Capital Briefing: October 9, 2015

Capital Briefing

#Manufacturing Tweet of the Week

Details: Martha Sprague, (202) 637-3083.


This Week in Washington

It’s Time to Renew Key Tax Provisions.
This week, the NAM hosted Investment Week in an effort to focus congressional attention on the urgent need to extend several key pro-investment tax incentives. Manufacturers support a permanent extension or, at a minimum, a multiyear extension of enhanced Section 179 expensing, 50 percent first-year expensing (also known as bonus depreciation) and the comparable provisions allowing the accelerated use of alternative minimum tax credits in lieu of bonus depreciation, all of which would bolster competitiveness for our industry and economy.

In recent months, we have seen some forward movement. However, as the fourth quarter begins, the House and Senate have continued down separate paths and are following different strategies. Through Investment Week, the NAM sought to drive home to policymakers the urgent need to renew these key tax provisions.

Events included a Shopfloor briefing on Capitol Hill featuring representatives from NAM member companies Verizon, Deere & Company and Owens-Illinois, Inc., as well as an economist from the University of Chicago Booth School of Business. The NAM amplified the message in the media and on our Shopfloor blog, profiling a number of companies that strongly support and rely on these provisions.

The NAM also spearheaded a business community–wide sign-on letter with more than 200 company and association signatories urging Congress to take swift action on the incentives. While our ultimate goal continues to be a reformed, pro-manufacturing tax code through comprehensive tax reform, we will continue to work to ensure that manufacturers have certainty about the tax provisions that help them compete in a global economy.

Details: Carolyn Lee, (202) 637-3079.

Hot Topic

House Passes Crude Oil Exports Legislation.
The House is expected to pass today H.R. 702, a bill to adapt to changing crude oil market conditions. Introduced by Rep. Joe Barton (R-TX), the bill would lift the ban on crude oil exports, an action that would bring the United States into compliance with its export obligations and help manufacturers in the United States access foreign markets.

Today, the United States is the world’s leading producer of petroleum liquids; yet, it maintains restrictions on the export of crude oil. The outdated federal ban not only hurts the United States, but also is inconsistent with U.S. international obligations. As NAM President and CEO Jay Timmons explained, it is long past time for the United States to lift the ban on crude oil exports and put itself into compliance with the same international commitments that we urge other countries to implement.

Manufacturers believe that all exports should be governed by the principles of free trade and open markets and that fairly conducted trade will provide opportunities for the growth and expansion of manufacturing in America. As a member of the World Trade Organization, the United States is bound to comply with rules that prohibit any imposition of quantitative limits on all products, including crude oil exports. Those rules are critical to ensure a fair and level playing field for manufacturers throughout every sector of the U.S. economy, particularly in the face of other countries’ efforts to restrict access to key raw materials.

The NAM key-voted H.R. 702 and will continue to advocate an international trade policy that strengthens manufacturing in America and improves the competitiveness of our nation’s job creators in the global economy.

Details: Linda Dempsey, (202) 637-3144.

Trade Policy

United States Reaches 12-Country Asia-Pacific Agreement.
On Monday morning, trade ministers from the United States and 11 Asia-Pacific nations announced the conclusion of the Trans-Pacific Partnership (TPP) to eliminate trade barriers and set the rules of trade for countries accounting for about 40 percent of the global economy. The Office of the United States Trade Representative released this summary of the TPP, but the full details of the agreement may not be public for several weeks, including the timing and extent of tariff cuts, the extent of foreign trade barriers eliminated and the scope and level of standards, such as on intellectual property, procurement and investment. The announcement was met with a variety of responses from Capitol Hill, including from Senate Finance Committee Chairman Orrin Hatch (R-UT), Senate Finance Committee Ranking Member Ron Wyden (D-OR), House Ways and Means Committee Chairman Paul Ryan (R-WI) and House Ways and Means Committee Ranking Member Sander Levin (D-MI).

The NAM issued this statement emphasizing the potential impact of this deal if it embraces the manufacturing-focused TPP priorities that the NAM has promoted throughout the talks. The NAM is seeking details on the full scope of the agreement, from its elimination of tariff and nontariff barriers to the extent it protects intellectual property and investment for manufacturers. During a meeting on Tuesday with NAM President and CEO Jay Timmons and other business leaders, President Obama discussed the TPP and urged business support for the agreement.

