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US Economy Is Growing, But Some See Serious Challenges Ahead

The U.S. central bank, the Federal Reserve, says the American economy will grow at a "healthy pace" in 2007, with a lower inflation rate than last year. Despite the optimistic forecast, the world's largest business federation says there are serious challenges threatening the nation's continued prosperity.

The U.S. Chamber of Commerce says, except for the soft housing market, the nation's economy is "fundamentally strong." But the group, which represents more than three million U.S. businesses, says the race for "human capital" could undermine the nation's continued growth.

In the Chamber's annual "State of American Business" report, federation president Tom Donohue advocates an ambitious agenda of reform. "We have got serious, serious challenges with 77 million people getting ready to retire, and we've got 12 million undocumented workers here now. Let's quit the baloney [quit wasting time] and get down to a system that is going to support our economy, or [otherwise] companies only have one choice, and that's to take some more of their business and take it somewhere else."

Among the Chamber's initiatives: to lobby lawmakers to pass a comprehensive immigration reform bill in 2007.

Donohue says a ready supply of skilled workers, along with higher educational standards, will allow the U.S. to stay competitive in a global economy. "The educational challenges facing this nation are alarming and need to be dealt with," he said. "Thirty percent or more of our high-school students don't graduate. At least 40 percent of our students enrolling in college have to take remedial courses when they get there. We're letting our young people down and putting our future at risk."

Next month, the chamber plans to release a state-by-state report card to show how well U.S. schools are preparing students for the workplace.

The Chamber is also hoping to influence U.S. energy policy by announcing formation of a task force that will look at "common sense" environmental and energy policies to reduce the nation's energy dependence without sacrificing jobs.