After nearly two solid years of townhall meetings, campaign speeches and wall-to-wall coverage by the national punditry, we know just about everything we ever possibly could have wanted to know about how many houses Senator John McCain (R-Ariz.) owns, about every sermon Senator Barack Obama (D-Ill.) sat through at his local church, and every fashion choice their spouses have made in their pursuits of First Ladyhood. Unfortunately, despite saturation coverage of every minute detail of their daily lives, there's not much clarity on exactly how either of the two major party's candidates would govern as president of the United States. And we certainly haven't heard much from them about what role government should play in promoting the growth of the manufacturing industry.
What follows, then, is an IndustryWeek summary of Senator McCain's and Senator Obama's positions on a number of manufacturing-oriented issues, as furnished by the candidates' campaigns. We have edited their comments to remove any references to their opponents, or to the current or previous occupants of the Oval Office. The goal here is to offer you some clarity in the voting booth when trying to decide which candidate is most in tune with the manufacturing industry.
Election Day is Nov. 4. See you at the polls.
On Government Investment Projects
Obama: Obama will create an Advanced Manufacturing Fund to identify and invest in the most compelling advanced manufacturing strategies. The Fund will have a peer-review selection and award process based on the Michigan 21st Century Jobs Fund, a state-level initiative that has awarded over $125 million to Michigan businesses with the most innovative proposals to create new products and new jobs in the state.
The Manufacturing Extension Partnership (MEP) works with manufacturers across the country to improve efficiency, implement new technology and strengthen company growth. This highly successful program has engaged in more than 350,000 projects across the country and in 2006 alone, helped create and protect over 50,000 jobs. Obama will double funding for the MEP so its training centers can continue to bolster the competitiveness of U.S. manufacturers.
McCain: McCain's Lexington Project will address the rising costs of energy that are hurting small businesses. He strongly supports increased domestic exploration of oil and natural gas. This will send a strong signal to oil markets that future supplies will be more plentiful, countering the rise in oil prices. The market for natural gas is less internationally integrated than that of oil -- increased domestic production will lower the cost of this key energy source. The Project will transform electricity generation. McCain has set the goal of building 45 new nuclear power plants by 2030 -- creating 700,000 jobs and providing cheap electricity. It will provide incentives for the production of electricity from renewable sources. Finally, the Lexington Project will devote $2 billion annually to research that will allow the clean use of our most plentiful and low-cost energy source: coal.
"There is no easier or more direct way to prove to the world that we will no longer be subject to the whims of others than to expand our [energy] production capabilities."
-- Senator John McCain
John McCain as president would push for a renewed emphasis on innovation through Cooperative Research and Development Agreements (CRADAs) where industry and government enter into public/private projects, sharing in the cost, benefiting from solving real problems, accelerating the application of technology in the government. This way the government is a leader of the technology revolution and not simply a beneficiary.
McCain: McCain has been a long and ardent supporter of fair and open world trade. Trade greatly benefits America and the American worker. The best protection for American workers is to ensure that they have access to the world's customers, 95% of whom live outside the United States. This access is particularly important for workers in the information technology sector where the United States has so much to offer the rest of the world. Lower tariffs on American products benefit American companies and create American jobs. Moreover, the Internet allows a global marketplace to emerge as the Internet knows no boundaries. As president, McCain will promote fair trade agreements to give America's high-tech workers the opportunity to compete and continue to win in the global marketplace.
Globalization will not automatically benefit every American. We must prepare the next generation of workers by making American education worthy of the promise we make to our children and ourselves. We must be a nation committed to competitiveness and opportunity. McCain will overhaul unemployment insurance and make it a program for retraining, relocating and assisting workers who have lost a job. The unemployment insurance system created in the 1950s needs to be modernized to meet the goals of helping displaced workers make ends meet between jobs and moving people quickly on to the next opportunity. McCain will reform the half-dozen training programs to approaches that can be used to meet the bills, pay for training, and get back to work. We can strengthen community colleges and technical training, and give displaced workers more choices to find their way back to productive and prosperous lives.
Competition has been a great strength for America -- offering opportunity, low prices and increased choice for our citizens. Markets work best when there is robust competition. Competition means that any new devices invented cost less because there are more choices. This ensures more Americans can afford to be part of the digital economy.
