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...The United States now runs a current account deficit of more than $700 billion a year...

...The Committee on Foreign Investments in the United States is, as everyone now knows, the body tasked with reviewing takeover bids for U.S...

...But it does have to be financed from somewhere...

...BY GERARD BAKER AMERICA'S LEGISLATIVE LEADERS spent a good deal of time last week discussing what to do about "undesirable" foreigners...

...What is more, it creates jobs, and, as the Organization for International Investment in Washington has documented, these foreign-created jobs are generally much better paying than jobs with domestic U.S...

...It is longer-term and more stable than foreigners' purchases of equities or debt, making the U.S...

...Indeed, for almost 20 years since it was established by the Exon-Florio Act, CFIUS has quietly managed to do its business without noticeably compromising the security of the United States...

...infrastructure to untrustworthy Arabs, congressional foes identified a once obscure but now eagerly demonized interagency committee called CFIUS as the culprit and vowed "reform...

...Closing American markets and companies in the name of national security would be another costly error...

...ports as part of its acquisition of a British shipping company...

...That's hardly surprising...

...editor of the Times of London, is a contributing editor to THE WEEKLY STANDARD...

...Many of the takeovers of U.S...

...Despite the rhetorical shellacking it took over the Dubai deal, CFIUS is a serious, deliberative process that considers, on their merits, the implications for U.S...

...In an ideal world, foreign direct investment would supply much of that needed funding...

...Whether it was slapping on protectionist tariffs in the Smoot-Hawley Act just as the Great Depression was getting started, or saddling business with billions of dollars in costs from Sarbanes-Oxley after the 1990s equity bubble collapsed, Congress has been a past master in undermining American prosperity and competitiveness...

...The political cost-benefit analysis of cracking down on foreign takeovers can be done in seconds, without pencil and paper...

...Hand the approval process on those over to politicians seeking reelection, and you guarantee outcomes that will not serve the interests of American consumers, businesses, or taxpayers...

...They want the category of companies that are subject to the CFIUS process to be dramatically expanded—from defense contractors, satellite communications companies, and the like to everything from food producers to banks...

...economy's great success over the last 20 years is owed primarily to the triumph of free markets...

...Because the law that Congress seems likely to pass could end up doing damage to the U.S...

...But Shelby, a few of his Republican colleagues, and almost all congressional Democrats are dissatisfied...

...But that ignores the fact that really dubious takeover proposals do not get as far as CFIUS, but are sniffed out much earlier...

...Richard shelby, the chairman of the Senate Banking Committee, has proposed a bill that would significantly tighten the rules under which foreign takeovers are approved by regulators...

...companies that might have implications for American national security...

...The Senate and House so far are diverging widely on whether it is best to keep them in or throw them out...

...economy...

...borrower less vulnerable to sudden shifts in the appraisals of international lenders...

...companies...

...And yet, at key moments in the nation's history, the temptation to fiddle with those free markets has proved too much for politicians...

...it looks likely to gain widespread support in both the House and the Senate...

...While even the hardest-hearted of immigration foes can be made to feel a bit queasy at the sight of half a million illegals and their families on the streets of Los Angeles, no one is going to get upset when British corporate lawyers, Swiss drugmakers, or Arab sheikhs are denied access to their acquisition targets...

...Illegal immigrants were the main target...

...Which is a pity...

...Though Shelby stopped short of Sen...

...There is nothing, despite the whining of some economists, intrinsically objectionable about that: Indeed, it reflects the openness of the U.S...

...Its congressional critics note that CFIUS has rejected only one bid out of thousands it has considered and deem it a soft touch...

...companies...

...Since doing the first defies angry voters and doing the second defies implacable economic forces, it is not going to be an easy decision...

...economy and its superior attractiveness to international investors...

...Gerard Baker, U.sS...

...Deregulation at home and, crucially, the embrace of free trade and free capital movements has opened up competitive pressures, driving down costs and raising productivity...

...They would also greatly expand Congress's own role in reviewing foreign investment...

...This politicization of the foreign investment process can have no good consequences...

...If the government of Yemen made a bid for Lockheed Martin, you can safely bet the cost of an F-16 it would not get near a CFIUS review...

...Rather quicker progress looks likely, however, on halting the other invasion that has the Lou Dobbs crowd steamed up—supposedly unscrupulous foreigners who want to buy U.S...

...The idea emerged from the collapse of the ill-starred effort by Dubai Ports World to buy six U.S...

...companies that would be reviewed under the new rules are contested bids, often with an American company also in the running...

...Fulminating at this surrender of U.S...

...Shelby's proposal takes the sledgehammer of congressional oversight to a foreign investment review process that has served the country well for decades...

...security of potentially sensitive mergers...

...Bill Frist's proposal to actually give Congress a veto over takeovers, lawmakers would be involved in the process at a much earlier stage...

...The U.S...