Congressman Adam Smith (D-Tacoma) called on his colleagues in the U.S. House to immediately pass legislation to provide a manufacturing tax credit to help the country’s struggling economy and avoid pending European trade sanctions on American goods and services.   

“Congress has been idle on this issue for too long,” Smith said.  “If we don’t act soon, European trade sanctions will hurt American workers and American businesses.  We need to address this problem now, and I believe a manufacturing tax credit is the right solution.  It will keep the United States in compliance with WTO regulations and help spur our struggling manufacturing industries and most importantly, its workers. In the last 3 years alone, Washington state has lost over 66,000 manufacturing jobs.”

The World Trade Organization (WTO) authorized the European Union to implement hundreds of millions of dollars in retaliatory trade sanctions unless the United States repeals a current tax advantage for exporters that amounts to an illegal subsidy, according to the WTO.  The sanctions are scheduled to go into effect Monday, March 1st, unless Congress takes action now.

“If the Europeans implement these tariffs on American goods and services, it will be yet another blow to our already struggling economy,” Smith said.  “It’s irresponsible for the Congressional leadership to ignore the problem and refuse to act.”

Smith supports bipartisan legislation to repeal the tax measure in question and replace it with a manufacturing tax credit.  H.R. 1769, sponsored by Democrat Charlie Rangel and Republican Phil Crane, would lower taxes for manufacturers who employ people in the United States.  It is co-sponsored by 154 Members of Congress.

Since the Republican leadership has not yet put H.R. 1769 on the agenda, Smith today took the first steps necessary to force action.  He joined colleagues in signing a discharge petition, which will force a floor vote on the legislation when 218 Members
 

Congressman Adam Smith (D-Tacoma) issued the following statement in response to President George Bush’s State of the Union address this evening:

“While the President outlined a number of issues that were important to his agenda, what struck me was what he didn’t elaborate on – the exploding federal debt, a real plan for job creation and a strategy for reinvigorating our foreign policy and repairing damaged relations with our allies.

The Bush Administration has squandered historic budget surpluses and now has annual budget deficits of nearly $500 billion – a collapse of fiscal discipline that will lead to a $5 trillion national debt over the next decade. We must roll back the components of the Bush tax cuts that disproportionately benefit the very wealthiest and we need to show restraint on large new spending programs. The Administration’s suggestion that their tax cuts have been only a minor factor in the fiscal deterioration is wrong…the tax cuts are the largest single contributor to the deterioration of our budget outlook.

Along with the exploding federal debt, we are experiencing the greatest job loss in a recovery since the Great Depression.  Almost 2.5 million jobs have been lost in the past two years. Last month, only 1000 jobs were created. Clearly, there needs to be more opportunities for America’s workers to regain their footing. Long-term unemployment is close to a 20-year high because the labor market is so weak. The administration’s major initiative to help the struggling manufacturing sector so far has been the appointment of a new Assistant Secretary of Commerce for Manufacturing and Services. We need to repeal tax cuts for the very wealthiest, let other tax cuts expire and extend benefits for the long-term unemployed. Sustained growth is necessary to bring the labor market out of its slump.  However, the large deficits, exacerbated in part by the past two tax cuts, undermine this goal.

Finally, we need to repair our relations with our allies across the world.  For example, we need to internationalize our efforts in Iraq.  No matter where people stood on the war resolution, we all have a responsibility to help Iraq through this period of political and economic reconstruction.  Although the Administration has shown some interest in getting the United Nations involved in Iraq again, we need to reach out to all of our allies through direct and personal involvement.  It is time to match words with actions.”