Obama: Trade can create wealth and drive innovation through competition. Obama supports a trade policy that ensures our goods and services are treated fairly in foreign markets. At the same time, trade policy must stay consistent with our commitment to demand improved labor and environmental practices worldwide. He will fight for fair treatment of our companies abroad.
A Fresh Face for the Oval Office
For the first time in more than 50 years, neither of the candidates for U.S. President in 2008 has ever previously served as President or Vice President. The last time that happened, the country elected a war hero, Dwight D. Eisenhower, a Republican. Will that same scenario play out this year, with Republican John McCain, also a celebrated war hero, ultimately winning the day? Coincidentally, Eisenhower's opponent in 1952 was Adlai Stevenson, a cerebral Democrat from Illinois, and of course in 2008 the Democratic party has again chosen a cerebral politician from Illinois, Barack Obama.
There the similarities end, though, as Eisenhower was elected largely on a tide of dissatisfaction with the state of affairs in Korea, a war begun on Democrat Harry Truman's watch. McCain, on the other hand, faces an electorate dissatisfied with the state of affairs in Iraq, a war begun on Republican George W. Bush's watch.
An Obama administration will look carefully at key industries to ensure that the benefits of competition are fully realized by consumers. Obama will strengthen the antitrust authorities' competition advocacy programs to ensure that special interests do not use regulation to insulate themselves from the competitive process. He will also strengthen competition advocacy in the international community as well as domestically. He will take steps to ensure that antitrust law is not used as a tool to interfere with robust competition or undermine efficiency to the detriment of U.S. consumers and businesses. He will do so by improving the administration of those laws in the United States and by working with foreign governments to change unsound competition laws and to avoid needless duplication and conflict in multinational enforcement of those laws. In short, an Obama administration will take seriously its responsibility to enforce the antitrust laws so that all Americans benefit from a growing and healthy competitive free-market economy.
Obama believes that trade with foreign nations should strengthen the American economy and create more American jobs. He will stand firm against agreements that undermine our economic security.
Obama will fight for a trade policy that opens up foreign markets to support good American jobs. He will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks. He will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.
Obama believes that NAFTA and its potential were oversold to the American people. He will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.
On Intellectual Property
Obama: The U.S. Trade Representative said 80% of all counterfeit products seized at U.S. borders still come from China. Obama will work to ensure intellectual property is protected in foreign markets, and promote greater cooperation on international standards that allow our technologies to compete everywhere.
Intellectual property is to the digital age what physical goods were to the industrial age. Obama believes we need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment while ensuring that intellectual property owners are fairly treated.
A system that produces timely, high-quality patents is essential for global competitiveness in the 21st century. By improving predictability and clarity in our patent system, we will help foster an environment that encourages innovation. Giving the Patent and Trademark Office (PTO) the resources to improve patent quality and opening up the patent process to citizen review will reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation. With better informational resources, the Patent and Trademark Office could offer patent applicants who know they have significant inventions the option of a rigorous and public peer review that would produce a "gold-plated" patent much less vulnerable to court challenge. Where dubious patents are being asserted, the PTO could conduct low-cost, timely administrative proceedings to determine patent validity. As President, Obama will ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration.
McCain: The patent system has been with us since the founding of our nation. Protecting intellectual property creates the incentives for invention and investment in commercial innovations. Yet too much protection can stifle the proliferation of important ideas and impair legitimate commerce in new products to the detriment of our entire economy.
The increased workload at the United States Patent and Trademark Office threatens to undermine the quality of our patent examinations. New resources to hire and train quality examiners are needed to ensure timely, predictable and effective patent review.
Intellectual property protection is increasingly an issue for U.S. innovators operating in the global economy. McCain will seek international agreements and enforcement efforts that ensure fair rewards to intellectual property.
For many important technologies, the only effective way to challenge a patent in the United States is through litigation, but litigation on patents is much too expensive. The lack of an affordable, reliable means to ensure that the Government only grants valid patents has led to overly broad, frivolous lawsuits designed to force innovative companies into big settlements.
