2005 and what Washington has planned for manufacturing.
You have to be excited as we approach the new year of 2005.
If President George Bush has his way this will be the most important year in manufacturing news since Franklin Roosevelt’s New Deal reforms of 65 years ago.
It won’t be all wine and roses to be sure. The war in Iraq and other challenges of force in the Middle East will distract us. The broad economy is clearly reviving at a sustainable pace but remains vulnerable to the unforeseen jolts that could stall revival in key sectors.
This is why it is important that President Bush hit the ground running on Inauguration Day a few weeks from now. He already has a good start with a near clean sweep of his economic advisers and the replacement of many of them with top flight executives from the manufacturing community.
And Mr. Bush has set his agenda for manufacturing already. We at U.S. Industry Today are glad to have Leo Reddy, founder and CEO of the National Council for Advanced Manufacturing to give us the low-down on what the Bush priorities look like and how we can check their progress through the grinder of Congressional politics in the 12 months to come. NACFAM is a Washington-based think tank devoted to the issues of the high-tech, high value manufacturing sector and will be an important player on our side.
A lot will depend on Mr. Bush himself and his powers of persuasion and discipline over the Republican majorities in both the U.S. House and Senate. This may be harder than it first appears. The GOP legislators may well be ungrateful for the Bush election victory and many of the more conservative will have ideas of their own about particular projects that may help their specific home constituencies. Pork is always in season on Capitol Hill.
From our perspective, there are three key struggles to watch in the year to come. Most visible and arguably most important is the broad income tax reform and simplification bill that will come from Treasury Secretary John Snow the lone economic cabinet holdover. We are old enough to remember the Tax Reform Act of 1969 which started out with the best of intentions and end up derided as the Tax Lawyers Relief and Annuity Act, because its complexities gave lifetime employment to practitioners of the tax bar.
Assuming that reform goes forward, the next priorities lie in the 55 policy measures embodied in the report entitled Manufacturing in America which will be the province of our new Commerce Secretary Carlos Guiterrez, the ex-CEO of Kellogg.
On our personal wish list: The third priority has to be a tougher trade policy.
As James Srodes, our Washington editor reports a conflict looms between the White House and lame-duck Federal Reserve Chairman Alan Greenspan over the administration’s systematic 20 percent devaluation of the U.S. dollar since 2002. A cheap dollar does help our exports compete and it makes our imports more expensive but it is a beggar-thy-neighbor policy that cannot go on forever. That is why we applaud Mr. Bush’s plans to create a rapid response Office of Investigations and Complaints and an Unfair Trade Practices Task Force to combat the unfair competition of some of our most important trading partners. China is a prime target for these reforms, particularly in its own cheap yuan practices which are beyond unfair. At the same time the administration must push forward with its ongoing emphasis on bilateral free trade agreements with nations that want to play the trade game fairly.
Those are priorities we pick but they are far from the only points of emphasis a president must make in the four years allotted to his administration. Social Security reform is long overdue. Broader health care and pension liability reform are mandatory. So is action on energy costs and reliability, legal reform, worker’s compensation and litigation cost limitation.
All this can be done with the mandate the people handed Mr. Bush and the Congress. All they have to do is work together. That is why we are so excited.