John Garamendi

Mr. GARAMENDI

Mr. GARAMENDI. You talked about the investment. A week ago, President Obama spoke to this issue of making it in America and of rebuilding the American industries. He spoke about the need to give significant tax breaks to businesses that want to invest capital to expand their businesses, to expand their manufacturing bases. Here is a very, very powerful notion. I was meeting with three of my friends who are in the business community. They are manufacturers--one in the food industry, another in the high-tech industry. I was talking to them about this notion of would you increase your business, would you increase your capital investment on your production lines if you could write off in 1 year the cost of that capital. They said, Absolutely. You put that into law, and I'm investing tomorrow. I'm going to put people to work building my manufacturing base. So the President has now spoken to this. It's one of the proposals that he has put forward. Today, I introduced a piece of legislation that would do exactly that. Any business that wants to increase its capital investment in that business--broadband, production lines, machine tools, whatever it is--they could write it off in year one. We can restart the American manufacturing system if we are committed to making it in America, which is a whole series of legislation: ending tax breaks for offshoring, ending tax breaks for businesses that are routinely killing the American economy by sending jobs offshore, using our tax money to build a green economy here in America rather than buying it from manufacturers overseas, making sure our buses, our trains, our planes are made in America. Dr. Kagen, you've been in the high-tech industry, in the medical industry. You understand these issues.

Mr. GARAMENDI. It affects your kinds of businesses. Share with us your perspective as we begin to wrap this up in the next 6 minutes.

Mr. GARAMENDI. If I might, you and I were talking earlier about a program that you have been doing in your district for the last couple of weeks, and you have been going to communities. And along the way you've reached out and said we need to make it in America. And you were talking about the paper industry. I suppose you have a paper industry in your district?

Mr. GARAMENDI. That is, the Democrats supported and passed the stimulus program, the American Recovery and Reinvestment Act.

Mr. GARAMENDI. ``No.'' ``No.'' ``No.'' So for research-specific programs, for energy research and small businesses, they got grants and loans to develop. The Democrats know that we have to improve the private sector to make jobs.

Mr. GARAMENDI. You said something a moment ago when you were talking about the multinational corporations and whether we're willing to stand up to the multinational corporations and bring jobs back to America. Two and a half weeks ago, we came back from our session working out in our districts to pick up a piece of legislation called the Education Jobs and Medical Assistance Act. As a result of that, 160,000 teachers are employed across the Nation, and police and firemen, public safety officials and medical services are being provided in the communities. A major piece of that legislation dealt precisely with the issue you discussed a moment ago about multinationals. Under the previous law, multinational companies that took jobs from America and shipped them to China or somewhere else in the world actually got a tax break. We closed that loophole. We closed that tax loophole, bringing $10 billion back to the Treasury and discouraging American corporations, ending their incentive. Mr. Tonko, if you would like to jump into this one.

Mr. GARAMENDI. Wait, you mean to tell me that the Republican Party actually has, as one of their policy planks, to phase out Social Security?

Mr. GARAMENDI. Most people don't know what the Recovery Act is. They think of the stimulus program. They are one and the same, the stimulus program and the Recovery Act.

Mr. GARAMENDI. Before you go to the next one, could you share with us where the ARPA-E money came into the system?

