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NAM Applauds American Competitiveness Initiative in State of the Union Address

The President of the National Association of Manufacturers tonight praised President Bush’s commitment to innovation in his State of the Union Address, and promised wholehearted support for the President's new American Competitiveness Initiative.

WASHINGTON, January 31, 2006-The President of the National Association of Manufacturers tonight praised President Bush’s commitment to innovation in his State of the Union Address, and promised wholehearted support for the President’s new American Competitiveness Initiative.

"There is no question that our nation’s strength lies in our leadership in innovation and productivity, and that leadership is being challenged as never before," said NAM President John Engler. "The President’s commitment to increase funding for R&D and improve science and math instruction in our schools is exactly what we called for in our 2005 Labor Day Report. We are especially pleased by his proposal to make the R&D tax credit permanent and make it available to more companies. Technology advancements are derived primarily from R&D and the tax credit is a proven incentive. Also, the doubling of funding for the National Institute of Standards and Technology, the National Science Foundation and the Department of Energy’s Office of Science will enable more professors to chase knowledge rather than dollars.

"The really great thing about this address is its focus on competitiveness," Engler said. "The American people must understand that we are engaged in deadly earnest competition with an array of nations resolved to challenge our economic leadership. We must recognize this challenge and move on a variety of fronts to meet it."

Engler welcomed the President’s determination to rein in soaring health care costs and bring more clarity and transparence to the system to enable consumers to make reasoned judgments about health care. "The cost of health care is a major problem for manufacturers in the U.S., and it is getting to be a bigger problem with every passing year," Engler said. "There is much we can do to reduce this cost including greater reliance on digital technology to reduce errors and paperwork, and also more incentives to encourage consumers to purchase health care more wisely. In particular, we applaud the President’s intent to strengthen Health Savings Accounts by making it possible for individuals and small business employees to buy health insurance with the same advantages that employees of large firms now have."

Engler welcomed President Bush’s commitment to Free Trade Agreements. "He hit the nail right on the head when he said that isolationism is not the way to increase opportunities for American workers," Engler said, but added that the NAM is disappointed in the Bush Administration’s continuing reluctance to address predatory trade practices, including product counterfeiting, subsidies and currency manipulation. "We are running a huge trade deficit that is simply unsustainable," Engler said. "Much of this stems from unfair trade practices by foreign countries that are violating international trade rules in their determination to undermine our world leadership in manufacturing. This continuing assault on our economy must be dealt with."

Engler also applauded the President’s focus on education. "We are already facing a critical shortage of skilled manufacturing workers," Engler said. "The public schools are not preparing our young people for careers in modern manufacturing. A well-trained work force is critical to our economic future. As we improve education and training for our own workers, we appreciate the President’s recognition that we also need access to the best and brightest from around the world, many of whom have been educated in U.S. colleges and universities.

On the subject of energy, Engler expressed disappointment in the President’s lack of specific near-term solutions. "We had hoped the President would come out strong and clear for development of oil and natural gas resources. The emphasis on conservation and alternative fuels is all well and good, but manufacturers have long since tested the limits of conservation and the payoff in alternative fuels is far off in the future. Solar power, wind power and a new generation of battery technology may provide a significant part of our energy needs 10 or 12 years from now. Even construction of new nuclear power plants will take many years. Manufacturers must operate in the here and now.

"Congress has enacted several laws that encourage manufacturing to rely increasingly on natural gas, but now it obstructs every effort to bring more natural gas to market," Engler said. "As a result, manufacturers in the U.S. are paying the highest energy prices in the world, compromising our ability to compete. We have vast resources of oil and natural gas in the Arctic National Wildlife Refuge and in the deep water coastal areas that we can obtain without disturbing the environment. We had hoped President Bush would forcefully address this fundamental contradiction in our energy policy, and were disappointed that he did not."

"The President is committed to economic growth, and his reliance upon the private sector to lead the way is commendable," Engler said. "But ours is a manufacturing economy and there is much we need to do to strengthen manufacturing. It is our sincere hope that in the weeks to come, President Bush will flesh out a more specific economic agenda that recognizes the importance of manufacturing to the economy, and helps manufacturing in the U.S. become more competitive in the global marketplace."