Politics - HTF

7/24/2019 Politics - HTF

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Background info

McConnel is a moderate. (Recall that Senators are moremoderate they have to be elected by the whole state

and house members are more extreme house districtsare smaller !aul Ryan is more extreme. Means the housewill backlash against Ryan if he com"romises withMcConnel on the "lan. See overview # wrote for more info.

Reminder "ull this $le u" before %&C C'


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%&C %)*+,

-ighway bill s"endings set to ex"ire on the *+th

andMcConnell and Ryan need to work together to get the bill"assed. /ny vote on legislation necessitates acom"romise with McConnell kills Ryans cred withconservatives0 making it im"ossible for him to move thebillC&&0 %+1*2-15, Can Paul Ryan and Mitch McConnell Work Together?http://fo!"#co$/%"15/1"/%&/can-paul-ryan-and-$itch-$cconnell-'ork-together/()*: 1"-%&-15

The +eteran tactician, enate Maority .eader McConnell0 has to contend with thedaily realities of life in the Senate0 where he lacks the votes to overcome a

3emocratic $libuster0 a fact of life that frustrates -ouse conservatives. Ryan,the ne' ou0e 0peaker and a long-ti$e policy +i0ionary for hi0 party 'ho 'ill ha+e to $anage the epectation0 of a caucu0 hungry for re0ult0and eager to take the ght to the White ou0e 2 and the enate, too# o' clo0ely they 'ork together could 3e 3oth a 3oon and a pitfall forRyan, 'ho i0 no' leading a caucu0 that ha0 gro'n increa0ingly ho0tile to McConnell and enate Repu3lican0# 4 think you ha+e to ha+e a lineof co$$unication 'ith McConnell, 3ut think you ha+e to 3e r$,6 Tea0 Rep# Roger Willia$0, a t'o-ter$ Repu3lican, 0aid of Ryan# 7y allaccount0, Ryan and McConnell ha+e a profe00ional and cordial relation0hip# McConnell planned to attend Ryan80 reception Thur0day night atthe .i3rary of Congre00# Ryan ha0 pri+ately told hi0 colleague0 he80 kno'n McConnell u0t a0 long a0 9ohn 7oehner ha0 and they ha+e anhone0t relation0hip, e+en 'hen they di0agree# *nd a0 Ryan 'a0 deli3erating 'hether to run for 0peaker, McConnell pri+ately called theWi0con0in Repu3lican, 0aying that life often oer0 unepected opportunitie0 and that he 0hould 0ei;e thi0 one, people fa$iliar 'ith the $atter

0aid# The 8+e

kno'n Mitch a long ti$e 2 0a$e i0 true of 9ohn 7oehner#8 Thi0 i0 not t'o people 'hodon8t kno' one another,6 0aid en# Ro3 Port$an, R-)hio# 4# think its an

o""ortunity to refresh the relationshi" between the two bodies.7Ryan face0 )P angero+er enate li3u0ter ou0e and enate Repu3lican0 on 3oth end0 of the Capitol ha+e repeatedly $i0red during the 11!th Congre00, de0pite pledging at a retreat inPenn0yl+ania at the 3eginning of the year that they 'ould 3ol0ter their coordination# )n i00ue0 ranging o+er funding for the o$eland ecurity (epart$ent to go+ern$ent0ur+eillance, it80 3een one con0tant 3attle after another 2 and ou0e Repu3lican0 don8t think enate Repu3lican0 ha+e done enough to ad+ance the con0er+ati+e cau0e# 4'ould like to get the enate o thi0 'ait, hold-and-0ee 2 let80 0ee 'ho the ne' pre0ident i0 3efore 'e do anything,6 0aid Rep# To$ Rooney, R-@lorida# 4People in the enate0ee$ to 3e )A 'ith that $ore than the people here# They can 3e +ery fru0trating o+er there#6 @airly nor not, the anger fro$ ou0e con0er+ati+e0 o+er enate proce00 can

often nd it0 'ay to the 0peaker80 chair##fthe ou0e pa00e0 3ill0 that $erely 0tall in the enate, and then Ryan has to cut deals

with McConnell0 the new s"eaker could face the same ty"e of

backlash from many -ouse Re"ublicans frustrated that their

conference is getting steamrolled by 89! senators all1too1willing to

com"romise .*nd if the ou0e and enate can8t get on the 0a$e page, the )P could look like it i0 in di0array headed into the %"1B election0# *nu$3er of ou0e con0er+ati+e0 already are urging Ryan to pu0h McConnell to unilaterally change enate li3u0ter rule0, 0o$ething McConnell ha0 refu0ed to do# 4What 'edo ha+e to do i0 to get thi0 3oot o of the neck o of the Con0titution and thi0 cru0hing 0tale$ate that i0 doing thi0 country 0o $uch da$age,6 0aid Rep# Trent @rank0, R-*ri;ona, a0 he called on Ryan to pu0h McConnell to gut the enate80 li3u0ter rule0# enate Repu3lican0 +ie' their counterpart0 acro00 the Capitol a0 na+e 2 una'are ofthe procedure0 in their cha$3er that reDuire the 3ody to 3uild con0en0u0 around legi0lation# Changing li3u0ter rule0 'ould funda$entally change their 3ody into one thatlook0 like the $aority-rule0 ou0e, a $o+e $any 0enator0 3elie+e 'ould de0troy an in0titution de0igned to fo0ter con0en0u0# 4 think it80 'i0hful thinking,6 0aid en#Richard 7urr of Eorth Carolina, a friend of 7oehner80 fro$ hi0 ti$e 0er+ing in the ou0e# 4Mo0t of u0 ha+e 0er+ed o+er there 0o 'e under0tand the fru0tration# 7ut 'e al0orecogni;e 'hen 'e 0a+e the$ fro$ the$0el+e0 2 and the i$portance of that#6 Repu3lican0 hope that Ryan 2 'ith eperience he80 gleaned in hi0 nearly 1< year0 a0 aou0e $e$3er and a0 a 0taer t'o decade0 ago for for$er en# 7o3 Aa0ten, R-Wi0con0in 2 fully under0tand0 the li$it0 of 'hat the enate can do# 4 think Ryan get0 andunder0tand0 the enate, 'hat the li$itation0 are here and 'ill do a good o3 eplaining that to hi0 colleague0 in the ou0e,6 0aid en# 9ohn Thune, Eo# = in enate )P

leader0hip#Rep# Ae+inMcCarthy, R-California, the -ouse ma4ority leader0 said in aninterview that he believes Ryan will bene$t from his ex"erience in workingwith senators2 particularly the %"1= deal he cut 'ith en# Patty Murray, (-Wa0hington, a $e$3er of enate (e$ocratic leader0hip# 4e80 'orked 'iththe$ 2 and on 3oth 0ide0 of the ai0le,6 0aid McCarthy, a clo0e per0onal friend of Ryan80# 4*nd u0t the 'ay Paul carrie0 hi$0elf 2 it80 not on the political nature, it80 on thepolicy nature# *nd think that get0 a lot of people80 re0pect# e can go into any facet of any philo0ophical 3elief o+er there 2 and ha+e the credi3ility#6What could helpRyan i0 the hiring of key 0ta 'ho ha+e long-held relation0hip0 on the enate 0ide F nota3ly (a+e oppe, a long-ti$e for$er ill aide no' 0er+ing a0 the ne' 0peaker80chief of 0ta#McConnell-Ryan %#"till, Ryan 2 a0 chair$an of the ta-'riting Way0 and Mean0 Co$$ittee and pre+iou0ly the 7udget Co$$ittee 2 ha0 at ti$e0 ru33ed0o$e of hi0 enate colleague0 the 'rong 'ay 3y pu0hing 3ig grand policy idea0 that ha+e no chance of pa00ing a 3ody that reDuire0 3oth partie0 to agree to do u0t a3outanything# e ha0 had hi0 dierence0 in 0trategy 'ith enate Repu3lican0, including @inance Co$$ittee )rrin atch, o+er ho' to $o+e trade legi0lation and an )3a$acarerepeal through the reconciliation proce00, according to 0enator0 and aide0 fa$iliar 'ith the $atter# 4e80 going to ha+e to learn ho' to deal 'ith 0enator0,6 0aid one 0enior

Repu3lican 0ource 'ho a0ked not to 3e na$ed, referring to Ryan# * Ryan 0poke0$an declined to co$$ent, 3ut (on Stewart0 a s"okesman
http://fox40.com/2015/10/29/can-paul-ryan-and-mitch-mcconnell-work-together/http://fox40.com/2015/10/29/can-paul-ryan-and-mitch-mcconnell-work-together/http://fox40.com/2015/10/29/can-paul-ryan-and-mitch-mcconnell-work-together/http://fox40.com/2015/10/29/can-paul-ryan-and-mitch-mcconnell-work-together/


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for McConnell0 said that Ryan and his boss have built a "roductiverelationshi"0 "ointing to the "assage of :rade !ro$otion /uthority earlier thisyear and "otentially a highway bill later this year# McConnell prai0ed Ryan on the Goor Thur0daya0 'ell# 4en# McConnell and Chair$an Ryan ha+e a 0trong 'orking relation0hip going 3ack year0,6 te'art 0aid# 4*nd it include0 0ignicantacco$pli0h$ent0 like TP* and the 0oon-to-3e-co$pleted $ulti-year high'ay 3ill#6 Harly face-o: o' to pay for high'ay 3ill *0 he80ca$paigned for the 0peaker0hip, Ryan ha0 told hi0 colleague0 he 'ant0 to pur0ue $aor initiati+e0 2 including hi0 long-0ought goal ofre'riting the ta code, an idea he highlighted in hi0 inaugural 0peech Thur0day# 7ut McConnell, pu3licly and pri+ately, ha0 Gatly 0aid )P goal0on lo'ering rate0 and o+erhauling the 0pra'ling ta code 'ould ne+er happen in )3a$a80 re$aining $onth0 in oIce# ndeed, Ryan80 pu0hthi0 Congre00 to u0e a re'rite of the international ta code to pay for a high'ay 3ill i0 one that 0enator0 and aide0 0aid perpleed McConnell

and a nu$3er of hi0 like-$inded allie0# 4To get the high'ay 3ill paid for, it 'ould 3e 0o$ething that could not 3e done in thi0 0hort ti$efra$e,6 0aid atch, 'ho added he8d 'ork 'ith Ryan net year on an international ta refor$ 3ill# *t i00ue 'a0 the high'ay tru0t fund, 'hichregularly ran out of $oney 3ut kept 0ol+ent through a 0erie0 of 0hort-ter$ patche0 appro+ed 3y Congre00# The tru0t fund 'a0 depleted3ecau0e it relied a0 it0 $ain 0ource of re+enue an 1J#! cent0 per gallon federal ga0 ta, a rate that hadn8t 3een rai0ed 0ince 1&&=# 7othMcConnell and Ryan 'anted to reauthori;e the high'ay tru0t fund for 0i year0 3ut they had +ery dierent +i0ion0 to o0et the co0t0# Ryan'anted to o+erhaul tae0 on the prot0 *$erican co$panie0 earn o+er0ea0 and u0e the 'indfall to 4unlock a 0olution to our high'ay tru0tfund 0hortfall,6 he 0aid in 9uly# 7ut McConnell oppo0ed u0ing the international ta o+erhaul to pay for high'ay proect0# e 'anted it includedin a 3roader re'rite of the K## ta code and argued there 'a0n8t ti$e to reach an agree$ent on 0uch co$ple ta legi0lation 3efore thehigh'ay tru0t fund ran dry again# n0tead, McConnell propo0ed a 0erie0 of o0et0 for the enate high'ay 3ill, including 0ale of oil fro$ thetrategic Petroleu$ Re0er+e, i$pro+ing ta co$pliance, and reducing di+idend pay$ent0 the @ederal Re0er+e $ake0 to $e$3er 3ank0# ou0eRepu3lican0 0coed at that idea# 4We all 'ant the ou0e to ha+e the 0pace it need0 to de+elop it0 o'n 3ill, 3ecau0e 'e all 'ant to 'ork out

the 3e0t po00i3le legi0lation for the *$erican people in conference,6 McConnell 0aid# 7ut this week0 the -ouse

cleared a short1term increase of the highway trust fund until &ov.

