At the core of America's economic growth has always been a dynamic relationship between technology-driven change and political modernization according to Breakthrough Journal contributor Michael Lind's important new work, Land of Promise.

In a sweeping economic history of the United States released today, Lind, who is cofounder of the New American Foundation, traces how the competing Hamiltonian and Jeffersonian philosophies have shaped and defined the history of the United States for the past two hundred years and argues that it is Hamiltonianism that has laid the foundation for America's prosperity.

Continue reading ""Land of Promise" Released Today" »

In case you missed it, the Council on Foreign Relations just listed the Breakthrough Institute report, "Taking on the Three Deficits: An Investment Guide for American Renewal," as a "must read" report in their round up of "the best online analyses and inquiries on foreign policy."

Written with the Information Technology and Innovation Foundation, the report shows that the United States faces not one but three interrelated deficits challenges. As the report notes:

"An oftentimes myopic focus on the budget deficit has obscured the fact that America actually faces three deficits--the budget deficit, the trade deficit, and the investment deficit--that, if left unchecked, could total over $41 trillion in the next 10 years. Reducing all three deficits, not just the budget deficit, is critical to future economic prosperity."

The only way to reduce the three deficits, we argue, is to increase productive public investments in innovation, productivity, and competitiveness, while making targeted cuts to areas of consumptive government spending.

More economic experts are embracing the idea that the only way to both climb out of our economic doldrums and close the budget deficit, is through growth-enhancing public investments.

In last week's Washington Post, Fareed Zakaria argues that federal investment is central to long-term economic growth. Yet over the last two decades America has failed to make long-term investments to sustain economic prosperity. In "Taking on the Three Deficits," we estimate that America's "investment deficit" now totals $2.5 trillion and may grow to $5 trillion by 2020. "If we want the next generation of growth," Zakaria writes, "we need a similarly serious strategy of investment."

You can read the full "Taking on the Three Deficits" report here.

The following was written by Jesse Jenkins and Alex Trembath and submitted to the National Journal discussion "How Can Washington Green America's Economy?"

Before discussing the best way to green the economy, it's important to note that the U.S. economy has been greening steadily over the past three years. Buoyed by the policies established and extended by the American Recovery and Reinvestment Act (ARRA), the largest federal investment in clean tech in American history, the clean energy industry has experienced precipitous growth, as documented by Mark Muro and colleagues at the Brookings Metro program in their recent "Sizing the Clean Economy" report.

Unfortunately, the path of progress may be coming to an end. Our research shows that over 70% of the federal policies and funding support for clean energy that has catalyzed the recent growth of the industry is expected to lapse in the next three years, or has already expired. And make no mistake--clean energy is an industry dependent on government subsidy: tax credits, depreciation and other subsidies compose one third or more of the total after-tax value of most solar, wind or other renewable energy projects, for example. So while ARRA provided a "down payment" on a green economy, as these public investments fade away, we are now more likely to witness a clean tech crash than a clean tech revolution.

Continue reading "Surviving the Coming Clean Tech Crash" »

Twenty-three years ago, Ronald Reagan addressed the nation to defend federal investments in research and development, even amidst dire budgetary constraints, prefacing the innovation hawks of today. The following is excerpted from Reagan's 1988 national address:

Federal funding for science is in jeopardy because of budget constraints. That's why it's my duty as President to draw its importance to your attention and that of Congress.

...The remarkable thing is that although basic research does not begin with a particular practical goal, when you look at the results over the years, it ends up being one of the most practical things government does... Major industries, including television, communications, and computer industries, couldn't be where they are today without developments that began with this basic research.

...one thing is certain: If we don't explore, others will, and we'll fall behind. This is why I've urged Congress to devote more money to research. After taking out inflation, today's government research expenditures are 58 percent greater than the expenditures of a decade ago. It is an indispensable investment in America's future.

...Some say that we can't afford it, that we're too strapped for cash. Well, leadership means making hard choices, even in an election year. We've put our research budget under a microscope and looked for quality and cost effectiveness. We've put together the best program for the taxpayers' dollars. After all, the American tradition of hope is one we can't afford to forget.

It's not often that we agree with Ronal Reagan's policy prescriptions. But even Reagan recognized the difference between productive government investment and government spending, and called for increased investments in science and innovation even at a time of tight fiscal concerns. Reagan's speech stands in stark contrast to the ideology of modern-day Congressional Republicans, who continue to push cuts to critical federal investments in energy innovation, wholly disregarding the critical role that federal investments in innovation have played in driving the nation's economic growth.

Newt Gingrich has joined a growing group of innovation hawks in recognizing the importance of federal innovation investments in driving U.S. economic growth. Speaking at a Brookings Institution conference, the former Speaker of the House argued against making across-the-board cuts to government spending and acknowledged that we need to preserve key federal investments in science and technology research.

Here's The Wall Street Journal's David Wessel on Gingrich's Speech:

'One of them [the Republicans' ideas for addressing the deficit] is cutting investment in science and research,' Mr. Gingrich told a Brookings Institution conference. 'It's essentially like saying I want to save money on your car [so] we're not going to change the oil. And for about a year I can get away with it, then the engine will freeze, and we have to change the engine.'

