Just where do things stand between the United States and China? Does China have to be a friend or a foe, or can it be either depending on the particular issue? Even with China's likely rise, can the 21st century still be another American Century? Is the best American policy engagement or confrontation?

Most Americans' views of China are shaped by perceptions that cheap Chinese labor is destroying the U.S. manufacturing base and that China is not engaging in free and fair trade. Parts of these perceptions are true and parts are not. For example, China is not destroying our manufacturing industry. In fact, China lost 10 times more manufacturing jobs from 1994 to 2004 than did the United States. American manufacturing is holding its own--our factories' share of the world's manufacturing output hardly budged between 1993 and 2005. It has also set new records in recent years for output, revenues, and return on investment.

U.S. job losses in manufacturing have been primarily driven by massive technological change, not by China. In fact, many factories have "help wanted" signs for technologically skilled workers. Instead of throwing blame, we must retrain those who have lost jobs for new and better opportunities.

Americans, however, are right to be concerned about certain unfair Chinese trade and investment practices, particularly discriminatory industrial and investment policies, ongoing challenges to intellectual property rights, market access limitations, and a Chinese currency that is still undervalued.

The U.S. Chamber believes that these problems should be solved through a smart mix of diplomacy, engagement, and pressure, as well as enforcement of world trade rules that China has promised to abide by. Starting a trade war with punitive tariffs or other unilateral actions that violate world trade rules is not in anyone's interest--beginning with the workers, consumers, and taxpayers of America.

Let's not forget--despite a serious trade imbalance between our countries--China is one of the fastest-growing markets for U.S. products and services. In fact, our exports to China have soared 150% since 2001. Our task is to expand business with this large and growing customer, while working to bring balance to our trade and insisting upon a level playing field in China for our companies.

The immediate contest at hand is the Olympic Games, and we'll all be proudly rooting for America's athletes!

You can't say today's union leaders don't appreciate irony. Last week, one of the nation's largest unions held a global rally protesting our system of free enterprise and capital investment. The union called it the "Take Back Our Economy" rally. Well, if it manages to push through its radical agenda, what it will do is "Take Down Our Economy."

In fact, the agenda of a handful of national unions represents a direct assault on America's small businesses. Their top priority is passage of the deceptively named Employee Free Choice Act, commonly referred to as "card check." The bill would make it cost effective for unions to go after Main Street businesses and small retail establishments.

That's because the legislation would eliminate the expense and worker protection of secret ballot elections. It would give union organizers free rein to pressure workers into signing authorization cards. Once enough workers are persuaded to sign, the union would automatically be certified, and it would be illegal for workers to have a secret ballot election. Then the bill would implement a compressed schedule for employers to bargain with their new union. If an agreement isn't reached in time, a government-mandated arbitrator would dictate the terms and conditions of employment and hand the employer a contract—and even the workers wouldn't get a chance to vote on it.

But there's more. Also high on these unions' agenda is allowing the establishment of mini-unions. For example, organizers could go in and just sign up two or three people--not even a majority--and then you've got a union! Big labor also wants to mandate employer-paid leave and health care regardless of ability to pay, criminalize OSHA violations, nationalize health care, and increase taxes and the size of government.

How do these unions hope to implement their agenda? They are betting the house that their path to renewed power--the way to get everything on their wish list--is to elect a pro-union Congress and administration in 2008.

Can they do it? It's possible. Collectively, unions could spend $400 million to $500 million this election cycle. Of course, unions have a right to participate in the political process, but so does the American business community--and we must if we hope to maintain a free and open economy.

2008 will be a watershed year for the future of organized labor. These unions are not playing around, and neither can we. To help stop big labor's anti-small business agenda, visit VoteForBusiness and sign our petition against card check.

The failure of the U.S. transportation network to meet the needs of a growing population and economy is already having an impact on everything from safety to the environment, from quality of life to economic growth. We must immediately reform the approach we take for funding, planning, and building infrastructure so that we can keep people and goods moving across the country and around the world.

Evidence of failure is overwhelming. Safety suffers as a result of poorly maintained roads that contribute to a third of the almost 42,000 fatalities that occur each year on our highways. The environment is adversely impacted by the 2.9 billion gallons of fuel wasted annually as a result of congestion. Congestion also diminishes our quality of life; Americans lose a total of 4 billion hours annually in traffic jams. And in the global economy, our transportation infrastructure is quickly becoming a competitive disadvantage.

