```

[Senate Hearing 112-293]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-293

                         MANUFACTURING OUR WAY 
                         TO A STRONGER ECONOMY

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 11, 2011

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico                PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia                MARCO RUBIO, Florida
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
                                     DEAN HELLER, Nevada
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                   Bruce H. Andrews, General Counsel
   Brian M. Hendricks, Republican Staff Director and General Counsel
            Todd Bertoson, Republican Deputy Staff Director
                Rebecca Seidel, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 11, 2011.....................................     1
Statement of Senator Rockefeller.................................     1
Statement of Senator Hutchison...................................     3
Statement of Senator Ayotte......................................    34

                               Witnesses

Stephanie A. Burns, Ph.D., Chairman, Dow Corning Corporation.....     5
    Prepared statement...........................................     8
Leo W. Gerard, International President, United Steel, Paper and 
  Forestry, Rubber, Manufacturing, Energy, Allied Industrial and 
  Service Workers International Union (USW), AFL-CIO.............    11
    Prepared statement...........................................    14
Mike Rowe, Creator, Executive Producer and Host, Discovery 
  Channel's DIRTY JOBS...........................................    21
    Prepared statement...........................................    24

 
                         MANUFACTURING OUR WAY 
                         TO A STRONGER ECONOMY

                              ----------                              

                        WEDNESDAY, MAY 11, 2011

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:12 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John D. 
Rockefeller IV, Chairman of the Committee, presiding.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    The Chairman. Welcome. This hearing is of just vast 
importance, and what is frustrating is when you say the words, 
how we're going to do manufacturing better, all the people who 
are suffering from it, like everybody in West Virginia and 
everybody everywhere else, they can't engage with the subject 
properly.
    Manufacturing somehow is a word which people can't get into 
and say, ah, that means we should do this, this, this and this, 
and it's complicated, but you're here to straighten that out.
    Manufacturing, obviously, has been and will continue to be 
a focus of this committee for a very simple reason. In fact, 
it's our main focus this year. It's our second formal hearing 
here. I've had four other hearings, many of them in West 
Virginia. I've had four in West Virginia, including the glass 
industry, for example, and people are just literally going out 
of business and want to know how to stay in business, sometimes 
with government help, sometimes without it.
    I don't know what this budget is going to do to us but I'm 
not looking forward to having to report on the answer to that 
question.
    We just didn't become the envy of the world because of the 
things we made and the country that we built. We're envied 
because the people know that if you work hard in America 
opportunities are going to follow. That is the history of our 
country and that was the history of our country, its not right 
now, which is why we have to change it.
    Now, you can be a steelworker. You can be a coal miner. You 
can be a glassmaker, but you really put in the hours, and it's 
probably generational, and you're fanatically loyal, work 
incredibly hard, and then you just get swept off the map. In 
fact, two of the three industries that I mentioned pretty much 
have been swept off the map.
    It's certainly true in West Virginia. My state was built on 
coalmining, on steelwork, and a lot of other factories 
producing a very wide range of goods. We're not a rich state, 
so that every one of those jobs is incredibly important to us. 
Many of the towns and cities across the state grew and thrived 
because of the industry that provided reliable jobs.
    I voted against NAFTA. This isn't in my script, but it 
still makes me mad, because I knew at the time that it would 
cause, in our rural counties, where we have only garment makers 
and sneaker makers, to close down. And it was in 2 years, they 
were all closed down, and that really hurt. That really, really 
hurt.
    So we must dig in. We must redouble our efforts to ``make 
it in America.'' Manufacturing is critical, and it's critical 
to the national security. There are some things that we simply 
cannot outsource. We cannot outsource our ability to defend 
this country, for one, our secure communications networks or 
our research and development efforts.
    Now, some of them are being outsourced thanks to WikiLeaks, 
et cetera, but we have to find a way to deal with all of this.
    Co-Chair Hutchison, I just had a long meeting with 
cybersecurity folks, and they like the approach we're taking, 
but it's very complicated for them, because they're all of 
different sizes, but they bought the concept that if you wanted 
a government contract, therefore, you have to have security, 
cybersecurity protection which is up to the standard, and if 
you don't have that, you probably don't get the government 
contract. And they like that.
    Senator Hutchison. Yes.
    The Chairman. Because they said you have to incent people 
sometimes in a negative way to get things going.
    Jobs are just slipping away all the time, and we know it, 
and it hurts so many people. The truth is that manufacturing 
workers get higher pay and more generous benefits than 
Americans in non-manufacturing jobs, and these jobs have one of 
the largest multiplier effects in our economy. It's estimated 
that two-and-a-half additional jobs come from every one 
manufacturing job. People say that. Nobody pays any attention. 
It's tremendously important. It's like health care. The 
multiplier effect is huge.
    I don't think people appreciate that manufacturing is this 
country's principal source of R&D and innovation. Manufacturing 
firms perform approximately 70 percent of U.S. industry R&D, 
while accounting for only about 11 percent of the economy.
    Disturbingly, the R&D could be going on here, but isn't 
because it's being shipped overseas as well. Now, I don't mind 
that if somebody from South Korea comes here to get his Ph.D. 
It used to be they'd stay here, or India or Japan or Brazil or 
some other place, get their Ph.D. and they'd stay here and then 
they'd be a part of our innovation machine.
    Now, they go home because they want to build their 
countries. I can't argue against that. That's what they ought 
to be doing in a sense, but the loss hurts whether it's 
virtuous or not.
    R&D--I think we had 57,000 factories that have been closed 
in the last 10 years, and where factories go, so does 
innovation. If we still want people to believe that they can 
make it in America, we can't let manufacturing become a relic 
of the past.
    I'm heartened that manufacturing activity has increased 
over the past several months as our country makes it out of the 
recession. I don't think we've quite done that, but the month-
by-month numbers keep going up.
    It's just that there are still so many people unemployed it 
doesn't make any difference, and still fewer people are 
unemployed and kind of know it, because they see that happening 
in their neighborhoods, not just them, but they've got to feel 
it, see it, get a sense of the momentum.
    So we have to do more. Industry, labor and government have 
a responsibility to work collaboratively to make sure that the 
manufacturing sector is stronger in the short term and in the 
long term.
    To this end, the Committee has worked supporting science, 
technology, engineering and math in the famous reauthorization 
of the America COMPETES Act, which Kay Bailey Hutchison and I 
sort of did in the center aisle of the U.S. Senate floor, all 
by ourselves, with help from Lamar Alexander, and then it 
passed by unanimous consent. See, bipartisanship can work. And 
it was fun, wasn't it?
    I know that we have very hard choices to make, how Federal 
dollars are spent. And this is where I get into turmoil on the 
whole budget thing. The calls for slashing the budget have 
broad and often troubling implications for some of the hardest-
working Americans.
    Infrastructure investment is essential to promoting growth 
and creating jobs. You can't do anything if, like in West 
Virginia, over half of your bridges were built 50 years ago. 
Bridges are only meant to last, at the maximum, 50 years.
    There's no substitute for education and workforce training 
programs or for helping small manufacturers and exporters find 
new markets. Indiscriminate and unthinking budget cuts seeking 
a short-term improvement in our deficit will leave the 
country's economic power at the mercy of the rest of the 
world's economic power. I'm not sure we come out a winner on 
that, and that would hurt this country for years to come. So 
everything is hard around here.
    Today, I want to hear from our witnesses on what more we 
can do to help America's manufacturing sector and create more 
good-paying jobs, and, as I say, this is Kay Bailey Hutchison's 
and Jay Rockefeller's main agenda item for this 2-year period.
    And I now call on my distinguished friend.

              STATEMENT OF KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you. Thank you, Mr. Chairman.
    I, too, am very concerned about America's manufacturing 
base. While we are still the major manufacturing country of the 
world, we have lost market share, and I think we do need to 
stay on top of that kind of a trend and do what we can to 
assure that America is continuing to be competitive.
    I would say a couple of things are important. One is that 
we are looking now for a highly skilled workforce, and I think 
the bill that the chairman just mentioned is essential to 
assuring that we are valuing the STEM courses, making sure that 
we have technology training and the most advanced computer 
capabilities that are possible.
    And I think our committee has done a great job, and 
Congress passed the COMPETES Reauthorization of 2010, and we 
now have more research and more STEM education incentives for 
teachers to get teacher certificates along with their major 
being in science, technology and math.
    Yes, thank you.
    Second, I believe that we've got to aggressively open our 
markets. We have free-trade agreements that have been 
languishing that could add to our export capabilities and add 
to the opportunities for other countries to buy our products.
    So I certainly hope that we will look to ratifying free-
trade agreements that are in our country's best interests that 
are already in play.
    The last thing that I would just want to mention, before we 
go to our witnesses, is that a stable regulatory environment is 
very important to keeping manufacturing in America.
    When I talk to a CEO that does international business and I 
will inevitably say, Why did you put your manufacturing 
operation in another country rather than here? They will cite 
higher taxes. The corporate tax rate in America is among the 
highest in the world. And, second, the unstable regulatory 
environment.
    Now, that is a terrible thing to say about America, and I 
think we ought to have that in mind as we are passing laws and 
restricting the capability for our manufacturers to compete in 
the global marketplace.
    I would just say that in the state arena, the states that 
have right-to-work laws also have a competitive advantage where 
people have a choice whether to join a union and are not forced 
to, and----
    Mr. Gerard. Not forced to anywhere.
    Senator Hutchinson. Well, your definition of forced and 
mine might be different.
    Mr. Gerard. Because I understand mine.
    Senator Hutchinson. Sir, I want to say that I understand as 
well.
    And for their right-to-work laws, besides right-to-work 
laws is tort reform, and we must have a litigation environment 
that is reasonable and fair is also important for our 
competitiveness in the global marketplace. And maybe you would 
argue, but I would not, that we are litigious society and that 
hurts our competitiveness.
    So, with that, Mr. Chairman, I thank you for having this 
hearing and hope that we can come to agreement on goals that 
would benefit our competitiveness in the global marketplace. 
Thank you.
    The Chairman. Thank you, Senator Hutchison.
    We have three distinguished witnesses. Dr. Stephanie Burns, 
who's Chairman and CEO of Dow Corning Corporation, which has a 
pretty big presence in the state of West Virginia; Leo Gerard, 
International President--Leo, this is going to take a long time 
to read all----
    Mr. Gerard. Don't read it all.
    The Chairman. No, I'm going to read them.
    International President, United Steel, Paper and Forestry, 
Rubber, Manufacturing, Energy, Allied Industrial and Service 
Workers International Union. I didn't even mention 
steelworkers, did I?
    OK. And then Mr. Mike Rowe. I'm very curious, Mike, about 
you and what you're going to say. Creator and Executive 
Producer and Host, Discovery Channel's Dirty Jobs.
    And why don't we start off with you, Dr. Burns.

       STATEMENT OF STEPHANIE A. BURNS, Ph.D., CHAIRMAN, 
                    DOW CORNING CORPORATION

    Dr. Burns. Good afternoon. Thank you, Chairman Rockefeller 
and Senator Hutchison, for inviting me to join you this 
afternoon. I very much appreciate it.
    It is an honor and a pleasure to join you today to share 
some thoughts on how to grow domestic manufacturing in a way 
that increases our nation's exports, in the near- and long-
term, while reducing our trade deficit and strengthening 
America's competitiveness in a rapidly changing global 
marketplace.
    I should note at the outset that much of what I want to 
share with you today is not targeted specifically to this 
committee. Instead, I hope to articulate a suggested framework 
for thoughtful policymaking in the areas of manufacturing, 
exports and jobs creation.
    As you know, Dow Corning is a Midland, Michigan-based 
company that has become one of the world's leading providers of 
silicon-based materials that enhance the products of such 
industries as clean energy, automotive production, personal 
care products, construction--including the areas of green 
building and energy efficiency--electronics and health care 
technologies.
    I am proud to say that Dow Corning has more than doubled 
its sales since 2003. Last year, our sales increased by about a 
billion dollars to nearly $6 billion, and our net income was 45 
percent higher than in 2009. We are seeing record growth. We 
are exporting, and we are creating jobs.
    We have achieved that growth in part because we believe 
that you can only export what customers around the world want 
to buy. And, to sustain this growth, we know that we must not 
simply cater to the markets of today. We must also anticipate 
the shape and demands of the global marketplace of tomorrow.
    We study the trends--we call them megatrends--that will 
shape the world's economy and humankind in the decades to come, 
and we unleash our innovators to find products and solutions 
that will meet the needs and challenges posed by these 
megatrends.
    The innovation necessary to meet these emerging global 
demands leads us to invest 5 to 6 percent of our sales every 
year in research and development. Then we risk the capital to 
manufacture those solution-based materials.
    I applaud this committee for taking the time to explore the 
root causes of the loss of U.S. manufacturing muscle and the 
ways that government and industry can work together to 
strengthen manufacturing so more American workers can enjoy the 
well-paying, family supporting jobs that making things 
provides.
    But I would urge this committee to thoughtfully consider, 
as well, the linkage between the profound and long-term trends 
that even today are shaping the world in which we live and the 
companies and industries that are innovating daily to meet the 
needs of this world.
    I should tell you that my company traditionally has thrived 
in a culture of quiet innovation. We've only recently joined 
the public discussion because we know that the power of a 
vibrant manufacturing sector is critical to maintaining and 
enhancing the quality of life in our Nation. We know that 
forward-looking government policies are essential to 
encouraging innovation, eyes-on-the-future companies to take 
risks necessary for success.
    At Dow Corning, we are convinced that one path to future 
success will meld good business practice with meeting the needs 
of the billions of people in the world who are not sharing in 
the lifestyles that we have come to see in developed countries.
    An estimated three billion people lack access to 
sustainable and affordable modern energy. A billion of our 
global neighbors do not have access to safe drinking water, and 
every day, 200,000 people move to big cities, many of which are 
already overwhelmed by the demand for housing and other 
essentials of dignified life.
    Our executive, our research, engineering and marketing 
teams see opportunities in these megatrends to do good while 
exploring what we think is the unlimited potential for 
solutions hidden in the silicon atom, all the while creating 
jobs for Americans and making a profit for our owners.
