Transforming the American Economy Through Innovation

Remarks by Vice President Joe Biden at the Recovery Act Innovation Report Event

Recovery Act Innovation Report Event
South Court Auditorium, Eisenhower Executive Office Building

As Prepared for Delivery—

Let me start by addressing a couple of items from the news this morning.

First, as of today, we have officially reduced the number of U.S. troops in Iraq below 50,000, meeting a commitment President Obama made before taking office – and meeting it ahead of schedule. Next week, as you know, the U.S. military will end its combat mission in Iraq, with the remaining troops advising and assisting Iraqi forces. This is a remarkable milestone in a war that began more than seven years ago.  We owe a debt of gratitude to our military.

Second, I want to respond to the remarks made this morning by Mr. Boehner, the Republican leader in the House.

After months of promising a look at his party’s agenda and their plans for America, he made what was billed as a major economic address. And his chief proposal apparently was that the President should fire his economic team.  Very constructive advice, thanks. 
 
So, let's just review a little history here:  For eight years before we arrived, Mr. Boehner and his party ran this economy and the middle class into the ground.

They took the $237 billion surplus they inherited from the Clinton Administration and left us with a $1.3 trillion deficit, and, in the process, quadrupled the national debt – all before we had turned on the lights in the West Wing.

They gave free rein to the special interests to write their own rules at the expense of everybody else.

And the sum total of it was the greatest economic crisis since the Great Depression—a crisis that wreaked havoc on families and businesses across this country--a crisis from which we are still digging out.

The head of their campaign committee, Representative Pete Sessions, said that if they were to take control of Congress this fall—which, by the way, they won't—that they would go back to "the exact same agenda" they were pushing before President Obama took office.

They think the policies they had in place during the Bush years—the ones Mr. Boehner helped craft and sell—were the right ones. Well, let me tell you, there are millions and millions of Americans who saw their paychecks shrink or their jobs, houses, and savings vanish.  Mr. Boehner is nostalgic for those good old days…the American people are not. 

They don't want to go back.  They want to move forward.

Now let me respond to a few specific points Mr. Boehner raised:

On taxes, let's be clear on what this debate is all about: the big tax cuts of the last decade are scheduled to expire. This President says the middle class can't afford higher taxes in the midst of this recession. They've borne the brunt of it.

So the President proposes we extend the tax cuts for 98 percent of Americans.

What Mr. Boehner wants to do is extend the tax cut to the other two percent.  That means we’re going to have to borrow $700 billion we don’t have to give a $100,000 a year tax cut to millionaires.

This is a tax cut they don’t need, and they won’t use to create jobs or economic growth.

So to justify that, he has created this myth that a tax cut for millionaires is actually a tax cut for small business.

There aren't three percent of small businesses in America that would qualify for that tax cut. It's a Wall Street tax cut, not a Main Street tax cut.   At the same time, they’re blocking the genuine $12 billion tax cut for small businesses we proposed.

Also, he wants to give U.S. companies that shift jobs and profits overseas a tax credit for taxes they don’t even pay.

We've seen this movie before, Mr. Boehner. We know how it turns out.  And the American people deserve something different and something better.

The rest of his so-called plan doesn’t offer any real economic agenda, it merely is a list of things he thinks the President shouldn’t do.

So after all of this buildup and hype, all we know is what John Boehner and his Republican colleagues are against.  We still haven’t heard what they’re for.

So let’s be clear about the kind of change this administration supports.

Today, Secretary Duncan will make an announcement about Race to the Top, which is our plan to reward states that are willing to take bold steps and change the way we educate our children.

It’s striking that Mr. Boehner’s economic address was devoid of any proposal to improve America’s schools.

And another key to our economic future that Mr. Boehner ignored is what we’re here to discuss: innovation.

Let me tell you basic formula:

Government plants the seeds, the private sector makes them grow, and we launch entire industries, create hundreds of thousands jobs, and spark new forms of commerce that were once unimaginable, allowing us to dominate the 21st century like we did in the 20th.

You know, Secretary Chu is really the perfect person to talk about innovation with us today.  From what I understand, you don’t win a Nobel Prize for repeating the formulas of the past.  You win one for doing something that’s never been done before.  You win one for innovating. 

And more than ever, America needs to innovate. I’ve been all over this country, and talked to a lot of people, and I’ve not yet found anyone who has said to me:  Just bring us back to where we were.  Just bring the economy back to what it was before the beginning of this recession. 

Because not only were families struggling before the beginning of this great recession —America was stagnating.

We were seeing big challenges getting bigger —climate change, our dependence on foreign oil, the erosion of our manufacturing base. 

And at the same time, Americans were losing jobs, and losing hope. 

So when we passed the Recovery Act, our goals were three-fold:

•          To rescue a rapidly deteriorating economy;
•          To put the country on a path to recovery by getting Americans back to work quickly; and
•          To reinvest in the country’s long-term economic future.

