Stephen Hadley, Former US National Security Advisor
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Stephen Hadley
Former US National Security Advisor

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May 11, 2020 at 4:30 a.m. PDT

SOURCE: The Washington Post

Stephen J. Hadley was national security adviser in the George W. Bush administration. Anja Manuel, a former U.S. diplomat, is director of the Aspen Security Forum and the author of “This Brave New World: India, China, and the United States.”

“Build back better” was the mantra New Orleans adopted after the devastation of Hurricane Katrina. It should be our country’s motto as we work to recover from the economic and public health crises caused by covid-19.

The Trump administration and Congress are rightly, and swiftly, acting to protect the U.S. economy and save jobs. In the prospective fourth stimulus bill, this must be the priority. But for relatively little investment, we can do more.

Americans are increasingly concerned about China. With massive investments in critical technologies, China seeks to dominate the future both economically and militarily. To meet this challenge, the United States needs to get its house in order.

A smart, strategic stimulus package including a few key provisions — some costing relatively modest amounts or even nothing — would allow the United States to compete effectively with China and others, and position the country for future prosperity, security and job growth.

Elements could include:

An investment in state-of-the-art broadband and other digital infrastructure. U.S. roads and bridges have to be rebuilt. But the coronavirus outbreak exposed how vital it is for all Americans to be digitally connected — whether they live in cities, towns or rural areas. It is past time to make the investments and regulatory changes required to create a best-in-class national digital infrastructure, including by fully funding the Federal Communications Commission’s Rural Digital Opportunity Fund.

Price tag: The FCC estimates it would cost$80 billion to provide broadband nationwide. Some $20 billion has been raised by auctioning off previously unused digital spectrum. An additional $6 billion a year would get all Americans connected by the end of the decade.

A substantial boost in federal research and development (R&D) spending. The United States needs to accelerate development of new technologies, particularly in artificial intelligence, quantum computing, biotechnology, advanced microchips and cyber. These technologies stand to revolutionize how business is done, services are provided and our nation is defended. But the U.S. government spent just $66.5 billion on basic and applied research in 2017, with less than 10 percent going toward computing, artificial intelligence, physics and the like. Private-sector investments in R&D are mostly to commercialize existing technology rather than basic research. The nation needs to do more.

Price tag: Every $10 billion per year of increased government R&D spending, a recent study found, could yield roughly 400,000 new jobs in the near term (about $25,000 per job). New tech hubs could be placed in hard-hit areas, attracting additional private investment.

Smart R&D tax credits. The Chinese government massively subsidizes “hard” technology of strategic importance. In the United States, by contrast, companies get the same R&D tax credit whether creating a new mobile app — or a craft beer — or investing in critical technology of substantial national security or economic significance. The nation should target generous tax incentives only toward the most critical technologies.

Price tag: If stronger tax credits for critical technology are coupled with less generous subsidies for the rest, this would require little or no new funding.

Support advanced semiconductor manufacturing. Semiconductors are the crucial building block of the information economy. America leads in chip design, but our manufacturing companies are losing market share and risk falling behind global state-of-the-art capabilities. China is lagging but is investing more than $100 billion to catch up. State-of-the-art semiconductor fabs, or factories, costing $10 billion to $20 billion each are mostly found in Korea and Taiwan. U.S. government financial incentives should bring home to this country capacity to manufacture the most advanced chips — for defense, advanced AI and other applications — that would create much-needed supply chain security and fuel further technological advances.

Price tag: With public-private burden sharing, the likely total cost would be less than $10 billion.

Strategic education investments. Science and technology talent are the foundation of U.S. success, yet our country is falling behind in science, technology, engineering and mathematics learning. Responsibility for K-12 education mostly falls to the states. But a smart, strategic federal stimulus package could provide financial incentives for STEM education at the university level. One model: The grants and partial student loan forgiveness provided under the National Defense Education Act that followed the Soviet Sputnik success in 1958.

Price tag: $1 billion to $3 billion per year.

Recommendations such as these have been validated in countless studies by a variety of experts. Other good ideas, of moderate cost, might also help while not taking away from the priority properly given to addressing the economic crisis caused by the pandemic. A smart, strategic stimulus package could support economic recovery while also laying the foundation for future prosperity, security and job growth. Together, they could set America up for success in a more competitive world.

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