Mr. GARAMENDI. Mr. Speaker, I will engage in a colloquy here, with the permission of the Chair, with my colleagues to discuss an extremely important issue for America--that is, manufacturing. If America is going to make it, we're going to have to make it in America. But before I go into the subject of how we can restart and rebuild the American manufacturing sector and make it in America, I'd like to do a little review of history first. Years and years ago, I played football at the University of California. And it's football season, and my friends have often accused me of using football analogies, and, well, it happens to be true. So, okay, it's football season. Let's consider for a moment that it's not football that we're dealing with but, rather, it's the economy. And if we were to consider the first quarter, we would have to look at the George W. Bush and the Republican first quarter. What happened? Beginning in 2007, we began to see the extraordinary crash of the American economy. It just bled jobs. Eight million jobs were lost, peaking in December of 2008, just before the onset of the Obama administration. Nearly 800,000 jobs were lost that month alone, totaling 8 million during that period of time. So you see this incredible decline in the American job market, and this is just the private employment sector. This was replicated in the public sector also. So that was the first quarter. How did it happen? Why did it happen? Well, crazy tax policy for starts. Tax policies that gave extraordinary breaks to the very wealthy; modest breaks to the middle class; two wars that were not paid for, the money was borrowed; the Medicare drug benefit, not paid for, creating an enormous deficit and the regulators stepped back. The period of no regulation occurred during that first quarter. Wall Street went crazy. It collateralized debt obligations. The meltdown of the housing industry, subprime loans. All of those things led to this extraordinary decline. In January of 2009, President Obama came in and we began the second quarter. Tough situation going into that second quarter, but we began to see immediate action taken. The Wall Street stabilization programs went into effect, and the way in which that was administered began to stabilize Wall Street. We had the stimulus program, the American Recovery and Reinvestment Act. It went into effect. And we saw numerous other pieces of legislation go into effect during the Obama second quarter. I'm going to go through some of these very, very quickly. The stimulus program, 3 million jobs as a direct result of that since it went into effect in February of 2009. We saw also the Worker, Homeownership, and Business Assistance Act dealing with the foreclosures, trying to keep people in their homes and to provide tax relief for small businesses. We saw the Student Aid and Financial Responsibility Act, the biggest effort since the GI Bill in the 1940s and 1950s, to give people an opportunity to get job training and to get new skills when they got back into the job market. Cash for Clunkers, stabilizing the automobile industry. And we also saw the American Government stepping in to save two great icons of the American industry and the hundreds, in fact, thousands of small businesses that depended upon the auto industry with the bailout of General Motors and Chrysler--to good effect. We were able to maintain those small business jobs that were directly impacted there. We also saw the Credit Cardholders' Bill of Rights. How many of us have reached into our pockets for our credit cards and we go, ``I just know those banks are going to screw me one more time.'' But no more, because we passed the Credit Cardholders' Bill of Rights. Other legislation is now pending. All of those are laws. And one that passed just 3 weeks ago, which was the teachers and the medical legislation, that went into effect fully paid for; 160,000 teachers across the United States will stay in the classrooms providing that education that our students need, and paid for by ending an extraordinarily bad piece of policy that's been in effect for many years that gave a tax break to American corporations that off-shored American jobs. So what do you mean? Do you mean to tell me that American corporations were able to get a tax break every time they sent a job offshore? Yes. That's exactly what is over today as a result of action taken. On every one of these bills, every single effort made by this Congress to bring jobs back, to stabilize the economy, we found virtually no Republican support. In the stimulus, none at all. In the credit card, only a handful of Republicans. Republican opposition was uniform for every single effort made by this House, by the Democrats. The result of our work without Republican support has been a steady improvement, so that for the last 8 months we have seen private sector jobs actually increase--not as much as we need, not as much as we want, but we have seen a clear differentiation between the first quarter with the Bush debacle and the rebuilding of the American economy in the second quarter. Where are we today? We're at halftime. We're in the locker room here in Washington, D.C. We're in Congress. We're working to complete our plan for the second half--the resurgence and the rebuilding of the American economy. And in this half, we have a series of bills that we put forward--some already law; others that will go into effect in the months ahead--hopefully passed. We'd love to have the support of our Republican colleagues, but, as in this moment, their seats are empty. But when they're filled, they still vote ``no'' on every effort to rebuild the American economy. So it's halftime. The question for the American public is: Which team's going to go back on the field for the second half, for 2011 and 2012? Which team's going back on the field? The team that brought us this great debacle, the great crash of the American economy, or the team that has slowly, but every month, brought progress back to the American economy? We're talking now about making it in America. Joining me today for this discussion is my colleague from the great State of Wisconsin, Dr. Kagen, an extraordinary individual, an entrepreneur in his own right, who is going to talk about some of the efforts that he's made and some of the issues that face his district in making it in America and the things that we need to do. Dr. Kagen from Wisconsin.

