THE CLINTON-GORE ADMINISTRATION:
STRENGTHENING MANUFACTURING FOR THE 21^ST CENTURY
February 4, 2000

Today, the President will announce a series of proposals that will help strengthen U.S. manufacturers, workers, and communities and to help keep manufacturing a strong and vital part of the U.S. economy in the 21^st century. These initiatives were developed as part of the interagency Manufacturing Task Force announced by Vice-President Gore last summer.

The total investment in this initiative represents an increase of $386 million increase this year in addition to the President's $2.86 billion increase in the "Twenty-First Century Research Fund."

Specific Budget Initiatives Targeted Toward Manufacturing

Investing in research and development for the 21^st Century

Almost $3 billion increase in the Twenty-First Century Research Fund

• President has proposed increases in all areas of science and engineering - not just biomedical research. Many of these disciplines are important for maintaining America's leadership in manufacturing -- such as mechanical and electrical engineering, computer science, chemistry, physics.

• Increases proposed for Twenty-First Century Research Fund includes:
  • A new $495 million National Nanotechnology Initiative. Nanotechnology -- the ability to manipulate matter at the atomic and molecular level - could lead to major advances in high-tech manufacturing, such as the ability to develop materials ten times stronger than steel and a fraction of the weight, or molecular computers that could store the contents of the Library of Congress in a device the size of a sugar cube.
  • An almost $600 million increase in information technology research -- which could lead to faster supercomputers capable of developing manufactured products more rapidly -- using modeling and simulation and virtual reality.

Upgrading the skills of the Manufacturing Workforce

1. $30 million in new grants to States to upgrade the skills of incumbent workers:

• The Labor Department will competitively award $30 million in grants to States for projects that demonstrate innovative approaches to training and upgrading the skills of non-management incumbent workers.
• The grants would require similarly sized matches of state and employer money and would be dispersed through existing State and local agencies for on-the-job training.
• A recent National Governors' Association study showed that 70 percent of State training funds go to manufacturing.

2. More than tripling to $14 million resources to strengthen the science and mathematics preparation of technicians being educated for the high-performance workplace of advanced technologies:

• Increases funding for the National Science Foundation's Centers of Excellence for Advanced Technical Education that focus on manufacturing from $4 million to $14 million.
• The program strengthens and broadens the education of technicians for high-skill occupations including high-tech manufacturing. With two-year colleges at the hub, the program is creating synergy by engaging industry, four-year institutions, high-schools, and other organizations in producing a new generation of versatile technicians who are well-versed in the fundamental concepts of science and engineering and can critically apply their knowledge and experience in the workplace.

Expanding Trade Promotion and Financing

1. $215 million increase in available export financing – a 26.5 percent increase:

• Increase funding for the Export-Import Bank to $1.026 billion – a 26.5 percent increase over FY 2000 enacted and the highest level of funding ever requested for the Bank.
• These funds are expected to generate over $3 billion in new manufacturing exports, sustaining more than 25,000 high-wage manufacturing jobs.
• The increase in funding will allow Ex-Im to absorb higher international lending costs resulting from the financial crises around the globe.
• Ex-Im will continue to put trade-financing resources in the hands of small businesses and provide the necessary stimulus for export sales in high-risk markets now recovering from the global financial crisis.

2. $11.6 million to develop next-generation trade promotion programs and services made possible by the Internet – an export advisor on every desktop:

• The Department of Commerce will receive a $11.6 million increase to develop next-generation trade promotion programs and services made possible by the Internet.

• The initiative will broaden the exporter base of smaller manufacturers, lower barriers to exporting by streamlining the export process through an Internet-based infrastructure, and will develop and deploy Internet-based tools specifically designed to meet the needs of manufacturing exporters.

• By lowering the administrative and process barriers to exporting, the program will increase the number of smaller manufacturers that export, as well as the dollar value of exports from those firms that currently sell abroad.