*+ ; meaning McConnell and Ryan will need to immediately sort out

a way forward 0one of their r0t de3ate0 of their ti$e together atop Capitol ill#

/nd0 well win the "lans un"o"ular with re"ublicans that su"ercharges the link because it means theyllbacklash even harder8ross0 8rant0 8rant 8ross covers technology and telecom "olicy in the ?.S.government for the #38 &ews Service0 and is based in @ashington0 3.C.0 #38 &ews Service0 !C@orld0 =%>0 htt")==www."cworld.com=article=*2A*AA=dont1ex"ect1ma4or1changes1to1nsa1surveillance1from1congress.html

3ont ex"ect ma4or changes to &S/ surveillance from Congress

/fterthe K## Congress a""roved'hat critic0 ha+e called modest limitson the

Eational ecurity *gency80 collection of do$e0tic telephone record0, many lawmakers may

be reluctant to further change the governments surveillance"rograms. The Senate this week "assedthe K* 5reedom /ct0'hich ai$0 toend the E*80 $a00 collection of do$e0tic phone record0, and Pre0ident 7arack )3a$a 0igned the 3ill

hour0 later# /fter that action , ex"ect Re"ublican leaders in both the

Senate and the -ouseof Repre0entati+e0 to resist further calls forsurveillance reform.:hat resistance is at odds with many rank1and1$lela'$aker0, including $any ou0e Repu3lican0, 'ho 'ant to further li$it E* progra$0 3rought tolight 3y for$er agency contractor Hd'ard no'den# Ci+il li3ertie0 group0 and pri+acy ad+ocate0 al0o

pro$i0e to pu0h for $ore change0# #t may be diDcult to get E broad0 swee"ing

reform7 through Congress 03ut $any la'$aker0 0ee$ ready to pu0h for $ore change0, 0aid*da$ Hi0grau, $anaging director of the oIce of go+ern$ent relation0 for the *$erican .i3rary*00ociation# The *.* ha0 charged the E* 0ur+eillance progra$0 +iolate the @ourth *$end$ent of the K##Con0titution, 'hich prohi3it0 unrea0ona3le 0earche0 and 0ei;ure0# 4Congre00 i0 not allo'ed to 3e tired of

0ur+eillance refor$ unle00 it80 prepared to 0ay it80 tired of the @ourth *$end$ent,6 Hi0grau 0aid# 4The

*$erican pu3lic 'ill not accept that#6 )ther activists are less o"timistic about more

congressional action . E#t will a long slog getting more restraints07 9#Airk Wie3e, a for$er E* analy0t and 'hi0tle3lo'er 0aid 3y e$ail# 6The length of that ourney 'ill depend

on pu3lic outcry2that i0 the one thing that i0 hard to gauge#6 @ith the ?S/ 5reedom /ct0

Eelected oDcials have o"ted to reach for low1hanging fruit 07 said7ill

Blunden0 a cybersecurity researcher and surveillance critic. E:hetheater weve 4ust witnessed allows decision makers to boast to


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their constituents about reforming mass surveillance while s"iesunderstand that whats actually trans"ired is hardly ma4or change#6:he Eactual "hysical mechanisms7 of surveillance "rograms remainlargely intact.7lunden added 3y e$ail# 4!oliticians$ay dither around the periphery 3ut they

are unlikely to institute fundamental changes .7

-ighway fundings key to econ com"etitiveness&FC %GLEational Hcono$ic Council, *E HC)E)MC *E*. )@

TR*EP)RT*T)E E@R*TRKCTKRH ENHTMHET,http0://'''#'hitehou0e#go+/0ite0/default/le0/doc0/econo$icOanaly0i0OofOtran0portationOin+e0t$ent0#pdfQ 0top0 tran0portation proect0, cau0e0 do'ngrading of 3ond0, decrea0e0federal 0pending, kill0 co$petiti+ene00 glo3ally, collap0e0 K Hcon

ince the 1&5"00 the -ighway :rust 5und has been the "rimary federal

source of funding for state and local surface trans"ortation

"ro4ects . H+ery +e to ten year0, Congre00 authori;ed predicta3le le+el0 of funding to 0tate0 and later local tran0itagencie0 for road, 3ridge, and tran0it proect0# *nd o+er the la0t Duarter-century, Congre00 ha0 cu0to$arily taken 0tock on

the nation80 need0 for tran0portation in+e0t$ent and ha0 authori;ed $ulti-year funding increa0e0 of roughly !" percento+er the prior authori;ation to 3etter $eet the need0 of our co$$unitie0 and our econo$y# But over the"ast few years0 revenues that go into the 5und havent ke"t "acewith the federal funding levels "romised to states by Congress# *0 are0ult, the (epart$ent of Tran0portation proect0 the igh'ay Tru0t @und to 3e in0ol+ent 3y the end of thi0 0u$$er# oon

after'ard0, Congressional authorities for the federal government toreimburse states and localities for s"ending on surfacetrans"ortation including roads0 highways0 and transit will ex"ire.

The Pre0ident ha0 called on Congre00 to en0ure the continuity of the igh'ay Tru0t @und in the near-ter$, and toreauthori;e tran0portation legi0lation on a long-ter$ 3a0i0 'ith 0u30tantially increa0ed funding le+el0 to gi+e tate0,

co$$unitie0 and 3u0ine00e0 the certainty to in+e0t, a0 $any Congre00e0 ha+e done 3efore# #n light of theconsiderable funding uncertainty0 states and localities are already"ulling back from surface trans"ortation "ro4ects. Meanwhile0 credit

rating agencies are downgrading bonds %H su""orted by antici"atedfederal "ayments. %2 While co$plete data i0 not yet a+aila3le, a old$an ach0 analy0i0 found that inpre+iou0 year0 'hen Congre00 ha0 3alked at reauthori;ing tran0portation funding, 4uncertainty regarding federal fundingha0 3een a00ociated 'ith a te$porary 0lo'do'n in con0truction acti+ity, and the 0lo'do'n 'ould pro3a3ly 3e $ore

0e+ere if pay$ent0 'ere actually delayed or reduced#6%" Thi0 $ean0 that Congresss stalling mayhave already cost /merican 4obs and slowed down "ro4ects . *ppendi 1pro+ide0 a ta3le of 0tate 0pecic data on the tran0portation 0y0te$ and 0ugge0t0 ho' federal funding delay0 $ight i$pact

dierent 0tate0# *0 0ugge0ted a3o+e, federal s"ending on trans"ortation is anim"ortant "art of our national infrastructure investment0 because ittraditionally "rovided a steady and multi1year funding source forma4or ca"ital "ro4ects e0pecially $aor road proect0 that link $aor econo$ic center0, 3oth regionallyand nationally# !! percent of al l 0urface tran0portation capital in+e0t$ent co$e0 fro$ federal fund0 and 0tate0 'ith0$aller population0 tend to rely $uch $ore on federal fund0# n %"11, the late0t year for 'hich co$prehen0i+e data area+aila3le for federal, 0tate, and local go+ern$ent0, the K## 0pent $ore than %15 3illion on 0urface tran0portation# Takentogether, total 0pending a0 a 0hare of (P ha0 3een fall ing, fro$ a3out = percent of (P in 1&B% to only 1#! percent

today# That80 $ore than a 5" percent decline# *nd although total 0pending ha0 generally 3een increa0ing in real dollarter$0 0ince the 1&J"0, it declined in %"1" and %"11# /s investments have declined0 it hasbecome widely recogniIed by government agencies0 state agencies0think tanks0 stakeholders0 and business grou"s that ourinfrastructure is not kee"ing "ace with the demands of a growingeconomy. H0ti$ate0 of the need0 for in+e0t$ent +ary 0ignicantly, a0 'ould 3e epected in any 0tudie0 of 0uch alarge 0y0te$# n a 'idely cited report, the *$erican ociety of Ci+il Hngineer0 nd0 1%5 3illion per year i0 needed to$aintain and repair our ei0ting 0urface tran0portation 0y0te$, 'hile the Eational urface Tran0portation nfra0tructure@inancing Co$$i00ion e0ti$ate0 1=& 3illion per year Sin %"1% dollar0# 7oth e0ti$ate0 are higher than actual capital0pending in %"1%, 'hich 'a0 1"= 3illion at federal, 0tate, and local go+ern$ent le+el0# The (epart$ent of Tran0portation


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pu3li0he0 an o3ecti+e apprai0al of the phy0ical condition0, operational perfor$ance, and nancing $echani0$0 ofhigh'ay0, 3ridge0, and tran0it 0y0te$0 3a0ed on 3oth their current 0tate and under future in+e0t$ent 0cenario0# n the

$o0t recent Condition0 and Perfor$ance SCUP Report, ()T e0ti$ate0 'e need J5 to 1future epectation of trade8 i0 a 0ignicant +aria3le in under0tanding econo$iccondition0 and 0ecurity 3eha+iour of 0tate0# e argue0 that interdependent 0tate0 are likely to gain pacic 3enet0 fro$ trade 0o long a0 they

ha+e an opti$i0tic +ie' of future trade relation0# o'e+er, ifthe ex"ectations offuture trade decline,particularly for diIcult to replace ite$0 0uch a0 energy re0ource0, the likelihood for conJict increases , a0 0tate0 'ill 3einclined to u0e force to gain acce00 to tho0e re0ource0# Cri0e0 could potentially 3e the trigger for decrea0ed trade epectation0 either on it0o'n or 3ecau0e it trigger0 protectioni0t $o+e0 3y interdependent 0tate0#! Third, other0 ha+e con0idered the link 3et'een econo$ic declineand eternal ar$ed conGict at a national le+el# 7lo$3erg and e00 S%""% nd a 0trong correlation 3et'een internal conGict and eternal

conGict, particularly during period0 of econo$ic do'nturn# They 'rite, The linkages betweeninternal and eternal

conJict and "ros"erity are strong and $utually reinforcing# Fconomic conJict tend0 to

s"awn internal conJict , 'hich in turn return0 the fa+our# Moreo+er, the pre0ence of a rece00ion tend0 to a$plify the

etent to 'hich international and eternal conGict0 0elf-reinforce each other# S7lo$3erg U e00, %""%, p# J&Hcono$ic decline

has al0o been linked with an increa0e in the likelihood of terrorism S7lo$3erg, e00, U Weerapana, %""!,

whichha0 the capacity to s"ill across bordersand lead to eternal ten0ion0# @urther$ore, cri0e0 generally reducethe popularity of a 0itting go+ern$ent# >3iversionary theory suggeststhat, 'hen facing unpopularity ari0ingfro$ econo$ic decline, 0itting governmentsha+e increa0ed incenti+e0 to fabricateeternal militaryconJicts to create a Krally around the Jag eLect # Wang S1&&B, (eRouen S1&&5, and7lo$3erg, e00, and Thacker S%""B nd 0upporting e+idence 0ho'ing that economic decline and use offorce areat lea0t indirectly correlated# elpi S1&&


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conGict ha0 not featured pro$inently in the econo$ic-0ecurity de3ate and de0er+e0 $ore attention# Thi0 o30er+ation i0 not contradictory toother per0pecti+e0 that link econo$ic interdependence 'ith a decrea0e in the likelihood of eternal conGict, 0uch a0 tho0e $entioned in ther0t paragraph of thi0 chapter# Tho0e 0tudie0 tend to focu0 on dyadic interdependence in0tead of glo3al interdependence and do not0pecically con0ider the occurrence of and condition0 created 3y econo$ic cri0e0# *0 0uch, the +ie' pre0ented here 0hould 3e con0ideredancillary to tho0e +ie'0#