    So what are these megatrends to do with what I have been 
referring to? At Dow Corning we are focused on the following:
    First, energy scarcity and the need for clean energy 
solutions. Our materials enable solar and wind energy 
generation, energy efficiency and energy storage.
    Second, the rapid urbanization of the developing world. Our 
green buildings and energy efficiencies technologies are 
complemented by high-performance building materials.
    For example, we make glass more resistant to fire, 
vibration and impact, and new technology insulations by 
squeezing more protection from the elements into fewer inches, 
allowing architects to add square feet to urban dwellings.
    And, third, aging populations and the corresponding 
challenges related to provision of health care. We are 
innovating our materials to enable improvements in wound care 
and transdermal and topical treatments to enhance patient 
comfort through aging.
    I'm sure other companies are exploring these and other 
megatrends through the lenses of their competencies and 
business plans. I am also sure that companies that play into, 
and not resist, these trends will be the job engines of the 
coming decades, if the United States is to be home of these 
kinds of companies and industries, these innovators. That means 
having a competitive corporate tax structure and regulatory 
regime, as well as incentives for investment in innovation and 
growth.
    But it also means having smart, forward-looking policies 
that invite investment from manufacturers poised to meet 
challenging global demand.
    Take, for example, the challenge of energy scarcity and the 
unabated global demand for renewable energy. About 2 years ago, 
we proposed a four-point plan for accelerating America's 
adoption of solar energy. This plan focuses on solar power, 
because, as one of the world's largest producers of these 
materials, it is among the technologies that we know best.
    But our suggestions, nevertheless, also address many of the 
manufacturing, legislative, regulatory and workforce-related 
factors that influence America's ability to develop a thriving 
advanced manufacturing base.
    First, we are encouraging Congress and the administration 
to enact Federal policies and regulations that will increase 
domestic consumer demand for renewable energy, for energy 
efficiency and manufacturing of those products here at home.
    Not surprising the solar supply chain wants to be where the 
market is. So growing demand for solar is key to realizing the 
enormous jobs potential that the growing market will create 
here in America.
    Other nations have adopted aggressive policies to support 
growth for renewable energy, and, not coincidentally, during 
the past 12 years, the U.S. global market share for solar 
manufacturing has dropped from 45 percent down to 7 percent.
    Meanwhile, other nations are aggressively courting solar 
manufacturers, specifically, China, Germany, India, Malaysia 
and the Philippines. Luring manufacturers with roughly 40 
percent manufacturing tax credits, high demand markets, the 
U.S. risks losing this growth industry unless it puts into 
place strategic, short-term, demand side incentives.
    Second, we are advocating increased Federal funding for 
research and development, as the government does for many other 
industries, to accelerate technology innovation and advanced 
manufacturing capabilities. Making the R&D tax credit permanent 
is critical.
    Third, we support training and education to develop a green 
collar workforce. We won't have exports without manufacturing. 
And we won't have manufacturing without a ready workforce.
    Other nations have undertaken massive expansions of 
educational assets in recent years, some nearly tripling their 
share of GDP devoted to education. These countries are ramping 
up the construction of colleges and increasing the number of 
college students as much as five fold to accelerate their 
manufacturing development.
    We applaud the efforts of the Science, Technology, 
Engineering and Mathematics Education Coalition. It is doing 
the important work of supporting training for teachers and 
students through activities of the U.S. Department of 
Education, the NSF and other agencies. Rigorous education is 
essential to developing an American workforce that can compete 
in the global marketplace.
    And, last, we urge our government, at the Federal, state 
and local levels, to lead by example. If the designers of new 
government facilities incorporate renewable power options, the 
change in the landscape would remind our citizens, in big 
cities and small towns, that renewable energy has arrived in 
our lives.
    My company is doing its part to encourage a climate of 
collaboration, creativity and commitment to greater energy 
security. We know it is fundamental to protecting our nation's 
competitiveness in the decades to come. Generations of future 
Americans deserve nothing less than our best effort.
    At Dow Corning, we look forward to working with each of you 
as we enter the marketplace that is full of incredible 
opportunities for American manufacturing.
    Business and government must work together to lead the 
economic transformation to a growing and exporting 
manufacturing base. We should play to our strengths. For U.S. 
manufacturers who channel the human capital and R&D that 
emanates from our world class universities, that means opening 
markets that are currently closed to U.S. goods and services. 
Emerging economies offer unbridled opportunities to those 
companies who have access to those markets.
    I take this position not only as the head of an American 
company selling to the world, but also as a member of the 
President's Export Council. The 20 private sector members of 
the council, whose companies represent a large swath of the 
American manufacturing and service sectors, have urged 
President Obama to prepare and submit to Congress as soon as 
possible pending free-trade agreements.
    Leaders on both sides of the aisle know that free trade can 
play a major role in our nation's economic recovery and the 
revitalization of our manufacturing sector.
    And, finally, I applaud the administration for making a 
case for trade in his State of the Union address when he 
announced his National Export Initiative, which seeks to double 
U.S. exports within 5 years.
    Innovative, flexible, strong, courageous and collaborative 
public-private partnerships can lead to a recovery that creates 
engaging, well paying and worthwhile work for Americans, as 
well as exports that serve an increasing demand in our global 
neighborhoods for products that enhance the quality of their 
lives.
    I'm confident that if we were to share these ideas with the 
people in coffee shops and diners from your communities, they 
would agree.
    Thank you for your attention.
    [The prepared statement of Dr. Burns follows:]

      Prepared Statement of Stephanie A. Burns, Ph.D., Chairman, 
                        Dow Corning Corporation
    Good afternoon and thank you Chairman Rockefeller and Senator 
Hutchison for inviting me to join you this afternoon.
    It is an honor and my pleasure to join you today to share some 
thoughts on how to grow domestic manufacturing in a way that increases 
our Nation's exports--in the near- and long-term, while reducing our 
trade deficit and strengthening America's competitiveness in a rapidly 
changing global marketplace. I should note at the outset: much of what 
I want to share with you today is not targeted specifically to this 
Committee. Instead, I hope to articulate a suggested framework for 
thoughtful policymaking in the areas of manufacturing, exports, and 
jobs creation.
    As some of you know, Dow Corning is a Michigan-based Company that 
has become one of the world's leading providers of silicon-based 
materials that enhance the products of such industries as:

        clean energy,

        automobile production,

        personal care products,

        construction--including in the areas of green building and 
        energy efficiency,

        electronics

        and health care technologies.

    I am proud to say that Dow Corning has more than doubled its sales 
since 2003. Last year, our sales increased by about a billion dollars 
to nearly $6 billion, and our net income was 45 percent higher than in 
2009.
    We are seeing record growth; we are exporting; and we are creating 
jobs.
    We have achieved that growth in part because we believe that you 
only can export what customers around the world want to buy--and, to 
sustain this growth, we know that we must not simply cater to the 
markets of today . . . we must also anticipate the shape and demands of 
the global marketplace of tomorrow.
    We study the trends--the megatrends that will shape the world 
economy and humankind in the decades to come--and then we unleash our 
innovators to find the products and solutions that will meet the needs 
and challenges posed by these megatrends.
    The innovation necessary to meet these emerging global demands 
leads us to invest 5 to 6 percent of our sales every year in research 
and development. Then we risk the capital to manufacture those 
solutions-based materials. We take great pride in the fact that 10 to 
15 percent of our silicone sales are from products and services less 
than 5 years old.
    I applaud this Committee for taking the time to explore the root 
causes of the loss of U.S. manufacturing muscle and the ways that 
government and industry can work together to strengthen manufacturing 
so more American workers can enjoy the well-paying, family-supporting 
jobs that making things provides. But I would urge this Committee to 
thoughtfully consider, as well, the linkage between the profound and 
long-term trends that even today are shaping the world in which we live 
and the companies and industries that are innovating daily to meet a 
changing world.
    I should tell you that my company traditionally has thrived on a 
culture of quiet innovation. We've only recently joined the public 
discussion because we know that the power of a vibrant manufacturing 
sector is critical to maintaining and enhancing the quality of life in 
our Nation. We know that forward-looking government policies are 
essential to encouraging innovative, eyes-on-the-future companies to 
take the risks necessary for success.
    At Dow Corning, we are convinced that one path to future success 
will meld good business practice with meeting the needs of the billions 
of people in the world who are not sharing in the lifestyles of what we 
have come to call ``developed'' societies.
    For example:

   An estimated 3 billion people lack access to sustainable and 
        affordable modern energy. Many live off the electricity grid in 
        the darkness of energy poverty.

   A billion of our global neighbors do not have access to safe 
        drinking water.

   Every day, 200,000 people move to big cities, many of which 
        already are overwhelmed by the demand for housing and other 
        essentials of dignified life.

    Our executive, chemistry, engineering and marketing teams see 
opportunities in these megatrends to do good while doing well by 
exploring what we think is the unlimited potential for solutions hidden 
in the silicon atom--all the while creating jobs for Americans and 
making a profit for our owners.
    So, what are these megatrends to which I have been referring? At 
Dow Corning we are focusing on the following:

   First, energy scarcity and the need for clean energy 
        solutions. Our materials enable solar and wind energy 
        generation; energy efficiency and energy storage.

   Secondly, the rapid urbanization of the developing world. 
        Our green building and energy efficiency technologies are 
        complemented by high-performance building materials--that, for 
        example, make glass more resistant to fire, vibration and 
        impact--and new-technology insulations that--by squeezing more 
        protection from the elements into fewer inches--allow 
        architects to add square feet to urban dwellings.

   And, third, aging populations and the corresponding 
        challenges related to the provision of health care. We are 
        innovating our silicones, for example, to enable improvements 
        in wound care and transdermal and topical treatments to enhance 
        patient comfort and care.

    I'm sure other companies are exploring these and other megatrends 
through the lenses of their competencies and business plans. And I am 
also sure that companies that play into--and not resist--these trends 
will be the jobs engines of the coming decades. If the United States is 
to maintain its global economic leadership it must strive to be home to 
these kinds of companies and industries . . . these innovators. To be 
sure, that means having a competitive corporate tax structure and 
regulatory regime, as well as incentives for investment in innovation 
and growth. But, it also means having smart, forward-looking policies 
that invite investment from manufacturers poised to meet changing 
global demand.
    Take, for example, the challenge of energy scarcity and the 
unabated global demand for renewable energy.
    About 2 years ago, Dow Corning proposed a four-point plan for 
accelerating America's adoption of solar energy--with a key plank of 
that program dedicated to the need for tax incentives to stimulate 
manufacturing investment and create much-needed jobs in recession-
ravaged places like our home state of Michigan.
    Dow Corning's plan focuses on solar power because, as one of the 
world's largest producers of the base material needed to convert the 
sun's energy into clean and sustainable electricity, that is among the 
technologies we know best.
    But our suggestions, nevertheless, also address many of the 
manufacturing, legislative, regulatory and work force-related factors 
that influence America's ability to develop a thriving advanced 
manufacturing base.
    First, we are encouraging Congress and the Obama Administration to 
enact Federal policies and regulations that will increase domestic 
consumer demand for renewable energy, energy efficiency products and 
the manufacturing of those products here at home. Not surprisingly, the 
solar supply chain wants to be where the market is. So, growing 
domestic demand for solar is key to realizing the enormous jobs 
potential that the growing market for solar promises.
    Other nations have adopted aggressive policies to support the 
growth of their renewable-energy marketplaces, and, not coincidentally, 
during the past 12 years, the U.S. global market share of solar 
manufacturing has dropped from 45 percent of the total to only 7 
percent.
    Meanwhile, other nations are aggressively courting solar 
manufacturers. With China, Germany, India, Malaysia, and the 
Philippines luring American manufacturers with roughly 40 percent 
manufacturing tax credits and high demand markets, the U.S. risks 
losing this growth industry unless it puts into place strategic, short-
term, demand-side incentives. But it is also time to uncap the 48C 
advanced manufacturing tax credit to stimulate immediate manufacturing 
investments here in the U.S.
    Second, we are advocating increased Federal funding for research 
and development--as the government does for many other industries--to 
accelerate technological innovation and advanced manufacturing 
capabilities. Making the R&D tax credit permanent is critical.
    Third, we support training and education to develop a ``green 
collar'' work force. We won't have exports without manufacturing. And 
we won't have manufacturing without a ready workforce. Other nations 
have undertaken massive expansions of educational assets in recent 
years--some nearly tripling their share of GDP devoted to it. These 
countries are ramping up the construction of colleges and increasing 
the number of college students as much as five fold to accelerate their 
manufacturing development.
    We applaud the efforts of the Science, Technology, Engineering and 
Mathematics Education Coalition. It is doing the important work of 
supporting training for teachers and students through activities of the 
U.S. Department of Education, the National Science Foundation and other 
agencies. Rigorous education is essential to developing an American 
workforce that can compete in the global marketplace.
    Fourth, Dow Corning urges our government--at the Federal, state and 
local levels--to ``lead by example.'' If designers of new government 
facilities incorporated renewable-power options, the change in the 
landscape would remind our citizens in big cities and small towns that 
solar energy has arrived in our lives.
    My company is doing its part to encourage a climate of 
collaboration, creativity and commitment to greater energy security. We 
know it is fundamental to protecting our Nation's competitiveness in 
the decades to come. Generations of future Americans deserve nothing 
less than our best effort. We hope Congress will continue to do its 
part by enacting policies and incentives to encourage private sector 
investment.
    At Dow Corning, we look forward to working with each of you as we 
enter a marketplace that is full of incredible opportunities for 
American manufacturing.
    Business and government must work together to lead the economic 
transformation to a growing and exporting manufacturing base. So, let's 
play to our strengths. For U.S. manufacturers, which channel the human 
capital and R&D that emanates from our world-class universities, that 
means opening markets that are currently closed to U.S. goods and 
services.
    Emerging economies offer unbridled opportunity to those companies 
that have access to those markets.
    I take this position not only as the head of an American company 
selling to the world but also as a member of the President's Export 
Council. The 20 private sector members of the Council, whose companies 
represent a large swath of the American manufacturing and service 
sectors, have urged President Obama to prepare and submit to Congress 
as soon as possible the pending free trade agreements.
    Leaders on both sides of the aisle know that free trade can play a 
major role in our Nation's economic recovery and the revitalization of 
our manufacturing sector.
