ITIF

Congress should review export control policies that inhibit U.S. exports.

While the Obama Administration’s Export Control Reform Initiative has begun the effort to implement common sense reforms to streamline and improve the nation’s export control system, more needs to be done. In particular, the government should remove outdated U.S. export control restrictions, especially unilateral burdens placed on widely available ICT products or software. For instance, the United States could remove performance-based controls on commercial scalar computers and associated technology, because access to computing power is so widely available that U.S. export controls on commercial computers are no longer effective and undermine U.S. technology competitiveness and national security. The United States could also remove encryption controls on products and components that are, or will be, widely available or deployed, do not contain encryption as their primary function, or are not peculiarly responsible for creating a military- or intelligence-related advantage.

Congress should update the charter of the Committee on Foreign Investment in the United States (CFIUS) and provide it more resources to address the realities of modern-age state capitalism.

CFIUS is an inter-agency committee authorized to review transactions that could result in control of a U.S. business by a foreign entity (“covered transactions”), in order to determine the effect of such transactions on the national security of the United States. Current CFIUS regulations state that examiners must review covered transactions on a case-by-case basis. But because the threat to both the U.S. defense industrial base and the U.S. industrial base overall is systemic, the CFIUS charter needs to be updated to address the realities of modern-age state capitalism—particularly the threat from SOEs—by allowing reviewers to assess and gauge systemic threats and examine covered transactions in a broader context. Congress should also increase the time period permitted for an initial CFIUS review and also better equip CFIUS with additional personnel and financial resources to support more thorough reviews.

Congress should authorize the Export-Import (Ex-Im) Bank to provide loan assistance to SMEs and to firms competing against subsidized foreign competitors.

Congress should authorize the Export-Import Bank to go beyond providing export credit financing by leveraging the resources of the Bank to help create domestic manufacturing jobs. In particular, Congress should allow the Bank to use $20 billion in unobligated authority to lend directly to domestic manufacturing companies that are in competition with subsidized foreign competitors (e.g., competitors who receive subsidies in the form of grants, subsidized loans, special tax treatment, beneficial land use, etc.). The loan recipients should be able to demonstrate how the funds would support expanded manufacturing activities and employment in the United States.

Congress should raise the Export-Import Bank’s authorization limit to at least $200 billion.

In May 2012, President Obama signed Congressional legislation that reauthorized the Export-Import Bank (Ex-Im Bank) for three additional years while raising its lending authority by 40 percent to $140 billion by 2014. While this is an important step in the right direction, the reality is that foreign competitors continue to invest substantially more in their countries’ export credit agencies (ECAs) as a share of GDP than the United States does. For example, in 2010, Brazil and China provided ten times more and Germany, France, and India all provided at least seven times more export credit financing to their exporters as a share of GDP than did the United States. To adequately respond to increasing foreign export credit competition, Congress should raise the Ex-Im Bank’s authorization limit to at least $200 billion.

Department of Commerce should include a Data Policy Office to focus on data policies that foster innovation.

It’s not enough for the Obama administration to work to protect people from inappropriate use of data; they should proactively encourage the appropriate use of data, including pushing for policies that increase data sharing and reduce barriers to global information flows. A newly created Data Policy Office should also lead the development of an R&D framework for privacy to ensure that federal research dollars are directed at the most pressing privacy challenges.

The Obama Administration should create 400 new STEM-focused high schools.

To expand STEM graduates, high school is a key place to start and the best way to improve STEM high school education is to foster the creation of more STEM-focused high schools. The Obama administration should urge Congress to allocate $200 million a year for ten years to the Department of Education, to be supplemented by states and school districts and industry, with the goal of quintupling the number of STEM high schools to 500.

USTR should fight local data center requirements and highlight instances of non-compliance by foreign governments.

Strong U.S. leadership is necessary to combat the unfair trade practices nations are using to block foreign competitors in the rapidly growing cloud computing industry. For example, the United States Trade Representative should highlight this type of behavior in its annual 301 report.

The Obama Administration should transform Fannie Mae into an industrial bank.

Former Intel CEO Andy Grove notably has called for a “scaling bank” to help scale innovations to production in the United States. To do this, the Obama administration should call for repurposing Fannie Mae into an industrial financing organization. The very existence of Fannie Mae reflects the fact that America has put more emphasis on consumption (housing) than on production (manufacturing). The new Fannie Mae (perhaps called the Federal National Industrial Mortgage Association) would buy and resell loans made to traded sector firms from banks and other lenders.

The FCC should carefully examine “network neutrality” complaints.

No formal complaints of the FCC’s 2010 Open Internet (“network neutrality”) rules have been lodged, although a number of firms complain about unfair conduct. In the event that an actual Open Internet complaint is made to the FCC, it should be carefully examined by an expert panel such as the Broadband Internet Technical Advisory Group before the FCC takes action.

Congress should Reform the Electronic Communications Privacy Act (ECPA) to ensure that citizens have a right to privacy for their electronic data whether it is stored at home on a device or remotely in the cloud.

ECPA was enacted in 1986 and has not kept pace with the advancement of technology. For example, there are different levels of protection afforded to the privacy of an individual’s data based on where the data is stored and how long the data has been stored. Where possible, the privacy of an individual’s communication should be the same regardless of the type of technology that is used to faci