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%&R


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?ni6ueness


9/38

? Ryan -as !olitical Su""ort &ow

Ryan has "olitical su""ort now

Aurt Frickson0 %+1A+-15, erald Re+ie', 4Ryan 7ring0 Chance for a @re0htart,6 http://herald-re+ie'#co$/ne'0/local/ryan ()*: 1"-=-15

Ryan, of Wi0con0in, secured the "ost ina +ote Thur0day $orning, garneringsu""ort from *A< -ouse members# Eine $e$3er0 of a con0er+ati+e 3loc --none fro$ llinoi0 -- +oted again0t hi$# Ryan, the younge0t 0peaker elected 0ince1JB&, 'ill 3ring a 'elco$e change in the at$o0phere under the Capitol do$e, 0aidRe"ublicanK## Rep# Rodney 3avisof Taylor+ille# Xt al'ay0 change0 'hen youha+e a change in leader0hip# Paul Ryan ha0 the a3ility 3ring a lot of faction0together,X (a+i0 said# E# look forward to working with S"eaker Ryantoreduce our nationV0 de3t, our cru$3ling infra0tructure, i$pro+e our education0y0te$ and addre00 $any other i00ue0 critical to the 1=th (i0trict#X Re"ublicanK## Rep# 9ohn Shimkusof Collin0+ille oLered u" his reactionon T'itter,thankingoutgoing peaker 9ohn 7oehner of )hio and congratulating Ryanon hi0ne' o3# n a telephone inter+ie', hi$ku0 0aid Ryan 'ill 3ring a fre0hne00 to theou0e thatV0 3een lacking# *nd, the ne' 0peaker ha0 pledged to put $ore e$pha0i0on the co$$ittee proce00, 'hich 'ill e$po'er $ore $e$3er0# XtV0 pro3a3ly 'hatthe legi0lati+e 3ranch need0,X hi$ku0 0aid# Ee'ly elected Congre00$an (arin.aood, a Repu3lican fro$ (unlap, 0aid RyanV0 econo$ic policie0 and XMid'e0tern+alue0X 'ill 3e eecti+e in dri+ing a con0er+ati+e agenda# 4 3elie+e Paul Ryan i0 thefre0h face the Repu3lican Party ha0 3een in need of to pre00 for'ard a co$$on0en0e, con0er+ati+e agenda 'a0 elected to pur0ue,X .aood 0aid# Re"ublicanK## Rep# *da$ inIingerof Channahon didnVt i00ue a for$al 0tate$ent Thur0day,3ut he did po0t a congratulatory $e00age to Ryan on T'itter# N:his is a greatchance for the 89! to reunite under new leadershi"0NAin;inger 0aid#

Re"ublicanK## Rep# Mike Bostof Murphy03oro said Ryan has Na uni6ueo""ortunity to bring Members of Congress togetherto do the people80'ork at a critical ti$e in our nation80 hi0tory#X X a$ condent that peaker Ryan 'illlead in a $anner that i0 accounta3le to the citi;en0 'e repre0ent and faithful to ourcon0titutional principle0,X 7o0t 0aid# 3emocraticK## Re"# Cheri Bustos ofMoline said she was ho"eful the new s"eaker would work in abi"artisan manner# X*$erican0 are tired of Wa0hington gridlock# t80 ti$e forCongre00 to 'ork together on co$$on 0en0e 0olution0 to 0trengthen 'orking fa$ilie0and pro+ide econo$ic 0ta3ility for our nation,X 7u0to0 0aid in a prepared 0tate$ent#
http://herald-review.com/news/local/ryanhttp://herald-review.com/news/local/ryan


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? -ighway Bill 5unding @ill !ass &ow

Congress will "ass a new0 multiyear highway funding bill

now uni6ueness only Jows negAeith Oiang0 %+1*2-15, The ill,http://thehill#co$/policy/tran0portation/%5J5&J-o3a$a-0ign0-three-'eek-high'ay-3ill()*: 1"-%&-15!resident 9bama signed into a law a bill to extend federal trans"ortationfunding, 'hich had 3een 0et to epire on Thur0day night, pre+enting an interruptionin the nationV0 road and tran0it 0pending# :he bill0 "assed this week by3oth theou0e and enate, extends federal trans"ortation funding until &ov. *+ .)3a$a ha0 railed again0t 0hort-ter$ tran0portation funding patche0, 3ut he 0ignedthe 3ill that 'a0 0ent to hi$ on Thur0day to pre+ent an interruption in the nationV0road and tran0it funding ahead of the 3u0y holiday tra+el 0ea0on# Oawmakers inboth chambers have said the tem"orary "atch will "rovide time for them to$nish work on a long1sought multiyear highway funding bill.N:his three1

week extension will allow the -ouse and Senate to go conference on ourbi"artisan long1term bill and get that signed into law before &ov. *+0Nenate Maority .eader Mitch McConnell SR-Ay# 0aid $o$ent0 3efore the Duick +oteon Wedne0day# The enate ha0 already pa00eda 0i-year high'ay 3ill in 9uly, 3ut the$ea0ure only include0 three year0V 'orth of guaranteed funding# The ou0e,$ean'hile, ha0 'orked on a 0i-year, =%5 3illiontran0portation 3ill that 0i$ilarlycontain0 only three year0 of guaranteed funding# The ou0e 'ould cut o the nationV0infra0tructure 0pending in three year0 if Congre00 doe0 not co$e up 'ith a 'ay topay for the re0t of the 0pending# :he lower chamber is ex"ected to bring themultiyear highway bill u" for a vote on the Joor of the -ouse next week,clearing the 'ay for a long-0ought conference on infra0tructure 0pending 3et'eenthe cha$3er0# .a'$aker0 ha+e 3een 0truggling for year0 to co$e up 'ith a long-ter$ eten0ion of federal tran0portation funding that i0 nor$ally nanced 3y the

1J#!-cent0-per-gallon ga0 ta, 'hich ha0 not 3een increa0ed 0ince 1&&=# The federalgo+ern$ent typically 0pend0 a3out 5" 3illion on tran0portation proect0, 3ut the ga0ta only 3ring0 in appropriately =! 3illion at it0 current rate# .a'$aker0 'ere a3le toput o the Due0tion of ho' to pay for tran0portation proect0 in the $ea0ure they0ent to )3a$a 3ecau0e they included enough funding in a 0hort-ter$ 3ill appro+edthi0 0u$$er to la0t until the end of the year# 7ut that earlier patch had 3een0cheduled to epire Thur0day, nece00itating the patch that 'a0 0igned into la' 3y)3a$a# Congre00 ha0 not pa00ed a tran0portation funding 3ill la0ting longer thant'o year0 0ince %""5, to the chagrin of infra0tructure ad+ocate0 in Wa0hington#Senate leaders have said they ex"ect to be able to get a multiyear highwaybill to 9bamas desk by :hanksgiving#XKnlike in year0 pa0t, epect a +ery 0hortconference period,X en# 9a$e0 nhofe SR-)kla# 0aid in a 0peech Monday e+ening#XWhen 0ay a +ery 0hort conference period, itV0 3ecau0e thereV0 +ery little dierence

3et'een the ou0e 3ill and the enate 3ill,X he continued# XV+e talked to the likelyconferee0 and they are in accord 'ith the idea that 'e can do thi0 in a $atter ofhour0 and not day0#X The 0hort-ter$ high'ay 3ill that 'a0 0igned 3y )3a$a al0oetend0 a (ec# =1 deadline for railroad0 to in0tall an auto$ated train na+igation0y0te$, kno'n a0 po0iti+e train control, to the end of %"1J# The eten0ion hadpre+iou0ly 3een attached to 3oth the enate and ou0eV0 $ultiyear high'ay 3ill0after railroad0 threatened to partially 0hut do'n $any of the nationV0 rail'ay0#
http://thehill.com/policy/transportation/258598-obama-signs-three-week-highway-billhttp://thehill.com/policy/transportation/258598-obama-signs-three-week-highway-billhttp://www.thehill.com/policy/transportation/258409-senate-approves-three-week-highway-billhttp://thehill.com/policy/transportation/249785-senate-approves-six-year-highway-billhttp://thehill.com/policy/transportation/257797-house-panel-approves-six-year-325b-highway-billhttp://thehill.com/policy/transportation/257880-senators-say-highway-bill-could-reach-obama-by-thanksgivinghttp://thehill.com/policy/transportation/257880-senators-say-highway-bill-could-reach-obama-by-thanksgivinghttp://thehill.com/policy/transportation/258598-obama-signs-three-week-highway-billhttp://thehill.com/policy/transportation/258598-obama-signs-three-week-highway-billhttp://www.thehill.com/policy/transportation/258409-senate-approves-three-week-highway-billhttp://thehill.com/policy/transportation/249785-senate-approves-six-year-highway-billhttp://thehill.com/policy/transportation/257797-house-panel-approves-six-year-325b-highway-billhttp://thehill.com/policy/transportation/257880-senators-say-highway-bill-could-reach-obama-by-thanksgiving


11/38

? &o Controversial #ssues &ow

&ewly "assed budget bill means controversial issues have

been removed from the table Ryans getting back toworkC&&0 %+1A+-15, http://'''#cnn#co$/%"15/1"/="/politic0/0enate-3udget-agree$ent-rand-paul/inde#ht$l()*: 1"-="-15:he Senate early 5riday morning gave $nal a""roval to a large $scal"ackage that would "revent a ?.S. default next week and lower the risk of agovernment shutdown in 3ecember. The 3ill, already cleared 3y the ou0e, no'goe0 to Pre0ident 7arack )3a$a, 'ho i0 epected to 0ign it# The +ote 'a0 B! to =5#:he measure 0'hich 0u0pend0 the nationV0 de3t li$it through March %"1< andincreases federal s"ending for domestic and defense "rograms by morethan PH+ billion over the next two years0 had broad su""ort from3emocrats but limited su""ort from Re"ublicans 0 many of whomcom"lained the deal0 brokered by bi"artisan congressional leaders0

contained too much s"ending# )P pre0idential candidate en# Rand Paul ofAentucky forced a rare o+ernight enate 0e00ion 'hen he li3u0tered the 3ill# XTherightV0 going to get $ore $ilitary $oney, the leftV0 going to get $ore 'elfare $oney#

The 0ecret hand0hake goe0 on, and the *$erican pu3lic get0 0tuck 'ith the 3ill,X he0aid in a 0peech on the Goor Thur0day afternoon# XThi0 deal 'ill do nothing 3uteplode the de3t#Xen# Pat Too$ey, a con0er+ati+e Repu3lican facing a tough re-election ca$paign in Penn0yl+ania, 0aid the 3ill Xfail0 to addre00 our o+er0pendingpro3le$#X Tea0 en# Ted Cru;, 'ho helped force the la0t go+ern$ent 0hutdo'n in%"1=, 0aid the deal gi+e0 )3a$a a Xdia$ond-encru0ted, glo'-in-the-dark *$Hcard#XX*nd it ha0 a 0pecial feature,X Cru; continued# XThe Pre0ident get0 to 0pend itno', and they donVt e+en 0end hi$ the 3ill# They 0end the 3ill to your kid0 and $ykid0# tV0 a pretty nifty card# ou donVt ha+e to pay for it# ou get to 0pend it and itV00o$e3ody el0eV0 pro3le$#X9ther Re"ublicans-- including tho0e 'ho 'ork

regularly acro00 the ai0le -- com"lained too. XThe agree$ent reached 3y the Whiteou0e and congre00ional leader0 i0 yet another ea$ple of 'hat the *$ericanpeople hate a3out Wa0hington,X 0aid en# 7o3 Corker of Tenne00ee, 'ho critici;ed thedeal for relying on 3udget Xgi$$ick0#XThe concern0 3y enate Repu3lican0 'erecon0i0tent 'ith tho0e of ou0e Repu3lican0, $o0t of 'ho$ +oted again0t the deal'hen it pa00ed the ou0e on Wedne0day# 7ut it 'a0 ne+er really in dou3t that enateRepu3lican0, led 3y their leader0hip, 'ould pro+ide enough +ote0 to clear the enateto en0ure the K## 'ould not default on it0 de3t# (e$ocrat0 in0i0ted the agree$ent'a0 'orth'hile#XThe 3udget agree$ent i0 good for the $iddle cla00, good for theecono$y, and good for the country,X 0aid enate (e$ocratic .eader arry Reid, 'ho'orked Duietly 'ith 3iparti0an leader0 in the ou0e and enate to cut the deal# The+ote ca$e hour0 after for$er ou0e peaker 9ohn 7oehner retired and turned o+erthe top ou0e po0ition to Rep# Paul Ryan, R-Wi0con0in# !assage of the bill means

