As expected, the Federal Open Market Committee increased the federal funds rate to 4 1/2 percent today. The Fed correctly pointed out that the economic expansion remains on a sold footing, but cautioned that volatile energy prices remain a concern on the inflation front.

Today marks the last day of Alan Greenspan’s term as Chairman of the Federal Reserve. While at the helm of the Fed for more than 18 years, Chairman Greenspan successfully navigated our economy through some dangerous waters.

While his accomplishments are many, I think his most important act as Chairman was his recognition in the mid-1990s that changes in technology were enhancing underlying productivity growth and that the economy could grow faster than previously thought without igniting runaway inflation which the Fed worked so hard under Chairman Volcker to extinguish in the early 1980s.

By persuading other members of the FOMC to keep interest rates low, Chairman Greenspan enabled the economy to grow at a robust 4-percent pace for four consecutive years (1996-1999) – a first in over three decades. As a result, the economy created 12.4 million jobs – the largest 4-year surge in 20 years.

Chairman Greenspan deserves a sincere “thank you” for his dedication to public service from a grateful nation.

Thank you, Chairman Greenspan

Mike Pence is here (IN-6), he’s the Chair of the conservative Republican Study Committee (RSC).

The RSC retreat, just completed in Baltimore, heard from Newt Gingrich, Phil Gramm, George Will, and all the candidates for Majority Leader. Heard from Chuck Colson. We had about 60 members there. Sponsored by Heritage Foundation. Very broad agreement on the priority of budget reform. I expect you’ll see a document next week form the RSC. We will reveal our agenda on fiscal discipline. This will be completed a week from tomorrow.

From member discussions, the issues were budget reform, marriage amendment and lobbying reform, in that order.

[Pence described this retreat facetiously as "Intellectual roughage."] Phil Gramm challenged members to think about what their legacy would be. Newt challenged our group on war policy and challenged Congress to engage in much more aggressive oversight of the executive branch. Congress ought to be about the business of asking the hard questions.

On lobby reform, there was broad consensus that we need to marry fiscal and ethics reform. It is not enough that we change the way lobbyists spend their money. We need to change the way we spend the money of the American people. It’s all linked to an “opaque” system of budgeting. We should repeal the Budget act of 1974 and re-write it in a way that shows the American people how their money is spent.

Rep. Shimkus (Il-19): Big issue: Energy. All energy, all the time. We will eventually drill in ANWR. It’s environment. My colleague Rep. Peterson (Pa) has been pushing Outer Continental Shelf (OCS). We’re losing our competitive nature through things we can control like natural gas prices. You’ll see some things this year that try to address natural gas prices. I am focused on the great coal reserves. There’s a refinery in my district. We expect energy companies who are making profits to roll that money over into exploration and expansion.

Rep. Capito (WV-2): It’s been a rough month in West Virginia, back to back mine accidents. We need to tighten up some things that are wrong with mine safety regulations. Oxygen is one area, very important to me. Interested in what the President has to say tonight on health care, interested in AHP’s and health savings accounts. Hope he gets into energy, that’s huge in my state. We are resource-rich.

Mine safety: The Sago miners suffocated. Need availability of oxygen. These are common sense. Want to stay in the common sense arena. If we could have located our miners in Sago, we could have saved them. There’s inherent dangers in mining, always will be. Length of time it took the rescuers to enter the mine was 12 hours. We don’t want an overreaction, but we want hearings and investigations. I just don’t think that mine owners would knowingly and recklessly endanger the lives of their miners.

Energy prices — huge issue. We have a lot of people living on a fixed income. We passed the energy bill. I hope we expand refineries, ease some of the regulatory processes, more coal and gas liquification. Need more resources, whether in OCS or elsewhere.

As many readers of this blog know and probably knew long before they got here, innovation and manufacturing are tied together. But not all are so enlightened. So to remind people of what’s at stake, we are releasing a new study on February 1 — “US Manufacturing Innovation at Risk.” If you are in Washington, DC on Wednesday, come by the NAM at 9:30 am and hear all about it at our press conference, with author Joel Popkin.

We are the world’s leading manufacturing economy because of the innovative products and processes that Yankee ingenuity spins out year after year. A lot of this creativity and productivity is taken for granted,unfortunately, both by consumers and some politicians. Increasingly, American manufacturers are challenged by rising manufacturing powers in China, India, Singapore and elsewhere. In these countries, they also know about the link between innovation, R&D, productivity and manufacturing. They most certainly don’t take this vital innovation process and manufacturing for granted and, in the future, they could eclipse the United States, with adverse implications for our standard of living. Tune in here tomorrow and we’ll have more information on the new study, including a link to it on our website.

We’re set up in the Cannon House Office Building with a number of our fellow bloggers, awaiting the arrival of our first Members of Congress. We will tee up your questions and summarize their comments for you throughout the day.

Remember to drop us an e-mail if you have a question.

