AS PREPARED FOR DELIVERY
Tuesday, April 12, 2011
CONTACT OFFICE OF PUBLIC AFFAIRS
202-482-4883
Commerce Secretary Gary Locke
Remarks at Metropolitan Milwaukee Association of Commerce, Milwaukee, Wisconsin
Hello, everybody,
it’s great to be here today. Thanks to Mayor Tom Barrett, the
Metropolitan Milwaukee Association of Commerce and the rest of the
chambers who are serving as our hosts.
This time last week I
wasn't sure I'd be here, on account of the budget situation in
Washington. But Congress came together. In the process, they prevented
800,000 Americans from being thrown out of work this week.
That’s
critical because it would've been the height of irresponsibility to
shut down the government at a time when our economy is showing the most
strength since the recession hit over two years ago.
National retail sales just had their strongest quarterly gain since 2001.
Manufacturing activity just hit its highest level since 2004.
Finally,
the jobs picture is improving. Since February 2010, the U.S. economy
has added private sector jobs every single month, with private
employment increasing by 1.8 million jobs.
And this past month's
increase of more than 200,000 private sector jobs for the second
consecutive month represents the largest such bump since April of last
year.
But 8.5 percent unemployment in Wisconsin and 8.8 percent
unemployment nationally is no reason to celebrate – not with millions of
families still struggling to:
- Keep a roof over their head;
- Put food on the table; and
- Pay the college tuition of their children.
That's why helping American businesses grow and create jobs remains a singular priority of the Obama administration.
At his State of the Union address earlier this year, you heard President Obama explain why.
He
said the most important contest our nation faces is not between
Democrats and Republicans, but between America and countries around the
world that are competing like never before for the jobs and industries
of the future.
To win that competition, the president said we’d have to:
- Out-educate;
- Out-innovate; and
- Out-build the rest of the world.
So
today, I'd like to talk about how we do it – and how the president's
economic agenda will support the ambitious economic development efforts
already underway in the Milwaukee region.
This city helped teach
America how to make and build things. Milwaukee innovators helped
develop everything from a more-efficient steam boiler to the snowmobile –
and those goods were sold around the world through the teeming port on
the west shore of Lake Michigan.
Milwaukee has built on this
foundation to become a state-of-the-art manufacturing epicenter and a
hub of entrepreneurship and innovation.
Today the Milwaukee
region is home to a high-tech industry that is among the Midwest’s best,
with $2.3 billion in combined payroll from local technology industries.
It also ranks among the top five cities in the number of Fortune 500
company headquarters, as a share of the population.
These
companies are supported by a thriving research base led by
public-private research organizations like the Milwaukee Institute and
numerous colleges and universities.
You’re also capitalizing on
your natural resources. Under the leadership of Senator Herb Kohl,
Mayor Barrett and countless local partners, you are working to turn
Milwaukee into a world-class water research hub and a thriving regional
innovation cluster.
The Milwaukee Water Council estimates that
this region already generates $10 billion in revenue from freshwater
technologies and products like meters, sensors and filters.
You
have recognized the cluster’s value, and the Department of Commerce –
through its Economic Development Administration – is supporting those
efforts with grants to help understand how to create jobs and private
investment in this important field.
Milwaukee is also aggressively courting industries of the future, like clean energy.
A
few weeks ago, President Obama spoke of the urgency of breaking
America’s oil addiction and moving towards cleaner, more efficient
domestic sources of energy.
In the last two years we've made huge steps toward that goal with:
- ground-breaking fuel efficiency standards for cars and trucks;
- historic investments in electric vehicles and the advanced batteries that power them; and
- major new investments in next-generation clean energy sources like wind, solar and biofuels; and a national smart grid that can deliver that energy to homes and businesses across America.
And going
forward, President Obama has set an ambitious goal of reducing our
foreign oil imports by a third over the next decade.
Wisconsin is helping move us in that direction.
Wisconsin’s
solar and wind industries are booming, with the number of solar
installers in Milwaukee up 250 percent since early 2009. Nearly 90
percent of Wisconsin’s wind capacity has come online since mid-2008,
which means a lot of great work has been done in a short period of time.
Wisconsin
is also leading the way on biofuels. In Madison, the Great Lakes
Bioenergy Research Center is figuring out new ways to bring down the
costs of making these advanced renewable fuels.
All these efforts
will do more than simply change our energy consumption. As we recover
from this recession, the shift to clean energy has the potential to
create scores of new businesses and new jobs – but only if we seize the
opportunity.