A serious effort to modernize our infrastructure comes with the realization that existing funding is insufficient to meet our needs. The National Surface Transportation Policy and Revenue Study Commission recommended an annual investment of at least $225 billion annually over the next 50 years to finance a surface transportation system capable of sustaining strong economic growth and individual mobility.

However, infrastructure investment in 2005 only totaled $155 billion, a $70 billion shortfall. Solving this problem is going to take more money, and every option must be on the table, including privately financed projects and user fee increases. We must also stop the diversion of dedicated transportation funds to non-transportation purposes.

To address infrastructure needs, it will take a fundamental shift away from the piecemeal approach currently employed to an approach driven by economic need and regional mobility. Policymakers must put the needs of citizens and the economy ahead of local political interests by directing financial resources to where they can do the most good, while reducing funding for pet projects.

If we take the right course, our transportation network will be the foundation of a 21st century economy that can move people quickly and safely, easily handle a growing volume of freight, and minimize the release of pollutants.

In this election year, it is crucial that voters ask candidates about their plans for modernizing our infrastructure. No matter who is elected this November, the next president and the next Congress will have the responsibility for rebuilding America. Our prosperity and our way of life depend on it.

It's been a year since a hard fought, bipartisan, comprehensive immigration reform plan collapsed in the United States Senate among much rancor and finger-pointing. The emotionally charged debate rifted the nation, dividing communities and citizens and bringing protestors of all viewpoints out into the streets.

Although immigration is no longer on the front burner of the national debate--and comprehensive reform has been left for dead in Congress--we continue to suffer the consequences of this failure of leadership every day. In fact, all of the issues that reform would have addressed--worker verification systems, border security, visa policy, worker shortages--are simply getting worse.

Think about what's happening. In the absence of comprehensive solutions from Washington, states and localities are filling the void with hundreds of their own rules and regulations. Just last week, a U.S. District Court judge delayed implementation of an Oklahoma law that shifts the burden of immigration enforcement from government to business, saying it is most likely unconstitutional. The U.S. Chamber has been battling similar state and local laws and is the lead plaintiff in the Oklahoma case. The only thing worse than one broken federal system is hundreds of different systems that are contradictory, probably unconstitutional, and impossible for businesses to follow.

The federal government is no closer to implementing an effective, technology-based employee verification system. On June 6, President Bush signed an executive order requiring contractors and others who do business with the federal government to make sure their employees can legally work in the United States. The problem is no such system exists that is fair to employers and employees and actually works. The government's Basic Pilot program (also known as E-verify) is experimental, unreliable, and extremely burdensome.

Our nation continues to turn away badly needed, highly skilled workers by placing counterproductive limits on the number of H1-B visas. An editorial in the June 4 edition of The Washington Post reflects a growing consensus--the current limits are irrational. Wrote the Post: "America's loss of foreign-born experts translates directly into gains for China, India, and other rapidly developing competitors ... the ongoing brain drain of the best and brightest foreigners should give [the nation] pause."

One year later, our border remains insecure, our immigration laws are a mess, we still lack a workable employee verification system, and we are undermining the competitiveness of our country. We can create an immigration system that meets all of our economic and security needs while still honoring our values. All we have to do is find the will, courage, and leadership to make it happen. Business will have to lead the way.

It's amazing how facing an important vote can focus a senator's mind. That's exactly what happened late last week when members of the U.S. Senate seriously weighed the price tag for the Climate Security Act--commonly known as the Lieberman-Warner bill--and decided not to even bring it up for a floor vote.

Senators got it right--the price was too high to pay. Lieberman-Warner would have created a massive new federal bureaucracy, significantly increased energy prices, cost 2 million to 4 million jobs, and transferred $6 trillion of wealth from business and other energy consumers to government.

The U.S. Chamber has offered practical and workable solutions to the climate change debate for a decade. We have outlined the fundamental principles we believe must guide any response to it. They include a recognition that economic growth and competitiveness must be preserved; that technology and efficiency based on realistic timetables should be at the center of any effort; and that only a global solution, including all major greenhouse gas emitters, would actually have a chance to work.

