more assistance. So, yes, if these measures that have 

been taken in this C.R. do not lead to economic growth, then certainly that will increase the deficit, but moreover, we are really 

sort of cutting off our nose to spite our face with this C.R. in that 

we need these investments in our long-term economic future. We 

need to be investing in education. We need to be investing in technologies. We need especially to be investing in infrastructure. Much 

of our infrastructure in the United States is aging, it is frayed and 

it just don’t work, and so we need an infrastructure that supports 

all of the businesses in America so that they can compete. 

Mr. BUTTERFIELD. So as a conclusion that if we make these massive cuts in spending that it is not going to result in America’s competitiveness being improved? 

Ms. BOUSHEY. I am very afraid that it will reduce our competitiveness, and the Center for American Progress and the Economic 

Policy Institute just released a letter earlier this week signed by 

over 325-some-odd economists including a number of Nobel laureates saying that this budget, that that C.R. will hurt our competitiveness because we do not make the investments that we need to 

make in America. 

Mr. BUTTERFIELD. Dr. Boushey, while I am with you, let me ask 

you this. In your testimony you note that the Federal Reserve survey of senior loan officers shows that while bankers are lending for 

mergers and acquisitions, which ultimately leads to job losses, they 

are not lending for investment in plants and equipment that will 

create jobs and expand economic opportunities. Can you explain 

more about this? 

195 

Ms. BOUSHEY. Well, what, of course, we have seen since the end 

of the—the financial crisis led to tightening credit conditions and 

we have seen that across the board. We have seen that it continues 

to be the case for small businesses that they are facing tight credit 

conditions and that that is a part of the problem, especially for the 

small business owners who need those funds to make those investments. 

Mr. BUTTERFIELD. Let me go to you, Mr. Resch, if I can. With the 

situation in the Middle East as it is, particularly in Libya—and gas 

prices are on the rise yet again. As of yesterday, gas prices had increased in each of the last 8 days by a total of 24 cents. The national average stood at $3.39 for a gallon of gas. Some are speculating that the price per gallon could hit $4 by the summer. Let 

us pray that that does not happen. Rising fuel prices can and will 

have a ripple effect across our fragile economy. This isn’t a new or 

surprising development for anyone. We have long known that our 

dependence on foreign oil puts our economic security in the hands 

of others. 

Mr. Resch, what do you think we must do to spur demand in the 

United States for clean energy technologies? 

Mr. RESCH. It is absolutely critical that we do so, and part of it 

is education, but just in the same way that we provide subsidies 

to the oil and gas and coal industries, we need to make sure that 

we are providing a level playing field for wind, solar and other 

technologies. Unfortunately, our policies are on again, off again, 1 

year, 2 years, where those industries enjoy permanency. So providing a stable regulatory and policy framework is absolutely critical. The investment is there. The infrastructure is built. We are 

going to see these industries continue to grow very, very rapidly as 

long as we provide stability for the business environment. 

Mr. BUTTERFIELD. It is sad that we get to $4-a-gallon gasoline 

before the American people really concentrate on the importance of 

renewable energy. 

Mr. RESCH. It is amazing. 

Mr. BUTTERFIELD. Thank you for the work that you do. 

I yield back. 

Mrs. BONO MACK. I thank the gentleman. 

The chair recognizes Ms. Blackburn for 5 minutes. 

Mrs. BLACKBURN. Thank you, Madam Chairman. 

Ms. Wince-Smith, I appreciate that you mentioned creative destruction, especially in the creative economy as we look at technologies. The lifecycle is so sort and I think it is important that we 

not try to prolong the lifecycle of a product that the American people do not want. So thank you for mentioning that. 

Mr. Cummiskey, I want to come to you. Very quickly, Georgia, 

is it a right-to-work State? 

Mr. CUMMISKEY. Yes, ma’am, it is. 

Mrs. BLACKBURN. OK. And that I would assume helps the Quick 

Start program? 

Mr. CUMMISKEY. It helps a lot of things including Quick Start, 

yes, ma’am. 

Mrs. BLACKBURN. And if you would submit for me the budget 

that you have for Quick Start and then the dollar, the ratio on your 

return for investment. I would love to know that. It sounds like a 

196 

great program, and sometimes we in Tennessee at your border get 

a little bit jealous of some of the work you are doing there. What 

I would also like to know from you, because of the work you all are 

doing in some of the high-tech industries, what are the five things 

that you hear from the companies that you are working with when 

they talk about the Federal Government and they say they need 

to get this, that or the other off the book and you can just submit 

those for the record, and we would appreciate knowing what those 

five things are. We need to drill down and get some of these onerous regulations off the books. 