    Finally, I applaud President Obama for making the case for trade in 
his State of the Union address when he announced his National Export 
Initiative, which seeks to double U.S. exports within 5 years to 
support an additional 2 million American jobs.
    Innovative, flexible, strong, courageous and collaborative public-
private partnerships can lead to a recovery that creates engaging, well 
paying, worthwhile work for Americans . . . as well as exports that 
serve the increasing demand of our global neighbors for products that 
enhance their quality of life.
    I'm confident that if we were to share these ideas with the people 
in the coffee shops and diners of your communities, they would agree.
    Thank you for your kind attention.

    The Chairman. Thank you very much, Dr. Burns.
    I should point out that any member's statement is a part of 
the record. All of your statements are automatically a part of 
the record.
    So all kinds of questions, Dr. Burns, I have for you.
    Leo Gerard.

           STATEMENT OF LEO W. GERARD, INTERNATIONAL

      PRESIDENT, UNITED STEEL, PAPER AND FORESTRY, RUBBER,

 MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS 
               INTERNATIONAL UNION (USW), AFL-CIO

    Mr. Gerard. Thank you very much, Chairman Rockefeller and 
members of the Committee.
    I'm here on behalf of the 850,000 members of the 
steelworkers union, but also on behalf of the 12\1/2\ million 
members of the AFL-CIO, and we want to tell you that American 
manufacturing is currently in dire circumstances, and we 
believe its future is in jeopardy, as is the economic and 
national security of the United States at risk.
    America's economic recovery remains fragile, as you pointed 
out earlier. Unemployment, underemployment, wage stagnation, 
foreclosures, they all paint a grim picture of a people and an 
economy that's still in terrible, terrible straits and is 
struggling to recover.
    There's too many, and there have been too many shuttered 
factories. Forty-four thousand of those factories closed during 
the first 8 years of this decade. Close to 3,000 more factories 
closed as a result of the Wall Street economic meltdown.
    Now, less than 10 percent of America's GDP comes from 
manufacturing, where just 20-something years ago, close to 23 
percent of America's GDP came from manufacturing.
    And despite, as you pointed out, Mr. Chairman, the small 
uptick in manufacturing, employment and production that occurs 
against the backdrop of a long-term decline and devastation, 
let me say to you and to members of the Committee that real 
wealth is not created by creating collateral debt offerings and 
phony financial bubbles. Real wealth is created when we take 
raw material, ingenuity, engineering, energy and people's 
creativity and add value to that, and that's what manufacturing 
does.
    The details of the backdrop are outlined in the AFL-CIO's 
industrial council report, ``Manufacturing Insecurity: 
America's Manufacturing Crisis and the Erosion of the U.S. 
Defense Industrial Base.'' And the report has been submitted as 
support for this testimony. [This report can be found at http:/
/www.aflcio.org/Issues/Jobs-and-Economy/Manufacturing/
Manufacturing-and-U.S.-Security/Manufacturing-Insecurity-
America-s-Manufacturing-Crisis-and-the-Erosion-of-the-U.S.-
Defense-Industrial-Base.]
    My written testimony makes four key points, Mr. Chairman:
    The nation's technical, innovative and industrial 
capacities are essential to our economic and national security, 
as is the rebuilding of our nation's infrastructure.
    The health of our manufacturing base and our defense 
industrial base are inextricably linked, and they are both 
currently in critical condition.
    Our trade, tax, investment, procurement policies, the 
globalization of production and the failure to have a national 
manufacturing strategy helped create this situation.
    Probably no one expects me to quote one of America's great 
manufacturers, one of America's great capitalist families, but 
Bill Ford, the chairman of Ford Motor Company, said, on more 
than one occasion, not having a plan is not a plan. And I'm 
happy to quote him, and I agree with him.
    It doesn't have to be this way. I think that we must act 
now. The Senate, the House of Representatives and the 
administration need to act now with a strategic plan and 
employment-linked policies, investments and incentives to start 
revitalizing America's industrial base.
    Mr. Chairman and members of the Committee, I could spend my 
time today on an ongoing basis describing problem after problem 
after problem, but I believe all of you understand it. So let 
me further identify what I think needs to be done to address 
it.
    Before I do this I want to quote specific policy 
approaches. Let me make two overriding points. I believe that 
there is a fundamental and growing gap between the interests of 
multinational companies and Wall Street and the national 
interest.
    Our companies in the financial sector are simply 
interested, most of the time, for most of them, in short-term 
profits wherever and however they may be achieved. Their 
interests are not naturally in the creation of economic growth 
and opportunity here at home, and we have to recognize that and 
deal with it.
    Americans are interested in where we stand in the world and 
where their kids' opportunities for good jobs will come from. 
They know that our leadership on human rights, democracy, 
freedom and internationally recognized workers rights depends 
on our economic and military strength.
    They aren't interested in being number two or number three, 
and we shouldn't accept decline as being inevitable, although 
we are number one in accumulated trade deficits.
    For those that are the die-hard free traders, let me give 
you two quick facts. Since NAFTA, America has accumulated a $7 
trillion, ongoing trade deficit, year over year over year.
    Since the passage of PNTR with China, we've accumulated a 
$1.7 trillion ongoing trade deficit with China. That is nothing 
more than a wealth transfer from America to China.
    So it's important that we get our trade house in order and 
enforce our laws, aggressively enforce our trade laws. We need 
to address China's trade violations and establish our own 
strategic priorities and policies.
    We should view success not as the number of trade 
agreements we can pass or that are signed, but by the results 
they achieve in creating jobs. Our trade agreements should be 
designed to lower our massive trade deficit, not to add to it.
    We also need to empower workers to share in the fruits of 
their labor, enable them to enter the middle class with respect 
and compensation for their efforts.
    We need to invest in infrastructure, and, Mr. Chairman, I 
want to compliment you for your advancement of an 
infrastructure bill.
    The nation can no longer live on a legacy that we need--and 
we need the jobs now. We need to start investing trillions of 
dollars over time, the 21st century infrastructure, from roads 
to rail, from clean technology and to the rest of our 
infrastructure.
    Let me give you a fact that you may already know. More than 
50 percent of the schools in the United States are more than 60 
years old. If we care about our kids, one of the things we 
could do is start helping our cities and municipalities to 
modernize our schools.
    Buy America laws ensure that we actually make the things we 
are building and installing. An improved America is the legacy 
we should leave our children and grandchildren, not a decrepit 
and falling infrastructure.
    Taxes that support domestic manufacturing. We should 
eliminate tax incentives and loopholes that encourage financial 
speculation, rather than investment, outsourcing and off-
shoring production, and we should enact tax incentives for 
companies that produce domestically.
    Innovation for American manufacturing. We must protect our 
nation's innovative leadership. Doing so requires that we 
maintain strong intellectual property protections here and 
abroad.
    We must ensure that increased R&D investment results in 
American jobs in American workplaces.
    We need to train and educate America's workers. 
Revitalizing manufacturers requires workers equipped to meet 
the skills and the needs of this century and the next.
    Congress must increase access to training funds for people 
unemployed as well as those seeking to enhance their skills. 
Ultimately, a high skills workforce must be one whose rights on 
the job and ability to speak are protected and thus made real 
through strong labor laws and strong unions.
    And we should make sure that we revitalize and strengthen 
TAA for those workers that have unfortunately lost their jobs 
through bad trade deals through no fault of their own.
    Our nation's future success, the reclamation of the 
American dream, depends on the revitalizing of our 
manufacturing sector. And the steelworkers union and the AFL-
CIO stand ready to work with Congress in the interests of the 
future.
    And let me make one other point, Mr. Chairman. There are 
those that would want to try to blame the labor movement, as I 
heard at the start of this, and let me put something on the 
record. Consider Germany, which has high rates of unionization, 
an hourly compensation in manufacturing that averages $48 per 
hour. But Germany has more--a bigger percentage of its GDP in 
manufacturing that we ever had in our lifetime. Germany has a 
world lead in exports. It has a balanced trade agenda with 
China, so that let me make it clear: Of the more than 5.5 
million jobs that were lost during the first 8 years of this 
decade, those jobs were lost in every sector of the economy, in 
every region of the country, including the south, including 
Mississippi, Louisiana and Texas, in the East and the West and 
the North in almost every sector.
    But one of the most important facts is more jobs were lost 
in non-union facilities than union facilities.
    Well, thank you very much for the opportunity to testify, 
Mr. Chairman.
    [The prepared statement of Mr. Gerard follows:]

     Prepared Statement of Leo W. Gerard, International President, 
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied 
   Industrial and Service Workers International Union (USW), AFL-CIO
    Thank you, Chairman Rockefeller, Ranking Member Hutchison and 
members of the Committee. I welcome the opportunity to be here today to 
testify on behalf of both my own union, the United Steel, Paper and 
Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service 
Workers International Union--the United Steelworkers (USW) and the 
entire AFL-CIO whose affiliate unions represent some twelve and a half 
million working men and women across the United States.
    The focus of today's hearing is exactly what this Nation needs to 
do but the truth is American manufacturing is in dire circumstances and 
its future is in jeopardy.
    The American economy remains fragile and uncertainty reigns. 
Unemployment, underemployment, wage stagnation, foreclosures all paint 
a grim picture of an economy still struggling to recover. For American 
manufacturing communities, this recession has been just one more big 
wave in a decade of economic tsunamis that have devastated workers, 
employers and communities.
    We believe that the decade long decline of the American 
manufacturing base is a crisis that has undermined our economic 
security and is a direct threat to our national security. The question 
before us is, what has happened to that prosperity and security and 
what must we do to strengthen the Nation's industrial base?
    The erosion of America's manufacturing base is a clear and present 
danger. The details of this threat are in a report commissioned by the 
AFL-CIO Industrial Union Council, entitled Manufacturing Insecurity: 
America's Manufacturing Crisis and the Erosion of the U.S. Defense 
Industrial Base.* This report has been submitted in support 
of this testimony, and it documents these concerns in detail.
---------------------------------------------------------------------------
    \*\ [This report can be found at http://www.aflcio.org/Issues/Jobs-
and-Economy/Manufacturing/Manufacturing-and-U.S.-Security/
Manufacturing-Insecurity-America-s-Manufacturing-Crisis-and-the-
Erosion-of-the-U.S.-Defense-Industrial-Base.]
---------------------------------------------------------------------------
    My testimony makes four key points:

        (1) The nation's technical, innovative and industrial 
        capacities are essential to our economic and national security.

        (2) The health of our manufacturing base and our defense 
        industrial base are inextricably linked. They are in critical 
        condition.

        (3) Our trade, tax, investment, procurement policies, the 
        globalization of production and the failure to have a national 
        manufacturing strategy helped create this situation.

        (4) It doesn't have to be this way. We must act now with 
        strategic and employment linked policies, investments and 
        incentives to revitalize our manufacturing base and ensure our 
        national security.
The Current Situation
    It is dangerous to assume that the 250,000 increase in 
manufacturing employment over the past year, the first increase since 
1997, signals a major recovery. Yes, it comes as welcome news, but 
occurs against the backdrop of how far we have fallen. More telling is 
new Department of Commerce data that shows companies cut their 
workforces in the U.S. by 2.9 million during the 2000s while increasing 
employment overseas by 2.4 million. The technical and industrial 
capacity offshored quickly became imported goods and a major 
contributor to our crushing trade deficits.
    Between 1998 and 2010 we lost approximately six million 
manufacturing jobs with over two million of these occurring from 2007-
2009. At the same time some 57,000 manufacturing facilities closed. The 
loss of these skilled workers, engineers, designers, scientists and 
more has eroded the Nation's working middle class and dangerously 
undermined our technical, industrial and innovative capacity. This 
nation will not be able to double net exports, reduce our trade 
deficits substantially nor meet our economic and security needs unless 
we produce more of what we consume. Our nation's future success, the 
reclamation of the American Dream, in fact, depends on revitalizing our 
manufacturing sector.
Manufacturing Insecurity
    It is a myth to think that the manufacturing base and the defense 
industrial base are independent of one another. A National Research 
Council study has noted, the boundaries between the defense industrial 
base--the set of industrial and military facilities devoted to the 
production of defense-related products--and commercial industry has 
become blurred. Workers see this on a daily basis as they produce 
commercial goods and technology that are used or modified for defense 
purposes.
    The Manufacturing Insecurity report we have submitted by Dr. Joel 
Yudkin documents the dangers the Nation faces from this erosion. There 
has been a continuous weakening in manufacturing value-added output, 
acceleration in manufacturing's steady decline as a share of U.S. GDP, 
stagnant and even negative growth--the first time in seven decades--in 
industrial capacity, and the substantial drop in capacity utilization 
since 2000. In addition there is the shocking growth in trade deficits 
and import penetration that have led to the loss of millions of U.S. 
jobs. Increasingly, our Nation's corporations are picking up stake and 
moving their production overseas, scouring the globe for the lowest 
cost location to produce--in the short-term--no matter what the long-
term cost to our economy and our people. Congress' role is to decide 
what's best for our people, not the corporations whose only allegiance 
is to short-term profits and rising compensation for their management, 
directors and returns to their shareholders.
    Another new report by the Information Technology and Innovation 
Foundation, The Case for a National Manufacturing Strategy for the 
United States, offers startling evidence that the rosy published 
industrial output and productivity figures are grossly overstated. The 
truth is far more troubling. From 2000 to 2008 (pre-Great Recession), 
fifteen of nineteen manufacturing sectors accounting for 72 percent of 
manufacturing output saw absolute declines. Dr. Susan Housman of the 
Upjohn Institute estimates that manufacturing productivity figures for 
the past decade have been overstated by 20-50 percent because they 
failed to account for imported elements. Bad data has been used to 
gloss over the reality of what has occurred in critical industries. The 
data, however, can not mask the pain that has been, and continues to be 
felt, all across this Nation by unemployed workers and those that live 
in hollowed out manufacturing communities.
Losing Critical Industries
    America's manufacturing sector continues be the largest, most 
productive and technologically advanced in the world. But its lead in a 
number of industries vanished years ago, and many of its remaining 
areas of strength are facing powerful challenges.