Lieberman-Warner failed on all counts. Therefore, the Chamber opposed it.

The bill would have created an elaborate system of carbon allowances, auctions, and trading arrangements. Under a complex formula, a specified number of emissions allowances would be given away, at first. Emitters would pay for CO2 in excess of their allowances. Over time, most “free” allowances would end, and emitters would have to purchase them.

The intent was to push up the cost of carbon in order to force the conversion to “clean” technologies and alternative sources. But these technologies do not yet exist, and experts agree that the replacement sources could never be ready in time to meet the deadlines in this legislation.

This bill would have imposed a vast, intrusive layer of new and costly regulations over virtually every economic activity in our country. To get an idea of how complex it would be, view this chart.

Lieberman-Warner also does little to confront the international nature of global climate change. Domestic greenhouse gas regulation will not affect emissions from developing nations, and without the participation of these nations, global greenhouse gas levels will continue to rise.

While the bill failed, the debate laid down important markers for the battles to come next year with a new president and Congress. The Chamber will continue to be a leader in devising common sense, effective, and realistic solutions to address climate change. We will work constructively on Capitol Hill to register our concerns, make improvements, represent our members' interests, and seek solutions that address climate change while also working to expand, diversify, and secure America's energy supply.

Last week we discussed how America is having the wrong conversation about health care--one that does not comprehensively address all of our major health care challenges and sets the wrong expectations for the American people. This week we examine how to build and maintain the best health care system in the world, improving access, quality, and affordability for all.

Let's start with the single biggest barrier that puts coverage out of reach for many families and employers--costs. We can dramatically reduce costs by implementing health IT, focusing on wellness and prevention, reducing medical errors, and ending frivolous medical malpractice suits.

When it comes to health IT, we need to build a networked health care system that unites providers, facilities, and patients--and makes information available to support efficient, collaborative care.

We can improve quality of care by reducing litigation and costly medical errors. We should not tolerate, or pay for, preventable medical errors. In fact, Medicare and Medicaid--and some large insurance companies--are now refusing to do so.

We can remove medical malpractice claims from the tort system by creating specialized Health Liability Courts. Lawsuits are driving doctors out of business and raising costs for everyone.

The best way to reduce costs is to prevent the need for services in the first place, and you can only do that through wellness and prevention. Government and employers must educate workers about good health decisions and encourage personal responsibility.

We need a much more consumer-driven health care system, with better transparency. Congress can strengthen the individual health care market by granting comparable tax treatment whether premiums are paid through an employer or by individuals in the private marketplace. Lawmakers should also improve health savings accounts, a true success story.

We need more transparency in the quality of providers and treatments so that individuals can make better, more cost-effective decisions regarding health care--and, so that good providers can be rewarded and bad providers avoided.

We need to strengthen the employer-provided system, which covers 177 million people, by keeping regulations and mandates to a minimum. Congress should allow smaller businesses to pool risk and purchase coverage for their employees at an affordable price.

Sound like small potatoes? It's not. Instead of imposing an expensive, government-run health care system on the American people, let's implement some commonsense ideas to make health care more affordable and accessible. If we do that, American health care will once again be seen as an opportunity--not as a problem.

Sky-high oil and gas prices are socking Americans right in their wallets. The average price for a gallon of gasoline is more than $3.60. Oil prices are hovering around a record $120 a barrel. Many of the elderly and the poor are being forced to choose between filling their tanks with gas or their cupboards with food. It also means slower economic growth and higher consumer prices at a time when our country can least afford them.

It's time for Congress to stop wringing its hands and start acting. If Congress is serious about increasing supply, easing pressure on prices, and reducing our dependence on foreign energy, it can take one simple step--allow energy explorers to tap into America's huge reserves of oil and natural gas in an environmentally responsible way.
 
Over the years, Congress has locked away vast untapped domestic energy resources offshore, on federal lands, and in the Arctic National Wildlife Refuge. These restrictions have been imposed by politicians who frequently call for "energy independence." Federal lands hold an estimated 635 trillion cubic feet of recoverable natural gas, enough to meet the natural gas needs of 60 million homes for 140 years.