McCain: The current federal moratorium on drilling in the Outer Continental Shelf stands in the way of energy exploration and production. It is time for the federal government to lift these restrictions and to put our own reserves to use. There is no easier or more direct way to prove to the world that we will no longer be subject to the whims of others than to expand our production capabilities. We have trillions of dollars worth of oil and gas reserves in the United States at a time we are exporting hundreds of billions of dollars a year overseas to buy energy. This is the largest transfer of wealth in the history of mankind. We should keep more of our dollars here in the U.S., lessen our foreign dependency, increase our domestic supplies, and reduce our trade deficit -- 41% of which is due to oil imports. McCain proposes to cooperate with the states and the Department of Defense in the decisions to develop these resources.
When people are hurting, and struggling to afford gasoline, food and other necessities, common sense requires that we draw upon America's own vast reserves of oil and natural gas. Within the United States we have tremendous reserves of natural gas. The Outer Continental Shelf alone contains 77 trillion cubic feet of recoverable natural gas. It is time that we capitalize on these significant resources and build the infrastructure needed to transport this important component of electricity generation and transportation fuel around the country.
Obama: We need to rely on technology to help solve the critical energy and environmental problems facing this country. Obama will invest $150 billion over the next 10 years to enable American engineers, scientists and entrepreneurs to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial-scale renewable energy, and begin the transition to a new digital electricity grid. This investment will transform the economy and create millions of new jobs. Obama will:
"We need to rely on technology to help solve the critical energy and environmental problems facing this country."
-- Senator Barack Obama
- Double federal science and research funding for clean energy projects, relying on the resources and ability of our national laboratories, universities and land grant colleges.
- Invest in the development of the next generation of biofuels, including cellulosic ethanol.
- Increase the resources devoted to the commercialization and deployment of low-carbon coal technologies.
- Create a Clean Technologies Deployment Venture Capital Fund, funded by an annual $10 billion investment for five years, to ensure that promising technologies move beyond the lab and are commercialized in the U.S.
- Use innovative measures to dramatically improve the energy efficiency and stability of our economy and improve our national energy intensity 50% by 2030.
- Invest in a digital smart energy grid.
On A Windfall Profits Tax
Obama: Obama will enact a windfall profits tax on excessive oil company profits to give American families an immediate $1,000 emergency energy rebate to help families pay rising bills. This relief would be a down payment on his long-term plan to provide middle-class families with at least $1,000 per year in permanent tax relief.
McCain: McCain does not support a windfall profits tax. A windfall profits tax on the oil companies will ultimately result in increasing our dependence on foreign oil and hinder investment in domestic exploration.
On the Automotive Industry
McCain: McCain will issue a Clean Car Challenge to the automakers of America, in the form of a single and substantial tax credit for the consumer based on the reduction of carbon emissions. He will commit a $5,000 tax credit for each and every customer who buys a zero carbon emission car, encouraging automakers to be first on the market with these cars in order to capitalize on the consumer incentives. For other vehicles, a graduated tax credit will apply so that the lower the carbon emissions, the higher the tax credit. A $300 million prize should be awarded for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars. That battery should deliver a power source at 30% of the current costs. At $300 million, the prize is one dollar for every man, woman and child in this country -- and a small price to pay for breaking our dependence on oil. In just three years, Brazil went from new car sales that were about 5% flex-fuel vehicles (FFVs) to over 70% of new vehicles that were FFVs. American automakers have committed to make 50% of their cars FFVs by 2012. McCain calls on automakers to make a more rapid and complete switch to FFVs.
McCain has long supported CAFE standards -- the mileage requirements that automobile manufacturers' cars must meet. Some carmakers ignore these standards, pay a small financial penalty and add it to the price of their cars. The penalties for not following these standards must be effective enough to compel all carmakers to produce fuel-efficient vehicles.
Obama: Obama will increase fuel economy standards 4% per year while providing $4 billion for domestic automakers to retool their manufacturing facilities in America to produce these vehicles.
Obama wants to get 1 million plug-in hybrid cars on the road by 2015. These vehicles can get up to 150 miles per gallon. We should work to ensure these cars are built here in America, instead of factories overseas.