Stand by…

Tonight is the State of the Union address and lots of manufacturers will be watching. We hope the President says something about the need for our country to expand the pool of engineers, scientists and technical workers. We also hope that he talks about the research and development challenges we face as other countries around the world ramp up their own R&D budgets. These are both important because we can’t take it for granted that our country will always be the innovation leader. We have to compete as never before. For a good primer on what’s at stake for manufacturers, visit the website for the recent National Summit on Competitiveness where manufacturers large and small alike met and issued a statement that outlines some of our concerns.

We’ll write more on this later, but Judge Alito is on his way to becoming Justice Alito, having just now been confirmed by the US Senate, on a 58-42 vote. Here’s a link to our press release applauding the vote.

Thanks to all of you who used this blog to weigh in. We congratulate Judge Alito and look forward to many years of service on the highest court in the land.

New Jersey boy makes good. The Garden State is smiling.

We have been invited to participate in a “Blog Row” on Capitol Hill today, sponsored by the House Republican Conference. As we’ve said in this space many, many times, if the Democrats invited us, we’d go there, too, ask the same questions, write their answers for all to see. We are non-partisan.

In any event, the festivities begin around 2 p.m. and stretch all the way through the State of the Union address and beyond, until 11 p.m. We’ll be there and posting periodically. Please do drop us a note — either via e-mail or by clicking on the “Comments” tag below — if you have questions for the Members of Congress who will be stopping by, or if you have comments about the speech. We’ll be posting your comments and asking your questions, along with some of our own.

Again, as with other events, we hope to bring you into it, to make you a part of it. You will get the information we receive and it will be unvarnished,unfiltered and unedited. We’ll let you draw your own conclusions.

Some of the Members of Congress expected to stop by are: Barrett (SC), Brown-Waite (FL), Burgess (TX), Cannon (UT), Carter (TX), Franks (AZ), Gohmert (TX), Green (WI), Harris (FL), Jindal (LA), King (IA), McHenry (NC), Pence (IN), Pombo (CA), Price (GA), Ros-Lehtinen (FL), Royce (CA), Shimkus (IL) and Tiahrt (KS). Various members of the House Leadership are expected to drop by as well.

We hope you’ll join us.

Under that headline is a front page story in the Washington Post today about the nomination of Judge Alito to the Supreme Court. Yesterday, the Senate beat back a (frankly) wimpy and last-minute effort by erstwhile Presidential candidate Sen. Kerry (D-MA) to force a filibuster on Judge Alito’s nomination. This in spite of knowing that he lacked the votes to do so. He was, in essence, trying to take his ball and go home. He failed. The cloture vote wasn’t even close, with a final vote of 72-25. Ouch. Here’s a link to see how your Senators voted. His nomination now goes to the floor where hopefully there will be no further mischief, only a vote.

Some interesting statistics for you to ponder:

The average time from the President’s nomination until confirmation for the last few Justices was 68 days. For Judge Alito — if he’s confirmed today — it is 92 days.

The time from the President’s announcement of the nomination to the start of the hearings in Justice Rehnquist case was 13 days. For Ruth Bader Ginsburg it was 26 days, for John Roberts 55 days and for Judge Alito, 70 days.

No nominee was “held over” in Committee since 1971. Judge Alito was held over for a week, a simple delaying tactic.

This man has been subjected to grueling questioning and bitter partisan barbs. Republicans confirmed the former General Counsel of the ACLU, Ruth Bader Ginsburg, without a fight, because it was seen as the President’s prerogative. Ah, the days of yore.

Hundreds of you have weighed in through this blog to urge your Senators to vote, with a bunch doing so in the last week. We are down to the short strokes. Please tell your Senators to get on with it. Legal reform begins at the top.

Rising prices for oil and natural gas have had a distinct and adverse impact on the U.S. economy as the fourth quarter 2005 GDP numbers showed last week. There are many paths to building a stronger energy base for the economy–more reliable sources of energy from the Outer Continental Shelf and Alaska, more diverse sources such as LNG, whole new sources such as hydrogen, use of new materials and greater energy efficiency of a wide range of products.

At the core of all of these solutions is the ability to develop and harness new technologies. Many people just take it for granted that U.S. manufacturers will lead the way. Like most of manufacturing, it is the pace and application of innovation that distinguishes it from other sectors in the economy with new ideas that translate into higher productivity and, in this instance, more energy. One such new technology is profiled in this month’s edition of The Manufacturer magazine. A Massachusetts-based company, A123 Systems, has developed a new generation of lithium-ion batteries made with nanotechnology. The company’s researchers turned to advanced materials to boost the life, power and efficiency of lithium-ions. The company, with support from Motorola and the Massachusetts Institute of Technology, says that these new batteries offer ten times the life and five times the power of conventional lithium-ion technology. As reported recently, Black & Decker will use them in a new generation of portable power tools. Moreover, A123 Systems believes that this new technology could help popularize the all-electric vehicles or “pluggable” hybrids that rely less on the internal combustion engine.