    The pattern of decline in key sectors such as semiconductors, 
printed circuit boards, machine tools, advanced materials, and 
aerospace is apparent. It can be seen in defense critical technologies 
where domestic sourcing is endangered in products ranging from 
propellant chemicals to space qualified electronics, power sources for 
space and military applications (batteries and photovoltaics), 
specialty metals, hard disk drives, and flat panel displays (LCDs), to 
name but a few.
    It can be found in critical materials like rare earth metals and 
magnets where the Chinese purchased U.S. manufacturing facilities and 
closed them, such as at Magnaquench in 2004). China now holds a 
monopoly on the rare-earth minerals used in the manufacturing of 
missile magnets, computers, wind turbines, lithium ion batteries and 
hybrid engines. In fact, advanced manufacturing is dependent upon rare 
earths.
    Another critical indicator of the erosion of U.S. manufacturing 
competitiveness is the Import Penetration Rate (IPR), the share of the 
U.S. market held by imports. According to the 2010 U.S. Business and 
Industry Council (USBIC) study of Import Penetration Rate (IPR)--in 
2008, 69 of the 114 capital and technology intensive industries 
examined lost share of their home U.S. market to imports, and their 
aggregate import penetration rate increased from 34.30 percent to 36.23 
percent.
    The broad domestic and global economic trends and import 
penetration rates reflect a sustained and dangerous erosion across 
nearly all manufacturing industries, including many that supply 
products, components, and technologies that the Pentagon considers 
important to defense. The capacities required for national security 
needs rest upon a defense industrial base embedded in, the Nation's 
overall domestic manufacturing base.
    As the commercial industrial base globalizes, the loss of domestic 
production facilities can also lead to the loss of innovation 
capabilities.
    Specifically, the acceleration of manufacturing offshore is 
associated with the following trends:

   Weakening innovation capabilities of domestic industrial 
        sectors;

   The transfer--deliberate and unwitting--of cutting-edge 
        technologies and know-how to economic rivals and potential 
        military adversaries; and

   Foreign countries establishing industrial and technology 
        policies aimed at enhancing their technological capabilities 
        relative to America's.
Tomorrow's Industries
    The United States has long been--and remains--the world leader in 
most materials-related technologies, but during the first half of the 
2000s decade, the National Research Council (NRC) warned that this 
leadership was eroding. This is reflected in the doubling of the U.S. 
advanced materials industry's global trade deficits between 2002-2006, 
according to the U.S. Census Bureau's Advanced Technology Products 
(ATP) trade data, as foreign competitors made inroads into U.S. 
markets. The NRC found that:

   Domestic materials production is disappearing and moving 
        offshore. Materials subsectors have consolidated significantly 
        since 2000. Plant capacity and employment both have declined, 
        and production of critical materials, such as specialty steels, 
        advanced ceramics, and magnesium, has been moving offshore.

   Materials R&D and innovation is following production 
        offshore. The migration of materials producers and users has 
        harmed domestic advanced materials R&D by inducing many U.S. 
        companies to shift materials R&D overseas. It has weakened U.S. 
        R&D capabilities in several materials technologies vital to 
        national security, including night vision systems, lanthanides 
        (rare earth elements), and specialty metals.

   The margin of U.S. leadership in advanced materials R&D is 
        eroding and increasingly challenged by other nations. The 
        largest U.S. advanced materials trade deficit is with Japan, 
        whose imports into the United States grew steadily over the 
        decade, more than doubling in the years between 2002-2008 ($417 
        million to $948 million). However, China is also aggressively 
        seeking to develop its own technological and production 
        capabilities in this area. Our escalating advanced technology 
        deficit with China and their recent actions to control rare 
        earth exports reflect their strategy.

    The net result is the erosion of U.S. leadership in advanced 
materials R&D. The following illustrations from the NRC reports for the 
National Academy of Science highlight this trend:

   Metals. Research into the production, processing, and 
        development of metallic materials in the United States has been 
        declining since 1998.

   Superalloys. Superalloy R&D has declined significantly over 
        the past decade. Attracted by lower costs, superalloy 
        manufacturers increasingly are locating their production 
        offshore.

   Composites. Composites are a critical technology used in 
        major defense systems. Once unchallenged, other countries in 
        several areas have supplanted U.S. leadership in composites. 
        U.S. defense and commercial programs--the Joint Strike Fighter 
        and Boeing's 787 Dreamliner--are outsourcing production and 
        supporting R&D in composites overseas.

   Electronic and Opto-Photonic Materials. These are critical 
        technologies for maintaining leadership in semiconductors. This 
        industry and its material supply chain are moving toward a 
        global processing and manufacturing infrastructure that is 
        taking some of its R&D capacity with it.
Building Other Nations' Research & Development
    The flip side of the migration of U.S. innovation capabilities 
offshore is the buildup of other countries' R&D capacity. The 
strengthening of foreign technology capability does not always result 
from market forces and commerce-facilitating progress in communications 
and transportation. Instead, this development often results from 
multinational companies taking one of three tacks:

 -- Actively exploiting the business environments created by U.S. trade 
        policy--for which they have lobbied hard--that encourage them 
        to supply the U.S. market even for highly sophisticated 
        manufacturers from low-cost foreign facilities;

 -- Responding to foreign government carrots and sticks; or

 -- Formulating various investment strategies synthesizing these two 
        approaches.

    The carrot-and-stick approach by foreign governments is a direct 
reflection of a broader strategic and tactical approach to capture 
markets and technological dominance in specific sectors. The recent 
announcements by Intel, Applied Materials and other advance technology 
firms of multibillion dollar investments in research and production 
facilities in China show how aggressive and successful the Chinese 
government has become at this game.
Trading Away Jobs
    Our trade deficit, especially with China, is symptomatic of the 
challenges we face in maintaining our industrial base. Although the 
overall trade deficit is down by a quarter from the record levels of 
2008, the 2010 U.S. goods trade deficit with China broke all previous 
records. And, the reduction in our trade deficit largely resulted from 
the economic crisis our country faced, not a long-term change in the 
trend.
    Through the decade our goods trade deficit with China soared, 
tripling since WTO accession--from $84 billion in 2001 to a record $273 
billion in 2010. China's share of the U.S. trade deficit in 
manufactured goods rose continually from 28.5 percent in 2002 to 75.2 
percent in 2009. In 2010, we ran a trade deficit with China in advanced 
technology products (ATP) of $94 billion, while with the rest of the 
world; we ran an ATP surplus of $10 billion. The U.S. trade imbalance 
with China in ATP should be a clear warning signal that our overall 
trade relationship is severely imbalanced in ways that are detrimental 
to our economic potential and future.
    U.S. foreign direct investment (FDI) in China has jumped, 
especially in manufacturing. FDI in China is all about new production 
and job creation, unlike in the United States where new FDI tends to 
signal a change of ownership, not new production. The Economic Policy 
Institute has estimated that the growth in the U.S. trade deficit with 
China from 2001 to 2008 has displaced about 2.4 million American jobs.
    Perhaps even more disturbing than the aggregate growth in the U.S. 
trade imbalance with China is the composition of our imports and 
exports. Our top fifteen exports to China (by 4-digit HTS code) include 
five categories of waste products (ferrous scrap, paper scrap, copper 
scrap, aluminum scrap, and offal); two categories of raw materials (soy 
and polymers), and at least three categories of parts. In contrast, all 
of China's top fifteen exports to the United States are manufactured 
products or parts.
    More than 50 percent of China's exports to the U.S. come from 
foreign-invested enterprises. Many U.S. corporations supported 
Permanent Normal Trade Relations claiming that they wanted to serve 
China's vast market. Some may have had honest intentions. But the 
reality is, far too many of our companies have offshored their 
production using China simply as an export platform replacing U.S. jobs 
and production.
    This is the result of concerted strategic interventions, starting 
with currency intervention, by the Chinese government over many years--
and inaction by our own. With an explicit export strategy targeting key 
industries, sectors, and technologies, China has captured a growing 
share of U.S. and world markets. It has used a wide array of unfair 
trade practices, including currency manipulation, export subsidies, 
widespread suppression of worker rights and wages, and tariff and non-
tariff barriers to exports, to support this strategy.
    The financial crisis has proved to be another opportunity for the 
Chinese government. By controlling access to its market in crucial 
sectors with indigenous innovation, the Chinese government buys time to 
build dominant industries and technology powerhouses that will have a 
clear competitive advantage over their lagging counterparts in other 
countries. This is already underway in the clean energy sector, where 
these trade-distorting polices work in concert to ensure market 
control. The 301 clean energy manufacturing trade case filed by the 
United Steelworkers union and the currency legislation passed by the 
House last fall are aimed at stemming these practices.
    It always baffles me why we don't believe the Chinese when they say 
they want to dominate certain industries, why we don't believe what 
they publicly announce as part of their ``five-year plans''. They 
outline to the world what their intentions are, but too many of our 
policymakers simply don't want to believe them. Our nation is being 
victimized by free trade ideologues and policymakers who want to 
discuss theory, rather than recognize reality.
Innovation Is Key To Our Future
    President Obama is right to focus on innovation as key to our 
economic future. But, innovation does not mean changing course, as 
America has been, and continues to be a leading innovator. And, no 
sector is more important to leading innovation than manufacturing, 
which generates more than 60 percent of all patents.
    Many people continue to have an outdated image of manufacturing as 
companies with belching smokestacks and rusted buildings. Today, at a 
modern steel making facility, you will find most people working in air 
conditioned rooms at computer keyboards. Auto factories are replete 
with robot welders and workers controlling activities at ergonomic 
workstations. Fiber optics, carbon fiber composite materials and 
countless other advanced materials are produced by our people.
    But, these operations are at risk. The policies of our competitors, 
and some failures in our own system, have resulted in more and more 
research and development being moved overseas. Our competitors 
understand that R&D and manufacturing are inextricably linked--
engineers, scientists and other innovators want to be close to the 
action, so that they can test their creativity and ensure its success.
    Our first priority must be to make sure that our intellectual 
property protection regime maximizes our ability to innovate, produce 
and create jobs for the future here at home. Congress is hard at work 
on patent reform legislation that, hopefully, will achieve these goals. 
For the last several years, organized labor has been an active 
participant in the legislative process and is optimistic that the 
legislation that passed the Senate, and is now working its way through 
the House will achieve those goals. Our ultimate desire is to ensure 
that companies that innovate can reap the rewards of their efforts and 
deploy the fruits of their innovation here at home in American plants 
and by creating American jobs. Strong intellectual property protection 
is the foundation upon which we can build a 21st century manufacturing 
base.
    The linkage between innovation, research and development, and 
production is clear and powerful. Engineers, scientists and innovators 
want to be close to the action, to deploy their creativity and refine 
its application. Investing in research and development is critical and, 
as noted, once created, it must have a robust legal framework of legal 
protections.
    But, we must do more. An activist approach is necessary. Other 
nations recognize the importance of investments in this area: we need 
to do the same. It's vital not only to the quest to develop the 
products of tomorrow but, to ensure that we produce them as well with 
the skills and hard work of our people. China, is actively seeking to 
develop its own innovative capacity--either by subsidizing its own 
indigenous development, or by incenting and coercing foreign companies 
to create R&D facilities on its soil. Hundreds of millions of dollars 
of investments in new R&D facilities are occurring by U.S. 
multinational companies in China. With it, today, and in the future, 
will go the manufacturing facilities to produce the products of those 
investments.
    We need to permanently extend the R&D tax credit, but need to 
ensure that the innovation is applied here at home to reinvigorate our 
manufacturing sector. We shouldn't be subsidizing R&D expenditures by 
our companies only to find that their innovations are deployed 
offshore. Other nations recognize the value of investments in this 
area, and the need to spur domestic opportunity . . . so should we.
Undervalued Currency Subsidizes Exports and Investment
    Through systematic and one-sided intervention in currency markets, 
the Chinese government has kept the renminbi approximately 40 percent 
undervalued with respect to the U.S. dollar for many years in support 
of its export strategy. The undervalued Chinese currency serves the 
government's strategy of building powerful export markets rather than 
boosting its own domestic consumer market. Undervaluation takes market 
share and jobs from the United States by penalizing our exports. It 
subsidizes imports into this country while encouraging outward 
investments into the Chinese economy.
    This is not free trade, nor is it the way the major economies of 
the world have agreed to behave. And the Chinese government's actions 
influence the monetary policies of other countries compounding our 
trade problems. The U.S. Treasury bi-annual currency reports 
acknowledge the fact that other nations mirror the Chinese government's 
behavior. Indeed, South Korea has been manipulating it's currency--the 
won--yet we have failed to respond and the soon-to-be-considered Free 
Trade Agreement with that country failed to include provisions to 
address this critical issue.
    While addressing the Chinese government's currency manipulation is 
one of the highest priorities for workers and employers in the 
manufacturing sector, it is time to recognize the broader impact of 
China's practices. Lost manufacturing jobs lead to lost tax revenue and 
higher budget deficits that limit our ability to invest in our future. 
This puts substantial pressure on Federal, state and local budgets, 
resulting in layoffs of teachers, police and other emergency 
responders. And it has undermined our future by undercutting the array 
of career choices and educational opportunities, especially in science, 
engineering and the technical occupations needed for a vibrant 
innovative manufacturing economy.
    Taking action to end currency manipulation will generate jobs and 
investment in the U.S. economy. Nobel laureate Paul Krugman estimates 
an end to the manipulation would produce a net export gain to the 
United States, Europe and Japan amounting to about 1.5 percent of GDP, 
increasing growth in the U.S. economy by about $220 billion. The 
Peterson Institute and the Economic Policy Institute agree that a 25 
percent to 40 percent revaluation in the renminbi would reduce the U.S. 
trade deficit between $100 billion and $150 billion per year, adding 
between 750,000 and 1 million jobs to American payrolls.
    It is time for Congress and the Administration to act decisively to 
end currency manipulation and other illegal trade practices.
Strategy Matters
    The U.S. needs to recognize that all our major global competitors 
have national manufacturing strategies. Advanced developing nations 
like China, India and Brazil all have one. The leading developed 
nations like Germany, Japan and the Scandinavian nations all have them. 
We do not and it is killing us.
