House Democrats Promote Their Innovation Agenda

February 14, 2006. Rep. Nancy Pelosi (D-CA), and other House Democrats hosted an event in the Capitol Building on Tuesday, February 14, at which they discussed and promoted the "House Democrats' Innovation Agenda"

The participants included Rep. Pelosi, Rep. George Miller (D-CA), Rep. Hilda Solis (D-CA), Rep. Kendrick Meek (D-FL), and Rep. Rush Holt (D-NJ).

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The participants also included George Lucas, Chrissie England and other persons associated with Industrial Light & Magic (ILM), and its parent corporation, Lucasfilm, Ltd.

The audience for this event was largely youthful staff and interns from Democratic offices on Capitol Hill. Their interests, as reflected by their applause, and by the questions that they asked, lay in George Lucas, his Star Wars movies, and the film industry, rather than in Rep. Pelosi and the policy debates over of incenting innovation.

Lucas, and other ILM people, spoke about film making and special effects. Lucas also spoke at length about the importance of secondary and university education for innovation, including the need for more government funding.

Lucas said that "education needs to be free" and that "we need to have a free higher education system in this country". He said that "that is what buys hope. And hope buys us innovation."

ILM is based in the San Francisco area. Rep. Pelosi represents a San Francisco district.

Rep. Nancy PelosiRep. Pelosi (at right) looked on, and smiled adoringly.

She spoke about the House Democrats' innovation agenda.

This agenda contains several education related statements. It proposes to "Educate 100,000 new scientists, engineers, and mathematicians in the next four years by proposing a new initiative, working with states, businesses, and universities, to provide scholarships to qualified students who commit to working in the fields of innovation."

It also proposes to "Place a highly qualified teacher in every math and science K-12 classroom by offering upfront tuition assistance to talented undergraduates and by paying competitive salaries to established teachers working in the fields of math and science; institute a ``call to action´´ to professional engineers and scientists, including those who have retired, to join the ranks of our nation’s teachers."

It also proposes to "Make college tuition tax-deductible for students studying math, science, technology, and engineering."

The Democrats' agenda also includes several research and development items. It proposes to "Double overall funding for the National Science Foundation, basic research in the physical sciences across all agencies, and collaborative research partnerships; restore the basic, long-term research agenda at the Defense Advanced Research Projects Agency (DARPA) to conduct long-range, high-risk, and high-reward research."

It proposes to "Create regional Centers of Excellence for basic research that will attract the best minds and top researchers to develop far-reaching technological innovations and new industries, and modernize existing federal and academic research facilities."

It also proposes to "Modernize and permanently extend a globally competitive R&D tax credit to increase domestic investment, create more U.S. jobs, and allow companies to pursue long-term projects with the certainty that the credit will not expire."

The Democrats' agenda also addresses broadband deployment. After some vague language about a "national broadband policy", it adds that the Congress should "Enact a broadband tax credit for telecommunications companies that deploy broadband in rural and underserved parts of America to ensure that every region of the country benefits from our innovation investments."

The Democrats' agenda also proposes to "Reward risk-taking and entrepreneurship by promoting broad-based stock options for rank-and-file employees." It also proposes ending the practice of diverting U.S. Patent and Trademark Office (USPTO) user fees to subsidize other government programs.

Also, Rep. Pelosi sent a letter to President Bush dated February 9, 2006. She wrote that "Many of the ideas you expressed in the State of the Union address are similar to the proposals in our Innovation Agenda. It is critical to move beyond words and speeches with a real financial investment in innovation, and we must do it now."

"I am writing to request a bipartisan meeting of Congressional leaders to discuss how we can advance these vital issues", wrote Rep. Pelosi.

Free Trade v. Protectionism. One youthful film buff asked Lucas about filming in Australia. Lucas responded that he went there because of high quality and low costs, particularly in the labor market. He then launched into a discourse on globalization. He said that he operates internationally, that companies can and should use workers from any nation, and that governments should not erect protectionist barriers.

Rep. Pelosi stopped smiling.

Lucas said that "when it comes to shooting a film, I go wherever I can get it done with the highest quality at the lowest price. That is Economics 101." He said that "We found that the most competitive place in the world was Australia. So, we moved our operation to Australia."

He continued that "You live in an international community. The President is kind of talking about, you know, we have to be really careful about isolationism. You know, isolationism, just as everything else in this world, is economic. You cannot think outside the box. But, the world is out there, and unless you realize that it is a very big world. And, you can't really protect unfairly your particular position at the expense of somebody else's. You have to open everything up and compete with everybody everywhere. This is what we have been forced to do. And in the end everybody benefits from that. If you take away the cushy little protections that you have, you end up with a very different marketplace, but a much more stable market place, and a much fairer marketplace." ...

The Democrats written agenda does contain one policy proposal related to global labor markets. It recommends that the U.S. "create a special visa for the best and brightest international doctoral and post-doctoral scholars in science, technology, engineering and mathematics."

Comparison of Bush's and Democrats' Innovation Plans. The President's agenda and the House Democrats' agenda contain many similarities, both in what they include, and in what they omit.

Both propose to make the R&D tax credit permanent. The Congress has long been enacting legislation that temporarily extends the R&D tax credit, but which does not make it permanent. There are bills in every Congress to permanently extend this tax credit.

There is some smoke and mirrors in this process. Since the Congress has extended the R&D tax credit so many times, companies have come to expect the credit to be continued, and plan accordingly. However, administration and Congressional budget staff, in making revenue projections, can operate under the fiction that tax revenues will increase when the credit expires.

Both the President and the Democrats propose to increase federal funding for research. And both focus on education in math, science and technology.

There are many other policy debates on Capitol Hill, and in federal agencies, that the participants assert are essential to promoting innovation, yet which the House Democrats' and the Presidents' agenda largely ignore. There are a host of copyright law issues, and many patent law issues, that neither the House Democrats nor the President address.

The House Democrats' written agenda contains one vague reference reference to intellectual property law. It proposes to "Protect the intellectual property of American innovators worldwide, strengthen the patent system".

George Lucas compared the President's and the House Democrats' innovation agendas. He said that President Bush "said the same things these guys said." He recommended that "They should get together and work things out."

He added that both the President and the House Democrats have identified innovation as an issue to be addressed, and that they only differ a little on the timing. Republicans view this with a "long term" perspective, while Democrats see this as "short term". Otherwise, he said that "They seem to be saying the same thing."

TLJ asked Rep. Pelosi after the February 14 event what is the main difference between the President's innovation agenda and the House Democrats' innovation agenda.

She responded, "Well, the investments. In other words, the President talked about investing in the National Science Foundation over ten years. It has to be five, or within five. You can't have innovation unless you fund, invest in education K through 12. K through 12. You cannot have innovation if you are adding to the cost of student loans. So, the investment in education, the investment in research and development, the real investment in energy independence, because the technology is there for it. These all have a high return to our budget. Our Democratic proposal is pay as you go, no deficit spending, and we believe these priorities will prevail in any budget debate. So, the main difference, well, we have more a aggressive program, initiative. The main difference is is the level of investment that Democrats are willing to make to make this happen in a short period of time. And again, with staying number one, timing is everything. Ask the Olympians."