>> okay. if you can get back to us a little more, i would appreciate that. we are short of time on this and i'd like to understand. you have knowledge that they are manipulating their currency. the second is you made an interesting remark -- >> let me just say, if i could. we can refer that to u.s. department of treasury. i'd be happy to refer it to them. that is where the judgment is reached about treasury. >> okay. the second issue that you were very -- you made an interesting remark earlier about, how they are reining in some regulatory effects. you said as long as it doesn't have an impact on manufacturing and jobs, but we've seen that using the clean air act, the epa has now caused up to approaching 40 kick -- gigawatts of power, coal fire generating plants have indicated they are going to shut

down. will you not suggest that probably is going to increase the cost of electricity to some manufacturers when you have over 10% of our electric generating plants closing, isn't that likely to close -- excuse me, increase the cost of utilities? >> you'll have to give me a little more on the specific case in point. but let me say in general, what the president has stood for very strongly is limiting, reducing -- >> what he stands for, what he's doing and allowing to happen. i'm just asking your question, do you recognize -- does the commerce recognize that decreasing electric generating facilities is likely to increase the cost of electricity? it's a yes or no. >> let me address regulation. then i'll address utilities briefly, if i could. the regulation is the only thing that is allowed in this

administration with regard to regulation is things that bear strictly on health, safety, and security. that's it. that's all. so as perhaps you've seen in some epa cases, for example, the president has not allowed those to go forward. with regard to what happens to utility power costs, new forms of generation are less expensive than old forms of generation in many cases. >> if they're subsidized. the last is that comment that congressman from new jersey mentioned about the letter. about russia. this is a letter sent to you in february, february 17th. so for your staff to be able to find that, there was a letter directed to your attention february 17th asking. so perhaps they need to communicate that to you. >> all right. >> thank you very much. >> thank you. >> all right, the chair

recognizes mr. pompeo for five minutes. >> thank you for joining us. i appreciate your enthusiasm for the growth of american manufacturing. the president, i represent south central kansas, the air capital of the world. the president has more times than we have minutes remaining in our day, talked about corporate fat cat jet owners. we have one of the last great manufacturing jewels left in america that has not asked for a dime. doesn't want a grant, doesn't want a loan, does not want to be bothered, would just like to have your supervisor, the president of the united states, stop talking down this incredibly important industry. can you walk me through how he thinks the customers for these union workers, engineers that live in the heartland of america, how talking down that industry has anything to do with job creation in america? >> so i'm sorry. just take me a little further. what industry -- >> the general aviation industry

cessna and beechcraft and learjet and boeing and hundreds of suppliers that live in south central kansas and make their lifgs building the very airplanes sold to the folks the president refers to as corporate fat cat jet owners. it hurts the industry when he makes it politically incorrect to fly around in a business tool. i'm asking you what the job creation rational for talking down the aviation industry could possibly be? >> my experience, and i know this directly, i was for 18 1/2 years a president of the boeing board of directors. the president has been very, very supportive of the u.s. aviation. when i do the tours that i do around the world, i am again and again and again espousing u.s. aviation. component parts -- >> i appreciate that. >> it's what i do. >> i appreciate that.

it's an incredibly important industry, one of our largest export industries in america. he may be supportive of it, but the things he says when he speaks and his notion that we should increase user fees and he wants to increase taxes on general aviation users are inconsistent with your statement that he is supportive of that. so anything you can do to help make sure that folks want to use these as business tools, they're very efficient, they're a great product, and we make them here in the united states of america. i want to turn to a second topic. you said you go out to a lot of manufacturers. i actually was a manufacturer for a few years before i came here. when you ask them the things that restrict their ability to create and grow jobs and they list the top three or four, do any of them talk about receiving federal grants as important to their desire to grow jobs. do they say, mr. secretary, the most important thing you could do for me would be to provide a federal grant to my business? >> any advanced manufacturing

area, and principally possibly exclusive to the advanced manufacturing area, yes, because the focus there is in a global -- globally competitive world to retain the smarts, the very best technologies, the most outstanding means of retaining and enhancing our competitive position, in technology and the form of advanced manufacturing will be a significant part of that. if the role that the federal government plays by way of a stimulus, by way the kind of work that is done at nist, right here in thissa the d.c. area, where woodall rodgers doing, for example, this work on nanotechnology right now, that has opened in every case, invited -- the only thing i know, let's just say in the united states,