On the first two counts, we’re making progress:  We’ve created 3 million jobs, and we’re adding jobs every month.  The economy has been growing for a full year. 

In the last six months of the Bush Administration, we lost 3 million private sector jobs.  In the first seven months of this year, we created 630,000 private sector jobs.

We’re turning this around.

Now, it’s not happening as fast as any of us would like, and certainly not fast enough for the millions of folks who are still out of work.  But there isn’t any doubt – we’re moving in the right direction.

It’s that third part of our strategy that we’re here to report on today. 

As I said, it’s not enough just to rebuild the industries of the 20th century. 

We knew we had to lay the foundation for a new, more robust American economy, one that was ready to meet the challenges of the 21st century—which are different from the ones we face in the 20th.  And, like those before us, we know we have to innovate.

Since its birth, the United States has been a nation built on discovery and innovation.  In fact, our very roots are in innovation. We’re innovators — that’s who we are.  We’re tinkerers and inventors, explorers and entrepreneurs. 

It was in this spirit of taking bold steps forward amid daunting adversity that President Obama signed the Recovery Act. 

Today, I am proud to release this report on how the down payments we have made to entrepreneurs and innovators through the Recovery Act are transforming the American economy.

The report has a lot of details, but I can summarize it very briefly:

The first point I want to make is, our investments in innovation are creating jobs, creating new industries, making existing industries more competitive, and, in the process, they’re driving down costs for new technologies that are badly needed, and helping our nation reassert our place as the world’s center for inventors and entrepreneurs.

This report focuses on our investments in four main areas  Think of them as seed money:
 
1.         Modernizing transportation, including advanced vehicle technology and high-speed rail;
2.         Jumpstarting the renewable energy sector through wind and solar energy;
3.         Investing in groundbreaking medical research; and
4.         Building a platform that will enhance the private sector’s ability to innovate, through investments in broadband and the Smart Grid, by giving them the tools they need to grow.

In each of these areas, we’re seeking game-changing breakthroughs.  And in some cases, entire new American industries are being born—the very industries that are going to allow us to lead the world in the 21st Century.

I’d like to highlight just a bit of what’s happening in each of these areas.

First, modernizing transportation.

I know that we have several electric vehicle manufacturers, battery makers, and people working on charging infrastructure here today.

I was at a Jeep plant yesterday.  Right now, we’re seeing that we did the right thing when we stepped in to give them American auto industry a second chance.

Our goal was not just to rebuild the auto industry of the past—but to create an American auto industry for the next century, that will dominate for decades to come.

I want to see a day when you can pop the hood on your electric car made in Smyrna, Tennessee, to check on your advanced battery made in Holland, Michigan, or Noblesville, Indiana, and an electric motor made in Longmont, Colorado, as you recharge your vehicle at an electric charging station in San Diego. 

But we knew that day wasn’t going to come on its own.  In the greatest automobile producing-country on Earth, we were manufacturing less than two percent of the world’s advanced vehicle batteries. 

Thanks to the Recovery Act, that’s changing – in a big way.  Because we provided $2 billion in seed money to 30 advanced battery and electric drive component factories, it brought more than $2 billion more in private capital off the sidelines.   And, as a result, America is expected to have the capacity to produce 20 percent of the world’s advanced vehicle batteries by 2012.  By 2015, it could be as much as 40 percent—because the private sector will continue to invest in these changes.

And more importantly, we’re on pace to reduce the cost of batteries for autos by 70% by 2015 – which will make electric vehicles cost-competitive with similar non-electric vehicles.

When you put it all together, it means that America will once again be able to provide “Wheels for the world” –  the most advanced, efficient, competitive cars found anywhere—with a side benefit of not having to rely on foreign oil. 

Second, we’re jumpstarting investment in renewable energy.

Three decades ago, the U.S. led the world in another arena - the development of renewable energy such as wind, solar, and geothermal power.  Since that time, because of the failure to invest in these industries, we’ve fallen behind. 

President Obama, Secretary Chu, and I set a goal of doubling U.S. renewable energy generation capacity from wind, solar, and geothermal by 2012. 

We wanted to install as much renewable capacity in three years as the U.S. had in the previous thirty. 

But we’re ahead of pace to meet it.  In Pensacola, Florida, we’ve funded the largest photovoltaic power plant in North America, with over 90,000 solar panels—enough to provide energy for 3,000 homes. 

And the Department of Energy is in the process of supporting what will be the world’s largest solar thermal facility – in the Mojave Desert.  It will have 349,000 mirrors.

Because of projects like these, we are on pace to cut the cost of solar energy use in half by 2015 – leading us towards a day when solar power can be as cheap or cheaper than electricity from the grid, meaning that households can save money by using solar.

All told, the new generation capacity supported by the Recovery Act is going to power 16.7 million homes. 
 