Wisconsin, to be sure, is doing its part.
But
for all its commitment to innovation, Milwaukee has not been immune
from the upheaval in the global economy these last few years.
Jobs have been lost. Factories shut down.
You can point to a lot of reasons why the U.S. economy failed catastrophically in 2008.
But fundamentally, the problem is that America lost sight of our true economic strength:
Innovation. Technology. Scientific progress.
America didn't invest enough or invest effectively in research, education, or infrastructure.
We funneled too much capital and too much talent to speculation instead of innovation.
In
fact, a 2009 study found that no advanced industrialized economy had
done LESS over the last decade to improve its economic competitiveness
than the United States.
The upshot was that national job growth
in the 2000s was the lowest of any decade stretching back to the 1940s.
That's true even if you stopped measuring BEFORE the recession started.
To rebuild our economy, we can’t rely on the same debt-fueled economic schemes that failed catastrophically in 2008.
Instead, we need to build businesses that create long-lasting economic value.
We need businesses like GE Healthcare Technologies pioneering new medical innovations.
We need companies like:
- Marshall and Ilsley Corporation financing entrepreneurs; and
- Businesses like Rockwell Automation developing ideas for breakthrough sustainable energy and integrated systems technologies.
The
role of the Obama administration, and of the Commerce Department, is to
help increase the odds of these things happening to provide smart
incentives, targeted investments and assistance to allow all of you to
succeed.
When President Obama says that America needs to win the future, that's a national imperative.
But it won’t be achieved with a single national solution.
Instead, it will be hundreds of regions across America, just like this one, charting their own paths.
Here are just four ways the Obama administration is making that path smoother and more successful.
First,
investments in critical infrastructure, because Milwaukee businesses
need quality roads, bridges, airports and electric grids to efficiently
speed their goods and service across the globe.
Early in the
administration, we made the largest new investment in America’s
infrastructure since Eisenhower built the interstate highway system in
the 1950s. In Wisconsin alone, the Recovery Act funded:
- 475 different transportation projects worth $670 million;
- The creation or improvement of more than 3,800 miles of Wisconsin roads; and
- Enhancing or replacing 175 bridges statewide.
We made a long-overdue down payment to upgrade old infrastructure, but also to build the infrastructure of the future.
The
Recovery Act included funds to help America reach the president’s goal
of connecting 98 percent of Americans to high-speed Internet by 2015.
It’s a goal we need to meet if we want:
- Our kids – no matter where they live – to be able to take online courses from the best universities in the world, or simply courses not available in their high schools and middle schools; and
- Rural businesses to have the same access to global markets as their counterparts in the cities.
In
Wisconsin, the Commerce Department has already awarded grants that will
enable local Wisconsin organizations to build about 850 miles of new
broadband networks in areas where the private sector was either
unwilling or unable to invest.
Just as the federal government
might fund a highway that enables local entities to build new roads
branching off of it, these Commerce department grants are funding the
basic high-speed Internet infrastructure that local Internet service
providers will tap into to run lines directly into homes or businesses.
So
these federal dollars are bringing millions in additional private
capital off the sidelines to expand high-speed Internet in Wisconsin.
Our second effort to smooth your path: Research and Development.
The
President’s 2012 budget would increase the nation’s R&D investments
as a share of GDP to its highest levels since President Kennedy’s
administration.
But the president is also taking steps to get our fiscal house in order.
He
has called for a 5-year discretionary domestic spending freeze, saving
more than $400 billion and reducing that spending to its lowest level as
a share of the economy since President Eisenhower sat in the Oval
Office.
And I think it's important to contrast the president’s
vision with the one we saw released by the Republican House Budget
Committee last week.
Most of the attention last week was given to
cuts to Medicare and Medicaid in the budget committee's proposal, and
we’ll have plenty of time to debate those.
But what concerns me
most as America’s Commerce Secretary is what this proposal does to
investments in education, infrastructure and research that are critical
to America's economic competitiveness.
Everywhere I've traveled
in the world these last few years, I see our competitors like China and
India making unprecedented investments in their people, and in the
roads, bridges and electric grids that underpin a modern economy.
Go
to China and you’ll see them spending 9 percent of their GDP on
infrastructure. In Europe, it’s about 5 percent. In America, it's 2
percent.
And then you look at a Republican budget that by 2016, would cut the president’s proposed education funding by 36 percent.