Mr. CUMMISKEY. Yes, ma’am. 

Mrs. BLACKBURN. OK. Dr. Holtz-Eakin, for you, I appreciated 

that you talked about the households, businesses, governments, 

international partners and the effect the budget has there. I would 

love to have from you kind of a checklist as you look at this committee and our goal being to energize domestic production and 

manufacturing, how we best do that. As you look at these four sectors, what your advice would be on five items that we could do that 

you see would serve us well. 

Mr. HOLTZ-EAKIN. I would be happy to submit that. 

Mrs. BLACKBURN. Thank you. I appreciate that. 

Mr. Wilson, I want to chat with you a minute, because your 

group supported the Dodd-Frank or Frank-Dodd, whatever you 

want to call it, bill, and I have to—— 

Mr. WILSON. Actually, Congresswoman, the roundtable did not. 

Mrs. BLACKBURN. Oh, they did not? OK. Well, I have to tell you, 

I hear from my bankers and small businesses out in the district as 

we are doing these listening sessions that this is horrific. They 

want this thing off the books because it impairs their ability to get 

credit and they see it as a true impediment. I would love to hear 

from you your thoughts on how that legislation has and will continue to affect small businesses, and even though we don’t have jurisdiction over that piece of legislation, I think that it prohibits 

people moving to the next generation of technology that Ms. WinceSmith has, individuals that want to innovate something or a company that wants to locate in Georgia. So can you give me about 30 

seconds on that one? 

Mr. WILSON. Sure. I think one of the biggest concerns as I tried 

to make clear in my remarks is that there is still a lot of uncertainty about what the rules of the road are going to be going forward. So on top of the crisis, on top of not knowing what your capital liquidity requirements are going to be going forward and we 

may not know what those are going to be until the end of the year 

given the current state of U.S. rulemaking. None that helps establish the certainty nor do we know the full economic impact of what 

that is going to be. I happen to think that the 250 new rules coming out of Dodd-Frank are going to have a negative effect on economic growth and job creation. I can’t prove that you today. That 

is the kind of thing where I think the economic impact assessments 

that I referenced in my testimony would be useful, that either this 

committee or the Financial Services Committee could request of the 

Treasury and other financial regulators, or my idea of putting it on 

a new legislative requirement that all new future financial rules 

have a true economic impact assessment to—— 

197 

Mrs. BLACKBURN. Basically like we did in the pledge with the $100 million impact. 

Mr. Cummiskey, submit to me also how much you all have increased your exports in Georgia. I would be appreciative of knowing that, and give your governor my regards. 

Mr. CUMMISKEY. I will. 

Mrs. BLACKBURN. Mr. Resch, I would love to come to you for just 

a second, please, sir. Your member companies, how many receive 

government subsidies? 

Mr. RESCH. There are just a few that have received any kind of 

form of grants to help develop—— 

Mrs. BLACKBURN. And you don’t know how much those total? 

Mr. RESCH. I would have to look it up, but it is a pretty small 

R&D that exists in the solar industry. 

Mrs. BLACKBURN. OK. How many of those businesses would be 

viable without those government grants? 

Mr. RESCH. Most of them would be, but what they are trying to 

do is really advance the technology beyond where the state is 

today, to expand applications into military applications, portability, 

increased efficiency drive down costs so those programs are really 

designed to kind of lift up the industry, similar to what you see in 

R&D programs for other energy technologies that—— 

Mrs. BLACKBURN. OK, and then in 2005 you testified before this 

committee that tax incentives were necessary to jump-start the 

solar market but that those incentives should decline over time, so 

do you still hold that position? 

Mr. RESCH. You know, I think our industry needs this very stable platform in order to build upon. We have tax credits that exist 

through 2016. By 2016, we are hoping to be the source of—— 

Mrs. BLACKBURN. Yield back. 

Mrs. BONO MACK. Thank you. 

The chair recognizes Ms. Schakowsky for 5 minutes. 

Ms. SCHAKOWSKY. Well, following up on that, Mr. Resch, how 

viable do you think the oil and gas industry would be without the 

$40 billion in subsidies they get over 10 years? 