Mr. GARAMENDI

Mr. GARAMENDI. There was significant reform of the mortgage industry with the Wall Street Reform and Consumer Protection Act, and there was also a provision--well, it wasn't in the Wall Street Reform Act, but there is a debate going on now here in Congress and in the Senate about what to do with this executive pay, with this 300-1 ratio. That is the question of: Do we continue the middle class tax cuts, and do we let the tax cuts expire that the Bush administration put in for the high and the mighty and the wealthy?

Mr. GARAMENDI. Let me give another example of where we can set the stage for future manufacturing jobs in America. It was America that really created the photovoltaic cells. We've lost this industry in America. This is in China. Some of it is in Europe. But it's no longer really much of a manufacturing industry in America. We talked earlier about the wind turbines and the way in which that industry has gone offshore. We talked about the buses. It turns out that many, many economists, and certainly I would join with them, say that the future industries are green technology industries. We have to shift away from coal and oil. We needed to be energy independent. The green technologies of solar, wind, all of those biofuels and algae fuels, all of those are the industries of the future. Yet, our tax money is not used to support those industries. All too often here's what happens: Just as in buses, our tax money is used to buy wind turbines from China or Korea. I will give you another example on the wind turbine. Let me get that wind turbine back up here so I can get excited about this. I represent some of the biggest wind resource areas in the Nation: the Altamont Pass and the Solano wind resource area. I was out there touring it one day with one of the three companies that operate in the area. I looked at this thing. It's 400 feet tall. The blades are wider than the length of a football field. It's going round and round and generating electricity, and I said, where is it made? And the executive looks at me and said, well--I said, no, no, where is it made? He said, well, the tower is made in Korea. Oh, how about the blades? Well, the blades are coming from Europe. And I said what about the generator and all of the electronics? Well, it's not made here. It's either made in China or it's made in Europe. And I told him, I said, what's wrong with that story? And he said, well, that's where it's made. And I said you're receiving serious taxpayer subsidies to build those, to put those towers in place, and you are subsidizing China. Do you think that's right? He goes, well--and I said, I'm going to promise you this. I'm going to go back to Washington and I'm going to introduce legislation that says in the green technology, all of those subsidies, all of those tax subsidies for putting the photovoltaic system on top of your roof, for building a huge, giant solar thermal system or biofuels of all kinds, and of course the wind turbines, if you want that tax subsidy, it's going to be made in America or else you will get no tax subsidy. Those are our tax dollars. Those tax dollars are going to be spent on American-made equipment. And he said, Well, I don't think we can do it. I said, Your choice; you don't want the subsidy, then you can buy it from China, but by golly, if you want a subsidy, you're going to buy American-made equipment. That bill is introduced. It is going to move because Democrats understand American taxpayer money, whether it's building a sanitation system or a water system or paying for a wind turbine or a photovoltaic system on top of your house, those are going to be made in America.

Mr. GARAMENDI. Would the gentlelady yield for a moment?

Mr. GARAMENDI. Do I understand you to say that, presently, our tax dollars that are used for water projects and sanitation projects purchase steel, pumps and other material which are manufactured overseas?