    The differences in approach are dramatic. Our competitors 
consciously seek manufacturing as a critical jobs and prosperity 
strategy for their nations. Our blind free market approach theorizes 
seeking cheaper prices for consumers is better than good jobs and 
income. They target industries and technologies seeking to generate 
competencies and opportunities. We do not. Economic success is not 
measured simply by the price of a flat-screen TV, but how well one can 
feed, clothe and house their families, how they can have access to 
health care and education, how they can look forward to a secure and 
dignified retirement. On that basis, we are falling further and further 
behind.
    Other nations align their tax policies and government investments 
to achieve their goals and objectives. Out tax polices encourage 
offshoring and we quibble over Buy American policies that are less 
broad than our competitors own domestic procurement laws. They invest 
in training and education linked to their employment and economic 
strategies. We invest in training and education without clear 
employment strategies or goals and, unfortunately, as an after-the-fact 
sop to those most injured by free trade agreements.
    Last week, one news organization highlighted the potential for 
Congressional consideration of corporate tax reform legislation. In the 
article, it identified that the Administration was looking to reduce 
tax rates, and would make up the revenue lost from rate reductions by 
``closing loopholes and slicing exemptions.'' It only identified two 
examples: the tax deduction for domestic manufacturing and accelerated 
depreciation for capital equipment. Those are mechanisms vital to 
revitalizing our declining manufacturing base. Why on earth would we 
want to attack those key economic engines? Not one of our competitors 
would take such a short-sighted and self-destructive approach. If those 
changes take effect, our competitors will be laughing themselves silly 
as they skip to the bank.
    Some, like the Chinese government, engage in illegal activities in 
support of their manufacturing strategy such as currency manipulation, 
illegal subsidies, repression of workers' rights, weak environmental 
and wage and hour laws, intellectual property theft and more. These 
actions should be fought aggressively but for too many years we have 
been lax in the enforcement of our own trade laws. And, we find the 
same U.S. corporations and financial institutions that take advantage 
of the situation in countries like China to produce goods for export to 
the U.S. are the same ones fighting trade enforcement and changes to 
the tax laws.
    There is another way. Other nations clearly recognize their 
national interest. It is time to recognize ours. America has an 
economic and national security interest in a vibrant manufacturing 
base. It is time to do something about it.
A Strategy for the Future
    The USW and the AFL-CIO recognize the critical steps government has 
taken to stabilize the economy by helping ensure the survival of a 
domestic auto industry, investing in needed infrastructure and a 
diverse efficient clean energy economy, securing jobs from those 
investments with Buy America requirements, and putting critical 
financial reforms in place.
    This work is far from finished. But, today we see Congress mired in 
a specious debate that we can somehow downsize our way to success. The 
economy doesn't work that way.
    The Congress needs to complete efforts begun last year when the 
House passed a series of bipartisan bills that included a National 
Manufacturing Strategy, currency, rare earth and other manufacturing 
legislation. This year the Administration has proposed needed new 
investments in small business, research and development, clean energy 
manufacturing, and infrastructure.
    Democrats in the House of Representatives recently announced their 
Make It in America Agenda that identifies steps that should be taken to 
revitalize manufacturing and job creation here at home. It's an 
important foundation both parties embraced last year. It should not be 
a partisan issue in this Congress and we hope that Republicans will 
embrace the effort and join in promoting policies that will enhance 
national and economic security.
    All of these provide a start but much more needs to be done at 
scale. The policies, investments and incentives we enact must be 
strategic and employment linked. Essential to a comprehensive program 
to restore domestic manufacturing are the following elements:
    The USW and the AFL-CIO call on our government to aggressively 
address the Chinese government's trade violations, as well as to 
establish our own strategic priorities and policies. We believe a 
healthy and robust manufacturing sector is central to a sustained 
economic recovery and to our national security.
    The following elements are essential to a comprehensive program, a 
national manufacturing strategy, to restore domestic manufacturing:

   Get our trade house in order and enforce our laws: 
        Aggressively enforce our trade laws. We need to address China's 
        trade violations and establish our own strategic priorities and 
        policies. We should view success not as the number of trade 
        agreements that are signed, but by the results they achieve. 
        Our trade agreements should be designed to empower workers to 
        share in the fruits of their labor and enable them to enter the 
        middle class with respect and just compensation for their 
        efforts.

   A re-commitment to investment in infrastructure: America's 
        infrastructure needs--energy, roads, transit, bridges, rail, 
        water, etc.--are huge. We have a $2.2 trillion infrastructure 
        deficit, according to the American Society of Civil Engineers. 
        Not only will spending here employ people right away, it will 
        lay the foundation for economic growth in the future. Funding 
        for infrastructure must be built on a foundation that 
        aggressively promotes Buy American policies. Americans want to 
        know that their tax dollars are being used to create American 
        jobs. And there is no conflict between more spending now and 
        efforts to address fiscal imbalances down the road. Indeed, an 
        improved America is the legacy we should leave to our children 
        and grandchildren.

   A tax structure that encourages manufacturing investment: 
        Eliminate tax incentives and loopholes that encourage financial 
        speculation rather than investment, outsourcing and off shoring 
        production, and enact tax incentives for companies that produce 
        domestically.

   Investment in a 21st Century Energy Infrastructure: Enact 
        measures to encourage the deployment of renewable energy, 
        advanced automotive technology and other clean energy 
        technologies. This can be accomplished by expanding funding for 
        48(c), industrial efficiency projects, and other policies to 
        encourage development of renewable sources of electricity and 
        by providing higher loan authority and additional funding for 
        section 136, the Advanced Technology Vehicles Manufacturing 
        Incentive Program. These efforts must be coupled with expanded 
        utilization of domestic supply chains. Clean and green jobs 
        must become a reality: America must not cede leadership of this 
        industry to other nations. We must invest in these 21st century 
        infrastructure technologies on a similar scale to our 
        investment in replacing the failing infrastructure of the last 
        century. And, again, investments in this area must support and 
        promote domestic job creation and supply chains.

   Innovation for American Manufacturing: The United States 
        continues to be the world's engine of innovation, but that lead 
        is declining. There is a direct correlation between R&D and 
        production and we must protect our Nation's innovative 
        leadership. Doing so requires that we maintain strong 
        intellectual property protections to ensure that companies have 
        the incentive to make investments in plant and equipment here 
        at home. We must also increase efforts to fight the 
        intellectual property right violations of competitors that seek 
        to profit from the creativity of our people. Increased support 
        for research and development in the United States, coupled with 
        support for testing and deployment of those new technologies in 
        our factories, will ensure that our manufacturing capabilities 
        expand. R&D investments financed with public dollars (grants, 
        tax credits, etc.) must be accompanied by employment 
        accountability requirements.

   Workforce development policies: America continues to have 
        the best and most innovative workers To stay ahead of the 
        competition, however, we must constantly upgrade our skills and 
        training Revitalizing our manufacturing sector requires that we 
        make investments in our people to ensure they are equipped to 
        meet the needs of industry Now is the time to renew and expand 
        investments in our people Congress must increase access to 
        training funds for people who are out of work as well as those 
        seeking to enhance their skills Ultimately, a high-skills 
        workforce must be one whose rights on the job and ability to 
        speak up are protected and thus made real through strong labor 
        laws and strong unions.

    While the economic crisis that began in 2007 has done massive 
damage to our country, the truth is our problems run far deeper and 
none is more fundamental than the catastrophic decline of U.S. 
manufacturing which has occurred over a long period. The health of the 
economy, the success of our people and our national security are 
inextricably tied to a vibrant and innovative manufacturing sector. We 
must revive U.S. manufacturing as a clear centerpiece of our Nation's 
economic and security strategy.
    This Congress and the Administration have the opportunity to take 
steps to restore our Nation's manufacturing capabilities. The USW and 
AFL-CIO are committed to working with you to do so.

    The Chairman. Thank you, Mr. Gerard, President Gerard, very 
much.
    And Mike Rowe is the Creator and Executive Producer and 
Host of Discovery Channel's Dirty Jobs.
    Mr. Rowe. That's true.
    The Chairman. My wife thinks you're terrific.
    Mr. Rowe. Your wife has excellent taste, sir. Thank you. 
Give her my regards.
    [Laughter.]
    The Chairman. I will.

 STATEMENT OF MIKE ROWE, CREATOR, EXECUTIVE PRODUCER AND HOST, 
                 DISCOVERY CHANNEL'S DIRTY JOBS

    Mr. Rowe. And thank you, officially, for having me here 
today. It really is a thrill and an honor.
    One small thing, the credits for the show are very kind. In 
truth, I'm more of a guest. I assume the role of an apprentice 
on Dirty Jobs, and for the last 7 years or so I've traveled to 
every state and worked in just about every industry with people 
you would otherwise never get a chance to know. They're 
anonymous folks, many times, in small towns you wouldn't find 
on a map, who do the kinds of jobs that make civilized life 
possible for the rest of us.
    In the history of TV, it's probably the simplest show ever, 
but there are some very big themes that run through Dirty Jobs. 
And over the last 6 or 7 years, I've personally had a front row 
seat and I've watched the headlines catch up to a lot of those 
themes. Thus, the simplest show in TV has become interesting in 
a way that I never anticipated or intended.
    I could talk, certainly, at length about any of the people 
I've met in the show, and I'm tempted to, but I'd rather take a 
small portion of my 5 minutes and tell you about my 
grandfather, because he's the reason, ultimately, that I 
decided to come here today.
    His name was Carl Knobel, and he made his living in 
Baltimore as a master electrician. He was also a plumber and a 
mechanic, mason, carpenter. Everybody knew him as a jack-of-
all-trades. And I remember him mostly as a magician.
    For most of his life, my granddad woke up clean and he came 
home dirty, and, in between, he accomplished some things that 
were nothing short of miraculous to me. Some days he might re-
shingle a roof or rebuild a motor, run electricity out to our 
barn. He helped build the church that I went to as a kid and 
the farmhouse that I grew up in.
    Basically, he could fix or build anything, but to my 
knowledge he never once read the directions to anything. He 
just knew how stuff worked.
    I remember one Saturday morning when I was twelve, I 
flushed the toilet in the same way I had been flushing it for 
12 years. The toilet, however, responded in a way that was 
completely out of character. There was a rumbling sound, 
followed by a distant gurgle, and then everything that had gone 
down reappeared in a rather violent and spectacular fashion.
    Naturally, my granddad was called in to investigate, and 
within the hour I was invited to join he and my father--who's 
right behind me there--out in the front yard for about 12 hours 
of forced labor. You know, there was pipe welding and there was 
picks and there was shovels and there were blisters and 
laugher, and maybe some questionable language.
    But, by sunset, we were completely filthy, the new pipe was 
installed, the dirt was back in the hole, and our toilet was 
back on its best behavior, and it was one of my favorite days 
ever.
    Thirty years later, in San Francisco, my toilet blew up 
again, and this time I didn't participate in the repair 
process. I just called my landlord and I left a check on the 
kitchen counter and I went to work.
    When I came home, the mess was cleaned up and the problem 
was solved. As for the actual plumber who did the work, I never 
even met him. It never occurred to me to meet him.
    What did occur to me that day was the fact that I had 
become disconnected from a lot of things that really used to 
fascinate me growing up. I no longer thought about where my 
food came from or how my electricity worked or who fixed my 
pipes or who made my clothes. I didn't think about who made 
anything. There was no reason to. I was less interested in how 
things got made, in fact, and more interested in how things got 
bought.
    Well, at this point, my granddad was well into his 
eighties. After a long visit with him 1 weekend, I decided to 
do a TV show in his honor.
    Today, Dirty Jobs is still on the air, and I am here before 
you guys, hoping to say something useful. So here it is: I 
believe that we need a national PR campaign for skilled labor, 
like a big one, something that addresses the widening skills 
gap head on and reconnects the country with the most important 
part of our workforce.
    Right now, American manufacturing is struggling to fill 
200,000 vacant positions, I'm told, and there are 450,000 
openings today in trades, transportation and utilities. The 
skills gap seems real, and it's getting wider.
    In Alabama, a third of all skilled tradesmen are now over 
55. They're retiring fast, and there's really nobody there to 
replace them.
    Alabama's not alone. A few months ago in Atlanta, I ran 
into Tom Vilsack, our Secretary of Agriculture. Tom told me 
about a Governor he knows who was unable to move forward on the 
construction of a new power plant. The reason, I thought, was 
fascinating. It wasn't a lack of funds or a lack of support. It 
was a lack of qualified welders.
    In general, people are surprised that high unemployment can 
exist at the same time as a skilled labor shortage, but they 
shouldn't be. We've pretty much guaranteed it. In high schools, 
the vocational arts have all but vanished and we've elevated 
the importance of higher education to such a lofty perch that 
all other forms of knowledge are now labeled as alternative.
    Millions of parents and kids see apprenticeships and really 
valuable on-the-job-training opportunities as vocational 
consolation prizes, best suited for those not cut out for a 
four-year degree. And still, we talk about millions of shovel-
ready jobs for a society that doesn't really encourage people 
to pick up a shovel.
    In a hundred different ways, I think we've slowly 
marginalized an entire category of critical professions, 
reshaping our expectations of a good job into something that no 
longer looks like work. A few years from now, an hour with a 
good plumber--if you can find one--is going to cost more than 
an hour with a good psychiatrist, at which point, we'll all be 
in need of both.
    I wanted to come here today because guys like my granddad 
are no less important to civilized life than they were 50 years 
ago. Maybe they're in shorter supply today because we don't 
acknowledge them the way we used to. We leave our check on the 
kitchen counter and hope the work gets done. That needs to 
change.
    My written testimony includes the details of several 
initiatives designed to close the skills gap, all of which I've 
had the privilege to participate in--Go Build Alabama, I Make 
America, my own modest efforts through Dirty Jobs and 
mikeroweWORKS.
    I'm especially proud, though, today to announce Discover 
Your Skills. It's a broad-based initiative from Discovery 
Communications that I think can change perceptions in a 
meaningful way.
    I encourage you to support these efforts, because closing 
the skills gap doesn't just benefit future tradesmen and the 
companies who are desperate to hire them. It benefits people 
like me and anyone else who shares my addiction to paved roads, 
reliable bridges, heating, air conditioning and, of course, 
indoor plumbing, something for all of us to consider, perhaps, 
during the next bathroom break.
