A Publication of the National Association of Manufacturers
Capital Briefing

February 23, 2012

Week_Washington

Administration’s Proposed Tax Reform Misses the Mark. On Wednesday, February 22, the Obama Administration announced a plan to reform the U.S. tax system. Manufacturers welcome this long overdue focus on tax reform and are keenly aware that on April 1, the United States is poised to have the highest corporate tax rate in the industrialized world. This will undermine job creation and cede competitiveness to nations that are all too eager to offer lower tax rates and take our position as a global economic leader.

The proposal the President outlined on Wednesday does include some tax relief supported by the NAM, including lower corporate tax rates and a permanent, strengthened R&D credit. Many of the President’s other proposals, however, completely miss the mark and would make U.S. businesses less competitive. In particular, a number of the provisions would make the tax code even more complicated and would increase taxes for energy companies, U.S. global manufacturers and manufacturers in general. In addition, the two-thirds of manufacturers who file as individuals will receive no relief from the current burdensome tax system.

“It’s a simple rule of economics—investment and growth will flow to the best business environment,” said NAM President and CEO Jay Timmons in a statement. “Imposing a complex tax system with high, uncompetitive tax rates on the backs of manufacturers in the U.S. will greatly slow economic growth and will bring nascent job growth screeching to a halt.”

In the international tax arena, the NAM advocates moving from our current worldwide system to a territorial tax system, in which income is taxed only in the country in which it is earned.Unfortunately, the Administration is proposing changes to our current system that will make it even worse.These international tax increases will make it more difficult for U.S. companies to compete in the global marketplace. With 95 percent of the world’s customers outside the United States and 77 percent of the purchasing power, the negative impact of these increased taxes will impact these companies, their employees and their supply chain.

In addition, the Administration’s proposal takes aim at the oil and gas industry—two key markets included in the “all of the above” energy strategy President Obama highlighted in his State of the Union speech last month. Tax hikes on specific industries will create even more uncertainty for our nation’s energy producers and will impact the cost of day-to-day business for manufacturers.

One element that is crucial to real tax reform was not included in the President’s proposal. Two-thirds of American small businesses file as individuals and receive no relief from the burdensome tax structure. This essentially means that any tax increase on individuals is a tax increase on manufacturers. Coupled with the 20 percent cost disadvantage that manufacturers face, this is not a proposal that will restore certainty and allow for growth.

This is a critical time for the nearly 12 million men and women who make up the manufacturing workforce. Manufacturers need action on a pro-growth, pro-manufacturing tax system that will allow them to hire, compete and thrive.

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Hot Topic

Congress Moves to Nullify NLRB Ambush Elections Rule. On Thursday, February 16, Sens. Michael Enzi (R-WY) and Johnny Isakson (R-GA) introduced the Congressional Review Act (S.J. Res. 36) to disapprove of the National Labor Relations Board’s (NLRB) “ambush elections” rule. Rep. Phil Gingrey (R-GA) and House Education and Workforce Committee Chairman John Kline (R-MN) introduced the companion measure (H.J. Res. 103). If passed and signed by the President, these resolutions would nullify the NLRB’s final rule, which is slated to take effect on April 30. Although the ambush elections rule does not explicitly shorten the time frame for a representation election to take place, it could allow for union certification elections in as little as 20 days and could strip employers of their right to voice concerns (such as who is eligible to vote in an election) through pre-election hearings. Elections currently take place in an average of 38 days, which provides enough time for employees to educate themselves and make informed decisions about whether they wish to join a union or not. The NAM sent letters to the lead cosponsors in support of these measures.

Details: Amanda Wood, (202) 637-3128 and Joe Trauger, (202) 637-3127.

, (202) 637-3128 and , (202) 637-3127.

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Energy and Resources Policy

NAM Urges Support for Boiler MACT Relief. On Tuesday, February 21, the NAM submitted comments to the Environmental Protection Agency (EPA) regarding its reconsideration of the Boiler MACT suite of rules. The comments focus on the stringency of the standards, the need for additional compliance time and the importance of more flexible standards for certain pollutants. The NAM also signed onto comments filed by a coalition led by the American Forest & Paper Association. These comments were technical in nature and specifically targeted at three separate rules addressing the largest boilers (MACT), smaller boilers (GACT) and solid waste incineration units (CISWI). Despite some improvements to the suite of rules, the reconsideration will still put over 200,000 jobs at risk and will place an undue financial burden on manufacturers. Please continue to voice your support for a legislative fix to this set of rules. Click here to contact your senators about Sen. Susan Collins’ (R-ME) Boiler MACT amendment to the transportation bill (S. 1813).

to the Environmental Protection Agency (EPA) regarding its reconsideration of the Boiler MACT suite of rules. The comments focus on the stringency of the standards, the need for additional compliance time and the importance of more flexible standards for certain pollutants. The NAM also signed onto filed by a coalition led by the American Forest & Paper Association. These comments were technical in nature and specifically targeted at three separate rules addressing the largest boilers (MACT), smaller boilers (GACT) and solid waste incineration units (CISWI). Despite some improvements to the suite of rules, the reconsideration will still put over 200,000 jobs at risk and will place an undue financial burden on manufacturers. Please continue to voice your support for a legislative fix to this set of rules. Click to contact your senators about Sen. Susan Collins’ (R-ME) Boiler MACT amendment to the transportation bill (S. 1813).