Mr. RESCH. I think the reality is, we need all energy sources. We 

are dependent upon foreign sources of energy right now. I think we 

need to refocus on our domestic sources and look at technologies 

like solar and wind that could be manufactured here, that could be 

deployed on homes and on businesses and in utility-scale applications. 

Ms. SCHAKOWSKY. But do you think we still need to subsidize, especially now that gas is at $100 a barrel once again? Do you think 

that they really need to be subsidized? 

Mr. RESCH. Certainly it doesn’t make any sense to subsidize an 

industry that is as profitable as the oil and gas industry while not 

providing the kinds of support for emerging technologies that are 

actually creating jobs here in the United States. But when you look 

at the economics of oil and gas, there is no doubt there are opportunities to encourage drilling that probably do require some kind of 

tax incentives, but ultimately what we want to do is make sure we 

support all of the energy technologies because we are going to need 

more of it going forward, especially more of the clean energy technologies. 

198 

Ms. SCHAKOWSKY. Thank you. 

I want to ask a question that I have been mulling over for quite 

a while now. In the United States of America, the income inequality has been growing enormously over about the last 30 years so 

that right now about the top 1 percent of earners control about 39 

percent of the wealth, which is more than the bottom 90 percent. 

The top .001 percent of Americans, the very, very rich, have an average income of about $27 million and the bottom 90 percent have 

an average income of about $31,000. It seems to me that that is 

a problem, not only for our economy but for our democracy as well 

when we have that kind of income inequality, and I am wondering 

if anybody wanted to comment on that. It seems like we are still 

going in the direction rather than of high-wage economy toward a 

low-wage economy. We still see while manufacturing is picking up, 

we still actually give some incentives for businesses to go overseas. 

Does anybody want to comment on this? Yes, Ms. Wince-Smith, 

and then we will go to Dr. Boushey. 

Ms. WINCE-SMITH. Well, we have a lot of data at the Council on 

Competitiveness over the years that really showed the direct correlation between educational attainment and income levels over 

time, and you are correct about the growing inequality gap. But on 

the issue of—and so our whole education strategy is—and of 

course, we spend more per child from K–12 than any other country 

in the world outside of Switzerland and we are not getting the outcomes. So the whole issue around how we get the impact from the 

investment in education is huge going forward. 

And the other thing I would say on, the issue of low wages and 

how that relates to manufacturing, even in countries such as China 

now, there is tremendous data that their wage structure is increasing as they become more productive and companies are not investing in China because of low wage. It is the skill of the workers, it 

is the overall capital structure, regulatory environment. So we have 

to look at all of these things as a system and really optimize what 

do we need to do to ensure we have the highest skilled workers and 

do the best high-value activity in this country. 

Ms. SCHAKOWSKY. Although it is also true that productivity has 

gone up even as average wages for the middle class have done 

gown. 

Dr. Boushey? 

Ms. BOUSHEY. You are right about that, Congresswoman, that, as 

we have seen America become wealthier and we have seen workers 

in the United States become more and more productive, you have 

seen an increasing divergence between how much the average 

worker is getting of those productivity gains or not, and that has 

been a trend that has been going on for the past 30 years. 

One of the things we have talked about on this that many folks 

on this panel have talked about today is understanding the economic impact of regulations and understanding the economic impact of what government is doing. And I think that what your 

question about inequality points us to is thinking not just what it 

means for profits but what does this mean for the kinds of jobs that 

are being created and not just for folks at the very, very top but 

across the distribution. When we are talking about jobs in the 

United States, we have to remember that six in ten workers who 

199 

are in this economy don’t have a college degree, and are we creating good jobs for them, and they are indeed good customers for 

many of the kinds of businesses and things that we have been talking about here on this panel. 

Ms. SCHAKOWSKY. Thank you. I yield back. 

Mrs. BONO MACK. The chair recognizes the gentleman from Kentucky, Mr. Guthrie. 

Mr. GUTHRIE. Thank you, Madam Chairman. Thank you for recognizing me. 

I first want to talk, I know we have had Mr. Zandi quoted for 

his proposal or his analysis, and also I believe he is the one that 

said that—resounding success, which most people that defend this 

thing was actually well, it would have been worse if we hadn’t done 

it but the President said it is going to create 3.5 million jobs and 

8 percent unemployment so if you are going to define something as 

resounding success, you might want to say at least you hit the 

goals you put forward. 

Mr. Holtz-Eakin, I know you are familiar with the Goldman 

Sachs study. Do you want to comment on that since it has been 

quoted here today and why you think it is probably not the best 

analysis? 

