BETHLEHEM, Pa. — California U.S. Rep. Ro Khanna joined Lehigh Valley politics and business leaders Wednesday for a roundtable discussion on the Lehigh Valley's resilience and economic transformations.
The event also sought potential strategies of how to get other struggling areas in the Rust Belt and beyond that have faced deindustrialization and other challenges in recent decades.
- U.S. Rep. Ro Khanna of California's Silicon Valley and former President Obama staffer, visited the area on a tour of Pennsylvania and Ohio to discuss what the economic building blocks for the Lehigh Valley were in its recovery, and how it could be replicated
- Also attending were Rep. Susan Wild, Allentown Mayor Matt Tuerk, LVEDC President Don Cunningham, Upper Macungie Township Board of Supervisors Chairman Sunny Ghai and representatives from local businesses
- Khanna said there is a responsibility of those from more successful regions and cities of the country to expend that beyond their area
The stop at the Lehigh Valley Economic Development Corporation is part of a three-day tour of Rust Belt communities in Pennsylvania and Ohio.
During the day, Khanna, a former President Obama staffer and Bucks County native, also made a stop in the Scranton area.
Khanna said he stopped in the Lehigh Valley, given Lehigh and Northampton counties' resilience and recent significant growth, to seek answers for communities in Pennsylvania and neighboring states that have continued to face economic and population declines from deindustrialization and downturns.
"It was inspiring. The Lehigh Valley is a success story, facing deindustrialization with Bethlehem Steel shutting down in the 1990s, but it is not a story of despair. And unfortunately, in many other parts of the country, the manufacturing never came back."California U.S. Rep Ro Khanna
"It was inspiring," Khanna said. "The Lehigh Valley is a success story, facing deindustrialization with Bethlehem Steel shutting down in the 1990s, but it is not a story of despair.
"And unfortunately, in many other parts of the country, the manufacturing never came back."
The presentation noted that only 27 of 67 counties in Pennsylvania have grown over the past two years, with the Lehigh Valley among them due to new residents moving to the area.
Expanding success
Speaking at the Lehigh Valley Economic Development Corporation, Khanna sat with Rep. Susan Wild (PA-07), Allentown Mayor Matt Tuerk, LVEDC President Don Cunningham, Upper Macungie Township Board of Supervisors Chairman Sunny Ghai and representatives from local businesses and groups such as B. Braun, Tyber Medical, IBEW Local 375 and Skills USA.
Khanna said there is a responsibility for those from more successful regions to expend that beyond their area, so there's no further divide and so people in hard-struck areas no longer feel that life was better off a generation or two ago.
"People in these communities were wronged, and they know they were wronged, and you have folks speaking about plant closures that took place 10-15 years ago and it's still raw," Khanna said.
"It destroyed these communities. In many cases, they lost health care, and the corporation's didn't do right by them. And so that anger, I'm always reminded when I go to these communities, still exists.
"And it's a hard challenge. How do we revitalize them? How do we bring that new economic vitality?
"Because we heard in this discussion that it's not enough just to bring a new company, you need also the fundamental workforce of young people, you need the schooling, you need the downtown where people want to live."
A regional native
Khanna serves the wealthy Silicon Valley region of California's 17th Congressional District, including Santa Clara and parts of Fremont and San Jose.
Khanna's district includes the corporate headquarters of Apple and Intel, while having a median household income of more than $159,000.
He was born to Indian immigrants in Philadelphia and raised in Bucks County before attending college at the University of Chicago and becoming involved in politics.
He worked for Obama's initial Illinois Senate campaign and eventually in the Obama administration in the U.S. Commerce Department before leaving to work as a lawyer in California.
Khanna said his parents still reside in Bucks County.
"My fundamental hope in America actually comes from my upbringing in Bucks County," Khanna said, speaking to how welcoming people were to his family when he moved to the county.
"I think Pennsylvania deep down is a pretty welcoming place."
Reinventing yourself
Many attendees of the talk spoke to some of the advantages the Lehigh Valley has had, such as its proximity to much of the country's population, the presence of strong higher education and ability to work together as a region.
"I've been in this area since the '70s, and I went through the decline with Bethlehem Steel and Mack truck we lost some of that operations and so forth, but I think the strength of the Lehigh Valley was that we adapted," Ghai said.
"And we were able to reinvent ourselves. And we found other things that we could do."
Ghai said that Upper Macungie offers, saying that the area has "some of the best chip designers in the world" because people valued the quality of life there and chose to continue calling it home.
Tuerk said, "The smart investments in place are what are attractive, right? So when you can create places where people truly want to live, and where there's fundamental quality of life, the commitment to being welcoming and belonging and instilling a sense of belonging.
"And I think that's true for immigrants from the Dominican Republic, or from India or refugees from, from Afghanistan, or from Venezuela. If you can create welcoming places that are inclusive, I think you have a leg up when it comes to attracting the talent that is needed by industry for the future."
Cunningham spoke to how now that the area has moved past the economic hardship of the early 20th century, what is faces now is growing pains with traffic, housing prices and other related issues.
"I think people have to realize it's a new ... Valley," Cunningham said. "It's great to have that, but there are also issues that you have to deal with, along with that.
"I'll take those issues over the issues we faced back in 1995 and 1998, any day."
Wednesday's discussion also focused on potential investment from the CHIPS and Science Act, which Khanna said would bring investment to the area.
Cunningham spoke to the area's intention to apply as a technology hub as part of the legislation, which would open up the area to new strategic development grants. Rep. Wild previously referred to the Lehigh Valley as a "perfect place" to get that designation.
Bringing back manufacturing
Khanna spoke to the need to return manufacturing to the United States, and wished to look to success stories such as the Lehigh Valley, which has grown back its manufacturing sector, to discover ways things could be replicated.
"Let's do clean steel, let's do that," he said. "In the United States. Let's do that in places like Lordstown, Ohio, or Johnstown, Pennsylvania, where you do have that tradition and manufacturing work ethic still there."
"There's just never any consistency, it makes capital investment very difficult to plan."B. Braun Vice President of Corporate Tax Michael Cacace
Khanna asked the table how the federal government might be able to step in and help growth along, like that which has been seen in the Lehigh Valley.
That prompted representatives from Tyber Medical and B. Braun to raise concerns about current tax codes, specifically section 174 of the U.S. tax code modified by the 2017 Tax Cuts and Jobs Act.
They said that section "created massive tax bills" when it went into effect last year.
"It really put a lot of pain points," said Damien Sibilla, chief financial officer for Tyber Medical in Hanover Township.
Sibilla said developments are no longer deductible as they were before, and would in Tyber Medical's case now only deductible be up to 20% of the cost annually over five years, increasing overall costs.
"There's just never any consistency, it makes capital investment very difficult to plan," said B. Braun Vice President of Corporate Tax Michael Cacace.
Khanna, who opposed the 2017 tax bill, said he would look into the issue and that he supports deductions for business investment.