Obama will create a new $7,000 tax credit for purchasing advanced vehicles. He will establish a National Low Carbon Fuel Standard (LCFS) to reduce the carbon in our fuels 10% by 2020. He will also require 60 billion gallons of advanced biofuels to be phased into our fuel supply by 2030.
Obama: Obama wants investments in a skilled research and development workforce and technology infrastructure to be supported here in America so that American workers and communities will benefit. He wants to make the Research and Development tax credit permanent so that firms can rely on it when making decisions to invest in domestic R&D over multiyear timeframes.
Obama will eliminate all capital gains taxes on start-up and small businesses to encourage innovation and job creation. He will also support small business owners by providing a $500 "Making Work Pay" tax credit to almost every worker in America. Self-employed small business owners pay both the employee and the employer side of the payroll tax, and this measure will reduce the burdens of this double taxation.
Obama will support entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country.
McCain: Basic research and development is the lifeblood of an innovative economy and is essential to keeping America competitive. A top priority needs to be putting private capital to work in research and development. As president, McCain will establish a permanent research and development (R&D) tax credit equal to 10% of wages spent on R&D. Offering a tax credit for R&D wages will encourage the creation of innovation-driven jobs in the United States.
McCain will lower the corporate tax rate to 25% to retain investment in U.S. technologies. Currently, the United States has the second-highest corporate tax rate in the world, and it is the American worker who suffers the consequences. When corporations put their money and investment into countries with lower tax rates, those companies invest less in American facilities, new hires, worker training and employee compensation. A 2006 study by the Congressional Budget Office found that 70% of the corporate tax burden falls on the American workers. McCain will help our nation compete more aggressively against the likes of China, South Korea, Singapore and Ireland by bringing taxes to a competitive level that encourages entrepreneurs to reinvest their earnings in American workers.
McCain will allow first-year expensing of new equipment and technology. To provide an immediate boost to capital expenditures and reward investments in cutting edge technologies, he would allow companies to expense the costs of new equipment or technology in the first year. The additional investment stimulated by such expensing will drive economic growth.
On Skilled Labor Shortages
McCain: American workers should always be the first choice for highly skilled technology jobs. However, there is a critical shortage of these workers and American competitiveness is suffering as a result. McCain will expand the number of H-1B visas to allow our companies to keep top-notch talent -- often trained in our graduate schools -- in the United States. The Department of Labor should be allowed to set visa levels appropriate for market conditions. Hiring skilled foreign workers to fill critical shortages benefits not only innovative companies, but also our economy. For every foreign worker hired, corporations generally hire five to 10 additional American workers.
Obama: An Obama administration will foster home-grown innovation and ensure that we can retain and grow high-paying jobs in fast-growing sectors in the sciences and technology rather than exporting those jobs to lower cost labor markets abroad. As offshoring becomes more of a long-term workforce management strategy and less of a perceived short-term cost savings, it presents a significant challenge to young people growing up in America's historically low-income and working-class communities.
An Obama administration will invest in human capital to ensure that our young people have the skills to fill the growing number of information technology jobs being created globally and will also support pilot programs that provide incentives for businesses to grow their information technology workforce in inner cities and rural communities.
On Carbon Footprints
Obama: Obama will establish a National Low Carbon Fuel Standard to reduce the carbon in our fuels 10% by 2020. He will also require 60 billion gallons of advanced biofuels to be phased into our fuel supply by 2030.
Obama will implement an economywide cap-and-trade program to reduce greenhouse gas emissions 80% by 2050. His cap-and-trade policy will require all pollution credits to be auctioned, and proceeds will go to investments in a clean energy future and rebates and other transition relief for families.
McCain: A climate cap-and-trade mechanism would set a limit on greenhouse gas emissions and allow entities to buy and sell rights to emit, similar to the successful acid rain trading program of the early 1990s. The key feature of this mechanism is that it allows the market to decide and encourage the lowest-cost compliance options. Market participants are allotted total permits equal to the cap on greenhouse gas emissions. If they can invent, improve, or acquire a way to reduce their emissions, they can sell their extra permits for cash. The profit motive will coordinate the efforts of venture capitalists, corporate planners, entrepreneurs, and environmentalists on the common motive of reducing emissions.
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