Federal lands also hold an estimated 112 billion barrels of recoverable oil, enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years. Opening up these resources will also give us a cushion as existing oil and gas deposits are exhausted.

Of course, there are many other steps we must take to decrease demand, such as improving efficiency, building modern and safe nuclear plants, and investing in renewables and other alternative fuels—we need to do all of them. But increasing domestic production is something we can do now with proven technologies. We can do it in a way that protects the environment. We can do it in a way that provides real relief to Americans who are hurting economically. And we can create thousands of new, good-paying jobs in the process. Instead of sending billions of dollars to foreign oil producers, wouldn't it be better to take control of our energy future and keep our money at home?

It's time to unlock America's natural energy resources. It's time to give our citizens a real energy plan that will deliver real results. It's time to take control of our energy future.

Treasury Secretary Henry Paulson recently announced a sweeping plan to overhaul the rules and structures governing our financial markets. Many of the Secretary's recommendations were based on ideas the U.S. Chamber and others have suggested.

Secretary Paulson deserves great credit for moving the debate forward by proposing a thoughtful and comprehensive plan to modernize and streamline the financial regulatory structure. Current U.S. financial services regulation is a patchwork of federal and state regulatory authorities with overlapping jurisdiction, inconsistent rules, and a hodgepodge of regulatory philosophies. As new financial services, products, and instruments have emerged, government has failed to adapt to changing times and is stuck in a system designed for the economy of the 1930s.

Some suggest we should respond to current difficulties by simply adding another layer of regulation on top of this creaky old system. While the regulatory weaknesses exposed by the current crisis must be addressed, our response should be smarter and more comprehensive. We must establish a modern 21st century regulatory framework to ensure our nation has the most efficient, innovative, fair, and well-regulated capital markets in the world.

In the coming days, much of the focus will be on the immediate housing and credit crises that have grabbed the headlines and roiled markets worldwide. There is bipartisan momentum for mortgage relief on Capitol Hill, and the Chamber will support a targeted program to allow responsible homeowners to stay in their homes under renegotiated terms. We have also voiced support for the Federal Reserve's action on Bear Stearns, which helped prevent a broad systemic collapse of the financial system.

You will also hear many pundits declare that Secretary Paulson's broader reform plan will never pass. Reform advocates should not be discouraged. This will be a marathon, not a sprint. In fact, the Secretary clearly divided his plan into short, medium and long term objectives. At all stages, there will be a vigorous debate over the details--and the Chamber will work closely with our members to drive the debate and shape the final outcome.

As this debate advances, all Americans must understand that no regulatory system can prevent every market loss or economic downturn. This should not even be our goal. Our free enterprise system thrives on taking risks. It is built on the potential for reward and the possibility of failure.

Our overriding goal must be to create a nimble regulatory system that leaves businesses and investors with the flexibility they need to innovate and compete in a global economy. If we lose the flexibility that has been a hallmark of America's success, our children and grandchildren will pay a terrible price in lost opportunity and prosperity.

Primaries in Texas and Ohio today could determine the Democratic nominee for president. For many voters, the election will be a referendum on free trade, particularly the North American Free Trade Agreement.

Voters in Ohio don't much like NAFTA; many in Texas do. As The Los Angeles Times points out, when Clinton and Obama hit the campaign trail in the Buckeye State, they compete to be NAFTA's biggest critic. But when they jet to Texas, the candidates clam up.

In fact, NAFTA is working not only in Texas but also in Ohio, which sells $20 billion in products to Canada and Mexico every year. Unfortunately, Ohio is struggling with economic changes that extend well beyond trade. NAFTA has become a convenient scapegoat.

Let's have some straight talk on trade. What do Americans say they want from free trade agreements? Many want protection for American workers, consumers, and the environment; the creation of good-paying jobs; and a level playing field. Are we achieving those goals?

Let's focus on jobs. Trade has spurred jobs for some types of workers while decreasing it for others. It's hard to pinpoint which jobs are lost due to trade or for other reasons. For example, thanks to technology, manufacturers can produce more goods with fewer workers. Some manufacturing jobs move from one U.S. state to another because of a more attractive business climate. Some jobs simply disappear as outdated industries fade away (think horse and buggies and carbon paper).

