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Letter to Harry Reid, Senate Majority Leader, and Nancy Pelosi, Speaker of the House, Re: Congressional Leadership for State Priorities

Michigan Members Call on Congressional Leadership for State Priorities

New Letter Outlines Plans Addressing Unemployment, Healthcare and New Investment in Advanced Technology

The newest employment numbers from the Department of Labor - showing a loss of another 51,000 jobs and a national unemployment rate that has climbed to 5.7 percent - are another sign that a new economic recovery package is needed. Michigan's unemployment rate is at 8.5 percent. Democrats in Michigan's Congressional Delegation support the efforts of both House and Senate leaders to help our citizens, and Michigan members are eager to work with leadership to include the specific needs of manufacturing states in a second recovery package. In a letter sent today to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, the Michigan Congressional Democrats are suggesting a package including both short-term initiatives to stimulate the economy, like extending unemployment benefits and assistance for states struggling with rising healthcare costs, as well as investment in advanced technology as part of a long-term strategy to help create jobs, retool plants and move our country more quickly towards energy independence.

Senator Carl Levin (D-Mich.), Co-Chair of the Senate Auto Caucus, said: "With people and families in Michigan trying to balance so many economic uncertainties - from record rates of foreclosure to creeping food prices and sky-high energy costs - a second economic stimulus package would make the federal government an important partner in our efforts to help Michigan recover. We have a responsibility to put our domestic manufacturers in a better position to succeed by providing incentives to retool existing plants, assistance to help pay for the rising costs of health care, funding to develop the next generation of advanced batteries, and a permanent R&D tax credit to spur innovation and create jobs."

Senator Debbie Stabenow (D-Mich.), a member of the Senate Democratic Leadership, said: "Our Michigan manufacturers are struggling and middle-class families in Michigan and throughout our country are being squeezed on all sides as unemployment rates continue to rise. This second stimulus bill will include a critical provision that I have fought for as part of my Green Collar Jobs Initiative, which will keep good-paying jobs here at home. I urge my fellow colleagues to support a second stimulus package, which will activate $6 billion in low-interest loans for automakers to retool older manufacturing plants here in the U.S. to produce the next generation of alternative fuel and plug-in vehicles."

Congressman Dale E. Kildee (D-MI05), Co-Chair of the House Automotive Caucus, said: "An Economic Policy Institute report issued this week found that our trade deficit with China alone cost Michigan 80,000 jobs. While some have given up and claim that those jobs are not coming back, I'm not willing to accept that. By providing resources for manufacturers to retool for a greener manufacturing industry, we will create new jobs in Michigan. In the meantime, however, Michigan job hunters need support, and an additional 13 weeks of unemployment insurance will help to ensure that our skilled workforce is the driving force that leads the way to a greener economy."

Congresswoman Carolyn Cheeks Kilpatrick (D-MI13) said: "The federal government must take immediate action to assist Michigan workers and their families. Extending unemployment benefits is a good first step. We must help stabilize Michigan's economy by providing a jobs program that will support individual workers and their families as they try to manage the burdens of the high costs of education, health care, gas, and food and provide a steady source of taxes to our strapped cities and states. We must also support our automobile manufacturers as they work to reinvent themselves. We must provide universal health care to reduce their operating costs and promote the use of alternative energies and technologies to revitalize the automotive industry."

Congressman John D. Dingell (D-MI15) said: "Unemployment nationally is at the highest level we've seen since March 2004 and there is no sign that things will get better anytime soon. Our House and Senate leadership have done an exceptional job providing some relief to those working families struggling right now, but the Bush recession demands that much more be done. We must also do more to help our manufacturing sector and the employees that work in our state. This plan includes incentives that will not only help keep people working, but will also encourage new innovation and technologies. It has been proven time and time again that the federal government can do a lot of good as a partner to America's manufacturers, not only during tough times like these, but as a long term investment in our future economic successes."

Below is a copy of the letter:

August 1, 2008

The Honorable Harry Reid
Majority Leader
United States Senate
Washington, D.C. 20510

The Honorable Nancy Pelosi
Speaker
United States House of Representatives
Washington, D.C. 20515

Dear Majority Leader Reid and Speaker Pelosi,

We write today to urge consideration of another economic stimulus package. You are to be applauded for steps taken thus far. However, it is our sincere feeling that the ongoing economic downturn demands further action. Moreover, we must have a strategy to create well-paying jobs and prepare a workforce in transition, in addition to stimulating the economy.

