S.Amdt. 684

1. Adds SEC. __. PROMOTION OF JOB CREATION wherever appropriate

   Adds a section

   Inserted: SEC. __. PROMOTION OF JOB CREATION.

   Inserted: (a) Findings.--Congress makes the following findings:

   Inserted: (1) In terms of bilateral surveillance, Article IV of the International Monetary Fund (referred to in this section as the "IMF") Articles of Agreement lays out a code of conduct for countries' exchange rate and domestic policies. Within this setting, Article IV consultations use exchange rate assessments to monitor countries competitiveness and vulnerabilities to balance of payments crises.

   Inserted: (2) The IMF uses three complementary measures to perform exchange rate assessments and to help determine exchange rate misalignments, a "macroeconomic balance" approach, an "equilibrium real exchange rate" approach, and an "external sustainability" approach.

   Inserted: (3) Exchange rate assessments are based on the notion of equilibrium, which the IMF has identified as "consistency with external and internal balance over the medium to long run".

   Inserted: (4) The "medium term," according to IMF definitions relevant to exchange rate assessments, is a horizon over which domestic and partner-country output gaps are closed and the lagged effects of past exchange rate changes are fully realized.

   Inserted: (5) An output gap is measured by the difference between actual output in an economy and potential output.

   Inserted: (6) Potential output is the level of output in an economy that would be realized if labor, capital, and other resources were at high levels of utilization.

   Inserted: (7) Negative output gaps mean that actual output in an economy is below potential output.

   Inserted: (8) This Act seeks to help close a negative output gap in the United States by promoting the elimination of global imbalances and currency misalignments, and relies partly on IMF determinations of exchange rate misalignments which, in turn, rely on the concept of the output gap.

   Inserted: (9) Negative output gaps are typically consistent with unemployed labor resources. The more negative the gap, the larger tends to be the unemployment rate and the greater the need for job creation.

   Inserted: (10) Negative output gaps for the United States mean the difference between the actual gross domestic product and "potential gross domestic product".

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   Inserted: (b) Definitions.--In this section:

   Inserted: (1) Output gap computed by the cbo.--The term "output gap computed by the Congressional Budget Office" means the difference, computed by the Congressional Budget Office, between actual gross domestic product and the Congressional Budget Office's measure of potential gross domestic product.

   Inserted: (2) Potential gross domestic product.--The term "potential gross domestic product" means the Congressional Budget Office's estimate of "full-employment" gross domestic product, according to the Congressional Budget Office's definition of full-employment as taken from statistical procedures grounded in economic theory.

   Inserted: (3) Unemployment rate.--The term "unemployment rate" means the U-3 measure as computed by the Bureau of Labor Statistics, which is the total number of unemployed as a percentage of the civilian labor force as reported in the Bureau of Labor Statistic's Current Population Survey (commonly known as the "Household Survey").

   Inserted: (c) Davis-Bacon and McNamara-O'Hara Not Applicable.--

   Inserted: (1) In general.--No Federal funds shall be used to administer or enforce the wage-rate requirements of subchapter IV of chapter 31 of part A of subtitle II of title 40, United States Code (commonly referred to as the "Davis-Bacon Act"), or of the Service Contract Act of 1965 (Public Law 89-286; commonly referred to as the "McNamara-O'Hara Service Contract Act"), with respect to any project or program funded by the United States, during any calendar quarter following a calendar quarter for which the output gap computed by the Congressional Budget Office is negative or the unemployment rate as computed by the Bureau of Labor Statistics averages five percent or more, until such time as the Congressional Budget Office makes the determinations under paragraph (2).

   Inserted: (2) Future application.--The limitation provided for in paragraph (1) shall cease to apply and the wage-rate requirements described in paragraph (1) shall apply beginning in the first calendar quarter that follows four or more consecutive calendar quarters of non-negative output gaps as computed by the Congressional Budget Office and four or more consecutive quarters of average unemployment rates that are below the level of the unemployment rate deemed consistent with the Congressional Budget Office's estimate of full employment.

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   Original wording

   At the appropriate place, insert the following:

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As printed