What we do know for certain is that since 2002, the United States has created nearly 16 million jobs. We know that America is the world's largest exporter and that one in five U.S. jobs are closely tied to our exports, meaning if we refuse to trade with the rest of the world we really will hear a giant sucking sound!

While most workers and consumers benefit from trade, we need to recognize some other facts. Some workers are dislocated. They deserve our support. They deserve new opportunities. They deserve better education and retraining programs so that they can succeed in a 21st century economy.

Our workers and businesses deserve a level playing field. Shutting down our trade, and pulling out of agreements with our closest neighbors, won't help anyone.

The bottom line: We need to focus on making free trade work better for more Americans, not shaking our fist at it and falsely blaming it for every economic ill. Presidential candidates, take note.

For too long, America's education system has failed to equip students with the knowledge they need to make good financial decisions. An alarming number of adults are unable to balance a checkbook, understand the terms of a basic mortgage, realize the benefits of compound interest, and properly manage credit card debt.

Today we are suffering the consequences. We can see it in the subprime mortgage meltdown, skyrocketing credit card debt, personal bankruptcies, and a low savings rate. Beyond individuals broken dreams, this lack of financial and economic education is threatening the competiveness and wellbeing of our country. So what can--and should--be done about it?

Ideally, an understanding and appreciation of economics and finances would be taught at school levels from kindergarten to the 12th grade and beyond. It should be taught as part of a robust curriculum as determined by the states, in the same way that music and art are taught. Unfortunately, local school boards decline to include financial and economic literacy as part of the core curriculum. Many college students can earn a degree without having taken any courses in basic economics.

That means the private sector, nonprofits, parents, and religious groups must step in to fill the void. Many companies in the financial services industry have robust and effective programs to teach kids how to handle their personal finances. They have partnered with groups like Junior Achievement, the Boys and Girls Club, Operation Hope, and Jump$tart, among many others.

We must also clearly recognize that our citizens will not be financially literate without first learning basic math. Without the ability to do fractions and percentages, students will not be able to calculate compound interest, amortize loans and mortgages, or figure out other financial products like annuities and 401(k)s. It's all tied together, and it's why the Chamber has a major initiative underway to renew and strengthen No Child Left Behind.

But there's something more ... The lack of financial and economic education is at the core of the growing and dangerous trends against international trade and immigration. Many of our citizens do not understand how the worldwide economy works. They do not understand how trade and direct investment create good-paying jobs, lower prices, and increase choice. They do not understand the reality of why some jobs go overseas even as many more are created here at home. They do not understand the looming worker shortages in both high- and low-skill jobs.

This puts our economy in peril. It leaves citizens easily susceptible to fear mongering by politicians who are eager to confirm people's belief that whatever is wrong in their life is somebody else's fault.

If America is to compete and win in the 21st century economy, we need citizens who can not only make smart financial decisions in their personal lives, but in the economic life of the nation.

Last week we explored the significant deficiencies in our K-12 school systems, including appalling high school graduation rates, lack of accountability, weakening academic standards, poor achievement results and fewer hours spent in the class room compared to our international competitors, and poor administration of our schools. This week we look at five guidelines for reform that can help our education systems become more accountable, rigorous, innovative, and focused on achievement.

First, teaching must be focused on results. We need to change the way we pay and evaluate our teachers. Pay for performance should be the standard. Teachers who achieve excellent results, choose to work in troubled schools, or teach hard to staff subjects like science and math should be paid more. Teachers who are ineffective, incompetent, or otherwise impede the progress of students should be removed from the classroom.

We should raise salaries for first-time teachers to bring better talent into schools. We should allow professionals from the private sector who wish to teach to do so by using common-sense certification requirements that take into account their experiences.

Second, school administrators must be given greater independence to run their schools. Principals should have more authority over budget and personnel decisions. They must insist on greater transparency surrounding spending, staffing, and student achievement.

Third, we need to collect more data so that we can accurately measure results. Without better data, we won't know when students need additional help to succeed, when teachers are being ineffective, or when teachers are excelling and should be awarded merit pay. Not a single state could provide systematic data on teacher performance or return on investment. No responsible publicly or privately held firm could operate successfully with such a lack of data.

Fourth, we need more rigorous academic standards, and states must be more truthful about whether or not they are meeting them. Many states paint a much rosier picture of how their schools are doing than is actually the case. This makes it tough for parents, voters, or business leaders to hold public officials and educators accountable.