Ryan can begin his new 4ob with a slate cleaned of some of the mostcontroversial issues before the Congress.
http://www.cnn.com/2015/10/30/politics/senate-budget-agreement-rand-paul/index.htmlhttp://www.cnn.com/2015/10/30/politics/senate-budget-agreement-rand-paul/index.htmlhttp://www.cnn.com/2015/10/30/politics/senate-budget-agreement-rand-paul/index.htmlhttp://www.cnn.com/2015/10/30/politics/senate-budget-agreement-rand-paul/index.html


12/38

/:) :hum"ers :o" of the 3ocket

-ighway bill is to" of the docket (comes beforeshutdown

/! 1>-15 LHrica Werner, Congre00 return0 fro$ holiday 3reak facing 3u0y agenda, i$pendingdeadline to fund go+ern$ent, *00ociated Pre00,http://'''#u0ne'0#co$/ne'0/3u0ine00/article0/%"15/"


13/38

Oink


14/38

9verview Oink (Short %&C

5irst0 recall that only the ma4ority gets to decide whatsdebated on the house Joor. Means that the "lan has to be

su""orted by both ma4ority leaders thats McConnel inthe Senate and Ryan in the house. :hat means the "lan isconsidered a com"romise by default that means any bill"assed is a link even if we dont win that the "lansun"o"ular with re"ublicans.

/nd0 well win the "lans un"o"ular with re"ublicans that su"ercharges the link b=c it means theyll backlasheven harder8ross0 8rant0 8rant 8ross covers technology and telecom "olicy in the ?.S.government for the #38 &ews Service0 and is based in @ashington0 3.C.0 #38 &ews Service0 !C

@orld0 =%>0 htt")==www."cworld.com=article=*2A*AA=dont1ex"ect1ma4or1changes1to1nsa1surveillance1from1congress.html




be reluctant to further change the governments surveillance

"rograms. The Senate this week "assedthe K* 5reedom /ct0'hich ai$0 toend the E*80 $a00 collection of do$e0tic phone record0, and Pre0ident 7arack )3a$a 0igned the 3ill




reform7 through Congress 03ut $any la'$aker0 0ee$ ready to pu0h for $ore change0, 0aid*da$ Hi0grau, $anaging director of the oIce of go+ern$ent relation0 for the *$erican .i3rary*00ociation# The *.* ha0 charged the E* 0ur+eillance progra$0 +iolate the @ourth *$end$ent of the K##Con0titution, 'hich prohi3it0 unrea0ona3le 0earche0 and 0ei;ure0# 4Congre00 i0 not allo'ed to 3e tired of0ur+eillance refor$ unle00 it80 prepared to 0ay it80 tired of the @ourth *$end$ent,6 Hi0grau 0aid# 4The


congressional action . E #t will a long slog getting more restraints07 9#Airk Wie3e, a for$er E* analy0t and 'hi0tle3lo'er 0aid 3y e$ail# 6The length of that ourney 'ill depend

on pu3lic outcry2that i0 the one thing that i0 hard to gauge#6 @ith the ?S/ 5reedom /ct 0


Blunden0 a cybersecurity researcher and surveillance critic. E:hetheater weve 4ust witnessed allows decision makers to boast totheir constituents about reforming mass surveillance while s"iesunderstand that whats actually trans"ired is hardly ma4or change#6:he Eactual "hysical mechanisms 7 of surveillance "rograms remainlargely intact.7lunden added 3y e$ail# 4!oliticians$ay dither around the periphery 3ut they



15/38

Means Ryan breaks the -asert rule he agreed on earlierthat he wouldnt bring u" legislation that the far rightdidnt agree on as well that means we only have to winthat far right senators dont like the "lan.7ecket /dams, %+1*2-15, Wa0hington Ha$iner, Wa0hington Po0t ee0 Rough

ea0 *head for peaker Ryan, http://'''#'a0hingtonea$iner#co$/'a0hington-po0t-0ee0-rough-0ea0-ahead-for-0peaker-ryan/article/%5


16/38

9verview Oink (Oong %&C

5irst0 recall that only the ma4ority gets to decide whatsdebated on the house Joor. Means that the "lan has to be

su""orted by both ma4ority leaders thats McConnel inthe Senate and Ryan in the house. :hat means the "lan isconsidered a com"romise by default that means any bill"assed is a link even if we dont win that the "lansun"o"ular with re"ublicans.

/nd0 well win the "lans un"o"ular with re"ublicans that su"ercharges the link b=c it means theyll backlasheven harder 1 breaks the -asert rule he agreed on earlierthat he wouldnt bring u" legislation that the far rightdidnt agree on as well that means we only have to win

that far right senators dont like the "lan.

/nd0 new link) the "lan breaks a commitment to no newma4or issues kills Ryan cred and dooms the "lan7ecket /dams0 %+1*2115, Wa0hington Ha$iner, Wa0hington Po0t ee0 Roughea0 *head for peaker Ryan, http://'''#'a0hingtonea$iner#co$/'a0hington-po0t-0ee0-rough-0ea0-ahead-for-0peaker-ryan/article/%5


17/38

!lan ills Ryan Cred 9"tional %&C

/nd0 well win the "lans un"o"ular with re"ublicans that su"ercharges the link b=c it means theyll backlash

even harder8ross0 8rant0 8rant 8ross covers technology and telecom "olicy in the ?.S.government for the #38 &ews Service0 and is based in @ashington0 3.C.0 #38 &ews Service0 !C@orld0 =%>0 htt")==www."cworld.com=article=*2A*AA=dont1ex"ect1ma4or1changes1to1nsa1surveillance1from1congress.html




be reluctant to further change the governments surveillance

"rograms. The Senate this week "assedthe K* 5reedom /ct0'hich ai$0 toend the E*80 $a00 collection of do$e0tic phone record0, and Pre0ident 7arack )3a$a 0igned the 3ill




reform7 through Congress 03ut $any la'$aker0 0ee$ ready to pu0h for $ore change0, 0aid*da$ Hi0grau, $anaging director of the oIce of go+ern$ent relation0 for the *$erican .i3rary*00ociation# The *.* ha0 charged the E* 0ur+eillance progra$0 +iolate the @ourth *$end$ent of the K##Con0titution, 'hich prohi3it0 unrea0ona3le 0earche0 and 0ei;ure0# 4Congre00 i0 not allo'ed to 3e tired of0ur+eillance refor$ unle00 it80 prepared to 0ay it80 tired of the @ourth *$end$ent,6 Hi0grau 0aid# 4The


congressional action . E#t will a long slog getting more restraints07 9#

Airk Wie3e, a for$er E* analy0t and 'hi0tle3lo'er 0aid 3y e$ail# 6The length of that ourney 'ill dependon pu3lic outcry2that i0 the one thing that i0 hard to gauge#6 @ith the ?S/ 5reedom /ct0


Blunden0 a cybersecurity researcher and surveillance critic. E:hetheater weve 4ust witnessed allows decision makers to boast totheir constituents about reforming mass surveillance while s"iesunderstand that whats actually trans"ired is hardly ma4or change#6:he Eactual "hysical mechanisms7 of surveillance "rograms remainlargely intact.7lunden added 3y e$ail# 4!oliticians$ay dither around the periphery 3ut they


Means Ryan breaks the -asert rule he agreed on earlierthat he wouldnt bring u" legislation that the far rightdidnt agree on as well that means we only have to winthat far right senators dont like the "lan.7ecket /dams, %+1*2-15, Wa0hington Ha$iner, Wa0hington Po0t ee0 Roughea0 *head for peaker Ryan, http://'''#'a0hingtonea$iner#co$/'a0hington-po0t-0ee0-rough-0ea0-ahead-for-0peaker-ryan/article/%5


18/38

Rep# Paul Ryan, R-Wi0#, may have won enough su""ort to become the next-ouse s"eaker0 but he still has a long road ahead of him, the Wa0hington Po0teditorial 3oard'arned thi0 'eek# &ow he actually has to lead.XWe 'i0h hi$ luck,Xthe 3oard 'rote# Xet he faces several grave challenges 0 some self1im"osed.:o" among them is that Mr. Ryan "romised hard1right members of Congressthat he would res"ect the informal -astert Rule0 which re6uires that a

ma4ority of the ma4ority "arty in the -ouse favor a bill for it to get a Joorvote.N
https://www.washingtonpost.com/opinions/good-luck-speaker-ryan-youre-going-to-need-it/2015/10/28/2f13ea92-7db8-11e5-afce-2afd1d3eb896_story.htmlhttps://www.washingtonpost.com/opinions/good-luck-speaker-ryan-youre-going-to-need-it/2015/10/28/2f13ea92-7db8-11e5-afce-2afd1d3eb896_story.htmlhttp://politicaldictionary.com/words/hastert-rule/https://www.washingtonpost.com/opinions/good-luck-speaker-ryan-youre-going-to-need-it/2015/10/28/2f13ea92-7db8-11e5-afce-2afd1d3eb896_story.htmlhttps://www.washingtonpost.com/opinions/good-luck-speaker-ryan-youre-going-to-need-it/2015/10/28/2f13ea92-7db8-11e5-afce-2afd1d3eb896_story.htmlhttp://politicaldictionary.com/words/hastert-rule/


19/38

#m"act


20/38

9verview

5ailure to extend the -ighway :rust fund is damning litany of internal links in %&C &FC %G ev sto"s

trans"ortation "ro4ects0 causes downgrading of bonds0decreases federal s"ending0 and kills com"etitivenessglobally that colla"ses ?S Fcon

!refer Royal %+ shows we have a strong em"irical base litany of internals uncertainty and miscalc0 dee"linkages0 internal conJict0 terrorism0 rally around the Jag0scholarshi" consensus "roves

Fcon colla"se guarantees every scenario for extinction turns every other im"act

3uncan %*LRichard (uncan, chief econo$i0t at ingapore-3a0ed 7lackhor0e *00et Manage$ent, for$er nancial0ector 0peciali0t at the World 7ank and glo3al head of in+e0t$ent 0trategy at *7E *MR) *00etManage$ent and 'orked a0 a con0ultant for the M@ in Thailand during the *0ia Cri0i0, author of three3ook0 on the glo3al econo$ic cri0i0, 0tudied literature and econo$ic0 at Nander3ilt Kni+er0ity andinternational nance at 7a30on College, @e3ruary %!, %"1%, 4The Ee' (epre00ion: The 7reakdo'n of thePaper Money Hcono$y6

