Remarks of Senator Edward M. Kennedy at the Associated Industries of Massachusetts 93rd Annual Meeting
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(As Prepared for Delivery)
There's an old blessing that my brother Bobby loved to quote - "May you live in interesting times." A lot of people felt it was more a curse than a blessing, but Bobby never thought of it that way. We certainly find ourselves in interesting times today, with the many challenges facing our country. An economy on the brink - a housing crisis that threatens our financial institutions as well as our homes - soaring costs of food and gas - college increasingly unaffordable, and an endless war that's cost us immensely in lives and treasure and that's made us hated in the world more than any time in our history.
We're in the midst of an unprecedented Presidential election where we can safely say that history will be made. Our Democratic nominee for President will either be an African American or a woman. You all probably know who I'm backing, but it does give pause to think of the extraordinary historic first that's about to happen.
The American people are clamoring for real solutions to the serious challenges we face at here and at home - they're tired of politics for politics sake, gotcha politics, us versus them politics.
That message was clearly sent in the elections of 2006, when Congress changed hands, and we're seeing it now in the record primary turnouts, and enormous interest in this race. I believe this Congress and the next President have an extraordinary opportunity to come together and provide real leadership on the basic issues that matter most to our people.
We've got to end the war in Iraq. We've got to deal with the huge concerns of a middle class that feels under siege, with evaporating pensions and costly health care; we've got to have an economic strategy that recognizes we're facing tougher competition than ever from other countries eager to replace us as the dominant economic power in the world.
In Massachusetts, we're confronting difficult challenges too. The signs aren't good. We've yet to regain the 200,000 jobs we lost in the recession of 2001 - we're still about 100,000 short, and a new recession has arrived.
Families are struggling across the Commonwealth. Since President Bush took office, gas prices are up 98%; health costs 37%; and college tuition 52%. Yet the income of the typical family is up 5%. Over 9% of our people - 700,000 - live in poverty, and that's unacceptable.
Our state has 9,000 personal bankruptcy filings in the past year. Subprime mortgage foreclosures have cost our families nearly $3 billion in that year. It's keeping our mayors up late every at night, because a foreclosure on any city block immediately depresses home values in the area and tears at the fabric of our communities.
But there are brighter signs as well. The biggest recent accomplishment is the enactment of comprehensive health coverage for all our people. I commend AIM for its leadership in this achievement and for your continuing efforts to make sure the program stays vital and strong.
We showed the nation that industry, government, and the non-profit sector could come together to find a solution to one of our greatest problems, and that our state still has the vision on key issues to lead the country in this new century.
We've also proven we can work together to resolve external challenges to our economy.
Our high tech sector won a major victory with the decision by the Pentagon to preserve and expand critical research jobs at Hanscom. We had a target on our back from the recent base-closing round. But all of us came together in the Defense Technology Initiative. With the help of a $410 million state incentive package, we convinced the Defense Department that we're committed to a strong future for Hanscom, and the 33,000 jobs it brings to our region, and the $3 billion a year it generates for our economy.
It would have taken decades to replace the jobs we would have lost if Hanscom closed. Today, instead we're about to build on the R&D presence there and keep Massachusetts at the forefront of emerging technologies.
Manufacturing remains a bright spot for us. AIM notes in its recent Business Confidence Index, despite the struggling economy, 61% percent of manufacturers expect good conditions in the next six months. Merchandize exports for the first two months of this year was nearly $5 billion - 21% more than in the same period last year.
Manufacturing still accounts for 10% of our economic production, and it's a cornerstone we can build on in the future. Our Massachusetts Manufacturing Extension Partnership (MassMEP) does extraordinary work with smaller and medium-sized manufacturers and their employees, helping them adopt the practices needed to thrive in this rapidly globalizing economy.
The data is impressive. Every dollar of investment in MassMEP leads to $35 in economic activity for our state. Between 2003 and 2007, MassMEP's assistance helped our companies create and retain 11,000 jobs representing over $590 million in wages and benefits, contribute $940 million to the gross state product; and expand sales by $508 million.
