Yesterday, a bipartisan group of Senators unveiled major competitiveness legislation. Entitled PACE – Protecting America’s Competitive Edge, the legislation was crafted by Senators Bingaman, Alexander, Domenici and Mikulski. This set of three bills implements the recommendations of the recent NAS report “Rising Above the Gathering Storm” (which Bingaman and Alexander were instrumental in bringing about). The legislation includes provisions to increase funding for science and math education (including better training for teachers) and for energy research and development (including creation of a new agency in the Department of Energy similar to the Defense Advanced Research Project Agency – the famed DARPA). The legislative package also expands the R&D tax credit and, more importantly in my mind, creates a tax-credit for providing continuing education to current workers (rather than waiting for them to lose their jobs before they can get job training help).
This is the second major competitiveness bill. Late last year, Senators Ensign and Lieberman introduced the National Innovation Act of 2005 (S.2109) – which tracked the recommendations of the Council on Competitiveness’s National Innovation Initiative.
Adding to the mix, earlier in the week, the Democratic Governors Association unveiled its “America Competes” plan
While I think these proposals are incomplete, they are steps in the right direction. One provision in the PACE package that may sow the seeds for greater progress in the future is an OMB and Treasury Department study on innovation incentives. Such a study could lay the groundwork for a much more comprehensive approach to innovation policy
I don’t know whether to be optimistic or pessimistic about these initiatives. The growing drum beat over competitiveness is heartening. And the PACE legislation has the best chance of serving as a engine to get something through the Congress – since at its core is a set of energy policy proposals that are co-sponsored by both the Chairman and the Ranking Member of the Senate Energy Committee. Getting these big packages passed requires some sort of legislative vehicle. The last time Congress did a big competitiveness package, the engine was the need to give the President trade negotiating authority (which culminated in the creation of the WTO). This time energy policy, rather than trade policy, might be the spur.
However, a lot will depend on how the President reacts. Next weeks State of the Union address will be critical. There are some indications that the President will address these competitiveness issues – or so says a recent story in the Baltimore Sun “Bush weighs costs to U.S. of keeping up”. In a recent interview with the Wall Street Journal, the President talked about competitiveness:
WSJ: Is competitiveness going to become more of a theme for you in this year?
Mr. Bush: Competitiveness has always been a theme for me, and I’m going to continue to make it one. Remember, in the campaign, I used to say, “How do you deal with jobs going overseas? Make America the best place in the world to do business.” That is a competitiveness theme that basically says I recognize that we’ve got to compete. And we have a global economy. Some wish there wasn’t a global economy, but there is a global economy. And we’ve got to have our young trained for the jobs of the 21st century or else [the jobs are] going to go somewhere else. That’s what happens in a global economy. And there’s been some interesting — there is an interesting debate in America about, well, how do you react to a global economy? There are some who say, let’s protect ourselves. And as you know, I believe in opening markets and enforcing trade law, which is the opposite of “let’s protect ourselves.” It’s “let’s compete, and by the way, let’s make sure we have an environment within America that enables us to be competitive.”
On the other hand, Bush’s energy message could veer off into a messy fight over a plan to reprocess used nuclear fuel, as reported in today’s Washington Post and Wall Street Journal. That fight could obscure other energy technology issues in a battle over nuclear waste and proliferation.
Presidential policy could also bog things down. Yesterday, Senator Clinton introduced her own energy technology bill – S. 2196 – to create an Assistant Secretary for Advanced Energy Research, Technology Development, and Deployment.
Like everyone else in Washington, I will be looking at the State of the Union address carefully – reading the tea leaves see the direction of our policy. More on my findings later