as a manufacturer focused on advanced manufacturing could go and use the lab and bring in the best people. the universities you work with best people and so on. >> i appreciate that. most of the grant programs, economic development administration is a good example, aren't providing for advanced manufacturing technologies. these programs are going to old line industries. most say get the government out of my way, regulation and allow me access to trade so i can advance markets. the president said when he was campaigning, he with need to cut back waste at agencies like economic development, his words september 2008. i haven't seen that. i've seen continued efforts of this commerce department to try and pick winners and losers in the manufacturing space. >> the federal government is involved in manufacturing in

multiple ways, the congress department in multiple ways. the work of the manufacturing extension partnership works with so many of these small and medium-sized manufacturers and in the communities and in the community colleges and so on that work with them. so yes there's federal government. there are dollars associated with that. what we try to do is use those dollars really, really well. with regard to -- >> i'm sorry. go ahead. >> economic development administration, likewise, small agency, modest budget, very tight control over cost. what it does, it is the only economic development administration across the entire federal government and it does things. we could provide you -- >> i'd welcome that. appreciate that. thank you. congress does such good things

but i wish they would spend less time redistricting wealth and more time trying to create opportunities for everyone. >> do you have time for one more question from the last member if it's a brief question? the last member has a quick question for you. >> okay, yes, we can do one. >> your staff is indicating they will drive quicker to the airport. the chair recognizes miss blackmon for her question. >> thank you, madam chairman. mr. secretary, you've been washt with us today and we're appreciate of that. i know that congressman dingell asked you a little about information technology. in my district in tennessee, we've got a lot of performers as well as having a lot of small business manufacturers who purchase information technology in order to try to get a competitive edge. and then it turns around that they are competing with companies that in china or russia or somewhere that have stolen that information technology.

and what i want to know from you is what can you do and can the federal government do anything about the competitive harms that are caused by the theft of that information technology that drives the efficiencies and always about other u.s. intellectual project that is stolen and specifically, are you going to put any strong ip protections in trade agreements like the transpacific partnership? >> the short answer is intellectual property that we do not get compensated for, that is taken in other countries and there's no compensation and no recognition of where that initially came from is flat-out a loss to the people in our country who deserve the right to be compensated for what

they provide. and with that, those people would only make better products rather than not getting the compensation they should have. so that is our responsibility at the commerce department. to see to it that those obligations are honored and that when it's not done, that we file these many proceedings against them that i've described earlier to see to it that it's done and that is a non-stop job at the commerce department. >> and then are you going to insert stronger ip protections with trade agreements like the transpacific? >> yes. >> thank you. yield back. >> thank the gentle lady. mr. secretary, you've been very gracious with your time. we appreciate you being with us today. we look forward to working with you in the future on the issues we care so much about. together let's just make printing help wanted signs a booming business in america.

we wish you safe travels -- >> one thing on the record i was going to ask to be sure that i have less -- with regard to this question that i had about the manipulation of currency in china and what i repeatedly answered is that's the u.s. freshry's role. but what i don't want to let not stand is that we believe that china absolutely must allow its currency to appreciate. that is critical. so -- and thank you very much. i apologizes for putting this last word in. >> that's okay. appreciate your clarification there. again safe travels to and from california, appreciate your time. we'll take a very brief recess as we seat the second panel. >> thank you.

we're ready to begin with our second panel. joining us today are dr. robert atkinson president of information foundation. alphonso lub rano, president of technical materials and vice president of national association of manufacturers, small and medium manufacturers. craig giffi, vice chairman and u.s. leader of consumer industrial products at deloitte. and dr. tyndall from the north carolina biotechnology center. good afternoon. thank you all for being here with us today in front of our

subcommittee. you'll each be recognized for five minutes. to keep track of time, please watch the timers in front of you. when it turns yellow, you have a minute to wrap up and make sure to turn your microphone on and bring it comes to your mouth. the audience at home needs to hear you and only can if you're speaking clearly into the microphones. dr. atkinson, you are recognized for five minutes. >> thank you madam chairman. members of the committee. it's a pleasure to be here. itif has been doing a fair amount of research on what's happened to the u.s. manufacturing economy and we'll be releasing a report shortly on what we need to do to fix it. as we've shown in our work, we lost a larger share of our manufacturing jobs in the last decade than in the great depression. the consensus among conmiss, is a reflection of superior performance, that all of these jobs were lost due to high productivity and our analysis

says that's partially true. companies get more efficient, don't have to hire as many workers. but we argue two-thirds were lost because u.s. companies were not able to be competitive in global marketplaces. my testimony goes into more detail on that, but just one important point there, 13 of 19 manufacturing sectors actually are producing less today than they were in 2000 in real inflation-adjusted terms. this is unprecedented in american history. it's never happened before. every decade before this, we've had expansion of manufacturing. we argue that when measured properly, u.s. manufacturing output declined 11% in the last decade in inflation adjusted terms. one indicator of that is when you look at the amount of capital investment that investors make, bureau measures this, capital stock, the amount of machines, computers, everything that they have.