    The Chairman. I have a smart wife.
    [Laughter.]
    Mr. Rowe. Thank you.
    [The prepared statement of Mr. Rowe follows:]

Prepared Statement of Mike Rowe, Creator, Executive Producer and Host, 
                     Discovery Channel's DIRTY JOBS
    Chairman Rockefeller, Ranking Member Hutchison and members of this 
Committee, my name is Mike Rowe, and I want to thank you all very much 
for the opportunity to share a few thoughts about our country's 
relationship with manufacturing, hard work, and skilled labor.
    According to the credits, I am the creator, executive producer and 
host of a TV program on the Discovery Channel called Dirty Jobs with 
Mike Rowe. In truth, I'm more like a perpetual apprentice.
    For 7 years, I've been traveling around the country, working 
alongside the people who grow our food, provide our energy, tend to our 
infrastructure, and manufacture our things. To date, I've completed 
nearly 300 different jobs, visited every state, and worked in just 
about every industry. A less flattering assessment might suggest that 
I've been fired 300 times in less than 7 years. Either way, my current 
resume has more to do with trying than succeeding, and my opinions 
should not be confused with those of an expert.
    Dirty Jobs is first and foremost an entertainment program. It does 
however, have a mission statement, and every episode begins the same 
way. ``My name is Mike Rowe, and this is my job. I explore the country 
looking for people who aren't afraid to get dirty. Hard-working men and 
women who do the kinds of jobs that make civilized life possible for 
the rest of us.''
    For years, no one paid much attention to this mission. But in 2008, 
the recession made Dirty Jobs relevant in ways I never envisioned. As 
unemployment became a dominate topic, and my own dirty resume continued 
to expand, reporters were suddenly interested in my take on all sorts 
of work-related issues. Labor disputes, free trade, currency 
devaluations, outsourcing, student loans--I was invited to weigh in on 
lots of issues for which I had no real expertise.
    For the most part, I pleaded ignorance and kept my mouth shut. But 
when a writer from The Wall Street Journal asked me to ``reconcile 
soaring unemployment with an ever-widening skills gap,'' I felt 
compelled to say something. So I referred him to the mission statement 
of the show and added, ``once upon a time, our country was filled with 
people who weren't afraid to get dirty. Times have changed. The 
definition of a `good job' has changed.''
    I went on to suggest that the skills gap might not be a 
``problem,'' but rather a symptom of something much more fundamental; a 
societal disconnect with work, brought about by the rapid 
transformation of a manufacturing-based economy into one dominated by 
financial services and technology.
    The reporter wanted to hear more so I kept talking. I told him 
about my grandfather, a modest man with an eighth grade education that 
went on to become a plumber, a mason, a mechanic, a carpenter, and a 
master electrician. A revered craftsman who could build a house without 
a blueprint. A man who today, would be mostly invisible.
    I talked about the subtle and not-so-subtle ways we marginalize 
work in today's culture. In the media, our portrayals of working people 
rarely surpass one-dimensional stereotypes and predictable hyperbole. 
Best-selling books like ``The Four-Hour Work Week'' fly off the 
shelves, a testament to short-cuts, and a growing belief that 
technology (or something) can somehow replace hard work. I talked about 
the way colleges have become ``institutions of higher learning,'' while 
all other forms of knowledge are relegated to ``alternative 
education.'' I suggested a PR Campaign for skilled labor might be in 
order, and concluded by saying this Administration's goal of creating 
three million shovel ready jobs might have a better chance of 
succeeding if our society still respected the people willing to pick up 
a shovel.
    When the article came out the flood gates opened. On Labor Day of 
2008, I launched mikeroweWORKS.com, my own modest PR Campaign for hard 
work and skilled labor. Its primary purpose is to challenge the notion 
that a career in the trades is some sort of ``vocational consolation 
prize,'' handed out to workers unfit for a four-year degree.
    Fans of Dirty Jobs helped collect and assemble thousands of links 
to trade schools, apprenticeship programs, community colleges, on-the-
job-training opportunities, and other resources that might be of use to 
anyone considering a career in the skilled trades. I set up a 
foundation and began to raise money for the purpose of tool 
scholarships and farming initiatives. Mostly though, I tried to 
encourage a bigger conversation, and challenge my partners to get 
behind this message in a significant way. I wanted mikeroweWORKS to 
function as a kind of connective tissue for other companies and 
organizations, and to that extent, I'm happy to say it's working.
    Ford, Caterpillar, Kimberly-Clark, Lee, Master Lock, and other 
large corporations are all working with mikeroweWORKS in some capacity, 
and are highly motivated to change perceptions about skilled labor. A 
few weeks ago, Alan Mulally at Ford pulled me aside and said, ``Mike, 
this issue is nothing less than the soul of America. Our country's 
future is at stake, and this is a battle we cannot afford to lose.''
    Aside from major corporations, other like-minded initiatives have 
begun to use mikeroweWORKS as a resource for their own purposes, and 
I've been honored to speak on behalf of several campaigns that have 
already been deemed successful.
    Last August, mikeroweWORKS partnered with ``Go Build Alabama,'' an 
education and recruitment campaign designed to bring new people to the 
commercial and industrial construction industry. I appeared in a series 
of advertisements that called attention to the fact that one third of 
all skilled tradesmen in the construction industry are over the age of 
50 and retiring fast, with no one to replace them. The campaign drives 
people to GoBuildAlabama.com, where potential employees can learn more 
about skilled trade careers and find information about training 
programs.
    In this same spirit, I was also proud to join forces with 
Caterpillar and The Association of Equipment Manufacturers for the 
launch of ``I Make America,'' a national grassroots campaign to promote 
U.S. manufacturing jobs through infrastructure investment and the 
passage of export agreements.
    I would also like to commend the White House initiative called 
``Skills for America's Future,'' which is designed to reduce the skills 
gap by working with employers and community colleges to make sure the 
education students receive will translate directly into the 
marketplace, increasing their chances of finding and keeping a good 
job.
    The fact is, there are many initiatives out there making a 
difference. The problem that so many encounter though, is a tendency to 
``preach to the choir.'' With respect to issues like the skills gap, we 
too often speak only to the people directly involved, the employers, 
desperate to hire skilled talent, and the unemployed, woefully 
untrained for the task at hand. To really make a difference, we need to 
change the perceptions of a much larger audience, and challenge the 
prevailing definition of a ``good job.'' Americans need to see these 
workers for what they are--the key to civilized life as we know it. And 
that means a campaign and a message that reaches everybody.
    Toward that end, I'm pleased to help launch a broad-based 
initiative sponsored by Discovery Communications that will reach 
millions and millions of people. Discovery's goal is to empower both 
unemployed and underemployed Americans with access to critical 
resources that will assist them in obtaining marketable job skills.
    TV personalities from across Discovery's networks will participate 
in this campaign which will leverage Discovery's position as the top 
nonfiction media company reaching more than 780 million cumulative 
subscribers across our 14 U.S. networks and Discovery Education's 
unparalleled reach into schools across the country. Participating on-
air talent have been chosen because their distinctive skills are 
particularly valuable and needed in today's marketplace, and because 
they are credible to viewers interested in similar professions.
    As the leader in both nonfiction programming and broadband-
delivered educational content and services to U.S. schools, Discovery 
is uniquely qualified to deliver this message to a mass audience, and 
to provide meaningful support on a national level. The people you see 
on Discovery's air are not only real people, but are also successful 
professionals working in critical areas of the economy.
    To be clear, I support the efforts of Congress and the 
Administration to create three to four million shovel-ready jobs. But 
obviously, it's no longer enough to merely create opportunity. If that 
were the case, we wouldn't have 200,000 vacant positions in the 
manufacturing sector, or nearly 500,000 openings for tradesmen, 
transportation, and utility workers. We need to create respect for the 
work itself, and for the people still willing to do it.
    As the host of a TV show about hard work, people often assume I 
speak for tradesmen and skilled workers. In reality, I don't. I can 
only speak for myself and anyone else who shares my addiction to paved 
roads, reliable bridges, heating, air conditioning, and indoor 
plumbing. The tradesmen I know don't need a spokesman. It's the rest of 
us who need to worry. Because a civilization without skilled labor, is 
not a civilization at all.
    Along with Discovery, I am ready, able, and eager to partner with 
the Federal Government to help reconnect our country to the importance 
of manufacturing and skilled labor.

    The Chairman. I failed to announce that there is a vote at 
three o'clock, which is very unchairmanlike of me and I 
apologize. I'm going to miss it and stay here, so that we can 
keep things going, and others probably should go vote.
    Senator Klobuchar. Yes.
    The Chairman. Yes. And then come back, if you can. OK?
    Mr. Rowe. I'll vote.
    The Chairman. Can't.
    Mr. Rowe. No.
    The Chairman. Can't. You can try, but you can't.
    Dr. Burns, you all talked basically about the same major 
problems. We take people for granted. You can't get Americans 
to pick up a shovel. You know, you're right.
    And I don't know what has happened to the American psyche 
which has made us less sort of aggressive about our own lives 
and the homes and circumstances around our homes that we don't.
    I mean, everybody says we're hard working. We are hard 
working. West Virginians work like crazy, but the skill set 
problems that you talked about, Dr. Burns, and Leo, what you 
were talking about, what you already talked about is just 
monumental.
    And the discourse in this world is about the tragedy of 
that, and then we don't do anything about it, which is then 
compounded by that really sad story--which probably has a good 
explanation--of those three billionaires or trillionaires 
who've been giving all this money to education, and they've all 
sort of stopped doing it, and it was in the area of people who 
needed exactly the kind of assistance you're talking about, and 
they gave up doing it because it wasn't working.
    Now, I haven't read the details as to why it wasn't 
working, but there's obviously not just a problem, but there's 
a state of mind in America, both in the public body and in the 
private body and in the home, that grasp for reward, which then 
usually prices hard work at basic levels out of the market.
    I don't know if any of you have a comment on that. I just 
worry about that about our country, that we're waiting.
    I mean, I just came from a group of people that were 
waiting for the--had to do with cybersecurity, which is kind of 
dangerous--were waiting for the government to do something. And 
we have somehow become like that, but we're not like that. 
That's not how we came to be what we are, and yet we're not--
neither as a public or as a private society--being aggressive 
in addressing this.
    Yes, we have a lot of technical schools. Yes, some of them 
do very, very good jobs, but it's not enough. And so I just 
want to worry about that for a moment with all three of you. 
Why are we in this situation?
    If you're losing jobs, then you ought to get more excited 
about it, all of us, get more urgent about it. We're not.
    Dr. Burns. Well, I'll try. You know, I don't know if I have 
the answers as to why. I can tell you that, on both sides of 
this coin, the skilled workforce that's required to operate our 
facilities, it's a critical need for us, and, for us, 
partnering at the local level seems to be the most effective.
    We have facilities in Michigan and Tennessee and Kentucky, 
and, for us, partnering with the local community colleges or 4-
year schools, putting skilled workforce programs in place, 
where we help develop the curriculum, where we fund pilot 
facilities, so these students can get in and use the 
manufacturing apparatus that they're going to use in their 
jobs, that seems to help. We've done this at Delta College in 
Michigan. We've done it at Austin Peay University in Tennessee, 
and it's working.
    The other partnership that we're very excited about is 
partnering with the military and with the veterans as they want 
to enter the workforce, and we're encouraging the veterans, 
particularly down in Tennessee coming from the Army base in 
Kentucky to enter into the skilled workforce programs and 
develop the skills.
    Leo knows this very, very well, the operators that we have 
in our facilities, they're making very advanced materials, and 
we are more and more building into these operations very 
critical high-tech decisions that these operators make on the 
spot, decisions about the quality of the product, products that 
go into health care applications or electronic applications.
    There's in-line testing that they need to understand and 
make decisions about the quality of the product. There are 
decisions that they are now making about the reliability and 
the maintenance needs in these operations.
    So we need a skilled workforce that can understand all 
these challenges and respond to it, and it is a constant 
challenge for us to continue to fund these training programs, 
work with the local communities. And it seems to work more 
effectively--at least for us--at the local level.
    Mr. Gerard. Senator Rockefeller.
    The Chairman. Yes.
    Mr. Gerard. I want to agree totally with Dr. Burns about 
that, and a lot of her workforce are our members, and they're 
extremely skilled. And one of the things that worries me a lot 
is the public denigration of manufacturing.
    The hair on the back of my neck tingles when I hear people 
talk about the Rust Belt. If you've ever been in a modern steel 
mill where material is put in at one end and comes out at the 
other end, never touched by human hands, within one-ten-
thousandth of an inch of variance, or a modern paper mill that 
is the same way, these aren't rust belts. These are high-skill, 
technologically advanced, meaningful jobs where people make 
strategic and important decisions on the fly as it's running, 
and they've got to be absolutely well informed and 
knowledgeable.
    In the steelworkers union, we created, as you may know, 
some 20 years ago, the Institute for Career Development, 
because we had to take an existing workforce and make sure that 
they had the opportunity to enhance their skills. So, like Dr. 
Burns said, we've made alliances with community colleges in 
areas where we have major manufacturing in steel, in aluminum, 
in tire and rubber.
    We're now trying to do the same thing in paper, where our 
existing workforce can go in and enhance their skills as the 
world around them changes.
    I made the reference to Germany. German workers get 
lifelong learning. They get the opportunity to get paid while 
they go back to school to enhance their skills, so that they 
can be the most productive workers in the world. We're a long 
ways from that in America.
    The last thing I'd say is that----
    The Chairman. Could you explain that further? I mean, they 
get it when they're 22 and they get it when they're 49.
    Mr. Gerard. They get ongoing, lifelong learning that 
every--and I don't want to say it's universal, but in most of 
their major industries, their technologically advanced 
industries, they get the opportunity to go back to school or 
the school comes to them.
    That was the basis on which we tried to create the 
Institute for Career Development. That's the basis on which Dr. 
Burns makes these alliances with community colleges.
    The problem is, in our case, it's done by the private 
sector or it's done by an individual union or an individual 
company, whereas, in Germany, it's done by the society.
    Let me make this last point, because I know that people 
have to go do their votes. It's about time that we started 
telling elected officials that we need more chemical engineers, 
we need more mechanical engineers, we need more aeronautical 
engineers, and we need less financial engineers.
