How Washington can renew U.S. manufacturing

By Karen Mills
Nov. 24, 2014
Fortune

Congress is back in Washington with the intent to get some key things done between now and the end of the year. One of those things needs to be making an investment in our economy by passing the Revitalizing American Manufacturing and Innovation (RAMI) Act, which would invest in a key segment of the U.S. economy: manufacturing. Here’s why.

Americans are tired of partisanship stymieing progress, and they are overdue for a sign from Washington that our leaders haven’t forgotten what agreement looks like.

More importantly, passing this bill would invest in the sector that has the greatest impact on our economy – every $1 spent in manufacturing generates another $1.35 in additional economic activity, which is more than is generated by any other sector, according to the U.S. Bureau of Economic Analysis. It also demonstrates an understanding of what it will take to continue to drive our nation’s competitiveness and create the kinds of good-paying jobs that offer a path to the American Dream.

Now, that’s a lot to put on the shoulders of a piece of legislation that most Americans haven’t heard of. But, it’s true and it’s achievable.

So what would RAMI do? It would establish up to 15 manufacturing institutes across the country – building on four that were already created by the Obama Administration. To do this, it would bring together government, colleges and universities, research institutions, business and industry in partnership to accelerate manufacturing innovation.

American workers would be the greatest beneficiaries of RAMI because, at its core, it invests in the U.S. labor force by building skills and capacity around the very good-paying jobs that will maintain our nation’s competitive edge in the 21st Century.

With Washington caught in a cycle of perpetual gridlock, agreement may not seem possible, but that’s not true. RAMI passed the House in September with bipartisan support, cosponsored by Republican Congressman Tom Reed of New York and Democratic Congressman Joe Kennedy of Massachusetts. The bill is awaiting action in the Senate, where it is backed by Democratic Sen. Sherrod Brown of Ohio and Republican Sen. Roy Blunt of Missouri.

While much attention is focused on the prospects for agreement on higher profile issues, here’s an idea. Why not move on RAMI, where the differences have already been sorted out and bipartisan support already exists?

One thing we can take away from the midterm elections is that working Americans are tired of gridlock and they have lost confidence in Washington’s ability to actually address the root causes of the economic anxiety they are feeling. An August NBC/Wall Street Journal poll found that 71% of respondents blamed Washington’s inaction for what they view as a lingering sluggish economy.

While large businesses have flourished and the stock market has reached new highs amid a falling unemployment rate, Americans are losing confidence that it’s possible to move up in the world. In fact, in a September survey by the Public Religion Research Institute, only 42% of respondents believe the American Dream – that if you work hard, you’ll get ahead – still holds true.

Americans are anxious about the economy. And, rather than more gridlock, Washington should take action where it can. Even if this means starting small, and passing a few things where there is already agreement.

I’m not saying we should step away from the big policy issues. But, real tax reform will take time, and closing loopholes will cause pain in many sectors. Immigration reform is critical, and may be something on which parties can agree in the year ahead.

RAMI is ready to move. It doesn’t cost much – in government terms – and if not passed in the next few weeks, its backers will have to start over again in the new Congress after the first of the year.

Americans need Congress to get back in the habit of agreeing on and actually passing bipartisan legislation. RAMI is one place to start.

By passing this bill, Congress can show working Americans that they do understand how to invest in building the kind of jobs that will strengthen U.S. competitiveness around the globe and restore the path to the American Dream.

Karen Mills is a senior fellow at Harvard Business School and Harvard Kennedy School focused on competitiveness, entrepreneurship and innovation. She was a member of President Obama’s Cabinet, serving as Administrator of the U.S. Small Business Administration from 2009 to 2013.