Finally, innovation. If history has taught us anything, it's that nations, organizations, and individuals that adapt and innovate are the most successful. Small learning communities, early enrollment in college-level courses for credit, charter schools, and online learning can help revolutionize and improve our classrooms.

What has long made the American private sector an engine of global prosperity--its dynamism, creativity, and relentless focus on efficiency and results--is essential to tapping the potential of our educators and our schools.

Looking back on U.S. history, Americans have argued, debated, and even fought one another over many things. But one fundamental principle our country embraced almost from the very beginning was that a quality education was a civil right for every child.

Despite its fundamental importance to our society and way of life, we've lost our way on education. Today, everyone utters all the necessary platitudes about the importance of education, but our deeds no longer match our rhetoric. Dangerous trends have taken hold nationwide that should not only worry us but also scare us ... and even shame us.

High school graduation rates remain appallingly low. Only about two-thirds of all 9^th graders graduate from high school in four years--it's only half for minorities. Those students who do receive diplomas often require remedial education. Many are unprepared for postsecondary education or the modern workforce.

Some states have chosen to dumb down their academic standards in order to achieve the appearance of proficiency even as our international competitors have toughened theirs. Today, U.S. fourth graders rank 11^th in the world in reading; in 2001, they ranked 4^th. We are also lagging in key subjects like math and science--skills essential to succeeding in the global, high-tech economy. In 2003, U.S. 15-year-olds ranked 19^th in science and 24^th in math. We get these results despite spending more on education than practically any other country.

Our students spend fewer hours in class than most of our international competitors. By age 18, students in many foreign countries will have received one to three years more class time than U.S. students. Talk about a competitive disadvantage!

And through lax management, poor oversight, and plain apathy, we have allowed schools to mismanage funds, facilities, and professional development; to hire and retain ineffective teachers; and to forgo collecting the data necessary to measure and track results. We cannot afford to lag behind as the rest of the world races ahead. The world will not stop and wait while our students catch up.

Unless we restore our commitment to education excellence for all students, we will pay a terrible price. America will go from economic superpower to an also-ran. Our high standard of living will erode like sand in a pounding surf. We will lose jobs, productivity, and, eventually, hope. The social fabric that holds our nation together will begin to unravel. Our failure will be measured not only in dollars and cents but in broken dreams.

How do we turn the situation around? Next week, I'll discuss five guidelines for education reform that could help our children achieve their dreams while ensuring America's global competitiveness.

How did we get to this point? We have allowed a deeply flawed legal system to infect and alter our democratic form of government, our civic life, and our character as a people.

We see some courts, juries, prosecutors, attorneys general, and regulators using the legal system not to enforce the law but to make the law. We see troubling attacks on the due process rights guaranteed to every American by ambitious prosecutors--including a frontal assault on the time-honored tradition of attorney-client privilege. And we have seen America move towards a culture where everyone is a victim, where suing is the first and not the last resort, and where any misfortune in life must always be someone else's fault.

Businesses, consumers, our health care system, our capital markets, and our identity as a people willing to take risks and innovate are suffering from the defects of our current legal system. Ultimately, the competitiveness of our economy is at stake.

The lawsuit tab for small businesses is $88 billion a year. Medical liability is forcing doctors to abandon their practices and engage in defensive medicine, ordering more tests and treatments than necessary solely to help avoid lawsuits. Securities litigation is driving foreign investors away in droves. And a relatively small group of class and mass action trial lawyers have devised a business model that lines their pockets while shortchanging their clients, clogs our courts, and perpetuates an endless stream of lawsuits.

As a result, businesses, governments, health care providers, community organizations, and others are becoming increasingly risk-averse. The first order of business is not to innovate, take a risk, build a project, provide a service, or help the community. The first order of business is how do I avoid getting sued?

It's easy to blame the lawyers for all this, but in fact, improving our legal climate, reforming our legal system, and reaffirming our culture of acceptable risk-taking and entrepreneurship are challenges all Americans must confront.