But we knew that generating renewable power was only half the story – that we had to reassert ourselves as renewable manufacturing leaders as well.  So President Obama set a goal of doubling U.S. renewable manufacturing capacity by the end of 2011.

And, by the way, that means jobs. 

We’re on track to meet that goal, too.  We’re using a tax credit (48C) to increase incentives for renewable energy manufacturers to set up or relocate their businesses here in the US.  Already, for example, it’s paid out $346 million in tax credits for wind alone, resulting in 52 wind manufacturing projects in the US.

And again, it’s not just government.  It’s leveraging private capital:  All in all, $46 billion in clean energy funds we’re providing in seed money alone will generate more than $100 billion in non-federal investment in new energy projects. 

As a result, we are on pace to hit our target of doubling America’s renewable energy generation and manufacturing capacity by 2012.

Third, the Recovery Act is investing in groundbreaking medical research, with the goal of finding new ways to treat or prevent some of the world’s most daunting and debilitating diseases, to develop powerful new medicines, and even define strategies that will prevent disease from occurring in the first place—saving lives and saving hundreds of billions of dollars. 

This disease prevention work is happening across the board: in human genome sequencing, cardiovascular disease, cancer, and autism.

Thanks to the Recovery Act, researchers at our National Institutes of Health will complete the sequencing on 50 times as many human genomes as we’ve sequenced to date – not only increasing our understanding of disease, but also bringing down the cost of doing this work and opening the door to a future of personalized medicine. 

Thanks to Recovery Act funds, NIH will be able to sequence the genes of cancers that affect 10 million Americans – again, with the potential to start winning the war on cancer our nation declared in the early 1970s.

The first human genome map cost an estimated $2.7 billion.  Today, a genome map stands at $48,000.  Now, we stand on the verge of bringing the cost of a human genome map below $1,000 – fifty times cheaper than what is currently possible and with the potential to completely transform health care in America.

In the National Institutes of Health, we have one of the greatest assemblages of doctors and scientists in the world. 

Through the Recovery Act, we’re giving them the tools to make the most profound innovation of all: improving and extending health and human life, while bringing down the cost in medicine. 

The fourth area of investment is in building a platform for private sector innovation.

In all of these areas, the President and I recognize that the federal government’s role is limited.  We provide the seeds, but it’s the private sector that makes them grow. 

That’s why we’re investing so heavily in broadband.  Thanks to $7 billion in Recovery Act investments, bringing $3 billion in private capital off the sidelines, approximately 2 million rural American households – and tens of thousands of community institutions – will have better access to broadband. 

Farmers will be able to access real-time weather reports, water conditions, and crop prices, helping them be as competitive as possible in a global market.

As I said, we’re also investing more than $4 billion in Smart Grid, bringing more than $5 billion in capital off the sidelines.  Smart grids provide real-time information on electricity use, so that consumers and businesses can make efficient energy choices on a truly reliable network. 

A smart utility grid.  Universal broadband.  These are the foundation upon which innovative businesses can be built here in the U.S. – able to open their doors anywhere, and prosper everywhere.

And that’s really what this is about – giving American entrepreneurs the tools to do what they do best.

I know that there are several representatives of ARPA-E here today. The original ARPA was started in response to Sputnik.  The goal of this new agency was to rejuvenate America’s military research and development capabilities. 

In 1962, ARPA launched a nationwide effort to build a computer network called ARPA-NET.

By 1975, after spending just $25 million, ARPA researchers had done just that - and they’d created the basic structure of the modern Internet.

In the 1980’s, private industry dove in, and by 2009, the Internet was being used by approximately 27 percent of the world’s population, over 1.8 billion people.  It’s the engine for hundreds of billions of dollars of commerce. 

That was a relatively modest federal investment that allowed private industry to completely transform our economy.

That is exactly what we’re doing again.  Our federal investment is bringing money off of the sidelines. For example, in scientific research, $2.9 billion in investment is being doubled by external investors.  Or take clean energy, where a $46 billion investment is supporting more than $3 for every $1 we spent. 

In fact, on $100 billion of Recovery Act investments, the private sector is investing $286 billion—three dollars for every dollar we spend

A couple of months ago, I visited a company called Cree, in Durham, North Carolina.  I know we have some folks from Cree here today.

Their CEO, Chuck Swoboda, said: “The Recovery Act funding made it a straightforward decision to continue to invest in the U.S., both at our North Carolina facility and throughout our supply chain partners across the country.”

In his Nobel Prize lecture, Dr. Chu said, “As scientists, we hope that others take note of what we have done and use our work to go in directions we never imagined.”

Both had it exactly right, and it brings me back to where I started: 

Government plants the seeds, the private sector makes them grow, and we launch entire industries, create hundreds of thousands jobs, and spark new forms of commerce that were once unimaginable.

That’s how we’ve led the world in the past.  And that’s how we’ll dominate again in the future.   Looking at all of you, I know that we’re already on our way.

Thank you.  May God bless you all, and may God protect our troops.

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