The con0eDuence0 of a&ewreat 3e"ression'ould etend far 3eyond the real$ of econo$ic0# ungry people 'ill ght to 0ur+i+e# o+ern$ent0'ill u0e force to $aintain internal order at ho$e# Thi0 0ection considersthe geo"olitical re"ercussion ofeconomic colla"se 03eginning 'ith the ?nited State0# @ir0t, the K## go+ern$ent80 ta re+enue0 would colla"se'ith the depre00ion# econd, 3ecau0e glo3al trade would shrivelup, other countrie0 'ould no longer help nance the K## 3udget decit 3y3uying go+ern$ent 3ond0 3ecau0e they 'ould no longer ha+e the $oney to do 0o# *t pre0ent, the re0t of the 'orld ha0 a 5"" 3illion annual trade 0urplu0 'ith the Knitedtate0# The central 3ank0 of the Knited tate08 trading partner0 accu$ulate that 0urplu0 a0 foreign echange re0er+e0 and in+e0t $o0t of tho0e re0er+e0 into K##go+ern$ent 3ond0# *n econo$ic collap0e 'ould cau0e glo3al trade to plu$$et and dra0tically reduce Sif not eli$inate altogether the K## trade decit# Therefore, thi00ource of foreign funding for the K## 3udget decit 'ould dry up# Con0eDuently, the go+ern$ent 'ould ha+e to 0harply curtail it0 0pending, 3oth at ho$e and a3road#

(o$e0tically,social "rogramsfor the old, the 0ick, and the une$ployed 'ould ha+e to 3e slashed# o+ern$ent 0pending on educationand infrastructure'ould al0o ha+e to 3e curtailed .Much le00 go+ern$ent 0pending 'ould result ina dra$atic increa0e in

"overty and 0 con0eDuently, in crime # Thi0 'ould co$3ine to produce a cri0i0 of the current t'o-party political 0y0te$# *0toni0h$ent,

fru0tration,andanger at the econo$ic 3reakdo'n 'ould radicaliIe "olitics # Ee' partie0 'ould for$ at 3oth etre$e0 of the political0pectru$# i+en the great and gro'ing inco$e ineDuality going into the cri0i0, the hungry ha+e-not0 'ould 0u30tantially outnu$3er the re$aining 'ealthy# )n the onehand, a hard 0'ing to the left 'ould 3e the outco$e $o0t likely to re0ult fro$ de$ocratic election0# n that ca0e, the ta rate0 on the top inco$e 3racket0 could 3e rai0edto J" percent or $ore, a le+el la0t 0een in 1&B=# )n the other hand, the po00i3ility of a right-'ing put0ch could not 3e ruled out# (uring the reat (epre00ion, the K##$ilitary 'a0 tiny in co$pari0on 'ith 'hat it 3eca$e during World War and during the decade0 of hot, cold, and terrori0t 'ar0 that follo'ed# n thi0 Ee' reat (epre00ion,

it $ight 3e the $ilitary that ulti$ately deter$ine0 ho' the country 'ould 3e go+erned# The political battleo+er *$erica80 future would be3itter,and Duite po00i3ly bloody# t cannot 3e guaranteed that the K## Con0titution 'ould 0ur+i+e# @oreign aair0 'ould al0o confront the Knited tate0 'ith enor$ou0challenge0# (uring the reat (epre00ion, the Knited tate0 did not ha+e a glo3al e$pire# Eo' it doe0# The Knited tate0 $aintain0 hundred0 of $ilitary 3a0e0 acro00do;en0 of countrie0 around the 'orld# *dded to thi0 i0 a Geet of 11 aircraft carrier0 and 1J nuclear-ar$ed 0u3$arine0# The country 0pend0 $ore than B5" 3illion a year on

it0 $ilitary# f the K## econo$y collap0e0 into a Ee' reat (epre00ion, the ?nited State0 could not aLordto $aintain it0 'orld'idemilitary "resence orto continue in it0 role asglo3al "eacekee"er# )r, at lea0t, it could not nance it0 $ilitary inthe 0a$e 'ay it doe0 at pre0ent# Therefore, either the Knited tate0 'ould ha+e to nd an alternati+e funding $ethod for it0 glo3al $ilitary pre0ence or el0e it 'ould ha+eto radically 0cale it 3ack# i0torically, e$pire0 'ere nanced 'ith plunder and territorial epropriation# The e0tate0 of the +anDui0hed ruling cla00e0 'ere gi+en to theconDuering general0, 'hile the re0t of the population 'a0 forced to pay i$perial tae0# The K## $odel of e$pire ha0 3een uniDue# t ha0 nanced it0 glo3al $ilitary

pre0ence 3y i00uing go+ern$ent de3t, there3y taing future generation0 of *$erican0 to pay for thi0 generation80 glo3al 0upre$acy# That 'ould no longer 3e po00i3le ifthe econo$y collap0ed# Co0tF3enet analy0i0 'ould Duickly re+eal that $uch of *$erica80 glo3al pre0ence 'a0 0i$ply no longer aorda3le# Many F or e+en $o0t F of theoutpo0t0 that did not pay for the$0el+e0 'ould ha+e to 3e a3andoned# Priority 'ould 3e gi+en to tho0e place0 that 'ere of + ital econo$ic intere0t0 to the Knited tate0#

The Middle Ha0t oil eld0 'ould 3e at the top of that li0t# The Knited tate0 'ould ha+e to $aintain control o+er the$ 'hate+er the price# n thi0 glo3al depre00ion

0cenario, the price of oilcould colla"seto = per 3arrel# )il con0u$ption 'ould fall 3y half and there 'ould 3e no 0peculator0 left to $anipulate price0higher# )il at that le+el would im"overishthe oil-producingnations 0 withetre$ely destabiliIing"olitical conse6uences# Maintaining control o+er the Middle Ha0t oil eld0 'ould 3eco$e $uch $ore diIcult for the Knited tate0# t'ould reDuire a $uch larger $ilitary pre0ence than it doe0 no'# )n the one hand, it $ight 3eco$e nece00ary for the Knited tate0 to rein0tate the draft S'hich 'ouldpo00i3ly $eet 'ith +iolent re0i0tance fro$ draftee0, a0 it did during the Nietna$ War# )n the other hand, *$erica80 all-+olunteer ar$y $ight nd it had $ore than enough+olunteer0 'ith the national une$ploy$ent rate in ece00 of %" percent# The ar$y $ight ha+e to 3e e$ployed to keep order at ho$e, gi+en that $a00 une$ploy$ent'ould ine+ita3ly lead to a 0harp 0pike in cri$e# )nly after the Middle Ha0t oil 'a0 0ecured 'ould the country kno' ho' $uch $ore of it0 glo3al $ilitary pre0ence it couldaord to $aintain# f international trade had 3roken do'n, 'ould there 3e any rea0on for the Knited tate0 to keep a $ilitary pre0ence in *0ia 'hen there 'a0 no o3+iou0

'ay to nance that pre0ence? n a glo3al depre00ion, the Knited tate08 alliesin *0ia would$o0t likely be unwillingor una3le to


21/38

$nance*$erica80 military3a0e0 there or to pay for the upkeep of the K## Pacic Geet# Eor 'ould the Knited tate0 ha+e the 0trength to force the$to pay for K## protection# Retreat fro$ *0ia $ight 3eco$e una+oida3le# *nd Hurope? What 'ould a co0tF3enet analy0i0 conclude a3out the 'i0do$ of the Knited tate0$aintaining $ilitary 3a0e0 there? What +alued added doe0 Hurope pro+ide to the Knited tate0? Eece00ity $ay $ean Hurope 'ill ha+e to defend it0elf# hould a Ee' reat(epre00ion put an end to the Pa *$ericana, the 'orld 'ould 3eco$e a $uch $ore dangerou0 place# When the reat (epre00ion 3egan, 9apan 'a0 the ri0ing indu0trialpo'er in *0ia# t in+aded Manchuria in 1&=1 and conDuered $uch of the re0t of *0ia in the early 1&!"0# Would China, *0ia80 ne' ri0ing po'er, 3eha+e the 0a$e 'ay in thee+ent of a ne' glo3al econo$ic collap0e? Po00i3ly# China i0 the only nuclear po'er in *0ia ea0t of ndia Sother than Eorth Aorea, 'hich i0 largely a Chine0e 0atellite 0tate#

o'e+er, in thi0 di0a0ter 0cenario, it i0 not certain that China 'ould 0ur+i+e in it0 current conguration# t0 econo$y 'ould 3e in ruin0# Mo0t of it0 factorie0 and 3ank0'ould 3e clo0ed# Kne$ploy$ent could eceed =" percent# There 'ould $o0t likely 3e 0tar+ation 3oth in the citie0 and in the country0ide# The Co$$uni0t !artycould loseit0 grip on "ower, in 'hich ca0e the country could 3reak apart, a0 it ha0 nu$erou0 ti$e0 in the pa0t# t 'a0 le00 than 1"" year0 ago that

China80 pro+ince0, ruled 3y 'arlord0, 'ere at 'ar 'ith one another# Knited or di+ided, China80 nuclear arsenal would makeit*0ia80 undi0puted 0uperpo'er if the Knited tate0 'ere to 'ithdra' fro$ the region# @ro$ Aorea and 9apan in the Eorth to Ee' [ealand in the outh to 7ur$a in the We0t,

all of /sia'ould 3e at Chinas mercy# *nd hunger a$ong China80 population of 1#= 3illion people could nece00itate territorial epan0ion intoouthea0t *0ia# n fact, the central go+ern$ent $ight not 3e a3le to pre+ent $a00 $igration 0outh'ard, e+en if it 'anted to# n Hurope, 0e+ere econo$ic hard0hip 'ouldre+i+e the centurie0-old 0truggle 3et'een the left and the right# (uring the 1&="0, the @a0ci0t0 $o+e$ent aro0e and i$po0ed a police 0tate on $o0t of We0tern Hurope# n

the Ha0t, the o+iet Knion had 3eco$e a co$$uni0t police 0tate e+en earlier# The far right and the far left of the "olitical s"ectrum

converge in totalitarianism # t i0 diIcult to udge 'hether Hurope80 de$ocratic in0titution0 'ould hold up 3etter thi0 ti$e thatthey did la0t ti$e# Hngland had an e$pire during the reat (epre00ion# Eo' it only ha0 3ank0# n a 0e+ere 'orld'ide depre00ion, the country F or, at lea0t .ondon F could

3eco$e ungo+erna3le# 5rustrationo+er po+erty and a lack of o30 would eru"t into anti1immigration

riots not only i n the Knited Aingdo$ 3ut al0o acro00 $o0t of Hurope# The etent to 'hich Russia would$enace it0 Huropean neigh3or0 i0unclear# )n the one hand, Ru00ia 'ould 3e i$po+eri0hed 3y the collap0e in oil price0 and $ight 3e too preoccupied 'ith internal unre0t to threaten anyone# )n the other

hand, it could "rovokea war with thegoal of maintaininginternal orderthrough e$ergency 'arti$e po'er0#er$any i0 +ery nearly de$ilitari;ed today 'hen co$pared 'ith the late 1&="0# .acking a nuclear deterrent of it0 o'n, it could 3e sub4ect toRu00ian

inti$idation# While er$any could appeal for protection fro$ Hngland and @rance, 'ho do ha+e nuclear ca"abilities , it i0 uncertain that'ould 3uy er$any enough ti$e to re$ilitari;e 3efore it 3eca$e a +icti$ of Ha0tern aggre00ion# *0 for the re0t of the 'orld, it0 pro0pect0 in thi0 di0a0ter 0cenario can 3e0u$$ed up in only a couple of 0entence0# lo3al econo$ic output could fall 3y a0 $uch a0 half, fro$ B" trillion to =" trillion# Eot all of the 'orld80 0e+en 3illion people

'ould 0ur+i+e in a =" trillion glo3al econo$y# Starvation would be wides"read # @ood riots would

"rovokepolitical u"heaval and$yriad 3ig and 0$all conJictsaround the 'orld# t 'ould 3e a hu$anitarian cata0trophe 0oetre$e a0 to 3e uni$agina3le for the current generation, 'ho, at lea0t in the indu0triali;ed 'orld, ha0 kno'n only pro0perity# Eor 'ould there 3e rea0on to hope that the

Ee' reat (epre00ion 'ould end Duickly# The 8reat 3e"ression was only ended by an even

more calamitous global war that killed approi$ately B" $illion people#


22/38

-:5 * Com"etitiveness

-ighway funding is critical to com"etitiveness in both thelong and short term

&FC %GLEational Hcono$ic Council, *E HC)E)MC *E*. )@TR*EP)RT*T)E E@R*TRKCTKRH ENHTMHET,http0://'''#'hitehou0e#go+/0ite0/default/le0/doc0/econo$icOanaly0i0OofOtran0portationOin+e0t$ent0#pdf

/ high 6uality trans"ortation network is vital to a to" "erforming

economy# #nvestments by "revious generations of *$erican0 F fro$ the HrieCanal in 1J"


23/38

go insolvent as early as /ugust0 "utting numerous active "ro4ects

at risk.