Mr. HOLTZ-EAKIN. Well, I certainly that the fundamental flaw 

with these analyses is that there is no conduit anywhere in them 

for someone to be worried about the future. They are entirely driven by the current cash flows, and so mechanically if the Federal 

Government spends less, that cash flow goes down, they say the 

economy is smaller. There is no ability for the private sector to recognize that taxes aren’t going to go up in the future, interest rates 

are going to explode, there is not going to be a financial crisis so 

I am going to make the investment, get offsetting impacts. That is 

the basis reason to be doing this. So the studies are rigged to be 

at odds with the basic motivation for the policy, and I think they 

shed no light on the potential effectiveness of them whatsoever in 

the same way that they were very misleading about what would 

happen with the stimulus bill. 

We are in the middle of a recovery that is driven by destroyed 

balance sheets. Households’ homes are worth a lot less than they 

used to be. Their pensions have been damaged. Governments have 

red ink as far as the eye can see. None of this is about the current 

cash flow. This is about the fact that the assets and liabilities don’t 

line up in any deep way but we have got the wrong analysis injected into that situation. You get bad policy advice. 

Ms. BOUSHEY. Can I comment on that? 

Mr. GUTHRIE. Yes. 

Ms. BOUSHEY. I would like to comment on that for a moment. 

You know, when we think bout economic growth, we often sort of— 

maybe it is sort of a black box so let us sort of open that up for 

a second. When you look at our gross domestic product, there are 

four basic components: consumption, which is about 70 percent of 

GDP, investment, government spending and net exports. In the 

short term, and what these models that the Goldman Sachs folks 

put forward, what these models measure is the impact over the 

next couple of years of reducing one of those components in a significant way. So in a moment when we already have so many indiVerDate Nov 24 2008 10:30 Aug 01, 2011 Jkt 037690 PO 00000 Frm 00203 Fmt 6633 Sfmt 6633 F:\112-015 JOB CREATION-PDF MADE\112-015 PDF MADE WAYNE
200 

vidual consumers cutting back, we already see investment is at 

decades lows, right? So firms aren’t investing because they don’t 

see customers. People don’t have any money, as Dr. Holtz-Eakin 

said, because of the unemployment and also the reduction in their 

balance sheets. The decline in spending from the Federal Government will reduce growth in our economy. 

Now, over the long term, of course, we need to be concerned 

about the taxes, the tax increases to pay for that, but in the short 

term where we have high unemployment, that is what that model 

is showing you. 

Mr. GUTHRIE. But also I want to say I know anecdotally a lot of 

businesses aren’t investing because they are concerned about the 

regulatory environment and the uneasiness that is coming forward. 

I know that from personal experience from people that I know. And 

so those of us who are concerned understand there are investments 

that are going to yield in the future. We spend a lot of money on 

education. That is something I was driven by in the state legislature. When you look at what I think we are looking at, inflation 

that is coming if we don’t get control of our budget deficit by printing money inflation is going to come. Interest rates, pressure has 

to be there eventually. I know they are record low. But looking at 

why does—if we say investments in the long term, we are looking 

in the long term and not trying to be, well—you are not trying to 

cut your nose off to spite your face. What we are trying to do is, 

how are we going to have a sustainable future and a sustainable 

budget, and if we don’t do it now, then when? Mr. Holtz-Eakin? 

Mr. HOLTZ-EAKIN. I just have one thing. These models are used 

by policymakers at times and they can be useful. I have been in 

the White House twice. I used these models when I ran the Congressional Budget Office. But they are missing things that are central to the economic moment. They, for example, assume a stable 

regulatory environment. We have an avalanche of new regulations 

in Washington. Last year we had a record number of Federal Register pages and this year we are coming to see come online DoddFrank, 240 rulemakings, 20 times more than we have ever seen, 

the Affordable Care Act, an extraordinary regulatory expansion, 

the EPA boiler rules, five other rulemakings in process. There is 

nothing in those models that recognizes what is happening to the 

business community in reality. 

Mr. GUTHRIE. And manufacturing is a pathway to the middle 

class for so many people, and that is why we have to make sure 

we preserve that in the environment. 

I know you probably want to comment. I only have 20 seconds. 