Strengthening Monitoring and Enforcement of Trade Agreements

• To ensure that U.S. manufacturers and others benefit fully from the opportunities created by our trade agreements and laws, the budget would significantly boost funding for monitoring and enforcement of compliance with trade agreements would increase funding for agencies with responsibility for trade agreement and trade law compliance --- Department of Commerce, US Trade Representative, Department of State, and Department of Agriculture. Specifically, it would:
  • Increase by 25 percent the number of personnel at the Commerce Department's Import Administration and Office of Market Access and Compliance,
  • Double the personnel devoted to monitoring import surges and performing expedited investigations,
  • Create an overseas contingent of trade experts to help monitor trade practices, such as those dealing with market access, subsidies, dumping, and other unfair trade practices,
  • Triple personnel dedicated to ensuring China's compliance with trade obligations,
  • Double personnel dedicated to ensuring Japan's compliance with trade obligations,
  • Establish a new trade law technical assistance center to assist small businesses and unions to make use of US trade laws.

Expanding Adjustment Assistance for Workers and Communities

1. $35 million increase to create a new office to craft and coordinate Administration-wide responses and to provide recovery funds for regions impacted by trade or other severe and sudden economic distress – increasing economic adjustment by $175 million over 5 years.

• Creates the Office of Community Economic Adjustment (OCEA) modeled after DoD's highly respected Office of Economic Adjustment – the federal government's first point of contact with communities slated for military base closure
• The Office will coordinate the Administration's response to regions experiencing severe and sudden economic distress. It will provide planning grants and help communities organize themselves and develop an economic adjustment strategy.
• OCEA will be located at Commerce's Economic Development Administration and will coordinate closely with Treasury and the Labor Department.

2. $39 million increase to reform and extend trade adjustment assistance -- $459 million over 5 years:

• The President's budget supports to be proposed legislation that would consolidate, reform, and extend the Department of Labor Trade Adjustment Assistance (TAA) and the NAFTA-Transitional Adjustment Assistance (NAFTA-TAA) programs through September 30, 2005.
• The reforms would extend eligibility for training and income support to those who lose jobs due to shifts in production abroad, now limited to Canada and Mexico; provide supportive services; and raise the cap on training expenditures.
• In FY 2001, TAA reforms will increase the program's budget authority by $39 million. Over 5 years, the reforms and program extensions are projected to cost $459 million.

Developing and diffusing technologies that increase productivity and enable smaller manufacturers to thrive in the New Economy

1. $20.5 million to assist smaller manufactures and other businesses overcome barriers to the use of the Internet and E-Commerce.

• The President's November 1998, directive on E-Commerce instructed the Commerce Department and the SBA to develop strategies to help small businesses overcome barriers to the use of the Internet and E-commerce.

• The Commerce Department's Manufacturing Extension Partnership will receive $15 million to focus on the needs of smaller manufacturers. The SBA will receive $5.5 million to accelerate the adoption of E-commerce adoption rates in under served markets – women and minority owned businesses. Through interagency agreements, USDA will be able to accelerate the adoption of electronic commerce in underserved rural areas.

• SBA, DOC, and USDA will accelerate the adoption of electronic commerce by small businesses by developing, distributing, and supporting through their combined extension service networks, a number of electronic commerce "tools" such as an electronic commerce self-assessment kit, an electronic commerce "jumpstart kit", and an electronic commerce adoption roadmap. The "tools" would be distributed to every small manufacturer in the Nation.

2. $4 million to accelerate the development of the technology infrastructure needed for manufacturers' and their supply chains to conduct reliable electronic commerce.

• The Department of Commerce's National Institute of Standards and Technology (NIST) would accelerate the development of the technology infrastructure needed for supporting reliable, effective, interoperable, and secure solutions for electronic commerce, that focus on the needs of manufacturers and their supply chains.
• NIST would collaborate with specific industry sectors, including electronics, automotive, and aerospace to identify, develop, test, and validate needed standards to describe products and business processes in electronic format, so that information can be exchanged quickly and accurately among firms conducting business-to-business electronic commerce.

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