24/38

-:5 * :ax Reform=9Lshoring internal

:he tax reform that funds the bill inde"endently "reventsoLshoring enables com"etitiveness

@ashington Fxaminer 1H-15 Lenator0 reach deal to keep$ultinational0 fro$ Geeing K##,http://'''#'a0hingtonea$iner#co$/0enator0-reach-deal-to-keep-corporation0-fro$-Geeing-u#0#/article/%5B


25/38

-:5 * Fcon

&umerous studies "rove trans"ortation is key to long1term economy sustainability and resiliency

&FC %GLEational Hcono$ic Council, *E HC)E)MC *E*. )@TR*EP)RT*T)E E@R*TRKCTKRH ENHTMHET,http0://'''#'hitehou0e#go+/0ite0/default/le0/doc0/econo$icOanaly0i0OofOtran0portationOin+e0t$ent0#pdf#. Oong :erm Fconomic Bene$ts from #nfrastructure #nvestment /modern trans"ortation network is vital to our economy0 and is a"rere6uisite for future growth. Pre0ident Hi0enho'er80 +i0ion i0 e+en $ore rele+ant today than it'a0 in 1&55, 'hen he 0aid in hi0 tate of the Knion *ddre00, X* $odern, eIcient high'ay 0y0te$ i0 e00ential to $eet theneed0 of our gro'ing population, our epanding econo$y, and our national 0ecurity#X Today, that +i0ion include0 $akingnot only our nation80 high'ay0, 3ut it0 entire infra0tructure 0y0te$, $ore eIcient and eecti+e# * 'ell-perfor$ingtran0portation net'ork allo'0 3u0ine00e0 to $anage in+entorie0 and tran0port good0 $ore cheaply, acce00 a +arietyof0upplier0 and $arket0 for their product0, and get e$ployee0 relia3ly to 'ork# *$erican fa$ilie0 3enet too: a0con0u$er0, fro$ lo'er priced good0, and a0 'orker0, 3y gaining 3etter acce00 to o30# *n eIcient tran0portation net'orkal0o ena3le0 r$0 and people to locate near one another, 0o that they can 3enet fro$ 0hared acce00 to input0 of

production, an in0ight r0t recogni;ed in the 1J&"0#1 :his is all the more vital as regional

economies with interde"endent urban0 suburban and rural areasrelying on each other for innovation0 em"loyment0 and growthbecome more im"ortant in manufacturing0 energy0 tourism0technology0 and other ?S industries# Fvaluating how trans"ortationand other infrastructure bene$t the overall economy has been the

sub4ect of extensive economic literature . 3avid /schauers research

found very large economic gains from "ublic ca"ital generally Sincluding3ut not li$ited to tran0portation, 0ugge0ting 1 in output gain0 for 1 in increa0ed in+e0t$ent# % u30eDuent re0earchha0 detected $ore $ode0t eect0 that can 3e 0en0iti+e to the type0 of pu3lic capital, 0ector0 of the econo$y, geography

le+el, and ti$e period0 con0idered a0 'ell a0 $ethod0 e$ployed to 0tudy the data# = More recentresearch has highlighted the im"ortance of selecting investmentswisely in key areas of the country on the basis of their economic

contributions. :his research has also em"hasiIed the im"ortance ofmaintaining existing assets in a good state of re"air# ! 7eyond contri3ution0 toecono$ic gro'th and producti+ity, Duality tran0portation infra0tructure can al0o 3enet 3u0ine00e0 and con0u$er0 alikethrough 0horter and $ore relia3le tra+el ti$e0, re0ulting in direct and indirect 3enet0 that ripple throughout the

econo$y# .e00 road conge0tion / well1connected trans"ortation network meansfaster0 more reliable travel times for both "eo"le and goods .!roviding trans"ortation choices enables businesses to choose themost eDcient way to shi" their goods# t i0 al0o i$portant, 3ecau0e ti$e 0pent 0tuck in traIcnot only 'a0te0 fuel, re0ulting in higher out of pocket co0t0 for 3u0ine00e0 and hou0ehold0, 3ut al0o 'a0te0 ti$e thatcould 3e 0pent engaged in $ore producti+e acti+itie0# @or ea$ple, the Tea0 Tran0portation n0titute e0ti$ate0 that*$erican co$$uter0 in ur3an area0 collecti+ely lo0t 5#5 3illion hour0 0tuck in traIc in %"11, $eaning the a+erageco$$uter lo0t nearly a 'eek to traIc# TT80 calculation0 further 0ugge0t that traIc conge0tion cau0ed *$ericanco$$uter0 to purcha0e an etra %#& 3illion gallon0 of fuel, co0ting the$ $ore than 1%" 3illion in added fuel co0t0 and'a0ted ti$e#5 @urther, 'ell-$aintained road0, coupled 'ith acce00 to pu3lic tran0portation and other dri+ing alternati+e0,can lo'er traIc conge0tion and accident rate0 'hich not only 0a+e *$erican0 ti$e and $oney 3ut al0o 0a+e li+e0# Morerelia3le 0hip$ent0 and tra+el ti$e0 More conge0tion al0o $ean0 that 3oth 3u0ine00e0 and fa$ilie0 $u0t account for theunrelia3ility of tra+el ti$e0 'hen $aking their plan0# @or the trucking indu0try alone, the @ederal igh'ay *d$ini0trationcalculate0 that high'ay 3ottleneck0 cau0e $ore than %!= $illion hour0 of delay each year, at a co0t of


26/38

tran0- Pacific 0er+ice0 to increa0e it0 u0e of container0 and cha00i0 3y 1,="", 'hich add0 ! $illion in co0t0 per year#& *'eek-long di0ruption to container $o+e$ent0 through the Port0 of .o0 *ngele0 and .ong 7each could co0t the nationalecono$y 3et'een B5 and 15" $illion per day igher land +alue0 and local econo$ic de+elop$ent Tran0portationin+e0t$ent0 aect not only the le+el of econo$ic output 3ut geographic di0tri3ution of econo$ic acti+ity# (ecliningtran0portation co0t0 in the pa0t facilitated the gro'th of citie0 acro00 the Knited tate0# Chicago, for ea$ple, gre' in 0i;eand i$portance 3ecau0e it 0er+ed a0 a central hu3 3et'een the fruitful plain0 of the $id-'e0t and the $arket0 of the

northea0t and Hurope# #nfrastructure investment can also raise "ro"ertyvalues0 "articularly if these investments bring about im"rovements

in local living standardsSincluding 0horter co$$ute ti$e0 and greater proi$ity to de0ira3lea$enitie0#1" @or ea$ple, research suggests that "roximity to "ublic transitraises the value of residential and commercial real estate.7ernard Wein0tein0tudied the eect of the (alla0 light rail 0y0te$ on property +alue0, and found that a u$p in total +aluation0 around lightrail 0tation0 'a0 a3out %5 percent greater than in 0i$ilar neigh3orhood0 not 0er+ed 3y the 0y0te$#11 Thi0 i0 con0i0tent'ith 0tudie0 conducted in t# .oui0,1% Chicago,1= acra$ento,1! and an (iego,15 all of 'hich nd that property +alue0eperience a pre$iu$ eect 'hen located near pu3lic tran0it 0y0te$0#


27/38

Fconomy Qobs=:imeframe

:rans"ortation key to short1term economic growth&FC %GLEational Hcono$ic Council, *E HC)E)MC *E*. )@

TR*EP)RT*T)E E@R*TRKCTKRH ENHTMHET,http0://'''#'hitehou0e#go+/0ite0/default/le0/doc0/econo$icOanaly0i0OofOtran0portationOin+e0t$ent0#pdf@hile the most im"ortant economic im"act of smart infrastructureinvestment comes from longterm com"etitiveness0 "roductivity0innovation0 lower "rices0 and higher incomes0 infrastructure

investment also creates many thousands of 4obs in the near1term

that are directly linked to the /merican economy and diDcult to shi"overseas# The0e o30 0pan acro00 a 'ide +ariety of dierent indu0trie0# @or ea$ple, road 3uilding not only reDuire0con0truction 'orker0, 3ut al0o grading and pa+ing eDuip$ent, ga0oline or die0el to run the $achine0, 0$aller hand tool0of all 0ort0, ra' input0 of ce$ent, gra+el, and a0phalt, 0ur+eyor0 to $ap the 0ite, engineer0 and 0ite $anager0, and e+en

accountant0 to keep track of co0t0# /nalysis of data from the BF/ *+%* annual in"ut1out"ut table and related data from the Bureau of Oabor Statistics

(BOS suggests that


28/38

Fconomy Qobs #=O

-ighway funding key to 4obs growth inde"endently"revents thousands of traDc deaths annually

Sullivan


29/38

Fconomy :rucking #=O

-ighway bill key to economy truckingBurch 1A-15 LAe+in, co-chair$an of Trucking Mo+e0 *$erica @or'ard,

*$erica depend0 on long-ter$ high'ay fund0,http://thehill#co$/3log0/congre00-3log/econo$y-3udget/%!B!

0hould not ha+e to 0ettle for a tran0portation 0y0te$ that i0 0econd 3e0t# Countries around theworld strive to "rovide certainty to businesses and their economiesby moderniIing and investing in trans"ortation networks. /mericacan and should make these same commitments and im"rovements toensure eDciency0 secure our future and maintain our global

com"etitiveness. ?nfortunately0 Congress has given /mericastrans"ortation system "atch after "atch, 'ith $ore than =" eten0ion0 and +ere+enue 0hortfall0 in tran0portation funding in the pa0t decade# Well-$aintained road0 and 3ridge0 are

i$portant to high'ay 0afety# /mericas highways and roads need a serious0

long1term "lan to $x bridges and i$pro+e road0 in0tead of failed 0hort-ter$ e0 to the

pothole0# :he cost of inaction has been stee"0 with costs to""ing P*++billion from delayed or canceled road construction "ro4ects0"roductivity costs and automobile re"airs. *ccording to the K## Cha$3er ofCo$$erce, congested roads total an estimated P%++ billion "er year inwasted time and fuel. @ith roads in such a "oor state0 motoriststake an additional $nancial hit by losing >.> billion hours sitting incongestion and s"end an average of PA*G "er year in vehicle re"air

and o"erating costs.f 'e continue on thi0 path, co0t0 'ill cli$3 for product0, the indu0try andfor con0u$er0 a0 producti+ity i0 reduced#
http://thehill.com/blogs/congress-blog/economy-budget/246474-america-depends-on-long-term-highway-fundshttp://thehill.com/blogs/congress-blog/economy-budget/246474-america-depends-on-long-term-highway-fundshttp://thehill.com/blogs/congress-blog/economy-budget/246474-america-depends-on-long-term-highway-fundshttp://thehill.com/blogs/congress-blog/economy-budget/246474-america-depends-on-long-term-highway-funds


