Robert F. Bukaty/AP Photo
Electrician Zach Newton works on wiring solar panels at the 38-acre BNRG/Dirigo solar farm, January 14, 2021, in Oxford, Maine.
President Biden’s latest large-scale initiative, the American Jobs Plan, is more like a progressive to-do list, with details to be filled in. Here, for instance, is the entire item on reviving manufacturing and U.S. supply chains, from the White House fact sheet released March 31:
Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future. President Biden’s plan will ensure that the best, diverse minds in America are put to work creating the innovations of the future while creating hundreds of thousands of quality jobs today. Our workers will build and make things in every part of America, and they will be trained for well-paying, middle-class jobs.
One can only applaud these goals. The devil, of course, will be in the details.
Which manufacturing? What supply chains? How to define what is economically or militarily strategic? When and why to override current norms and rules of “free trade” for the sake of domestic economic as well as military security? And how to coordinate a patchwork of piecemeal manufacturing initiatives, now strung out across 58 separate programs according to a 2017 study by the GAO?
One really smart idea is a bill created by Rep. Marcy Kaptur of Ohio, co-sponsored by Democrat Amy Klobuchar of Minnesota with lead Republican co-sponsors Sen. Rob Portman of Ohio and Rep. Brian Fitzpatrick of Pennsylvania. The bill would create a high-level Office of Manufacturing and Industrial Innovation at the White House to set priorities and coordinate government-wide consistent strategies and goals. The office would be responsible for creating a national strategic plan. It would also house a Coordinating Council, whose members included all the relevant Cabinet departments.
The United States has had episodic, somewhat guilt-ridden industrial policies for particular industries and technologies such as semiconductors, but nothing this explicit and deliberate since World War II or the Apollo moon shot. Equally impressive is the array of groups supporting this idea.
Groups endorsing this proposal include all the major manufacturing unions, but also the National Association of Manufacturers and Alliance for American Manufacturing, as well as several trade associations representing individual industries. At a time when the ideal of bipartisanship is honored mainly in the breach, a strategy for reviving U.S. manufacturing and achieving leadership in cutting-edge technologies could be bipartisanship for real.
Among the Republican co-sponsors is Mississippi Sen. Roger Wicker, a traditional conservative committed to the economic development of his state. If Trumpist Republicans can check their guns at the door, this is the kind of salutary economic nationalism that could command genuine bipartisan support.
It could also help sort out very tricky questions of China policy. It’s clear that the U.S. is overly dependent on China, for products and inputs that raise genuine security and supply concerns, as well as ones where the U.S. has good economic reasons for wanting to get back in the game.
Sorting out priorities and practicalities, while avoiding an all-out economic war with China, will require discernment and finesse. We can’t even begin unless we have a coherent process. The Office of the U.S. Trade Representative, now led by the capable Katherine Tai, can help determine how trade policy interacts with industrial policy, but USTR can’t set that industrial policy.
The Biden breakthrough is to admit, foursquare, that America needs an industrial policy. The Kaptur-Klobuchar initiative, with some Republican support, could help make it a reality.
Of course, never underestimate the Republican capacity for pure mischief. On March 30, eight Republican senators, led by Rick Scott and Marco Rubio, introduced a bill (with no Democratic co-sponsors) titled the Keep China Out of Solar Energy Act.
The coyly titled act would prohibit federal funds from being used to buy any solar panels manufactured or sourced in China. This sounds like strong medicine. The practical problem is that because of China’s current dominance in solar production, an outright immediate ban would shut down U.S. solar production and installation.
About 72 percent of panels installed in the U.S. come from China, and even ones fabricated in the U.S. rely heavily on Chinese components. Reviving a domestic supply chain will be a complex process that requires economic planning and industrial policy and a weaning of dependence, not just an absolute ban.
As two recent Prospect pieces on building domestic supply chains in wind and solar reveal, this is very complex choreography. By contrast, the Republican sponsors of the Scott-Rubio bill believe in sledgehammer nationalism. (The bill, if implemented, would also cheer the fossil fuel industry by shutting down solar.)
The difference between the Scott-Rubio approach and the bipartisan Kaptur-Klobuchar-Portman-Fitzgerald bill is the difference between cheap, cynical symbolism and getting serious about an urgent and complex national challenge.