In short, Mr. Gingrich argued: All government spending is not created equal. All government spending is not evil. And Washington's approach to budgets is imprudently starving the future.

In advocating for critical federal investments in innovation, Gingrich echoes the innovation-centered federal strategy outlined by President Obama is his State of the Union speech earlier this year.

Gingrich is strongly critical of the parts of his party's recently released 2012 budget proposal that would strip critical funding for innovation across the federal government.

Continue reading "Newt Gingrich: Innovation Hawk?" »

True, we must reduce low-priority discretionary spending, both defense and domestic; slow the projected growth of Medicare and Medicaid; and restore Social Security to fiscal soundness. But we also need to care for an aging population and invest in the skills, research and modern infrastructure that power economic growth.

Alice Rivlin, founding director of the Congressional Budget Office, former director of the White House Office of Management and Budget, former Federal Reserve Vice Chair, and member of the Presidential Debt Commission.

See also: "Losing the Future?" a Breakthrough Institute staff editorial, April 14, 2011

"The first step in winning the future is encouraging American innovation. ... We'll invest in biomedical research, information technology, and especially clean energy technology, an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."

With those remarks at the heart of his State of the Union address - and a 2012 Budget proposal to back them up - President Obama drew a line in the sand and articulated a vision of American economic renewal fueled by key investments in the kind of public-private partnership that brought us the railroads and jet aviation, microchips and the Internet, countless biomedical breakthroughs and a portfolio of clean energy alternatives.

As we wrote in January, "Obama's [State of the Union address] was a rejection of proposals to cut federal spending across the board, as he finally made the case before the American people about why public support for innovation is critical for the country's long-term prosperity."

It was a plan to "win the future" and restore American prosperity that embraced the crucial distinction between government spending - consumptive, transitory, and sometimes even wasteful - and public investment - that small portion of our federal budget that catalyzes the enduring innovation, entrepreneurship, and economic growth that makes this nation strong. We hailed the speech as "Obama's breakthrough" moment.

But that was January...

Today, we're veering closer to a very different vision of America's budgetary future, one that seems to embrace the logic of "across-the-board" spending cuts proffered by Republicans, including decreasing budgets for major national research agencies and clean energy innovation programs.

Budget Deal Cuts Investment in Innovation

Late on April 8th, President Obama's negotiators gave his imprimatur to a compromise to fund the government through the remainder of the 2011 fiscal year that would see federal investments in energy innovation fall by nearly 11% (or $325 million) below 2010 levels while stripping over $1 billion from the budgets of the nation's major non-defense research agencies.

These cuts amount to a veritable funding cliff, when one considers the nearly simultaneous expiration of the temporary investments flowing to innovation agencies in 2009 and 2010 under the American Recovery and Reinvestment Act.

If this is the opening battle in the war to win America's future, it is a clear defeat.

Continue reading "Losing the Future?" »

On Tuesday, House Budget Committee Chairman Paul Ryan released his fiscal year 2012 budget proposal, a plan that would strip federal funding for energy innovation. If enacted, the budget would seriously threaten the country's clean energy competitiveness and damage innovation, the engine of economic growth.

The following is excerpted from the The New York Times:

A long-term Republican budget plan released this week by Representative Paul Ryan of Wisconsin calls for drastic cuts in federal spending on energy research and development and for the outright elimination of subsidies and tax breaks for wind, solar power and other alternative energy technologies.

Under the Republican plan, overall discretionary funding for energy programs would fall to about $1 billion per year. President Obama's 2012 budget, meanwhile, would provide about $8 billion to support clean energy research and deployment.

Mr. Ryan's proposal calls specifically for "eliminating welfare for energy companies." The proposal does not include details on which subsidies would be curtailed, but its references to "uncompetitive" energy sources clearly point to wind and solar power, which typically generate electricity at a premium to fossil fuels like coal.

Clean energy advocates criticized the Ryan proposal, calling it a short-sighted plan that would cede dominance in the fast-growing clean-tech market to countries like China and Germany.

"The Ryan budget has handouts for big oil and a slammed door for the emerging technologies of the future," said Daniel J. Weiss, a senior fellow and director of climate strategy for the Center for American Progress, a liberal research organization. "It's bad for American competitiveness, innovation and job growth."

See this four-part series for an analysis of the budget battle and its implications for federal investments in energy innovation:

Budget Battle, Part I: President Obama's Budget Would Invest in Energy Innovation
Budget Battle, Part II: House GOP Budget Proposal Slashes Energy Innovation Investments
Budget Battle, Part III: Senate Democrats Aim to Invest in Clean Energy, Innovation, Infrastructure
Budget Battle, Part IV: Senate Democrats Propose Across-the Board Cuts in Energy Innovation Budgets

Budget Battle, Part I: President Obama's Budget Would Invest in Energy Innovation
Budget Battle, Part II: House GOP Budget Proposal Slashes Energy Innovation Investments
Budget Battle, Part III: Senate Democrats Aim to Invest in Clean Energy, Innovation, Infrastructure
Budget Battle Part IV: Senate Democrats Propose Across-the-Board Cuts in Energy Innovation Budgets

Last week, a group of Senate Democrat leaders unveiled their plan to build off of the innovation-centered budget proposal released by the President two weeks ago, including several important investments in energy innovation, advanced manufacturing, and infrastructure.