and in most decades from 1940 to the present, capital stock is growing about 30% a decade. sometimes 50% a decade. in this last decade, it grew 1.2%. so we think there's a big challenge. we think we have to respond to that challenge. so what should congress do. i think there are a number of areas that are important. clear we -- actually, let me just mention, i should say, i don't want to sound overall pessimistic. we have some challenges but there are trends in the right direction. we heard earlier about natural gas and reduction of input costs like chemicals. that's an important new benefit the u.s. economy didn't have five, ten years ago. certainly, some costs are going up in countries like china. many companies now are taking a new look at offshore and using full cost analysis, so there are some good things happen. but i still think we can't rely on that, we have to get some new policy changes. what are some of those?

three major ones. one is on the tax side. we have the dubious honor now of april 1st to have the highest corporate tax rate in the world, and that's also close to on the effective rate. so we have a high statutory rate. studies have shown we have a high effective rate as well. we've got to do something on the corporate tax side that doesn't just rejigger the deductions and incentives and leaves the effective rate the same. we've got to focus on reducing the effective rate. i would argue. as i argued before, we also should do that in a way that keeps key incentives that are cret cal to manufacturers. one of those is makers or modified accelerated cost recovery system, which is essentially being able to write-off committee sooner than you would. that's a critical incentive. the r&d tax credit, those are all very critical tax incentives that help u.s. manufacturers become more competitive. i think one other area we need to focus on is i would argue we

should be focusing on a new kind of regulatory review so that major regulations have to go through essentially a competitiveness screen. there are certainly needed regulations but when you're focusing on -- impacts on sectors globally traded, we need to look at that carefully. those could have bigger impacts on sectors that don't face global competition. having said that, i think it's not enough to focus just on cost reduction. it's important, but the germans, their wages are 45% higher than ours. so we have to get better, not just cheaper. one key area is trade. a number of people have talked about that. our view there is ramp at -- rampant mercantilization going on in brazil, china, india, russia. we have to get a lot tougher. that's about defending globalized trade. it's about defending the free trade system, which they are

systemically violating. i give the administration credit there but i think they need to do more. last point is technology. i don't think we can win this without doing all three things. we have to have the tax system, the trade system. i do argue we have to have a technology system. i give the administration credit and others supported like mep program and new national institute, nnmi. many of our major competitors have these kind of spri partnerships that help advance technology and get it out to companies. i think we could do a better job there as well. thank you very much. thank you, mr. atkinson. mr. lubrano, you're recognized for five minutes. >> thank you very much, chairman and thank you members of the subcommittee in allowing me this opportunity to testify on behalf of the national association of manufacturers. i'd like to start off by saying this is an extremely exciting

time for our country and for manufacturing. impresident of technical materials in lincoln, rhode lin island. a subsidiary headquartered in mayfield heights, ohio. we have officers in north america, europe and asia and serve customers in more than 50 countries. it is the world's leading resource fringing in specialty strip products and offers a wide range of products and expertise in numerous markets including automotive and consumer electronics. i have been leading the company since 1992. it is my privilege to serve of nam's board of directors as vice chair of the small to medium sized group, manufacturing group an on the board in general. i also serve as chairman of the rhode island manufacturers association and itac 11 here in

washington. i'd like to make a quick statement and what creates jobs and critical component for sustained economic recovery is job growth. with 95% of the potential consumers out of the united states, manufacturers everywhere have to compete globally. the way jobs are created is we go out and have to compete for that global business. if we're competitive, we book the business. if we book the business, we have to make things. we make things, we hire people. very simple. manufacturers have been proud to be leading the nation's economic recovery. with increased productivity, renewed investment, employment, export and innovation. as we have heard many times today, we're the top manufacturing economy in the world accounting for 21% of global manufacturing. none the less, we remain extremely concerned about the challenges facing us in the united states. it's 20% more expensive to