Ms. BOUSHEY. Certainly, completely, manufacturing is certainly 

vital to American workers. But two things. I mean, one on inflation. I mean, we are at a moment where we are not seeing a lot 

of pressure on the capacity here in the United States. We are not 

seeing pressure on employment, we are not seeing pressure on our 

productive capacity. It remains at about 76 percent of—— 

Mr. GUTHRIE. We are seeing record-high commodity prices. 

Ms. BOUSHEY. That is true, but there is a lot of—— 

Mr. GUTHRIE. There are other reasons for that. I understand. 

Ms. BOUSHEY. And so that is actually again why economically it 

makes sense that this is a good time for government to invest, 

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right? You have bridges that you need to invest in. Now is the time 

to do it. I will stop there. 

Mrs. BONO MACK. The chair recognizes Mr. Harper for 5 minutes. 

Mr. HARPER. Thank you, Madam Chair. 

You know, one of the things that we have noticed in my home 

State of Mississippi is that I haven’t found any business or any industry yet that believes that they are underregulated, and I guess 

what I would like to ask first of all is, if I could ask Commissioner 

Cummiskey, in your State, what have you seen that has worked 

that you would say would be good for other States and for us to 

look at? 

Mr. CUMMISKEY. I go back to what I talked about, about those 

type of endeavors, but our trade, we put a lot of time and effort 

into our trade and not just with large companies but with small 

business, less than 20 employees, and opening up pathways to people all across the State through our trade offices and our offices 

both in Georgia and outside internationally who really have had 

great success finding new markets for them. Going back to that, 

one thing that has worked is, every time a free trade agreement 

is signed, we have seen exports to those new areas increase by 206 

percent. So that is what is working right now, and that is one other 

area that I didn’t get a chance to talk about because of time issues 

but trade and trying to find new markets and putting some energy 

and time into that has paid off exponentially for us right now. 

Mr. HARPER. This is for anyone on the panel. As far as recommendations on changes in the tax code, what would come to the 

top of your mind? 

Mr. HOLTZ-EAKIN. I want to echo the comments that were made 

in Mr. Greenblatt’s opening remarks. Our corporate tax code is at 

odds with our ability to compete around the world. We are the last 

major economy that clings to a worldwide system of taxation. Everyone else has gone to taxing companies only on the basis of their 

activity in the jurisdiction, whether it is the United States or 

Brazil or Germany. We as a result are at a fundamental disadvantage in the way we structure our tax system, and our rate is way 

too high. Again, the President’s fiscal commission said we should 

move toward an internationally competitive rate and a territorial 

system. Absolutely, positively, it is the top thing to do in the tax 

code. 

Mr. HARPER. And if you did that, in what time period would you 

expect to see a turnaround or an impact in this country if we made 

that change? 

Mr. HOLTZ-EAKIN. I think you should just cut the rate right now. 

We have to end up there anyway so why wait? You would get a 

boost in the near term and you get sensible tax policy in the long 

run. 

Mr. HARPER. Yes, sir? 

Mr. GREENBLATT. I think you also have to reduce the complexity. 

We are paying about 40 grand a year in accountants and companies to make sure that we pay the right amount of payroll tax, 

make sure we pay the right 401(k). If we make any mistakes, in 

inadvertent booboos, we get very large fines, even if we are not 

meaning to do anything. So we spend over 40 grand a year. I would 

202 

much rather hire two unemployed Baltimore city steelworkers, get 

them working for me rather than paying my accountant for this. 

Mr. HARPER. Yes, ma’am? 

Ms. WINCE-SMITH. I would just add and support what Dr. HoltzEakin has said. You know, we see all over the world other councils 

on competitiveness that are partners of ours actually making fun 

of the United States now because of our corporate tax structure, 

countries in the Nordics, are saying, ‘‘How could you have the capital cost structure you have?’’ And we have the data now. It is not 

so much that U.S. companies that are sitting on, what is it, $1.8 

trillion. They are now investing in this country because they are 

not customers. It is because their global enterprises and they are 

optimizing all over the world where they are going to do their highvalue work and so it is a very complex issue. Having a very onerous corporate tax structure with all the other things we know, it 

is really just a knife in the coffin now. And when Canada and 

Japan can move very quickly, why can’t we? 

Mr. HARPER. Yield back. 

Mrs. BONO MACK. The chair recognizes Mr. Pompeo for 5 minutes. 

Mr. POMPEO. Madam Chairman, thank you. 

Dr. Boushey, there has been some discussion about what we did 

with H.R. 1. We heard lots of criticism from it. Do you think there 

is any connection between job growth and deficit spending and projected deficit spending? 