Details: Chip Yost, (202) 637-3175 and Alicia Meads, (202) 637-3174.

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Trade Policy

U.S. Trade Representative Talks Overseas Sales with NAM Members. On Tuesday, February 21, U.S. Trade Representative Ron Kirk invited a dozen NAM members to discuss what the Administration can do to enable U.S. industry to expand overseas sales. NAM member companies taking part in this unique opportunity represented a diverse group of industries, including chemicals, heavy truck manufacturing, apparel, processed foods, motorcycles, coated paper, large sprinkler systems, the defense sector, industrial gases, medical devices, metals and pesticides. NAM members highlighted a range of priorities, including the urgency of obtaining trade benefits from Russia, addressing trade barriers created by different foreign standards (including chemical and environmental standards), increasing trade agreements with economically-significant markets (including the European Union), maintaining the ability to offset foreign subsidies (including from non-market economies such as China), streamlining trade with Canada, expanding the Trans-Pacific Partnership, increasing Export-Import Bank support and accelerating modernization of export controls.

Details: Frank Vargo, (202) 637-3144.

, (202) 637-3144.

Ex-Im Bank Reauthorization Will Boost Competitiveness and Create Jobs. The NAM continues to urge Congress to move forward with a swift reauthorization of the U.S. Export-Import (Ex-Im) Bank. On Thursday, February 23, NAM President and CEO Jay Timmons sat down with reporters to discuss the vital role Ex-Im Bank plays for manufacturers who are looking to expand their sales overseas. He was joined by Todd McCracken, president of the National Small Business Association, as well as two small manufacturers who have used Ex-Im Bank to grow exports and hire additional workers. Last week, President Obama echoed the NAM’s call for Ex-Im reauthorization. The U.S. trails countries like Brazil, Canada, China, Germany and France in official export credit financing—both in absolute terms and as a share of GDP. Failure to reauthorize the Bank will give our competitors an unfair edge in global trade. “If we are going to double exports and create jobs, manufacturers need Washington to level the playing field—starting with reauthorizing the Export-Import Bank immediately,” said Timmons in a statement. Click here to contact your representative and urge support for the “Securing American Jobs Through Exports Act of 2011” (H.R. 2072). More information about Ex-Im Bank reauthorization is available at www.nam.org/exim.

Details: Lauren Airey, (202) 637-3141.

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Aberdeen Group
 
 
Manufacturers In The Courts

Federal Court To Hear NAM’s Landmark Greenhouse Gas Challenge. The NAM’s Greenhouse Gas Litigation Coalition will present oral arguments next week in its consolidated challenges to the Environmental Protection Agency’s (EPA) greenhouse gas (GHG) regulations. The rules, issued in late 2009 and 2010, impose the first permit requirements for GHG emissions from stationary sources such as manufacturing plants and electric utilities. Last year, the NAM filed a series of briefs challenging the EPA’s process and authority to regulate GHGs, and the business community and others will present oral arguments to a federal appeals court on Tuesday, February 28 and Wednesday, February 29. According to the EPA, the regulations will ultimately trigger new permitting requirements on more than 6 million stationary sources, including 200,000 manufacturing facilities. The key cases are summarized here

Details: Quentin Riegel, (202) 637-3058.

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Upcoming Events

NAM President and CEO Will Talk Energy and Jobs at CERA Week 2012. NAM President and CEO Jay Timmons will speak on “Energy and the Economy—The Impact of Energy Investment on Employment” at the 31st annual IHS Cambridge Energy Research Associates (CERA) executive conference, CERA Week 2012, March 5-9, in Houston, Texas. Moderated by IHS Global Vice President John Larson, Timmons’ panel will feature Louisiana Secretary of Natural Resources Scott Angelle, Aspen Technology Senior Vice President Blair Wheeler and Institute for 21st Century Energy President Karen Harbert. Recognized as the world’s most prestigious energy conference, CERA Week 2012 is sponsored by many NAM member companies. For more information, click here.

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Details: Laura Narvaiz, (202) 637-3104.

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Member Benefits

Save a Minimum of 70 Percent on LTL Shipping with YRC Freight. As a member of the NAM, you are eligible for significant savings with YRC Freight on your less-than-truckload (LTL) shipping with an automatic, no-fee, money-back guarantee. Save a minimum of 70 percent on non-guaranteed LTL shipments, inbound collect, outbound pre-paid and third party pre-paid, 10 percent on Time Critical and Time Advantage shipments, and 5 percent on Sealed Divider deliveries. Enroll today at www.nam.org/yrcenroll.

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Details: Please contact dedicated YRC Freight Representative Steve Velasquez, (1-800) 647-3061.

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Get Involved

NAM’s 2012 Public Affairs Conference: Your Opportunity to Make a Difference. Register now for the NAM's 2012 Public Affairs Conference, April 1-3, at the Turnberry Isle Miami in Aventura, Fla. This premier event is a key opportunity for manufacturing leaders to emphasize their priorities on regulations, energy and labor issues in this critical election year. Come prepared to hear valuable perspectives from leaders in the industry and share your own suggestions as we collaborate on a plan for action. Click here for more information and to register.

for more information and to register.

Details: Dana Hartwig, (202) 637-3116.

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Questions or comments? Please contact Clare James Johnson at cjohnson@nam.org.

President and CEO: Jay Timmons
Senior Vice President, Policy and Government Relations: Aric Newhouse
Senior Vice President, Communications: Erin Streeter