    We've had nothing but financial mishap after financial 
mishap for the last 15 years, while, at the same time, we've 
watched our manufacturing industry get denigrated. And I think 
once we change the language, kids will start to want to go to 
vocational school, kids will start to want to be able to work 
with their hands the way Mike said.
    And the reality is if my grandson got a job in a steel 
mill, I'd be happy. My grandson doesn't have to be a financial 
engineer to make me happy. He can earn a good living in a steel 
mill. That's honorable work.
    Mr. Rowe. Language really is important, you know. Metaphors 
are even more important, and that's what I meant to suggest 
earlier when I said that the way the headlines have caught up 
to this little TV show was really interesting to watch. And 
Leo's talking about, you know, more people talking about it. 
Obviously, that's huge. Having a conversation is the whole 
point.
    The challenge is who are you talking to, and, from what 
I've seen, there's so much preaching to the choir that goes on 
with these topics--infrastructure, manufacturing, currency 
devaluation, the definition of a good job. I mean, we all kind 
of talk to each other, and I've been to a lot of those places.
    Jim Ryan is CEO of a company called Grainger, and a couple 
of years ago--It was Jim who really brought to my attention the 
really unique challenge the skills gap meant for his company, 
because not only was it something he was concerned about for 
the country, his customer base was just getting smaller and 
smaller and smaller year after year, and fewer electricians, 
fewer carpenters.
    And so he was the one that really impressed upon me, 
there's not much new to say. We just have to find a way to say 
it to a much bigger audience. And, ultimately, in my view--I'm 
certainly not an expert--but it seems like the real 
conversations have to be between parents and kids at kitchen 
tables when they're sitting down trying to figure out what to 
do with the rest of their life and in their heads is an image 
of what a good job is, and I would imagine in most parents' 
minds is this hope that there's going to be something better 
for their kids.
    Problem is we just haven't defined what better is, and 
we're assuming that it's clean. I'm all for clean, but the idea 
of Dirty Jobs is to sort of tap the country on the shoulder and 
remind people, look, once upon a time, dirt was a badge of 
honor. Now, we've somehow found a way in popular culture to 
make an enemy out of it.
    And so, to your earlier question, I just think we're 
confused about what a good job looks like today. And I think we 
don't have a good toolbox as educators and parents. We're just 
celebrating a different kind of thing than we used to.
    And so--look, it's so immensely complicated. There's so 
much policy. There's so much politics. I just feel like 
sometimes when these issues come up we didn't look at the 
headline, you know, the country didn't look at the headline. 
And the big conversation about what's worthwhile in terms of 
encouraging your kids to do, that hasn't happened, and that's 
what I believe ought to be happening contemporaneously with all 
of these other conversations.
    The Chairman. Mike, thank you, but I need to go directly to 
Senator Hutchison.
    Senator Hutchison. Well, thank you. I am going to go vote, 
but a couple of things. First, I do agree with you, Mr. Rowe, 
that we need to do so much more to elevate the importance of 
these very good paying jobs, middle-class income jobs, that are 
going wanting because we have somehow said if you don't get a 
college degree, then your job is not worth something.
    I visited a manufacturing facility in my state, and I saw 
row upon row upon row of welders who were welding, and I said, 
what do they make? And the manager said, between $80,000 and 
$100,000 a year. And I said, where do you train them? And they 
have an agreement with the junior college in that area that 
does the training with them.
    And I thought, good heavens, I mean, that's fabulous to be 
able to have that kind of solid, steady job, and they were very 
fully employed. And that happens everywhere, but I think we are 
underutilizing our community colleges and our technical and 
vocational colleges.
    And I believe that the importance of computer training in 
our lower and middle schools is so important, and our high 
schools, because there's not a plumber, an electrician, a 
worker of any kind that doesn't have to have a computer to do 
their jobs, to keep up with the inventory, to make their buys, 
whatever it is. So it's not low-level work. It is a technically 
proficient necessity for that kind of work.
    So I think maybe--I mean, there are many ways that we could 
address this, but I certainly think the vocational training and 
talking about it in the right way is important to give these 
people the chance for those good jobs.
    Let me ask a question of Dr. Burns. Would you comment on 
the importance of the stability of the regulatory environment 
on what you can do in America? And if Dow Corning is doing work 
in other countries how would it compare?
    Dr. Burns. Yes. I guess, first of all, I would say that 
regulations are important. I don't think anyone wants to live 
in a society where good regulations are not in play, because 
they are critical.
    I applaud the administration, and being a member of the 
President's Export Council, we've actually submitted letters to 
the President recommending, and it is obviously being acted on, 
for a streamlining of regulations looking at which ones are the 
most effective, the most critical, looking at regulations that 
add cost, but do not necessarily achieve the outcome that 
they're designed to achieve. And we're available and support 
any relationship to help with that streamlining here in 
America.
    It is a burden. I think it's more of a burden for small 
companies and small businesses who really don't have the 
internal infrastructure to deal with regulations. You know, 
we're fairly capable in this respect, but it is a burden even 
on us, and I think anything we can do that can allow us to 
innovate faster, move quicker in the marketplace, grow, grow 
our business, create jobs in America is a good thing.
    Senator Hutchison. In your capacity with the Council, where 
do you see the most in need of change or reform regulations? 
And where do you see the most that are--the cost-benefit 
analysis is skewed the wrong way?
    Dr. Burns. Yes, you know, it's fairly broad-based. 
Certainly in the solar value chain, in working with our 
customers in the solar industry, a lot of it is in the 
permitting processes and the ability to move quickly with the 
installations, a lot of them being utility-skill installations.
    In our manufacturing facilities, it's mainly around 
environment, EPA regulations. We know there are a lot of 
regulations yet to be enacted by the EPA, and we just ask that 
they be smart regulations, fact-based, science-based 
regulations with a strive toward streamlining as much as 
possible, so that we can be efficient and so that the 
regulatory bodies can evaluate our compliance sufficiently.
    Senator Hutchison. Thank you. I'm going to go vote. Thank 
you very much.
    The Chairman. Thank you, Senator Hutchison. Thank you. 
Well, you're a fast walker so you'll make it. She's a power 
walker, five miles an hour.
    I asked some time ago for GAO, because of the German 
factor, also the Australian factor, they're keeping their 
manufacturing. And I asked them to do a report, which is coming 
shortly, on what they do that we don't, but, more importantly, 
what can we learn from them that we should be doing.
    And it's interesting to me because it's so easy to ask for 
a GAO report, you know, and the time goes by, and that slips 
into the hole. But, on the other hand, they tell you stuff that 
you really need to know.
    And then the question is are you going to be able to act on 
that or get a consensus on that in a year where we almost have 
no votes during the course of a week because everything is 
stopped, all legislation is stopped.
    We vote on judges. We do that once a day. You can count on 
us to vote for a judge every day or against a judge every day. 
But we don't really get much substantive work done, just 
because of the nature of the Congress right now, which 
reflects, in some way, the nature of the people--the anger, the 
hostility--which goes to your point, in a way, Mike.
    And I mentioned it in my opening statement, but not as well 
as you did, that you say the word manufacturing and it doesn't 
engage people's interest. And that's crazy, because that's 
where, as I say, so much of our R&D comes from. I mean, you're 
doing carbon capture and sequestration in West Virginia in the 
Kanawha Valley, which is taking 90 percent of the carbon 
dioxide out of your emissions.
    I don't know why you decided to do that, but you decided to 
do it, and it's working and potentially is a salvation for a 
much-despised product, which, in fact, I think is the only 
place that the Nation has to go, ultimately, to get its--have 
this electricity on all day long.
    But the whole psychological concept of how we talk about 
manufacturing, how we talk about everybody has to go to 
college, and then everybody has to do graduate work, and 
everybody has to----
    You know, I was in New York City last night, and I didn't 
want to live in New York City. I went to West Virginia, I'm 
much happier. But people talk a lot about their bonuses. They 
talk a lot about the size of their apartments or where the next 
apartment--what street is it going to be on? Is that an upgrade 
or a downgrade? And that's a superficial thing to say, but, 
frankly, it's a money culture.
    And there's a lot of manufacturing in New York, I'm sure, 
but the kind I think about, which is the kind all three of you 
not only talk about, but do, how do we enter that into the 
American psychology?
    And I don't know, maybe we want to rename manufacturing and 
call it surviving or something, but it doesn't make sense, or 
we throw money at things, at the vocational technical schools. 
I mean, those are working in some places, and they're not 
working in some places, because they're not always juxtaposed 
to the places that are likely to need workers.
    And in some cases--West Virginia being one of them--this is 
ironic, too, people want to work close to home.
    On the other hand, we have a Japanese motor company there, 
which employs only Americans, and all of their profits stay in 
this country, and they are taxed in this country. And they came 
in and built a plant, set out ads for applications for 300 
jobs, and they got 25,000 responses.
    And I said to myself and I checked later on--this is 
absolutely--of course, they were from Ohio and Kentucky, too, 
and I understand that. I said, well, that must be from former 
coalminers who have been unemployed, but who had the kind of 
skills that could be applied, for example, in the highly 
sophisticated world of automobile manufacturing.
    It turned out only three of those 300 who were accepted had 
backgrounds in coalmining of any sort. And in fact, they were 
people from 27 of our 55 counties who had enormous drives to 
work, or they probably just stayed in motels for the week, but 
they were mostly rural people. They were mostly in their 20s 
and 30s. They wanted to work. They had no alternatives in their 
own communities, and they took a chance on this brand name, 
which you've got for your company, Dr. Burns, and went to work.
    And they're all happy and they call themselves team 
members, and there are no special CEO parking spaces and no CEO 
lunch spaces, and everybody treats everybody very well.
    And I was kind of stunned by that, because they're not--and 
Toyota trains them. Well, maybe that's OK. You see? They send a 
lot of them to Japan for several weeks and they get trained.
    But Toyota has never stopped expanding in West Virginia. 
Since 1997, they're in their sixth expansion, and they employ 
well over 1,000 employees. So those kids see something.
    And so I go back to my question: Why are the rest of us 
missing this engagement with very good employment, very good 
wages, very good benefits and a very stable present and future? 
Why are we doing this, please?
    Dr. Burns. Can I try?
    The Chairman. Yes.
    Dr. Burns. It seems to me like what is missing is 
engagement with the public in understanding the connection 
between manufacturing, education and innovation.
    And I think we thought 15 or 20 years ago that 
manufacturing can go. You know, it can go to Asia. We can still 
innovate. We can still have highly-educated people and that 
we'll have a service economy and that everything is going to be 
fine.
    You can't separate those three. If the manufacturing goes, 
the innovation is going to go, and if the innovation goes, 
you're not going to have jobs for educated people either in 
manufacturing or in discovery research. So I think what's 
missing is the understanding that those are so linked now to 
our economic future, and we don't have an overarching 
manufacturing strategy.
    If I go to an Asian country and I say I want to build a 
plant here, I am surrounded by people who are going to make 
that happen. Whether it's government officials, whether it's 
banks, they are going to make it happen, and they have figured 
out to serve and attract that investment.
    I have heard from Asian companies trying to come to America 
the frustration that they don't even know where to start. Do 
they go to the state? Do they go to the Federal Government? 
There is no one-stop shopping for, you know, help me make my 
investment decision. You get that in Asia. If I want to put a 
research facility in Singapore, they'll make it happen next 
week. So we're missing this overarching priority on 
manufacturing and this understanding that they're so linked 
together.
    And I can tell you, if we lose manufacturing, the 
innovation is going to go with it, because you want to innovate 
close to where you're going to scale up materials, where you're 
going to experiment with materials, and you want to be close to 
the customers, and if the manufacturing is there, so goes the 
innovation.
    Mr. Gerard. Senator, I don't disagree with very much that 
Dr. Burns said, but I want to build on it about the discussion 
we've had about words matter and strategy matters and having a 
position matters. Let me give you a couple of examples.
    A well known steel company that has facilities in your area 
and our area, the Pittsburgh area, wanted to build a brand new 
coke battery, had to go to the market for capital. The capital 
wanted to treat them differently and charge them a premium.
    This is a company that's over 100 years old, that's been 
profitable for almost 100 years. Wanted to charge them a 
premium on their capital, so they could get the capital to 
build the brand new coke battery that would have made it much 
more environmentally efficient. It would have almost guaranteed 
the productivity of those mills for another 20 or 25 years.
    Yet, if I wanted to go to the market and borrow some money 
for some harebrained idea in high tech, they'd give it to me 
for next to nothing. There's something wrong with that when you 
look at the concept of America not having a plan, an America 
worrying about national security.
    Why should we have to rely on foreign oil to be the driver 
of our energy on our Air Force bases, on our military bases, on 
our Naval bases? Why don't we look at renewable energy on those 
Air Force bases and military bases and Naval bases? Why don't 
we look at wind turbines? Why don't we look at solar?
    If we were to say that we're going to power our military 
bases with renewable energy over the next 20 years and have 
5,000 wind turbines on military soil, there's all kinds of 
steel companies that would invest in new plate mills and make 
more steel. There's 200 tons of steel that goes into a wind 
turbine.
    If we were to use solar panels, Dr. Burns' facilities could 
expand, because there'd be a plan that over the next years 
we're going to do this. She can't meet the requirement now, so 
she's got to invest, and she wants to invest close to the 
market. We don't have any plan.
    DOD is one. DOE was going to--remember all the scuttle 
about building nucs? They were all going to be Korean nucs 
until the union interfered and said, if you're going to try to 
build Korean nucs, this is what we're going to do. And all of a 
sudden that toned down a bit, and, now, we're having a more 
civilized discussion.
    But it's all because we have no plan and everything happens 
sort of hit and miss. Somebody comes up with a policy, we're 
going to give this tax break for that. Give this tax break for 
that, and she's left there with no plan, you know.
    And so I think it's all about how we change the culture, 
and for 25 or 30 years here we've had a culture of denigrating 
manufacturing. And Dr. Burns says if we lose it--we're on the 
verge of losing it. We're down to below 10 percent of GDP. 
There's more people unemployed today from manufacturing than 
there are employed in manufacturing. 11.2 million people are 
employed in manufacturing. And unless we grow that back to a 
number, we're going to be losing our innovation.
