Obama calls for investment in economic building blocks

Obama calls for investment in economic building blocks    President Barack Obama said in Tuesday night’s ‘State of the Union’ address he plans to push for an export-oriented, manufacturing strategy for new innovative products, debt reduction and investment in education, research-and-development and infrastructure to help the country face growing economic competition around the world.

Obama

   Clean energy technology represents one of the new manufacturing opportunities available to U.S. companies, he said.
   America needs to catch up to major trading regions of the world when it comes to transportation, broadband, energy and other infrastructure, Obama said.
   ‘To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods and information — from high-speed rail to high-speed Internet,’ he said.
   The president suggested his upcoming proposal for the overdue surface transportation reauthorization bill will include programmatic reforms so that money isn’t disbursed to states simply for public works projects that support construction jobs, but instead is targeted to areas that can generate long-term growth from businesses seeking to take advantage of the infrastructure. And he endorsed the use of public-private partnerships.
   ‘America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the Interstate Highway System. The jobs created by those projects didn’t just come from laying down tracks or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp,’ Obama said.

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   On the heels of spending $48 billion for transportation projects in the 2009 Recovery Act, Obama said, ‘We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what’s best for the economy, not politicians.’
   Experts have warned that the United States has underinvested in infrastructure for decades and that systems are failing or inadequate to meet new population demands.
   The surface transportation spending blueprint expired at the end of September 2009, and the Department of Transportation has been operating on a series of 60-day extensions from Congress that has kept many projects in limbo. The Highway Trust Fund had to be propped up with money from the general fund in order for states to meet their commitments because fuel tax receipts are declining. The $286 billion SAFETEA-LU bill, which included thousands of congressional earmarks, went to many programs and state aid each year.
   Last year, former Minnesota Rep. James Oberstar, then chairman of the House Transportation and Infrastructure Committee, unsuccessfully tried to move a $500 billion, six-year bill to a vote. The Obama administration is expected to soon submit its draft version of a bill to Congress, possibly with the release of its budget next month.
   Any bill that comes out of the House this year — not a foregone conclusion given the divisions on how to raise revenue and other constraints — would be much more modest than Oberstar’s proposal, probably on the order of $42 billion per year, said Emil Frankel, director of transportation policy at the Bipartisan Policy Center and a former assistant secretary of transportation, during a panel discussion at the Transportation Research Board’s annual conference in Washington.
   The $42 billion is about the amount available from projected gas tax collections and general fund transfers per year through 2012, according to government estimates. After that, projected cash flow will only support a program of $31 billion per year.
   The Association of American Railroads jumped on the president’s reference to rail, issuing a statement that railroads have invested billions of dollars in their networks to ‘ensure freight rail can connect businesses to the global marketplace, thereby sustaining vital jobs across the country, while providing the literal foundation for increased intercity passenger and high-seed rail’
   Rep. Jim Mica, the new Republican Chairman of the House T&I Committee, said in a statement that he is encouraged by the Obama administration’s interest in infrastructure renewal after doing little to stop the expiration of the last surface transport bill. He also expressed skepticism that the White House will scale back its spending ideas for transportation.
   ‘However, just another proposal to spend more of the taxpayers’ money, when we have billions of dollars sitting idle tied up in government red tape, will never get our economic car out of the ditch.
   ‘We’ve got to do more with less to improve our infrastructure in a fiscally responsible manner,’ he said, referring to previous comments that money obligated to states takes a long time to get spent on projects.
   Obama reiterated his goal to double exports by 2014, first announced about this time last year, as a way to create more jobs. He said the government’s effort to coordinate export promotion has already paid off in increased exports, although much of the rise can be attributed to the economic recovery in other parts of the world and the weak dollar.
   Exports represent about 12 percent of gross domestic product, substantially higher than 30 years ago, but near the bottom when compared to Germany (47 percent, skewed by trade with EU states that resemble U.S. states), China (37 percent), Russia, the United Kingdom, France, India, Japan and Brazil.
   That means there is plenty of room for the U.S. export economy to grow.
   Obama said he wants to remove domestic barriers — tax loopholes that favor certain companies and industries, and ineffective regulations — and international barriers to fair business competition.
   He urged Congress to ratify the trade deal with South Korea that his team recently renegotiated, saying it adds necessary protections for U.S. workers, as do pending agreements with Panama, Colombia and a transpacific group of countries.
   ‘Manufacturers understand all too well the realities of an increasingly competitive global marketplace, and we are pleased to see President Obama begin the discussion on how to address this critical issue. The president’s comments on increasing our exports, opening new markets and passing pending free trade agreements are all important elements to achieving job creation, economic growth and competitiveness,’ the National Association of Manufacturers said in a statement.
   But Obama didn’t directly tie the prospects for export growth to the need for infrastructure rehabilitation and expansion.
   U.S. businesses and trade analysts say congestion and inefficiency in the transportation network — from roads to ports, rail and airports — adds cost and delivery time to U.S. products, making them less competitive against those of other nations that have well-thought out trade and transportation strategies.
   If exports are going to play a significant role in accelerating economic growth and bringing down unemployment the nation will need a national freight policy and have to reorient its infrastructure, which is currently set up primarily to support imports, said Paul Bingham, economics practice leader at Wilbur Smith Associates, in another TRB session. ‘ Eric Kulisch