Getting back to ‘Made in the USA’

Washington seems to have finally woken up to the jobs crisis facing our country. Both parties have a wealth of proposals and perspectives for how the government can create jobs. Some of these proposals will do some immediate good, some will pay long-term dividends and some miss the mark completely. The trouble is that whether it is a new free-trade agreement or another temporary hiring incentive, none of the ideas being debated address the root structural problems facing the economy.

Our shift from a manufacturing economy to a service economy to a Ponzi economy has decimated our middle class, eroded our place as the global leader and threatens to drive us into permanent decline. The country is rife with a myriad of symptoms, but diagnosing the core problem is simple enough: We do not make it in America anymore.

It does not have to be this way. There are a number of steps we can take, but they have to address the root cause. The first thing we have to do is start providing incentives to level the playing field so that the decision to manufacture in the United States makes economic sense.

We might not be able to match the incentives offered by our trading partners dollar-for-dollar, but we can make the choice competitive enough that we can leverage the inherent advantages that our country still offers to industry. The research and development for the vast number of market-changing products is still done in the U.S. in centers of innovation like my Silicon Valley district. The largest market in the world continues to be the United States.

I am drafting legislation that can reinforce these advantages by offering targeted tax incentives. For startups that are reaching the point where they are ready to go to market, I am developing a bill that will provide a tax incentive for placing that first manufacturing facility in the United States. This bill will not pick winners and losers — instead, it will set up a situation in which companies that have been able to do their own research and development, and obtain their own capital, will have an incentive to scale up in the U.S.

I am also introducing a measure to ensure that we do not lose the next generation of wind turbines, flat-screen displays and LEDs. These products were all developed in the United States, but we lost the industry to competitors. To make certain that this does not happen again, I am proposing the creation of a nonpartisan commission that will designate the next 10 disruptive products (innovations that create new markets and displace earlier technologies) and designate them for a tax credit to the consumer if they are manufactured in the United States.

This will not just encourage U.S. companies to keep their manufacturing in America but will also bring in manufacturers from abroad who want the advantage that domestic manufacturing grants them in our marketplace. They will not only bring their business but also the sustainable middle-class jobs that come with them.

These are just a few of the steps we can take to address the actual root of our economic problems. Infrastructure bills, like mine, will create jobs in the short term and will keep us competitive in the future. Reducing deficits and paying down our debt will stabilize our long-term fiscal footing. And emergency measures like unemployment insurance and aid to states will see us through this current crisis. Only by addressing the root causes of our economic problems can we reorient our economy for global leadership in the 21st century.

Honda serves on the House Budget and Appropriations committees.