Mr. GARAMENDI. Mr. Speaker, if I might just review with you and others what's happened since 2007 here in the United States. As this diagram indicates, beginning in 2007, the Great Recession during the George W. Bush administration, reaching its lowest point in December of 2008 and January of 2009 where 750,000 jobs were lost. The Barack Obama administration came in in January of 2009 and within 2 months passed the first stimulus bill which leveled off the decline and slowly began the recovery of the American economy. And most every month since January of 2009 we've seen an improvement, so that in this year, in 2010, we are now seeing small, but important, gains in the employment in America. Some 600,000 jobs have been created over the last several months. This is the result of policies that were enacted by the Democratic Congress, the Senate, and signed by the President. Those policies we need to understand. They began with the stimulus bill and carried on through several other pieces of legislation. In each and every one of those pieces of legislation, there was no help from our Republican colleagues. They were absent. They voted ``no'' on the American Recovery and Reinvestment Act; they voted ``no'' on the Workers, Homeownership, and Business Assistance Act--93 percent of them voted ``no.'' One hundred percent voted ``no'' on the stimulus even though, as you can see from the charts here, it stabilized the economy and then led to 2.8 million people keeping their jobs and getting a job here in the United States. The Student Aid and Financial Responsibility Act, 100 percent of Republicans voted ``no,'' denying students larger loans, greater Pell Grants, and it goes on and on. The Cash for Clunkers--and we will hear from Ohio in a few moments--a majority of the Republicans voted ``no.'' The Democrats had to carry the day. The hiring incentives to restore employment, the HIRE Act, creating 300,000 jobs, again, it was the Democrats; the Republicans voted ``no.'' So after this 18 months of concerted effort to create jobs in America through the various stimulus programs, such as the Cash for Clunkers, the homeowners assistance programs, all of those, we're seeing an improvement. But this was the first 18 months. We are now moving on to the second half of the Democratic agenda. If I might just reach over here, this is the second half of the Democratic agenda, Make It in America; Make It in America so that America can make it. Manufacturing matters, and that's the subject of our discussion. The first 18 months, get people back to work, stimulate the economy, set a solid foundation. We are now on the road to permanent improvement in the American economy through manufacturing. Joining me here tonight are my colleagues from Wisconsin and from the great State of Ohio to talk about manufacturing in the Heartland--some of it a little cool, or cold, depending on the time of the year, and some of it, the central part of America's manufacturing sector. I would like to ask the gentlewoman from Ohio, Betty Sutton, to join us and share with us her experiences about the great State of Ohio and ``making it in America.''

Mr. GARAMENDI. Mr. Speaker, before I start, I would like to ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on the subject of Manufacturing in America. This is the subject of my Special Order tonight.

Mr. GARAMENDI. Before you go to the next issue, I recall a piece of legislation that we had on the floor more than a month ago. That piece of legislation dealt with corporate tax breaks. It ended corporate tax breaks for corporations that ship jobs offshore. When a corporation under the present Tax Code sends a job offshore, it gets a tax break. It amounts to $14.5 billion a year. Would you put that previous one back up?

Mr. GARAMENDI. The 82 or the 22 cents an hour. Either way. So, if a corporation were to be making shirts, ties, or suits here in America, it could ship those jobs to China or to Cambodia and get a tax break. Now, this House voted to end that tax break. We voted to end that tax break.

Mr. GARAMENDI. Again, whose side are you on?

Mr. GARAMENDI. Every Republican voted to continue that corporate tax break, giving those corporations tax advantages, literally giving them our tax money so that they could offshore that garment worker's job.

Mr. GARAMENDI. Of course.

Mr. GARAMENDI. Let me, if I might, just bring that to the West Coast. The San Francisco Bay Bridge, from Oakland to San Francisco, major artery, had a problem with the Loma Prieta earthquake and had to be rebuilt. It's been a long process to rebuild. It's going to be a magnificent new bridge. The CalTrans, California Transportation Authority went out to bid. An American contractor proposed two bids. One bid was the steel would be manufactured and fabricated here in the United States; the other bid was the steel would be manufactured and fabricated in China. There was a 10 percent difference. The State of California chose to save 10 percent, and all of the steel winds up being imported from China. We lost jobs. This is an example of where our tax money, and that's exactly what it is, was not used to support American jobs but, rather, used to support jobs in China. For what, 10 percent? It turns out it actually turned out to be more expensive because the Chinese welds in the fabrication were not satisfactory, were purposely hidden, and it was only because an inspector finally arrived from California, looked at it and said, Oh, my. This will not work. So they had to go back and do the whole thing over. One example. I'll give you more examples as we go down here, but I'm telling you this: We can make it in America. Wind turbines. We led in the development of wind turbines. We're spending billions of dollars a year to subsidize the wind turbine industry. China said, Oh, we've got wind in China. Let's build wind turbines. They have excluded every international company except a Chinese company in the manufacturing of turbines, and now they are exporting those turbines to America. The same way with solar panels, photovoltaic panels. And I'll come to buses a little later. But this is something that I find extraordinarily wrong, and we're going to change it. And before this conversation is over, we're going to talk about how it can change. Mr. Kagen--excuse me. Dr. Kagen.