30/38

:urns :ech 1 Manufacturing

!oor #nfrastructure destroys manufacturinganter


31/38

manufacturing was only %* "ercent of 83! and e$ployed & percent of the 'orkforce#1Should this trend worry /mericansTThat i0 the focal Due0tion of thi0 3ook# The Due0tion 4(oe0$anufacturing $atter?6 i0 not a ne' one# n the 1&J"0, 3ook0 0uch a0 Re0toring )ur Co$petiti+e Hdge S3y our ar+ard colleague0 Ro3ert

aye0 and te+en Wheel'right and Manufacturing Matter0 S3y 7erkeley80 9ohn [y0$an and tephen Cohen argued that allowingmanufacturing ca"abilities to erode would be haIardous to acountrys economic health .With the nternet 3oo$ of the 1&&"0 and 9apan80 0tu$3le0, ho'e+er, the i00ue of$anufacturing appeared Duaint# The Knited tate0 'a0 de$on0trating it0 pro'e00 in RU(, 0oft'are, and 0er+ice0# The nternet 0pa'ned a

ho0t of ne' 3u0ine00e0# Hlectronic0 co$panie0 'ere pro0pering 3y focu0ing on RU( and out0ourcing production to *0ian 0upplier0# Manyeconomists hailed the arrival of4the "ost1industrial society6% anddeclared that the continued erosion of manufacturing was not 4ustharmless, itwas a healthy sym"tom of economic develo"ment : follo'ing the0a$e path that agriculture had taken a century 3efore, the 0hrinking $anufacturing 0ector 'a0 no' 4li3erating6 re0ource0 0o that they could

3e put to high-+alue-added u0e0 in other 0ector0, 0uch a0 0er+ice0# @e have chosen to revisit this issueat thi0 ti$e for two reasons. 5irst0 the Egood times7 of the %22+s and*+++s were not as good as they $rst a""eared # *+erage 'age0 for *$erican0 'ere0tagnating, and trade decit0 'ere piling up# *l0o, after 0urging in the 1&&"0, "roductivity growth sloweddownin the %"""0# Meanwhile, in a 3road 0'ath of high-technology indu0trie0, the center of gravityfor both manufacturing and innovation was moving to /sia# *nd thi0 'a0 all3efore the reat Rece00ion of %""J] #t struck us that the ?nited State0 had been running apretty

high1stakes ex"eriment: for decade0, /merica has been betting that theerosion of its manufacturingbase"osed no harm to its long1termeconomic "ros"ects# i+en the 0take0, 'e thought an ea$ination of thi0 a00u$ption and a careful analy0i0 of the data0ee$ed 'orth'hile# )ur 0econd rea0on for 'riting thi0 3ook 'a0 to clarify 'hat 'e thought 'ere 0e+eral di0tortion0 on 3oth 0ide0 of thede3ate a3out the i$portance Sor lack of i$portance of $anufacturing for an econo$y like *$erica80# )n one 0ide of the de3ate, there ha03een a $i0conception a3out the i$pact of $anufacturing on o30# 4a+ing $anufacturing6 i0 often eDuated 'ith 0a+ing o30# With fe'er thanone in ten $e$3er0 of the *$erican 'orkforce e$ployed in $anufacturing, though, it i0 hard to $ake the ca0e that $anufacturing can 3e a3ig o3 generator2e0pecially 3ecau0e producti+ity increa0e0 due to ad+ance0 in technology and 'ork proce00e0 are a $aor rea0on thenu$3er of $anufacturing o30 in the Knited tate0 ha0 plunged# n other 'ord0, if 'e epect producti+ity to continue to increa0e S'hich 'ould3e a good thing, it get0 harder to i$agine ho' e+en a fairly large 0urge in $anufacturing output 'ould put $uch of a dent in the *$ericane$ploy$ent picture# We do not deny that there $ay 3e a 0eriou0 e$ploy$ent i00ue in *$erica# The fact that $anufacturing i0 unlikely todri+e 0ignicant o3 creation, though, often lead0 too Duickly to the conclu0ion that it i0 therefore irrele+ant# The fallacy in thi0 thinking i0

Duickly re+ealed 3y the follo'ing 0tati0tic: although manufacturing accounts for only 2"ercent of the*$erican workforce, the %.> million RU3 workers em"loyedby ?S com"anies in /merica account for less than % "ercentof theworkforce#=et0 no one would suggest that RU3 is unim"ortant to the

health of the economy# Thi0 lead0 u0 to the 0econd $i0conception a3out $anufacturing: it i0 a lo'-+alue-added co$$odity acti+itythat reDuire0 lo'-0kill 'orker0 and can 3e ea0ily 0ourced fro$ any'here in the 'orld# Knlike RU(, +enture capital, or uni+er0itie0,$anufacturing i0 +ie'ed a0 out0ide the eco0y0te$ of inno+ation# t i0 not 4kno'ledge 'ork,6 to u0e the fa0hiona3le ter$# The a00u$ption i0that you can lo0e $anufacturing a0 long a0 you ha+e inno+ation# f you 3elie+e thi0 portrait, then $anufacturing i0 pa00^ for an inno+ation-dri+en econo$y 0uch a0 *$erica80# Thi0 per0pecti+e, though, u0t doe0 not 0Duare 'ith our o30er+ation0 a3out 'hat actually happen0 in0ide

$any $anufacturing operation0. #n the course of our careers, we have visitedhundreds of factoriesin u0t a3out every industryyou can i$agine and inu0t a3outevery corner of the globe.:he notion that manufacturing is somelow1value1added , low1skill activity that is unconnected to innovationisincreasingly a myth# 5actories "roducing so"histicated goods0uch a03iotechnology drug0, Gat-panel di0play0, aircraft engine0, 0e$iconductor0, 0pecialty $aterial0, and $edical de+ice0 re6uire veryskilled workers'ho can operate highly co$ple piece0 of preci0ion eDuip$ent# n $o0t factorie0 'e ha+e +i0ited, 'e ha+e0een a lot $ore 3rain than 3ra'n at 'ork# Manufacturing has become knowledge work# naddition, manufacturing has connections to the innovation "rocessthat

often goco$pletely unrecogniIed # )ne of u0 Sary 0pent $uch of hi0 acade$ic career conducting re0earch on ho'product0 in technology-inten0i+e contet0 Se#g#, 3iotechnology, $edical de+ice0, 0cientic in0tru$ent0, and electronic0 $o+e their 'ay fro$RU( into the $arket# The other SWilly 0pent a good chunk of hi0 profe00ional career actually $o+ing product0 fro$ RU( to the $arket andrunning co$ple $anufacturing and di0tri3ution operation0 in the Knited tate0, Meico, reland, 9apan, and China# @ro$ our contra0ting

+antage point0, 'e ca$e to a +ery 0i$ilar conclu0ion: manufacturing is often highly integral to the

innovation "rocess , and theco$$on assum"tion that the ?nited State0 can

"ros"er as an Einnovator7 without manufacturing is a dangerousone#ndeed, in 0o$e contet0, manufacturing is 4ust as im"ortant to the innovationecosystem as strong universities, outstanding RU3 0 and vibrant


32/38

venture ca"italare# The lo00 of $anufacturing co$petencie0 0hould deeply 'orry *$erican0# The pro3le$ 'ith the0e$i0conception0 a3out $anufacturing i0 that they often lead to 3ad deci0ion0 3y 3u0ine00e0 and 3ad policie0 3y go+ern$ent# @or in0tance, 'eha+e 0een co$panie0 out0ource their $anufacturing 'ithout con0idering the potential negati+e i$pact on their future a3ility to inno+ate# Weha+e 0een go+ern$ent policy $aker0 ignore the potential +alue of in+e0ting in 3a0ic and applied re0earch that $ight deepen K

$anufacturing capa3ilitie0 that 0upport a 3road range of 0ector0# :he combination of bad decisions 3y

3u0ine00e0 and inadeDuate policie0 3y go+ern$ent, 'e 'ill argue in thi0 3ook, is leading to an erosion of'hat 'e

call /mericas industrial commons2the set of manufacturing and

technical ca"abilitiesthat su""ort innovation across a broad range

of industries .)ur goal in 'riting thi0 3ook i0 to educate 3oth 3u0ine00 leader0 and go+ern$ent policy $aker0 a3out 'hen and'here $anufacturing $atter0 to an econo$y# )ur the0i0 i0 that for the Knited tate0, $anufacturing $atter0 'hen it i0 integral to the proce00of inno+ation, and 'e 'ill pro+ide 0o$e fra$e'ork0 to help identify 'hen and 'here thi0 i0 likely to 3e the ca0e# We are clear that not all$anufacturing i0 integral to inno+ation# Thu0, our0 i0 not a 3lanket call to 0a+e all $anufacturing in the Knited tate0# t i0 a call to 3uild$anufacturing capa3ilitie0 in tho0e area0 that pro+ide a critical foundation for future inno+ation# We ha+e 'ritten thi0 3ook fro$ an *$ericanper0pecti+e# t focu0e0 on the decline of the *$erican indu0trial co$$on0, 'hy that ha0 happened, and 'hat *$erican 3u0ine00 leader0 andgo+ern$ent policy $aker0 need to do to re+er0e thi0 proce00# o'e+er, Due0tion0 a3out $anufacturing are 3y no $ean0 li$ited to *$erica#Co$petition fro$ rapidly indu0triali;ing countrie0 0uch a0 China and ndia i0 pre00uring the $anufacturing 0ector0 of u0t a3out all ad+ancedindu0triali;ed econo$ie0# Policy $aker0 in the Knited Aingdo$, @rance, taly, (en$ark, 9apan, and e+en er$any are pondering 'hat thefuture role of $anufacturing in their countrie0 0hould 3e# urpri0ingly, e+en in relati+ely ne' $anufacturing po'erhou0e0 0uch a0 Tai'an andAorea, co$petition fro$ China in electronic0 $anufacturing i0 cau0ing policy $aker0 to a0k 4(oe0 $anufacturing $atter?6 *lthough going intothe policy i00ue0 facing the0e countrie0 i0 'ell 3eyond the 0cope of 'hat 'e can tackle in thi0 3ook Sa0 'ell a0 the 0cope of our eperti0e, 'ehope that reader0 fro$ out0ide the Knited tate0 'ill 0ee the analogie0 to their o'n 0ituation0# *nd

if they dont read tech im"acts,

/nd0 tech innovation de1escalates conJict and detersgreat "ower balancingMark [achary :aylorSPh#(# candidate, lecturer, and re0earch a00i0tant inthe (epart$ent of Political cience at Ma00achu0ett0 n0titute of Technology

*++G4The Politic0 of Technological Change: nternational Relation0 +er0u0(o$e0tic n0titution06 http://'e3#$it#edu/poli0ci/re0earch/'ip/Taylor#pdf

:echnological innovation is of central im"ortance tothe 0tudy of internationalrelation0 S#R, aecting al$o0t e+ery a0pect of the 0u3-eld#% @ir0t and fore$o0t0 a nationstechnological ca"ability has a signi$cant eLect on itsecono$ic gro'th,indu0trial $ight, and military "rowess\ therefore relative national technological

ca"abilities necessarily inJuence the balance of "ower betweenstates0 andhence have a role in calculations of war and allianceformation# econd, technology and innovative ca"acity also determine anations trade "ro$le, aecting which "roducts it will im"ort and ex"ort0as well as where$ultinational cor"orations will basetheir production facilitie0#=Third, in0ofar a0 inno+ation-dri+en econo$ic gro'th 3oth attract0 in+e0t$ent and produce0 0urplu0

capital0 a nations technological ability will also aLect international$nancial Jows and who has "ower over them#! Thu0, in 3road theoretical ter$0,technological change i0 i$portant to the 0tudy of R 3ecau0e of it0 o+erall i$plication0 for 3oth the relati+e

and a30olute po'er of 0tate0# *nd if theory alone doe0 not con+ince, then history also tells usthat nations on the technological ascent generally ex"erience acorres"onding and dramatic change in their global stature andinJuence, 0uch a0 7ritain during the r0t indu0trial re+olution, the Knited tate0 and er$any duringthe 0econd indu0trial re+olution, and 9apan during the t'entieth century#5 Con+er0ely, great "owerswhich fail to maintain their "lace at the technological frontiergenerallydrift and fade from inJuence on international scene#B Thi0 i0 not to 0ugge0tthat technological inno+ation alone deter$ine0 international politic0, 3ut rather that shifts in bothrelative and absolute technological ca"ability have a ma4or im"acton international relations, and therefore need to 3e 3etter under0tood 3y R 0cholar0 indirect0ource of $ilitary doctrine# *nd for 0o$e, like 8il"in 6uoted above0technology isthe very cornerstone of great "ower domination0 and its transfer the