It cuts the transportation budget by 41 percent.
Meanwhile, it calls for drastic cuts in energy research at a time when our economic competitors are increasing that research.
And
the thing is, these drastic cuts won’t be used to trim the deficit in
the next decade. According to the Congressional Budget Office, most of
Republican's proposed spending cuts would go to pay for more tax cuts --
primarily for the wealthy.
It just does not make sense. We
can’t get to fiscal responsibility by shortchanging the very things that
lay the foundation our businesses need to innovate and to create jobs.
Consider
that much of President Obama’s R&D investments – which the
Republicans want to cut – are in areas that are often too risky or
expensive for the private sector to take on.
Just since the 1960s, Defense Department and NASA-sponsored research has helped launch or revolutionize:
- The Semiconductor Industry;
- Chip design; and
- The Internet.
So, we’ve simply got to preserve these critical federal investments that ultimately lead to private sector innovation and jobs.
And
tomorrow, you're going to hear President Obama give a major speech on
how he plans to balance America's books, while preserving the
investments that are so necessary to our global economic
competitiveness.
Of course, one of the biggest barriers to
American competitiveness and innovation in America is our tax system,
and that’s the third area the administration is focusing on.
Look at the tax cut package the president signed at the end of last year.
As you’re all aware, that package prevented a big tax increase on middle-class families.
But
it also had two significant provisions – insisted on by the president –
that will directly help Wisconsin companies and their customers.
Take
the new expensing benefit, which will allow companies to write off 100
percent of their machinery and equipment purchases made in 2011 – the
largest temporary investment incentive for manufacturers in the history
of the United States.
The December tax cut package contained a
payroll tax cut that will put even more money in the pockets of millions
of Wisconsin workers to drive new business at local companies, stores
and restaurants.
For a married couple making $75,000, this cut will mean as much as an additional $1,100 over the taxes they paid last year.
Of
course, the measures I’ve described are temporary, and they’re
temporary because we need to keep one eye on the long-term deficit as we
work to kick-start the recovery.
To make sure we’re in a better
position to create the industries and jobs of the future, we need
comprehensive reform of our business tax system.
As the President
said in the State of the Union, he wants to work with Congress to get
rid of the loopholes, level the playing field and use those savings to
lower the corporate tax rate for the first time in 25 years without
adding to our deficit.
As the administration takes these steps to
create a favorable business environment here in America, we’re also
working to keep American business competitive all around the world.
Expanding our exports is the fourth and final item I’d like to discuss today.
In
a global economy where 95 percent of the world's consumers live outside
U.S. borders, you've got to go where the customers are.
The
simple fact is that the more American and Wisconsin companies export,
the more they produce. The more they produce, the more workers they
need. And that means jobs. Good paying jobs here at home.
Consider that exports directly support nearly 10 million U.S. jobs and about 200,000 here in Wisconsin.
And
these are good-paying jobs that pay 15 percent more than the typical
wage in America, exactly the type of jobs we need a lot more of.
That’s
why early last year President Obama announced his National Export
Initiative, which mobilizes departments throughout the federal
government to help double U.S. exports by 2015 and support millions of
jobs.
Although the United States overall is a strong exporter,
only one percent of our companies export and of those that do, 58
percent only sell to one market. We can and must do better.
The
Commerce Department has trade specialists here in Milwaukee and in 77
countries around the world, whose sole job is to find buyers and
customers for your Made-in-the-USA goods and services.
And
agencies like the Export-Import bank can provide you the working capital
to produce the goods you want to sell abroad, or guarantee that your
foreign buyer will pay you, so you can sleep at night.
So I hope you’ll take advantage of those services.
The
Obama administration has been very aggressive in opening up markets for
US companies over the last two years, and exports have been a key
driver of America's economic recovery.
In 2010, national exports:
- Grew nearly 17 percent;
- Reached the second-highest annual total on record; and
- Contributed to nearly half of all U.S. economic growth.
In Wisconsin, exports of manufactured goods were up 17 percent, to nearly $20 billion.
Now, I know I’ve mentioned a number of different initiatives. But there's a thread that holds them all together:
They are all designed to empower our businesses to innovate and to hire.
We
know government can’t solve all the problems facing our country. What
we can do is create smart incentives so that businesses in the Milwaukee
area – and all around America – can build something special.
That's
how we ensure that U.S. companies compete and win in the global
economy. And that’s what the administration will be focused on like a
laser in the year ahead.
Good luck and keep up the great work!