Mr. GARAMENDI. That was the stimulus bill.

Mr. GARAMENDI. At the beginning of this discussion, the gentlewoman from Ohio talked about the wise use of our tax money, in this case in the water systems and the sanitation systems, to use that tax money for materials and products and machines that are built in America. That's but one example. It's a very good example, because we desperately need that infrastructure. It's the foundation for quality life, for healthy life, as well as for building our economy. There's another one that came to me in this process. Actually, today I had a telephone town hall, and a fellow said, you know, in Vallejo, California, the old shipyard at Vallejo, Mare Island Shipyard, has this huge building, and one of the European train companies is setting up a shop there. They don't know what they are going to do with it, but is there some way that you could help that company bring to Vallejo, California, and Mare Island jobs to refurbish trains? And my answer was, yes, absolutely. We have had a buy American provision in your tax money for years and years. There has also been in the law four waivers that Secretaries of Transportation have used repeatedly for more than 20 years now to waive off, forget about, ignore the buy America clause. So about $5 billion a year of our gasoline tax money is used not to buy buses and trains and light rail cars made in America, but rather made overseas. So my answer to this gentleman was a piece of legislation that I have introduced, a lot of support among my Democratic colleagues to simply tell the Secretary of Transportation you don't have four waivers; we're eliminating three of those discretionary waivers. If the cost is more than 25 percent, then maybe you can have a waiver. But the other three waivers, they're gone. We're bringing those manufacturing jobs, those manufacturing jobs that build the buses, that build the trains, that build the BART cars, the MARTA cars, the transit cars here in Washington, DC, we are going to make those in America because, by golly, that's our tax money, and we're going to use it in America just as we're going to use our tax dollars to make those sanitation systems and water systems from American-made goods. That's our promise, and we can do it. I talked to Secretary LaHood, the Secretary of the Department of Transportation, yesterday. I said, Mr. Secretary, I know that you have been working hard not to give waivers, but I want to give you--in fact, I want to take away three of the tools that your predecessors have used to ship jobs overseas. And he said, I'm not giving waivers. And I said, if my bill passes, you won't be able to. We're going to spend that money in America. One more example of what we can do not just for jobs today, but for tomorrow and for generations in the future using our tax money to make it in America. Manufacturing matters. It's the heart and soul of the middle class. It is the strength of the economy. And we're going to reestablish in America the manufacturing industries of yesterday and today, whether it's buses or trains or light rail. Mr. Kagen, you were kind of getting agitated there. Maybe you want to add to this.

Mr. GARAMENDI. Well, the answer is halfway home. This House passed legislation more than a month ago, and tomorrow I believe we will have that same legislation back for another vote. Our Republican colleagues universally voted ``no'' on ending the tax loophole that gives corporations $14.5 billion of our tax money to offshore American jobs. We're going to end it. We're going to put the issue back on the floor tomorrow. The problem is the United States Senate and the Republican Party, where in the Senate one Republican Senator stands up and objects and says I'm going to filibuster, and everything stops. They got to round up 60 votes. The Republican Party controls that 60 votes, and they have repeatedly, time after time said ``no'' to jobs for American workers in the first 18 months of this Congress, where we have put 2.8 million people back to work. The Republicans in this House and in the Senate say ``no.'' I have got a solution for it. The next Senator that says, I object and I'm going to filibuster ought to be paraded down to the well of the Senate, the microphones turned on, and start talking, Mr. Senator. Let's see how long you are going to talk with the C-SPAN cameras on you. My guess is within an hour you'll make a fool of yourself. The filibuster will be over. The votes will be there to put Americans back to work. I yield.