Senate Majority Leader Harry Reid introduced the proposal as an effort to simultaneously "create jobs, promote growth and help America win the future by making smart investments in education, innovation and infrastructure while cutting spending to live within our means."

The Senate Democrats' plan to judiciously invest in innovation and infrastructure while cutting wasteful spending elsewhere in the budget stands in sharp contrast to the Continuing Resolution bill passed by the House this weekend. The House bill budget would cut more than $60 billion from the federal budget to fund the government through FY2011, slashing several important energy innovation initiatives.

Continue reading "Senate Democrats Aim to Invest in Clean Energy, Innovation, Infrastructure" »

Budget Battle, Part I: President Obama's Budget Would Invest in Energy Innovation
Budget Battle, Part II: House GOP Budget Proposal Slashes Energy Innovation Investments
Budget Battle, Part III: Senate Democrats' Aim to Invest in Clean Energy, Innovation, Infrastructure

The House Republican's Continuing Resolution proposal to fund the government through the rest of Fiscal Year 2011 (FY11, ending Sept. 30) would slash energy innovation investments across federal agencies. The bill, H.R. 1, was introduced last Friday as the GOP's attempt to reduce the deficit and restore "fiscal responsibility," yet would nevertheless strip highly leveraged dollars from important federal programs, while representing merely a drop in the bucket of the $1.3 trillion federal deficit.

The Continuing Resolution as it stands would slice over two billion dollars from the DOE's budget alone and would have detrimental impacts on the state of American energy innovation. The budget cuts would force the layoffs of scientists and engineers, shrink the capabilities of laboratories and universities to perform the most critical cutting-edge energy research projects, and, by cutting funds for highly-leveraged loan guarantee programs, steer private sector funds away from American entrepreneurs and small businesses looking to demonstrate and deploy their innovative energy technologies on American soil.

The Continuing Resolution proposes cuts of at least 17% as compared to FY10 levels in each of the most innovation-oriented offices in the Department of Energy:

• The agency which would be hardest hit would be the Advanced Research Projects Agency-Energy (ARPA-E), which funds both the riskiest and most transformative, early-stage energy innovation projects, and would lose a staggering 75% of its budget under H.R. 1.

• The Office of Energy Efficiency and Renewable Energy (EERE), which was responsible for roughly 34% of the DOE's energy innovation investments in 2010, would lose 35% of its FY10 budget.

• The Office of Science, which funds critical early-stage energy innovation research, would see a 20% decline in its budget. Office of Science devoted 20% of its 2010 budget to energy innovation funding, while supporting additional fundamental physical science research.

• The Office of Nuclear Energy, which devoted 41% of its funds to energy innovation projects in 2010, would lose 23% of its budget.

• Meanwhile, the Office of Fossil Energy would see an 11% reduction in its budget. 43% of the office's 2010 budget was devoted to energy innovation efforts.

Continue reading "House GOP Budget Proposal Slashes Energy Innovation Investments" »

Budget Battle, Part I: President Obama's Budget Would Invest in Energy Innovation
Budget Battle, Part II: House GOP Budget Proposal Slashes Energy Innovation Investments
Budget Battle, Part III: Senate Democrats' Aim to Invest in Clean Energy, Innovation, Infrastructure

Post Updated: 03/08/2011

President Obama released his fiscal year 2012 budget proposal this morning, a solid endorsement of the necessity to increase public investment in energy innovation amidst proposals to indiscriminately cut discretionary spending across all federal programs. The President's budget proposal builds off of the innovation-centered economic growth strategy presented in the State of the Union Address last month and the White House Innovation Report released two weeks ago.

On the energy investment front, the budget proposal aims to increase the DOE's budget by 11.8 percent over FY2010's current appropriation levels, or $3.1 billion dollars, a comparatively small increase in an overall budget proposal of $3.7 trillion that proposes reducing the projected deficit by roughly $110 billion per year for the next ten years.

This budget increase is a vital step towards meeting the scale of the energy innovation challenge long-underlined by the Breakthrough Institute and by a general consensus of leading energy innovation experts, think tanks, and policymakers.

However, not all of these increases lie with funding for energy innovation. Using the Energy Innovation Tracker, a tool that compiles federal energy-innovation funding across nine federal agencies for the years 2009-2011, inclusive of ARRA, we've broken out investments in energy innovation (defined in the tracker as Basic Science, RD&D, and Education investments) from general energy investments in measures such as deployment, facility construction, and program management.

Continue reading "President Obama's Budget Would Invest in Energy Innovation" »

In a recent column, Innovation Conservative David Brooks calls out both Democrats and Republicans as perpetuating "mirages" for advocating cuts to discretionary spending as deficit reduction measures, and argues that those advocating for increased investments in productive areas need to band together to address entitlements, as growing entitlement spending will impose constraints on those investments in the future.

Continue reading "David Brooks on Deficit Cutting Mirages" »