During the coming days and weeks, the NAM will be working closely with its members to share information on the final agreement and to seek input on the impact of the final deal on manufacturing in the United States

Details:Linda Dempsey, (202) 637-3144 and Ken Monahan, (202) 637-3078.

Tax, Technology and Domestic Economic Policy

House Passes Crude Oil Exports Legislation.
Earlier this week, the Organisation for Economic Co-operation and Development (OECD) released the final package of measures under its Base Erosion and Profit Shifting (BEPS) project. BEPS began in 2012, when the G-20 asked the OECD to develop an internationally “coordinated and comprehensive” approach to address aggressive tax planning that resulted in inappropriate corporate tax avoidance.

The final BEPS reports include recommended changes to tax policy, taxpayer reporting requirements and information sharing among governments that go well beyond that original objective. Some new information disclosure rules—part of an effort to establish standards for information reporting by multinational companies on income, business activities and taxes—raise serious concerns for manufacturers. These rules, if implemented, could impose substantial and unnecessary compliance costs on manufacturers and force disclosure of sensitive, confidential U.S. taxpayer information.

The NAM has raised concerns about these recommendations earlier in the process. Before the Department of the Treasury implements any of the recommendations, it is critical for Congress to fully vet the proposed changes and analyze their potential impact on U.S. global companies, our competitiveness and the broader U.S. economy. If implementation does move forward, Treasury should do all it can to minimize the compliance burden of information disclosure and ensure that U.S. companies are not required to disclose sensitive, proprietary business information. Contact NAM Vice President of Tax and Domestic Economic Policy Dorothy Coleman for further information about the issue or to join the NAM’s Ad Hoc BEPS Task Force.

Details: Dorothy Coleman, (202) 637-3077.

Manufacturing in Action

A group of 57 metals manufacturing students from Portland’s David Douglas High School tour the Purdy paintbrush manufacturing facility in Portland, Ore., on October 2. Purdy is a division of Sherwin-Williams paint company.

Photo by Scott Varley for the National Association of Manufacturers

Get Involved

Manufacturing Day 2015: Smashing Success!
The NAM thanks the nearly 2,400 locations that hosted Manufacturing Day events in 2015! You helped smash the goal of 2,250 events and prepared the students of today for the exciting manufacturing careers of tomorrow.

Manufacturing Day events were held in all 50 states, Puerto Rico, Canada, Mexico and even Europe. We have truly gone international with our message that manufacturing is a great career choice and provides many benefits to local communities and state and national economies.

If your facility hosted an event this year but did not register it on the official Manufacturing Day website, there is still time to do so. Registering your event can be done quickly and easily by clicking here.

Thank you again for making Manufacturing Day 2015 such an amazing success. We look forward to partnering with you again in 2016!

Details: Christopher Glen, (202) 637-3121

Download the NAM Advocacy App.
Contact Congress while on the go! The NAM developed the MFGWorks mobile app for smartphones and tablets to give employees, families and friends the power to take action in support of manufacturing—wherever they are.

Download the MFGWorks app for Apple or Android devices and share it with your colleagues, family and friends. We are all part of a growing manufacturing economy, and we need your help to maintain positive momentum on Capitol Hill.

Details: Leann Paradise, (202) 637-3049.

The Week Ahead

Senate Hearings:

The Senate is in recess until October 19.

Details: Rick Limardo, (202) 637-3198.

House Hearings:

The House is in recess until October 20.

Details: Laura Ringdahl Siegrist, (202) 637-3038.

Economic Reports:

There will be a number of key economic reports out next week, including new data on industrial production and the latest manufacturing surveys from the New York and Philadelphia Federal Reserve Banks. After sluggish growth in the sector due to headwinds in the global economy, these releases will be closely watched for signs of possible improvement. Likewise, the retail sales numbers will be examined to gauge the health of the consumer sector and Americans’ willingness to open their wallets. Beyond those figures, other indicators to watch include the most recent data on consumer and producer prices, consumer confidence, job openings and small business optimism.

Details: Chad Moutray, (202) 637-3148.

Questions or Comments?

Contact Christine Grimaldi at cgrimaldi@nam.org

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