Recent rumblings from Washington, D.C., reflect a renewed congressional showdown over the federal budget deficit.
But little is mentioned about another deficit, which feeds the former and continues to climb to record levels. Im talking about the trade deficit, which was $540.4 billion in 2012.
While tax issues are considered toxic and defunding social programs are contentious topics in D.C., Americas manufacturing sector waits for our elected officials to turn their attention to our out-of-tune trade stance, a problem that has been staring us in the collective face for decades yet whose solutions carry few costs and big effects.
There is an obvious connection between the trade deficit and the budget deficit. Imagine if we put just 1 percent of the millions of unemployed Americans (or a percentage of unemployed Hoosiers) into manufacturing careers. More people working decreases demand for public services while increasing tax revenue, which, in turn, would lower our budget deficit.
But we cant fix our budget deficit or our trade deficit without addressing the elephant in the room: trade with China. Chinas trade practices, including its chronic habit of currency manipulation and the raft of illegal subsidies it provides its industries, interfere with American manufacturers ability to increase exports and create jobs. While our political leaders sit idly by, China makes vague promises of economic reform, but the data tell the real truth: In the decade after the U.S. helped China join the World Trade Organization in 2001, America lost 2.4 million middle-income factory jobs. And our trade deficit with China keeps growing: It was $315 billion in 2012, and in July it hit a one-month record of $30.1 billion.
Those are huge numbers. But they arent insurmountable. A report from the Economic Policy Institute found that up to 2.25 million jobs would be created and the U.S. budget deficit could be reduced by an annual $71.4 billion if our trading partners simply stopped manipulating their currencies.
So why not provide them a pointed nudge to help them do so? House Resolution 1276 – the Currency Reform for Fair Trade Act – would add currency manipulation to the list of illegal subsidies against which an international trade case can be filed. In effect, it would give American businesses the ability to seek redress when a foreign government targets their industries with a rigged currency.
In Indiana, home to the highest concentration of manufacturing jobs in the nation, getting currency manipulation onto this list couldnt be more urgent. There are currently 130 members of Congress pledging their support for this bill, but we need more Hoosiers on the list. Last session, our own Rep. Marlin Stutzman supported currency legislation, but his name is curiously absent this time around.
Hoosiers are counting on him to support manufacturing and level the playing field for us. If Stutzman is as serious about reining in the budget deficit, hell get serious about our trade deficit and address currency manipulation by supporting this bill. Fix one deficit, and you fix the other. Millions of out-of-work Americans are waiting for Stutzmans vote.