It's unfortunate that in recent years, the Administration has sought to eliminate funding for the Manufacturing Extension Partnership, but we've beaten back those efforts. In the years ahead, we need to recognize the role that manufacturing plays and support an industrial policy that expands investment in innovative programs like the MEP and the Advanced Technology Program, which has helped small companies leverage billions in private investment in recent years.
We need a national policy that recognizes the opportunities that exist for our manufacturers in producing the environmentally friendly and energy-efficient products that American consumers are clamoring for, and that our society so desperately needs. We need our federal government to provide the incentives our domestic manufacturers need to develop these products of tomorrow.
Companies are strongly attracted to Massachusetts because of our innovative work force and cutting edge research, and they're increasingly willing to locate their manufacturing operations here.
Recently, for example, Shire Human Genetic Therapies agreed to double its current employee base of 675 Massachusetts workers and establish their global headquarters for research, development, and production in Lexington. Organogenesis, a Massachusetts-based company that was looking out of state, decided instead to expand its global headquarters, R&D, and manufacturing facilities in Canton.
AIM deserves great credit for recognizing the challenges and opportunities that globalization brings to the Massachusetts economy. Your Global Massachusetts 2015 partnership with Mass. Insight is developing a strategy for success in emerging industries and seizing the opportunities that increased foreign trade presents for the Commonwealth.
We're laying the groundwork for Massachusetts companies to create strong trading relationships with other nations that will benefit our people for decades to come.
We're deepening the Port of Boston channels to accommodate the growth of shipping at our port. After decades of decline and neglect it's been reborn because of the cleaning of Boston Harbor.
Last year, we signed a historic four-year extension of COSCO contract for direct shipping from China to Boston. Since COSCO first came to Boston in 2002, the number of containers coming in and out of our Port has more than doubled - an amazing boost for the 9,000 jobs tied directly to the Port of Boston and the 26,000 jobs across Massachusetts tied directly to international trade. Twenty years ago, such an announcement would have been inconceivable, but not today.
We also see other signs of good things to come. At least partly because of the success of our shipping ties, Hainan Airlines, one of China's biggest airlines, selected Boston as its first destination in America. Boston-Beijing-Shanghai service will begin as early as next year. Massport has also reached an agreement with All Nippon Airways for direct flights between Boston and Tokyo, which may also begin next year.
We currently invest nearly 5% of our gross state product on research and development, the highest figure of any state in the country. Our focus on innovation is helping us rebound faster than other states from the current economic crisis.
In fact, according to the U.S. Commerce Department, in the first three months of this year, Massachusetts 3.2 percent growth rate was 5 times faster than the nation's growth rate of less than one percent.
But this is no time for complacency. At a Senate hearing last year, Bill Gates testified eloquently about the crossroads America's at in terms of global competitiveness, especially for innovation-dependent states like ours. He said,
"When I reflect on the state of American competitiveness today, my immediate feeling is one not only of pride but also of deep anxiety. . . Too often, we lack the political will to take the steps necessary to ensure that America remains a technology and innovation leader . . . we are content to live off the investments that previous generations made for us - in education, in health care, in basic scientific research - but are unwilling to invest equal energy and resources to ensure that America's future is as bright and prosperous as its present."
That's got to change, and we're taking steps in Washington to see that it does.
Last year we passed the America Competes Act to guarantee greater federal investment in research and development. It doubles the funding for scientific research at the Department of Energy, potentially increasing Massachusetts' share of the Department's research funding to $200 million a year.
The America Competes Act will also provide resources to accelerate innovation at impressive Massachusetts companies such as Ballard Power Systems of Lowell, which is leading the effort to bring fuel cell vehicles to market, or Lilliputian Systems of Cambridge, which is developing a fuel cell small enough to replace the batteries we rely on so heavily for cell phones and other consumer electronics.