Ms. BOUSHEY. Certainly. In the short run or in the long run? 

Mr. POMPEO. I am talking about jobs. 

Ms. BOUSHEY. Yes. OK. Then that is—right now in this economy, 

we continue to have an output gap. We had a crisis—— 

Mr. POMPEO. So how much bigger should ARRA have been? 

Ms. BOUSHEY. When we—— 

Mr. POMPEO. Ma’am, there is a question. You suggested that we 

don’t have enough stimulus so I would like a number about how 

big you think the stimulus should have been to solve the problem 

in Kansas of unemployment. 

Ms. BOUSHEY. It is a compositional problem and it was a numbers problem. So Christina Romer, then-chair of the Council of Economic Advisors, argued for a stimulus of over a trillion dollars. 

That would have provided a bigger bank for the buck. But the second issue is that when the House got ahold of the bill—I am sorry. 

When the Senate got ahold of the bill, they changed it and changed 

the composition of where spending went. If you want to make a big 

bang for your buck in terms of government spending at a time of 

massive recession and massive unemployment, you want to spend 

it on things that have the largest multipliers, and Ms. Wince-Smith 

has provided a nice sort of primer on the multiplier effect. 

Mr. POMPEO. I appreciate that, but I would like to reclaim my 

time. 

Ms. BOUSHEY. So you don’t want to be spending that on tax cuts, 

you want to be spending it on—— 

Mr. POMPEO. All right. So there is a compositional problem. So 

we took $61 billion out of the fiscal year 2011 budget, and you 

think we should have instead added how much money? 

203 

Ms. BOUSHEY. I think we should have retargeted on things that 

would increase investment and increase our spending on infrastructure. 

Mr. POMPEO. Thank you. I have heard you offer no solutions for 

what we should have done. 

Ms. BOUSHEY. My testimony has a number of solutions. 

Mr. POMPEO. I appreciate that. 

Mr. Resch, you suggested we should not have visited tax credits 

associated with your industry. I don’t know exactly what the dollars were that we removed. Tell me, if we put that back in the 

spending bucket, what do you think we should take out? 

Mr. RESCH. It is specifically a loan guarantee program. It is actually not a tax credit. It is $2.5 billion that were specifically removed in H.R. 1. And what we are looking at reducing is somewhere on the order of $30 billion of economic investment that that 

would drive and somewhere around the order of 20,000 to 25,000 

jobs throughout the United States, and that is just direct jobs in 

the manufacturing of these facilities. You have then all of the manufacturing plants in Michigan and all the rest that would support 

these jobs. 

Mr. POMPEO. Mr. Greenblatt, we heard this morning from EDA 

that they provide grants to various industries and businesses. 

Would your business rather try and chase a grant from the Federal 

Government or have consistently lower tax rates? 

Mr. GREENBLATT. If we could have lower tax rates, if we could 

put it on a postcard, you know, this is how much we made, this 

is what our percentage is, this is how much the check is going to 

be for, I would love that. I think every business would be happy 

to give up any grants. 

Mr. POMPEO. I think so too. I spent the last 15 years of my life 

in the manufacturing world until I became part of the problem 60 

days ago, so I think that is what—I certainly know what would 

have helped my competitors too, not just me, be successful. 

Dr. Holtz-Eakin, you have talked about this deficit issue. I came 

to this because it is always tomorrow, so the folks from the Center 

for American Progress and other groups always say we have to 

spend today and we do the savings part somewhere down the road. 

It sounds to me like you think today is the day. 

Mr. HOLTZ-EAKIN. Today is absolutely the day, and the evidence 

is from around the world. I mean, you don’t have to do theoretical 

models, just go look at the evidence. Those countries who have had 

massive deficit problems, faced with financial crises who needed to 

fix those and grow, our problem, did it by controlling spending, 

keeping taxes low or even cutting it. That is the evidence around 

the globe. It is referenced in my testimony. We should simply copy 

success. 

Mr. POMPEO. Great. Thank you. I yield back my time, Madam 

Chairman. 

Mrs. BONO MACK. I thank the gentleman and recognize the gentleman from West Virginia, Mr. McKinley, 5 minutes. 

Mr. MCKINLEY. Thank you, Madam Chairman. 