    And an interesting part--I'll just close on this--an 
interesting part a few weeks ago was on ABC where they went 
through a house and took out everything that wasn't made in 
America. The only thing that was left was the kitchen sink and 
a Yankee candle.
    That same day on Meet the Press, a senator who's well known 
who ran for president got on and that senator said, Well, if 
they'd have checked for computers they would have seen that the 
iPad and computers are made in America.
    Well, guess what, they were invented in America, but 
they're not made in America. They're made in China.
    We need a plan.
    The Chairman. Senator Ayotte, I welcome you. I'm glad 
you're here, and you haven't had a chance to hear the 
testimony, so you can question away.

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you, Mr. Chairman.
    Dr. Burns, I wanted to follow up on something you had said 
about if you go to Asia and they want to put a plant up, they 
make it happen tomorrow.
    Well, one of the things I wanted to hear your insight on is 
I come from a small-business family. My husband has a 
landscaping and snowplowing business. So I actually did have to 
help him shovel in the beginning. So there's a little shoveling 
in my family.
    But one of the concerns I've heard from a lot of small-
business owners across our country, many of them that do so 
much of the important work to help the rest of us, is the 
regulations that they see that are passed by our government 
really make it difficult whether you want to start your own 
business, whether you want to expand, whether you're involved 
in a particular trade.
    You know, we come up with a lot of ideas here in Washington 
and we think they're well-intentioned, and then people have to 
go out in the field and implement them, and I think so many 
times they make us less competitive.
    And I wanted to get your thoughts on as we look forward and 
make ourselves more competitive in a regulatory context, how 
could we make it better for our private sector businesses? And 
a lot of them are just small businesses, a couple of people 
getting together and trying to provide services for other 
people.
    Dr. Burns. Yes, exactly. I spoke just briefly on this. You 
know, I started by saying I think regulations do matter and 
they're important, but they need to be smart regulations. And, 
frankly, I think there's a huge opportunity to streamline our 
regulations, to look at the cost of adhering to the regulations 
and the intended benefit of the regulation, and really just 
take a thorough look at what we've got with the intent to 
streamline.
    And I know the administration is supporting that. The 
President's Export Council has recommended that we do this, and 
I do agree. I said earlier I think it's more a burden on the 
small company than a large company because we end up getting a 
regulatory machine that is geared up to it. It is a cost, and 
it does hurt our competitiveness. But I think when it hurts a 
startup or an innovative company trying to get going, that's 
where a lot of jobs get created.
    Senator Ayotte. And just as a follow-up, one of the things 
that you mentioned is the need for us when we're passing 
regulations to really look at the cost-benefit analysis of 
them. Would you agree with that, that that's got to be in the 
component?
    Dr. Burns. Yes, absolutely. Absolutely.
    Senator Ayotte. So I very much appreciate that. I hope that 
we take that to heart here, and a lot of times cutting through 
the red tape to make it easier for us to--the private sector to 
thrive.
    Mr. Rowe, really appreciate your being here, and I have a 
6-year-old daughter, Kate, who is one of your biggest fans. 
So----
    Mr. Rowe. What's she do for a living?
    [Laughter.]
    Senator Ayotte. You know, I'm not sure what she's going to 
do, at this point, but she loves the show and is an avid 
watcher. So I'm going to be her hero now that I can tell her 
that I've met you.
    But I wanted to follow up. You're traveling around the 
country. You must have interacted somewhat with--in terms of 
interaction with state, Federal Government, what impression you 
have on this issue of what we're doing on the regulatory end 
that makes it more difficult.
    Mr. Rowe. Yes, it's--I mean, again, that was not one of the 
reasons we wanted to do the show. I mean, the show is first and 
foremost a celebration of work, but, you know, the network kept 
ordering more and more, and we kept going further and further 
and doing some things we didn't anticipate doing.
    And by the second or third season, when we got around 200 
of these jobs, it was really interesting, in the sense that--
well, in terms of the nomenclature of the town--you know when 
you guys are running for office, you spend a lot of time 
connecting with regular people, and I suddenly realized--though 
I'm not running for anything except possible renewal--I was out 
there working with a lot of different types of people in a lot 
of different types of industries.
    And, to your point, we began to stop looking for big, 
municipal, state-run jobs, because the red tape that we had to 
go through from a production standpoint was really instructive.
    Now, certainly, we've done a lot. I mean, I've built 
bridges in Mackinaw, and the Army Corps of Engineers has 
endless opportunities to get dirty and learn stuff, and that's 
great fun.
    But the obstacles to actually shooting with them are 
probably on par with the compliance issues that you're talking 
about that they deal with internally, and it's really 
fascinating.
    I mean, if somebody was doing a show about this show, to 
watch us, for instance, working with some coal miners in West 
Virginia, which we've done, versus, say, a family run maggot 
farm in Idaho, which is wildly profitable, by the way. People 
have no idea of the money that's in maggots.
    Mr. Gerard. The oil industry does.
    Mr. Rowe. You would see the difference, you know, in how 
those industries play out, and conversely.
    I mean, I could go down the list, but the short answer is 
there's a huge, huge cost of regulation and compliance, and, 
obviously, it's necessary, as Dr. Burns said, but there's no 
extra credit for going beyond what you need.
    And my sense, from working with a lot of people in a lot of 
industries, is a real frustration with policies that 
essentially force them to spend a lot of their day doing things 
that simply don't translate straight into the task at hand.
    What that actually means in terms of total lost revenue, 
way past my pay grade. I don't know. You should ask your 
daughter.
    [Laughter.]
    Senator Ayotte. Probably. Yes.
    Mr. Rowe. She might know.
    Senator Ayotte. She's--well, I don't know. Maybe she's 
going to take up this maggot farming----
    Mr. Rowe. Maybe she will.
    Senator Ayotte. She appreciates every one of your shows, 
so----
    Mr. Rowe. Well, you know what, here, share this with her, 
too, because I was just listening to--as Leo was talking about 
the way manufacturing has shrunk in terms of a composite part 
of our GDP, if there were such a thing as a dirt index--and I 
believe there should be.
    I mean, there's a misery index. There's a poverty index. We 
have an index for everything in this town it seems. We ought to 
have a dirt index, and if we did, I bet if we looked back at 
the last 100 years or so in terms of how our GDP was composed, 
we would see a really consistent level of the country's 
relationship with dirt.
    Certainly, in our agrarian past, our farmers were role 
models, because they woke up clean and came home dirty. And we 
understood that the dirt and the work and the profit and the 
need were all wrapped together in much the same way as 
innovation and manufacturing, but it just all made sense 
through the lens of dirt.
    As we evolved from agrarian into industrial, well, the work 
changed, but the relationship with work didn't. In the same way 
farmers were on the front line of agriculture, now, we have 
tradesmen on the front line of manufacturing in the middle part 
of the last century, and our relationship with dirt was still 
great because tradesmen were heroes, ergo, my granddad.
    But, then, in terms of the GDP--and it's just a theory, I'm 
just making stuff up--but for the first time, suddenly, 
manufacturing and industry isn't dominant. Farming is not 
dominant. Less than 2 percent of the workers in this country 
are feeding 300 million people. It's financial services and 
technology. That's dominating the GDP. But what is the dirty 
relationship--at least visibly--with finance and technology?
    That's what I meant before when I was talking about the 
changing look of a good job, because as you look at what the 
country is making and our collective relationship with the 
traditionally dirty face of work, the dirt's been scrubbed off, 
and what's left is clean and green, and that's all nice, but 
it's sent a weird confusion and a kind of disconnect.
    And not to beat a dead horse, but reconnecting--
reconnecting, not your industry specifically, but with the 
people who watch my show, you know, the 300 million-or-so 
people who are simply going about their day and not thinking 
about these things, we've got to reconnect them to the dirt 
index in some way. It's got to be fun, you know. Work can't be 
portrayed constantly as drudgery. It isn't drudgery, you know.
    I hope one of the reasons your daughter likes my show--and 
your wife, senator, enjoys it--is because we find humor where 
we have been conditioned to expect drudgery. And the people I 
know and the people I've met on the show have a wonderful sense 
of humor, and infusing that back in to the conversation and 
back into the practical reality of doing the job strikes me as 
key.
    Senator Ayotte. Thank you.
    Mr. Gerard--if I may follow up briefly, Mr. Chairman--
wanted to get your thought on one issue, and, then, Dr. Burns, 
if you have any comments on it.
    I heard from--wanted to get your thoughts on repatriation.
    Mr. Gerard. I didn't hear.
    Senator Ayotte. Repatriation. This week, I heard from a 
number of large companies who argue on the tax code that we're 
not competitive and that they're anxious to bring jobs and 
manufacturing plans and revenue back to this country, but they 
have a 35-percent corporate tax rate that does not make them 
competitive. So they've got a greater incentive to keep the 
revenue overseas than to bring the jobs back here.
    So what do you think we need to do in terms of what are 
your thoughts on the corporate tax rate issue and encouraging--
making us more competitive to encourage the larger global 
companies to come back to the United States?
    And if Dr. Burns has any comments on that, I'd appreciate 
it.
    Mr. Gerard. I'll confess, off the bat, that I don't think 
I'm technically informed enough to talk about the tax code. I 
know that the tax rate isn't necessarily the tax paid. Some of 
the most profitable companies in America paid no taxes, like 
General Electric.
    We've been giving tax handouts to the richest corporations 
on earth, the oil industry. I think we ought to quit giving 
them those subsidies and use those subsidies to provide 
computers to kids in schools.
    The other thing that I think is tremendously important is 
that we don't give tax breaks to companies that move jobs 
offshore, which we've been doing. And if either you or the 
senator, Senator Rockefeller, can jog my memory, I think that 
that issue came up in the Senate and there was a proposal to 
incent companies to bring jobs back where they would get an 
incentive to bring jobs back and we would remove the incentive 
that we were giving them when they moved jobs overseas. And I 
think that got defeated on a party-line vote, I think, with not 
an ability to overcome a filibuster. So that's the little bit 
that I know about that.
    But I do believe we ought to sit down and have a rational 
discussion to incent those companies that want to bring jobs 
back to America to do that, but take away the incentive for 
shipping jobs overseas.
    And I actually think we ought not get too wrapped up in the 
tax code until we find out what the real taxes that are being 
paid. As I said, General Electric paid nothing, in fact, and 
got a multibillion-dollar tax rebate.
    Senator Ayotte. Well, I'm just--If we look at the rates, 
where we are, we have the second highest corporate--we may end 
up being the highest if Japan decides to move theirs. So just 
as a matter of comparing numbers, we're not competitive. So I 
just was curious----
    Mr. Gerard. Well, let me just pick that up, because I don't 
think that Japan has the issue of their multinational 
corporations not bringing their industry back. They don't have 
that problem. We seem to do, for some reason. So I don't think 
it's about the tax rate. I think it's about the taxes paid. 
And, as I said, I'm not technically qualified, but from a 
distance, that's what I see.
    The Chairman. I have to interrupt. Senator Ayotte, I 
apologize to you, but we have to be at the White House in 10 
minutes.
    Mr. Gerard. When are we going?
    The Chairman. No.
    [Laughter.]
    Mr. Gerard. I tried.
    Dr. Burns. I hope you talk about manufacturing.
    The Chairman. I know. And we're going to talk about the 
budget, so that's going to be a lot of fun.
    Mr. Gerard. Manufacturing and the budget, senator.
    The Chairman. I know. So let me just say that it's not like 
we're moribund in this. This has been a--had a bit of a 
wandering in it.
    But I'm OK with that, because we're a little bit wandering 
in the desert as to what we need to do, and we need to talk 
about it, and we need to prove to ourselves that we're good at 
talking about it, but not very good at doing much about it.
    There are some things going on. I'm working with Steny 
Hoyer on a Make-It-In-America concept, which he's very 
aggressively pursuing, and which I am. And one of the things we 
have in that is one-stop shopping, that industry would just be 
able to go to one place.
    Now, I hear that in my mind and I say, yes, that's just a 
great thing for the government to be doing, and then watch the 
war of the turfs as to who gets the one-stop. But I can't think 
that way.
    In other words, what happens so much in this country is if 
you bring up a subject of substance people will then bring up, 
oh, what about regulation? What about EPA? What about this or 
what about that?
    And what it does--it's totally fair to do it and often 
right to do it--but it keeps us away from the subject. It keeps 
us away from the subject. We're really good at getting away 
from discussing what manufacturing really means.
    And the thing that we ought to be thinking about, and 
virtually the only thing, is that 70 percent of all innovation 
and research and development takes place in manufacturing, even 
though they're a very small part of our GDP. We're not going to 
move forward without manufacturing. We're not going to do it.
    So we're going to continue to work away at this, and, 
hopefully, we won't have a lot of budget meetings at the White 
House. But, on the other hand, I'm very afraid of what's going 
to happen, very afraid of what's going to happen.
    But I will tell you that we have the five biggest oil 
companies before us tomorrow at nine o'clock in the Finance 
Committee. I'm looking forward to that. And if you have nothing 
else to do----
    Mr. Gerard. I might come and watch.
    The Chairman. No, you just pay somebody tonight to stand in 
line and keep your seat. All right?
    Mr. Gerard. Senator, if I could, just for a moment, I 
really want----
    The Chairman. Can't actually.
    Mr. Gerard. I just want to congratulate you on your 
infrastructure investment fund. I really think that's 
important--hopefully, you'll get bipartisan support.
    The Chairman. Yes, yes, and that's $340 billion a year for 
the next number of years to get back to where we need to be.
    Mr. Gerard. Terrific.
    The Chairman. On infrastructure.
    Dr. Burns. We support it, too.
    The Chairman. And so where do we get the money?
    Look, I totally thank you. Huge subject, hard to get one's 
arms around, but we're just going to work at it until we do. 
That's what we're doing for the next year-and-a-half and 
beyond, but certainly for the next year-and-a-half.
    So I thank you very much, and--I really do. I mean, you 
know.
    Dr. Burns. Thank you.
    Mr. Gerard. You're welcome.
    Mr. Rowe. Thank you.
    The Chairman. I wish I could talk more about that CCS thing 
and why you did that, but I can't. Got to go.
    Hearing adjourned.
    [Whereupon, at 3:41 p.m., the hearing was adjourned.]

                                  
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