The legislation also doubles the research budget at the National Science Foundation. The current budget awards $350 million a year to Massachusetts universities, and has created two nanotechnology research centers in the Commonwealth -$17 million for UMASS-Amherst to focus on nano-technology manufacturing, and $12 million for the Northeastern/UMASS-Lowell partnership.
Jack Wilson, President of UMASS, had it right when he said of these grants that "Massachusetts is rapidly becoming the nano-capital of the world."
In the months ahead, I'm hopeful too that we'll enact an extension of the federal research and development tax credit, which means so much to Massachusetts companies, and I welcome AIM's strong support for this vital program.
Today, Massachusetts ranks third among all 50 states in National Science Foundation grants. The increased investment under the America Competes Act will bring significant new benefits to our colleges and businesses.
Nationally, Massachusetts ranks fourth in total federal research funding, behind California, which is six times our size, and Maryland and Virginia, which each house major federal agencies because of their proximity to the nation's capital.
We've also done extremely well with the job-creating small business research and technology grants that provide venture capital for creative small enterprises. Since the program was created 25 years ago, Massachusetts has consistently ranked 2nd, behind only California, and we have by far the highest amount of SBIR investment per capita of any state in the country.
Through these programs, nearly 1,300 small businesses in the Commonwealth have received over $3.5 billion in federal investment, producing more than $24 billion in economic benefits for our state.
Another of our top priorities in federal research is revitalizing the NIH budget. In the 1990's, Congress recognized the immense potential of NIH research for progress against disease, and we doubled the NIH budget. In recent years, the increases have stopped and there have even been some reductions, resulting in an overall 13% loss of research purchasing power due to inflation.
That's the wrong time to cut back. This new age of life sciences holds great promise for the prevention, treatment, and cure of countless diseases. Yet President Bush's budget for the coming year proposed exactly the same figure for NIH research as last year. That's unacceptable. Nearly 4 out of 5 new grant proposals are currently rejected - not for lack of merit, but lack of funds.
That's why I'm fighting now to increase NIH funding and guarantee that America's world leadership in biotechnology continues strong.
For Massachusetts, the stakes are particularly high. We now receive over $2 billion a year in health research funds from the federal government, and we'll do even better in the years ahead.
With our new majority in Congress, we're also reaffirming our commitment to make American education competitive again to build the workforce our economy needs.
That's why we passed the College Cost Reduction and Access Act - the largest increase in student aid since the GI Bill, and we're working hard to beef up other programs as well, especially to keep college affordable in this economic downturn.
I'm grateful for all AIM has done to promote workforce development and skills training. Your recognition of Bill Swanson and Raytheon is eminently deserved for all they are doing to give students the skills they need to compete in the global economy. As President Kennedy said in 1961:
"Our progress as a nation can be no swifter than our progress in education. Our requirements for world leadership, our hopes for economic growth, and the demands of citizenship itself in an era such as this all require the maximum development of every young American's capacity. The human mind is our fundamental resource."
Those words are truer than ever today.
Finally, on the issue of immigration, I'm disappointed we haven't acted yet. I'm not giving up, because there's too much at stake. I don't agree with much of President Bush's agenda, but he deserves great credit for having the courage to see this issue as one of fundamental justice and to insist on realistic reforms. I thank AIM and all of you for your own recognition of the importance of this issue.
The current flawed system is dangerous to our nation and ideals. To do nothing while an illegal, underground economy exploits the most vulnerable is unacceptable. It undermines respect for the rule of law, and breeds cynicism and contempt for our government.
We'll pay dearly if we fail to create a workable system that protects our borders, that treats people fairly, and enables us to continue to attract the industry and ideals of the ambitious from around the world.
There's no question that in these difficult, complex, and, yes, interesting times, we face immense challenges. But none of them is beyond our capacity to solve. I'm grateful to all of you for inviting me to be here today. I'm determined to do all I can to keep make our Commonwealth and nation strong, and I look forward to working with you to get it done.
Thank you all so much.