Michigan's unemployment rate of 8.5 percent leads the nation because we are at the center of the national manufacturing jobs crisis. As you know, since 2001 our nation has lost more than 3.5 million manufacturing jobs. Michigan's median household income has decreased by 11.9 percent since 2000 and the State has lost a total of over 400,000 jobs during this same period. At the same time, healthcare premiums rose 42.4 percent in Michigan and college tuition rose nearly 30 percent. Our State is currently undergoing a transformation never before seen in our lifetimes and while we are confident about our future, we know that Michigan and other states affected by the manufacturing jobs crisis cannot address these issues alone. They need a strong partner in the federal government. In order to address the precarious situation of manufacturing states like Michigan, as well as the nation as a whole, we urge that the following measures be included in a domestic supplemental appropriations bill or economic stimulus package.

Extension of Unemployment Insurance Benefits

As you know, the number of long-term unemployed individuals is higher than at the beginning of any previous recession. Given the continued loss of jobs nationwide and the growth of state unemployment rates we strongly support continuing the emergency unemployment compensation program. We urge a second 13 week extension of the program for states with high unemployment rates as well as a national unemployment rate trigger that would extend the program for additional weeks in all states if there is an increase in the national unemployment rate. The unemployment insurance program is vital to individuals and their families as they struggle to make ends meet while vigorously looking for a new job in a difficult economy, and is an effective method of stimulating the economy.

Alternative Energy and Advanced Technology

Section 136 of the Energy Independence and Security Act authorized the Advanced Technology Vehicles Manufacturing Incentive Program to encourage retooling of existing plants to produce the next generation of vehicles. This incentive program will make it more economically feasible for U.S. auto manufacturers and part suppliers to retool their facilities by providing low-interest credit for a percentage of the cost of retooling a manufacturing facility in the U.S. to produce advanced technology vehicles (such as hybrids, plug-in hybrids, electric vehicles, advanced direct injection diesels, and fuel cell vehicles) or their key components. Retooling will also create jobs for American workers by ensuring that the vehicles of the future are made in the United States. In addition, retooling plants to produce advanced technology vehicles will greatly reduce our consumption of oil and greenhouse gases, moving our country more quickly towards energy independence. Fully activating the program will require $3.75 billion in funding to provide up to $25 billion in low-interest credit to U.S. automakers and parts suppliers. The federal government must be a strong partner in the investment in advanced technologies which will both create jobs and ensure the production of fuel-saving advanced technology vehicles here in the United States. To that end, we strongly encourage the inclusion of full activation of the Advanced Technology Vehicles Manufacturing Incentive Program in any future economic stimulus package.

The United States lags behind other nations in terms of our investment in advanced technology. This is especially the case for advanced battery technology. Other nations such as Germany, South Korea, China and Japan have committed to invest heavily in these technologies, giving them a significant competitive advantage. In order to regain our own competitive edge we encourage the inclusion of $300 million for advanced battery research as part of any stimulus package.

At a time of increasing globalization, America's prosperity depends more than ever on its capacity for innovation. Furthermore, many of the challenges facing our economy in general and the manufacturing sector in particular, will ultimately require large investments in innovative technologies. As you know, the primary federal incentive for private sector research and development, the R&D Tax Credit, expired at the end of 2007. Ultimately, Congress should enact a permanent and strengthened R&D credit that provides all companies with a robust incentive to conduct innovative research here in the U.S. In the near term, a strengthened and permanent R&D tax credit provides a direct incentive for companies to create high paying jobs in engineering, research and technology, and in the long term, it fosters the innovative products and services that represent high paying jobs of tomorrow. We strongly support an extension of the R&D Tax Credit as soon as possible. Whether in the context of legislation to promote economic recovery or an "extenders" bill, it is essential that we eliminate the uncertainty that currently hangs over this critical tax incentive.

Healthcare

Steadily increasing healthcare costs place America's manufacturing base at a competitive disadvantage. For example, the domestic automobile industry provides healthcare benefits to over two million Americans at an annual cost of nearly $10 billion. Similarly, Medicaid expenditures by states stretch their already finite resources even thinner. In order to protect states' fiscal condition, we support a uniform increase in the Federal Medical Assistance Percentage (FMAP), similar to that approved by Congress in 2003. An increase of this nature is one of the simplest, fastest, and best ways to provide stimulus to states.

Again, we fully support your efforts to bring about investment in our nation and stimulus to our economy. As members representing a state that continues to be affected disproportionately by domestic and global economic forces, we look forward to working with you on this important matter.

Sincerely,

Senator Carl Levin (D)
Senator Debbie Stabenow (D)
Representative Bart Stupak (D-MI01)
Representative Dale E. Kildee (D-MI05)
Representative Sander Levin (D-MI12)
Representative Carolyn Cheeks Kilpatrick (D-MI13)
Representative John Conyers (D-MI14)
Representative John D. Dingell (D-MI15)


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