manufacture products here. if you look at that 20% and add china's currency manipulation, we come out of the box at a 60% in some cases, disadvantage. not to mention the trade barriers that put up. as president of the small business, i deal directly with these costs on a daily basis. i have an e-mail on my laptop about a new opportunity in china. their trade barriers are excite quiet likely going to prevent me from getting an opportunity. it's for a small company called apple. that's two to five jobs i'm not going to be able to get potentially. so the situation on a global bases and the uncertainty really, really hurts our able toy create jobs. we created roughly 150 in the last five months. if you look at the multiplier,

from two to four, you could be talking about 600,000 jobs. in order for us to continue to create jobs in this country, we need congress to help us get more competitive. it's all about global competition. there are four goals nam has put together. i defer you to lead those, but i'm trying as quickly as i can to the united states needs taxes get through everything here. for global markets to enable us to get and reach 95% of these consumers who live outside our borders. to do that, we need effective tax policy, energy policy. we need to stop these insane regulations and let me just make a quick point about the environment. i have children, grandchildren. i want them to breathe clean air. overregulating is going to hurt the global environment. how is that going to happen?

we're driving business out of this country into other countries that are not as careful with so in theory, overregulation is the environment as we are. going to backfire and hurt the global economy. lowering the tax rate is important. the back is another important parameter that we need. we need ftas. i want to make a quick statement about ftas. the ftas we have in place actually have trade surfaces. as a matter of fact, over the last four years, we have accumulative trade surplus of $120 billion. that equates directly to jobs. we need jobs for that sustained economy. i've talked about that earlier. workforce development. i have three technology jobs i can't fill right now. if you multiply that by all of the kinds of small companies, we could be talking 600,000 to million and a half jobs unfilled

because of workforce. i know i'm out of time. i just want to end with this is a time of great optimism for manufacturing in the united states. we ask for your help. help us get more competitive. please. i'm begging you. we can do it. we can get those jobs back here. we can make this economy rock, but we need your help. we can't do it without your help. >> thank you. >> mr. giffi, you're recognized for five minutes. >> good afternoon. thank you for inviting me to testify this afternoon. the work of this committee and your leadership to help bolster u.s. manufacturing competitiveness is essential to this country and well appreciated. for the past several years, deloitte has had the privilege of working with the world economic forum and manufacturing institute to understand the capabilities to drive through competitiveness. deloitte has conducted a survey

of the american public annually for the past three years. the results indicate americans remain steadfast in their commitment to creating a strong, healthy, globally manufacturing sector in the united states. the most recent survey revealed that 85% believe that it's important the our standard of living. ask how they would prefer to create a thousand jobs with any facility, americans indicated they wanted the jobs to be in the manufacturing sector. more so than any other industry choice. as part of the world forum, we uncovered compelling research from the hartford kennedy school and lit media lab which indicates that the advancement of capabilities is directly linked to a nation's economic prosperity and importantly to the prosperity of its middle class. this also indicates that the capabilities of the manufacturing sector is the best

predictor of prosperity of the long-term. it shows that the more advances the products are that a nation can make and trade and the more advances the manufacturing capabilities it possesses, the greater the prosperity. finally, for the benefits that their citizens could derive from a manufacturing sector and this is showing an increased emphasis on advanced capabilities and products. in a parallel effort, deloitte conducts a survey of ceos of manufacturing organizations around the world to gain their perspective on the drivers of competitiveness as well as the relative view of rankings. we conducted a series of one-on-one interviews on behalf of the counsel, ceos, labored union leaders, university presidents and the directors of some of america's national laboratories over the past 18 months. many of the leaders

participating describe the critical relationship between manufacturing and innovation in an echo system that extends to include community colleges, laboratories. they refuted any notion that america can retain its competitive research over the long run without also maintaining strong capabilities in manufacturing. they must go hand in hand. not surprisingly, all identified talent driven innovation as the key driver while also noting the growing skills gamble in america is one of the most concerning challenges affecting the u.s. according to a recent survey of u.s. manufacturers, 67% of executives reported moderate to severe shortages of qualified workers for open positions translating into more than 600,000 available jobs that can't be filled today because

employers can't find workers with the skills they need. america's secret sauce for success must lie in a workforce equipped with science and math backgrounds needed to compete with the very best and the creativity of leadership to be solution pace setters for the the world. a common theme, the counsels ignite series of recommendations to policymakers from u.s. business leaders, and the labor union leaders, the input from the american public in our unwaivering commitment report on the future of manufacturing from our work with the world economic forum is that the u.s. needs a comprehensive strategy for the 21st century and we will need an effective collaboration resulting in the united states being consistently recognized as the leader in workforce talent, innovatien