Mr. Resch, if I could ask you a question, please. When you were 

asked by someone on the back panel about subsidies, getting subsidies in the industry, you answered that by saying ‘‘grants,’’ and 

204 

then you went on to say in an earlier remark you had commented 

about how coal is a subsidized industry. So I am just curious since 

I think we are supporting the idea of R&D, robust R&D in energy, 

can you share with me, because I am wondering if you are being 

critical of the coal industry and I am curious, are you saying outside of R&D the coal companies are getting grants? And if you are, 

could you provide me a list of coal companies that are getting 

grants that are not for R&D? 

Mr. RESCH. There are a number of studies that look at the entire 

energy industry and compares what tax incentives and what types 

of programs support those industries. They may not be grants directly but I would be more than happy to, absolutely. 

Mr. MCKINLEY. I am very curious to see what coal companies are 

getting grants. 

Mr. RESCH. They are not specifically grants. 

Mr. MCKINLEY. Because you answered the question when you 

were asked about subsidies. You went immediately to grants. So I 

am assuming you equate the two so—— 

Mr. RESCH. And I was talking about R&D specifically. I was talking about individual companies that were receiving grants from 

DOE. 

Mr. MCKINLEY. Dr. Holtz-Eakin, if I could ask you a question. 

First, thank you for clarifying that gross mid representation from 

Goldman Sachs economic model. I just wish the rest of the panel 

had stayed to hear that misrepresentation. If we don’t cut spending, if Congress doesn’t cut spending and we continue this economic 

growth that plods along at 1–1/2 or 2 percent increase, when will 

we ever get back to the historic norms of employment here in this 

country? 

Mr. HOLTZ-EAKIN. It would take a decade, and the good-news 

scenario is one where it takes a decade, we get people back to full 

employment but there is no real productivity growth, there is no 

real rise in standard of living, we leave to our children a damaged 

economy. That is the good-news scenario. The bad-news scenario is, 

we experience something that makes 2008’s financial crisis look 

like a minor ripple and then have to pick up the pieces afterward. 

It is not an option. We simply have to change course. It is what 

the President’s financial commission said. It is very simple. 

Mr. MCKINLEY. So we have to cut? 

Mr. HOLTZ-EAKIN. Yes. It is the right thing to do, and it should 

not be posed as oh, we have to control future growth and entitlements, do you want to cut Social Security. No, it is do want to 

leave to our children impaired freedom and prosperity or do you 

want to get the federal spending under control. Those are our 

choices, our real choices. 

Mr. MCKINLEY. Well, help me out on that, Dr. Holtz-Eakin. Why 

doesn’t the other side understand that? Have they not had real-life 

experiences? Is this something they have not been private sector 

employers? Why don’t people get that? That is so fundamental. 

Mr. HOLTZ-EAKIN. I have spent my entire life in economic education. I have spent 10 years trying to teach policymakers different 

things, and I decline to answer. 

Mr. MCKINLEY. If you ever get it, I would sure like to hear it. 

Thank you very much. 

205 

I yield back my time. 

Mrs. BONO MACK. The gentleman yields back. 

The chair recognizes Dr. Cassidy for 5 minutes. 

Mr. CASSIDY. Thank you, Madam Chair. I am so rarely called 

doctor anymore. I appreciate the remembrance of times past. 

Mr. Greenblatt, hats off to you, buddy. Obviously our problem 

with the unemployed right now is in the non-college-educated man. 

That is really where our issues are. And as I look at it, the fields 

that have traditionally addressed that have been mining, manufacturing and construction since you use one to enable the other to do 

the other, if you will. The President has said that he wants to convert our electrical grid to renewables I think by 2035, 90 percent 

renewables. Now, looking at the subsidy of energy, I have here 

something based upon an EIA report from the Wall Street Journal. 

Effectively, wind gets a subsidy of $6.44 million per BTU produced, 

oil and gas $1.9 billion or about .3—basically 300,000 per BTU of 

energy produced. So if to go to a green economy with a green energy source, so to speak, was going to triple your energy costs by 

three times, what would that do to your ability to compete with 

other countries? 

Mr. GREENBLATT. It is very bad for our energy costs to go up, and 

if you make artificial costs that drive up what it takes to make 

something in America, you are going to hurt our jobs. 

Mr. CASSIDY. I have heard Chairman Barton say that the road 

to recovery goes through energy, so if your energy is inexpensive, 

that is a competitive advantage relative to other countries. 

Mr. GREENBLATT. I agree, and not only that, these are great, 

$70,000-a-year jobs. 