33/38

main vehicle by which war and change occur in world "olitics.JQervistells us that the balance ofoen0i+e and defen0i+e military technologyaLects the incentives for war#& @alt agrees0 arguing thattechnological change can alter a states aggregate "ower0 andthereby aLect both alliance formation and the international balanceof threats#1" .i3eral0 are le00 directly concerned 'ith technological change, 3ut they $u0t ad$it that

by raising or lowering the costs of using force0 technological"rogress aLects the rational attractiveness of internationalcoo"eration and regimes#11 Technology al0o lo'er0 infor$ation U tran0action0 co0t0 and thu0 increa0e0 the applica3ility ofinternational in0titution0, a corner0tone of .i3eral R theory#1% *nd in fo0tering Go'0 of trade, nance, and infor$ation, technological change can lead to Aeohane80interdependence1= or Tho$a0 @ried$an et al80 glo3ali;ation#1! Mean'hile, o+er at the 4third de3ate6, Con0tructi+i0t0 co+er the cau0al 0pectru$ on the i00ue, fro$Aat;en0tein80 4cultural nor$06 'hich 0hape 0ecurity concern0 and there3y aect technological inno+ation\15 to Wendt80 40tripped do'n technological deter$ini0$6 in'hich technology ine+ita3ly dri+e0 nation0 to for$ a 'orld 0tate#1B o'e+er $o0t Con0tructi+i0t0 0ee$ to fa+or Wendt, arguing that ne' technology change0 people80identitie0 'ithin 0ociety, and 0o$eti$e0 e+en create0 ne' cro00-national con0tituencie0, there3y aecting international politic0#1< )f cour0e, Mari0t0 tend to 0eetechnology a0 deter$ining all 0ocial relation0 and the entire cour0e of hi0tory, though they de0cri3e $ankind80 $aor fault line0 a0 running 3et'een econo$ic cla00e0rather than nation-0tate0#1J @inally, 7u;an U .ittle re$ind u0 that 'ithout ad+ance0 in the technologie0 of tran0portation, co$$unication, production, and 'ar,international 0y0te$0 'ould not ei0t in the r0t place#1&


34/38

:urns Security #m"acts

5ailure to "ass -ighway trust fund would result in adecrease in our national security turns case

Caballero %G S1"/15/1!, Chri0tian Ca3allero i0 a pu3lic aair0director 'ith @oley U .ardner ..P\ 'a0 the go+ern$ent aair0$anager for @ar$er0 n0urance roup, 4Manufacturing andnfra0tructure: Eot 9u0t *3out Hcono$ic0 F )ur )'n ecurity(epend0 on t6,http://'''#$anufacturingindu0tryad+i0or#co$/$anufacturing-and-infra0tructure-not-u0t-a3out-econo$ic0-our-o'n-0ecurity-depend0-on-it/

The call for dra$atic i$pro+e$ent0 in *$erica80 infra0tructure a0 a criticaldri+er in the ree0ta3li0h$ent of the nation80 $anufacturing 0upre$acy i03uilding $o$entu$# 7ut that80 only part of the 0tory# .o0t i0 the real correlation

3et'een $anufacturing, infra0tructure de+elop$ent and *$erica80 do$e0ticnational 0ecurity#(e0pite the e$pha0i0 on the econo$ic i$pact thatinfra0tructure de+elop$ent 'ill ha+e on $anufacturing, the K## 'ill 0o$edayface $uch $ore 0eriou0 do$e0tic challenge0 that $anufacturer0 are uniDuelypo0itioned to addre00 today # Manufacturer0 and co$panie0 in+ol+ed ininfra0tructure de+elop$ent are on the front line0 of the nation80 eort toi$pro+e our e$ergency preparedne00 in ti$e0 of natural di0a0ter0 andterrori0t attack0# *ll eort0 to de+elop a $ore per$anent 0olution to ourinfra0tructure and our e$ergency preparedne00 $u0t include the 0ignicantparticipation of $anufacturer0, a0 noted in * (ecaying Eational nfra0tructure i0 Challengingthe Re0urgence of *$erican Manufacturing#There i0 +irtually ;ero di0agree$ent or$i0under0tanding o+er the role infra0tructure play0 a0 *$erican do$e0tic

$anufacturer0 continue to pu0h the nation80 econo$ic engine# o'e+er, there i0

little a'arene00 that the $anufacturing and infrastructure develo"ment

industries "lay a critical role in ensuring that the inevitable natural

disasters and universally ex"ected future terrorist attacks on the

homeland can be mitigated by the eLorts of both economic sectors #

The Knited tate0 (epart$ent of o$eland ecurity S( clearlyunder0tand0 ho' critical it i0 to ha+e a 0trong $anufacturing 3a0e, coupled'ith an infra0tructure that i0 de0igned for the challenge0 of the %10t Century #( pro$inently highlight0 critical $anufacturing 0ector0 that harden *$erica80 a3ility to defend andre0pond to threat0 and di0a0ter0 on our ho$eland# The federal agency cite0, a$ong other indu0trie0, ironand 0teel, alu$inu$, po'er tran0$i00ion eDuip$ent, a+iation and aero0pace product and part0, and

railroad rolling 0tock $anufacturing a0 critical ele$ent0 to the nation80 0ecurity# *lthough thenation80 policy$aker0 are not re$aining idle on infra0tructure, $anufacturing ore$ergency preparedne00, it i0 clear that they ha+e no long-ter$ co$prehen0i+eplan0 on the0e critical i00ue0#Recently, Congre00 reached an agree$ent to te$porarily 0ta+eo an i$pending cri0i0 3y etending the igh'ay Tru0t @und80 0ol+ency until May %"15# @ailure to do 0o'ould ha+e re0ulted in a nancing cri0i0 that 'ould ha+e halted countle00 infra0tructure proect0, there3yfurther delaying *$erica80 $uch-needed pu0h to'ard0 a $ore $oderni;ed infra0tructure co$ple# The11 3illion 0top-gap $ea0ure pa00ed 3y Congre00 i0 intended to keep infra0tructure proect0 on 0chedule#i$ilarly on the $anufacturing 0ide, Congre00 ha0 al0o only te$porarily reauthori;ed the Hport-$port

7ank SH-$ 7ank#The H-$ 7ank i0 critical to the nation80 $anufacturer0, a0 it


35/38

facilitate0 the eportation of do$e0tically $anufactured good0# While 3oth eten0ion0 are po0iti+e, the0ete$porary e0 do not pro+ide the long-ter$ certainty and predicta3ility thatthe $anufacturing and con0truction indu0trie0 need in order to de+elopfor'ard-thinking 3u0ine00 plan0#* national $o+e$ent i0 needed, a0 it 'ill 3e *$erica80$anufacturer0that 'ill produce the che$ical0, +ehicle0, protecti+e gear, 'eapon0, $ea0uringde+ice0, $edicine0 and countle00 other product0 that 'ill 3e u0ed to pre+ent cata0trophic

e+ent0fro$ 3eco$ing catacly0$ic one0# Thi0 +ital role i0 'hy it i0 critically i$portant that$anufacturer0 +ie' go+ern$ent a0 a partner, rather than an ad+er0ary# Manufacturer0 0hould +igorou0lypur0ue pu3lic contract0, and help conceptuali;e other propo0al0 de0igned to further our national intere0t0#*nd, 'hen not pur0uing or propo0ing contract0, $anufacturer0 $u0t 3eco$e in+ol+ed in the politicalproce00 at the federal, 0tate and local le+el0 of go+ern$ent# The nation80 $anufacturer0 cannot aord to

0er+e a0 pa00i+e o30er+er0#They $u0t lead the ad+ocacy eort to en0ure that*$erica re$ain0 prepared for it0 challenge0,'hile $aintaining it0 rightful place in the'orld# *nd a0 the old (#C# adage 0tate0: 4if you8re not at the ta3le, you8re on the $enu#6 *$erica80$anufacturer0: 'hat 0ay you?


36/38

:urns Fnvironment

5ailure to "ass leads to highway congestion9berhelman,


37/38

percent# That $ean0 a3out one in four Gight0, and therefore deli+erie0 'e and our cu0to$er0 'ere

counting on, 'ere late# The co$petiti+e ad+antage 0lip0 a'ay 'hen $anufacturer0 di+ert 0hip$ent0

3ecau0e K## port0 are too 0hallo' or lack capacity# )ur port0 need to 3e deepened and $oderni;ed to

handle today80 large container 0hip0# We 'ant to 0hip our K##-$ade $achine0 out of K## port0# The

co$petiti+e ad+antage 0lip0 a'ay 'hen truck0 ha+e to detour around aging 3ridge0 3ecau0e they can8t

acco$$odate $odern truck 0i;e0 or 'eight0# * Caterpillar


38/38

S"eci$c Scenario

&uke war we have a s"eci$c scenarioem" %+Leorey Ae$p, (irector of Regional trategic Progra$0 at The

Eion Center, 0er+ed in the White ou0e under Ronald Reagan, 0peciala00i0tant to the pre0ident for national 0ecurity aair0 and 0enior director forEear Ha0t and outh *0ian aair0 on the Eational ecurity Council ta,@or$er (irector, Middle Ha0t *r$0 Control Proect at the Carnegie Hndo'$entfor nternational Peace, %"1", 4The Ha0t Mo+e0 We0t: ndia, China, and *0ia80ro'ing Pre0ence in the Middle Ha0t6, p# %==-!The 0econd 0cenario, called Mayhe$ and Chao0, i0 the oppo0ite of the r0t 0cenario\ e+erything that can

go 'rong doe0 go 'rong#The'orld econo$ic 0ituation 'eaken0rather than 0trengthen0, andndia, China, and 9apan 0uera $aor reduction intheir gro'thrate0, further'eakening the glo3al econo$y# *0 a re0ult, energy de$and fall0 and the price of fo00il fuel0 plu$$et0,leading to a nancial cri0i0 for the energy-producing 0tate0, 'hich are forced to cut 3ack dra$atically on

epan0ion progra$0 and 0ocial 'elfare# That in turn lead0 to politicalunre0t:and nurture0dierentradical group0, including, 3ut not li$ited to, 0la$ic etre$i0t0# The internal0ta3ilityof 0o$e

countrie0 i0 challenged, and there are $ore 4failed 0tate0#6 Mo0t 0eriou0 i0 the collap0e ofthede$ocratic go+ern$ent in Paki0tanand it0 takeo+er 3y Mu0li$ etre$i0t0, 'ho then take

po00e00ion ofa large nu$3er of nuclear 'eapon0# The danger of war between

#ndia and !akistan increases 0ignicantly# ran, al'ay0 'orried a3out an etre$i0t

Paki0tan, epand0 and 'eaponi;e0it0 nuclear progra$#Thatfurther enhance0nuclearproliferation in the Middle Ha0t, 'ith audi *ra3ia, Turkey, and Hgypt oining 0rael and ran a0 nuclear0tate0# Knder the0e circu$0tance0, the potential for nuclear terrori0$ increa0e0, and the po00i3ility ofanuclear terrori0t attackin either the We0tern 'orld or in the oil-producing 0tate0 $ay lead toa further de+a0tating collap0eof the 'orld econo$ic $arket, 'ith a t0una$i-like i$pact on0ta3ility# n thi0 0cenario, $aor di0ruption0 can 3e epected0 'ith dire con0eDuence0 fort'o-

third0 of the "lanets "o"ulation #

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