Clinton says middle class at risk

Proposes $7 billion in tax incentives, investments to create quality new jobs and fend off outsourcing


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Warning that the United States faces intense economic competition from abroad, Sen. Hillary Rodham Clinton yesterday proposed $7 billion in tax incentives and investments to expand research and create new jobs in the high-tech and environmental sectors.

"If we don't do this, we're not going to recognize our country. We will not maintain a middle class with a rising standard of living. That is what is at stake here," Mrs. Clinton said during a panel discussion at the International Brotherhood of Electrical Workers hall on the South Side. "The fact is, we are in a race and we've got to win that race."

She called it her "insourcing agenda" for reversing the loss of jobs to other countries and ensuring that the nation embraces industries that likely will see the most growth in the 21st century.

The proposal includes $5 billion in tax credits targeted at communities affected by global trade; an increase in the federal research and development tax credit from 20 percent to 30 percent; the creation of a 40 percent "basic research" credit; credits for start-up companies; and $500 million annually to encourage the creation of clean energy manufacturing technologies.

Mrs. Clinton also proposed 15 "Innovation and Research Clusters" that would receive another $500 million a year in federal matching grants. State and local governments would apply for the grants. Mrs. Clinton said the program is similar to Pennsylvania's Keystone Innovation Zones, an initiative pushed by Gov. Ed Rendell.

Such proposals would deliver much-needed federal funds for efforts that are already underway, said John W. Manzetti, president and chief executive officer of Pittsburgh Life Sciences Greenhouse, a nonprofit group that raises money from philanthropic foundations and the state to provide resources to biotechnology companies.

He was one of five local speakers joining Mrs. Clinton on stage during the closed event.

"We need to protect our jobs here, or obviously they'll go somewhere else," Mr. Manzetti said.

Earlier in the day, Mrs. Clinton toured the Greenhouse's Oakland facilities on the other side of river, including a University of Pittsburgh lab that specializes in Alzheimer's disease research and a lab run by Stemnion, which is studying stem cells from amniotic fluid to develop treatments for diabetes and serious burn injuries.

Mrs. Clinton briefly peeped through a microscope at cells drawn from a mouse's brain in the Pitt lab.

"Hang on! Help is on the way, I hope," she told researchers there, promising that a second Clinton administration would significantly expand funding for science research through the National Institutes of Health.

Mr. Manzetti said increased money for NIH would be a great boon for Pitt and Carnegie Mellon University. Those institutions often fuel the start-up companies helped by his organization. The new companies, in turn, bring high-paying jobs to the region.

Over the past five years, the Greenhouse has worked with 250 companies.

Fourteen companies now lease lab space at below-market rates at the organization's facilities in Oakland and the South Side. Mr. Manzetti said federal money could help the organization expand the available space for similar start-ups, which usually move on within one to three years.

He also said Mrs. Clinton's proposals -- particularly the innovation and research clusters -- could aid local efforts to create a regional high-tech corridor between Pittsburgh and Cleveland.

David J. Malone, chairman of the Greater Pittsburgh Chamber of Commerce and the Pennsylvania Workforce Investment Board, said he was also enthusiastic about the senator's proposals. But he said the government needs to avoid putting too many restrictions on federal funds since different regions have different needs.

"We want the federal government to be a partner, but we don't want you tell us what to do with the money," he said during the panel discussion.

Mrs. Clinton said she agreed that a hands-off approach is ideal if grant recipients are producing results, but she also said there would be a need for transparency and oversight.

Other Clinton proposals include the creation of a Manufacturing Advanced Research Projects Agency, which would conduct research in technology areas that could be too costly and risky for private enterprises

Mrs. Clinton said some of her plans would be funded by ending tax subsidies for oil companies enacted under the Bush administration. She also would stop U.S. corporations from avoiding domestic taxes by reinvesting their overseas earnings abroad, which they can do under the current tax code.

The change would bring the U.S. about $15 billion in extra tax revenue each year, according to the Clinton campaign.

Mrs. Clinton was joined yesterday by Mr. Rendell, Allegheny County Chief Executive Dan Onorato and Pittsburgh Mayor Luke Ravenstahl. She praised their roles in revamping the economy in a region that suffered heavily after the decline of the steel industry.

"I'm a big believer in comebacks," Mrs. Clinton said to loud applause. "I know that what Dan and Luke have done is right in that category, really focusing on the future, what it is we need to do together in order to give the people here -- who are working so hard -- the better future they deserve."


Jerome L. Sherman can be reached at jsherman@post-gazette.com or 412-263-1183.


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