Mr. CASSIDY. That is what I next wanted to say. It is my understanding and my experience in the oil and gas mining industry, 

those are good jobs with good benefits that allow people to send 

their kids to college, et cetera. That is yours in manufacturing as 

well, I gather. 

Mr. GREENBLATT. Absolutely. Remember, we have so many disadvantages. In China, they pay 30 cents an hour. In Mexico, they 

pay 3 bucks an hour. You know, we pay 20-something bucks an 

hour. 

Mr. CASSIDY. So if the cost of your energy is increased by EPA 

regulating CO2 emissions, same effect, correct? 

Mr. GREENBLATT. Absolutely. Any more artificial ways to drive 

up our costs are not going to help grow jobs in America. We want 

to grow jobs in America. You have to lower the barriers so we can 

compete more effectively. 

Mr. CASSIDY. So if we increase the cost of energy, lowering the 

number of jobs there, by the way, to increase the cost to manufacturing lowering the jobs there, by the way, would that have an effect upon the ability of the construction industry to employ? 

Mr. GREENBLATT. Absolutely, because when we have less factories or less needs for additions, we need less construction workers. 

Mr. CASSIDY. So, if you will, if the answer to our problem of unemployment among the non-college-educated man, good people—my 

dad was a non-college-educated man. So is mining, manufacturing 

206 

and construction policies which increase the cost of energy is a silver stake in the heart of each? 

Mr. GREENBLATT. Our mission is to grow jobs. 

Mr. CASSIDY. Yes. 

Mr. GREENBLATT. And when you increase our costs in America, 

we are not going to grow more jobs in America. You want to help 

us lower our costs. If you take off the shackles, we will beat China, 

we will beat Mexico, we will grow and we will get us out of the recession. 

Mr. CASSIDY. Now, Mr. Resch, I know you are just over there biting your tongue. I can appreciate that. But let me ask you, if we 

equalize the subsidies that went between oil and gas and, say, your 

industry, but made those subsidies permanent, so I think I see that 

currently federal subsidies per megawatt-hour for wind are $23 per 

megawatt-hour, solar, $24, and for coal is 44 cents, now, the coal 

is permanent and yours is not, but if we said, listen, it is permanent in perpetuity but it is 44 cents, would you accept that bargain? 

Mr. RESCH. I was smiling before because you sound like a lawyer, not a doctor. Sorry about that. I don’t mean to offend you. 

Mr. CASSIDY. I will meet you afterwards. 

Mr. RESCH. I think what you really need to look at is stability 

over time periods, and the oil and gas industry has enjoyed—— 

Mr. CASSIDY. So if I give you 44 cents per megawatt-hour—— 

Mr. RESCH [continuing]. Since 1916—— 

Mr. CASSIDY. So for 100 years if you get 44 cents an hour, will 

you accept that as opposed to what you are getting now? 

Mr. RESCH. We will be subsidy-free by 2020. Our goal as a technology is to drive down costs and to drive down regulations—— 

Mr. CASSIDY. So quick question. To balance the budget, we began 

to phase down those so by 20 whatever, 2023, the subsidy is completely gone, would you accept that? 

Mr. RESCH. If you do that for all technologies, absolutely. 

Mr. CASSIDY. So if went from 44 cents to zero, you would accept 

that? 

Mr. RESCH. We would do it, but again, we need enough stability 

to build up the manufacturing base for the next 6 years, because, 

remember, coal, nukes and oil have enjoyed almost 70 years of subsidies. We have enjoyed just 3 years. 

Mr. CASSIDY. If you have subsidies for 20 years, at which point 

does it become stability? I yield back. I am sorry. I know I am out 

of time. I apologize. 

Mrs. BONO MACK. I thank the gentleman. 

I would like to thank our panelists very much. I believe we have 

recognized all colleagues. I want to say that I think it has been a 

very, very informative hearing. It has been a good hearing. I want 

to thank my colleagues and certainly thank the ranking member 

for his indulgence today and his help. 

I would like to remind members that they have 10 business days 

to submit questions for the record, and I would like to ask the witnesses to please respond promptly to any questions that they receive. So without objection, the chair is also going to insert two additional statements for the record, and we have previously shared 

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hearing record. Without objection, so ordered. 

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Mrs. BONO MACK. So again, this concludes the hearing. Thank 

you all very much for your time. 

[Whereupon, at 12:55 p.m., the subcommittee was adjourned.] 

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