Americans need to make some fundamental decisions, and soon--do we want to be a nation ruled by laws, or lawyers? Do we want to reward innovation and risk, or punish it? Do we want to encourage individual responsibility where the truly wronged can seek just compensation from the courts, or do we want to discourage it by allowing an onslaught of frivolous lawsuits by plaintiffs looking to win the "litigation lottery?"

It's been several months now since the tragic collapse of the I-35 bridge in Minneapolis. That terrible event did help serve one useful purpose--it focused the attention of our citizens and elected leaders on the need for greater investment in our crumbling infrastructure.

While the jury is still out on whether Congress will heed this call--the U.S. Chamber is using every resource at its disposal to ensure that it does--one aspect lost in the debate is how we spend the infrastructure money we currently have, and how we should spend any additional funds.

Taxpayers would be outraged to learn how much of the money they pay in user-fees for roads, the aviation system, and other transportation systems are diverted to non-infrastructure projects like childhood obesity programs, "bridges to nowhere," or rain forest museums in Iowa.

The number of earmarks in infrastructure spending bills has ballooned from 101 in 1981 to 6,371 in 2005. Politicians should be penalized when they skim money from dedicated transportation funds to pay for projects of their own choosing. It breaks trust with the taxpayers.

If Congress insists on earmarking infrastructure funds, it should at least require that the earmarks go to core infrastructure needs, not unrelated pet projects. It should also refuse to give states carte blanche to use federal bridge money as they please. California diverted $350 million from its bridge program last year alone; Pennsylvania, about $130 million.

Congress must also work with the states to ensure that infrastructure funding goes to the highest priority projects yielding the greatest economic and safety benefits to the entire nation. There is no mechanism in place to do this now.

Yet even if we spent every single dime of infrastructure funding for its intended purposes--and we should--we still wouldn't have enough to bring our current system up to par, much less expand it. In this case, more money must be part of the solution, and it should come from three places: private investment, public-private partnerships, and consideration of an increase in the gasoline user tax fee, which hasn't been raised in 14 years. And the money must be spent wisely.

What will we get in return for these investments? We will save lives and create American jobs, and set the foundation for a more robust, productive, globally competitive economy.

Last week we examinU.S. Chamber of Commerce President & CEO Thomas J. Donohue's column:ed the causes and consequences of the subprime crisis. If nothing else, it focused attention on the critical role U.S. capital markets play in our economy and personal lives. How important are our capital markets?

The answer is simple--every company, whether big or small, public or private, needs capital to run its business. And there's something more. Given the failure of politicians to modernize government entitlement programs, our nation must rely on strong private sector markets to help provide for the needs of 77 million retiring baby boomers.

So what can we do to create the world's most efficient, transparent, and attractive markets? First, we must modernize the regulatory structure that governs them. We need to consolidate overlapping and duplicate regulatory agencies, foster better coordination among regulators, and implement a regulatory culture that aggressively pursues bad actors, while providing fair and understandable oversight of all others.

Second, we must ensure the viability of the global system of accounting and auditing. Audit firms are required by law to be private partnerships. This makes them uniquely vulnerable to legal risk--and ultimately uninsurable. Today, all the top audit firms face multi-billion dollar lawsuits, any one of which could put them out of business. This exposes our entire capital market system to serious risk.

Third, we need to uphold the due process rights that are guaranteed under the Constitution of the United States. We are fighting abusive tactics by government prosecutors and agencies, such as pressure to waive attorney-client privilege or to penalize companies for paying attorney fees for employees.

Fourth, we must stop further misuse of the regulatory process by third party special interests. For example, union-controlled public pension funds are using proxy battles to achieve what they could not win at the bargaining table. We have a system where shareholders sue themselves and drive down their own stock prices, with huge fees paid out to the lawyers!

Fifth, we must educate all Americans about the fundamental importance of our capital markets and encourage their participation in them. The Chamber has long supported tax policies and savings vehicles that encourage citizens at all income levels to build wealth in the markets--and we will continue to do so.

The bottom line is if we put the regulators, politicians, bureaucrats, cops, lawyers, and bean counters in the driver's seat of American enterprise, we will pay a terrible price. That's what we have been doing to our capital markets for too long, and it must stop! America's capital markets have generated more wealth, opportunity, and financial security for more people than any system ever created. They are the powerful engine behind our nation's economic miracle. And we'd better not forget it.