Policy and Legal

Manufacturers need smart laws and effective policies. That’s why the NAM is standing up for manufacturers everywhere – from the halls of power where we advance important legislation, to the courts where we fight to defend our rights.

Policy and Legal

Trump Threatens Executive Actions for COVID-19 Relief

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President Trump threatened to use executive actions if Republicans and Democrats can’t reach a deal on the next round of stimulus, reports The Washington Post (subscription). How much he can accomplish unilaterally is unclear, however.

What he said: “We’re negotiating right now as we speak, and we’ll see how that works out,” Trump said. “In the meantime, my administration is exploring executive actions to provide protections against eviction . . . . As well as additional relief to those who are unemployed as a result of the virus. Very importantly, I’m also looking at a term-limited suspension of the payroll tax.”

Meanwhile, on Capitol Hill: Democrats and Republicans intended to come to a deal by the end of this week. The latest word is that it will happen “in the near future,” according to Senate Majority Leader Mitch McConnell.

NAM connection: The NAM has been urging Congress to include liability protections in the next stimulus package. To that end, it organized a “Day of Action” yesterday on social media, calling for “commonsense protection from opportunistic lawsuits in order to fuel our recovery and help creators respond to this crisis.” A range of groups and organizations participated in the Day of Action, including the Minnesota Chamber of Commerce, the Michigan Manufacturers Association and the Illinois Manufacturers’ Association.

Press Releases

White House Threatens Innovation with Drug Price Indexing

Timmons: “The White House has chosen to dangle an axe above these manufacturers’ heads”

Washington, D.C. – The National Association of Manufacturers launched a new seven-figure television and digital ad campaign aimed at potential rules to address drug pricing through International Price Indexing.

“As the nation continues to battle the COVID-19 pandemic, we should not be enacting policies that could potentially stifle pharmaceutical innovation. Price-setting schemes manipulated by foreign governments have no place in our economy. They could impact our ability to develop cures for future pandemics, cancer or Alzheimer’s. So we’re unsure why the White House has chosen to dangle an axe above these manufacturers’ heads by threatening this policy,” said NAM President and CEO Jay Timmons.

“Manufacturers are constantly working to lower costs for top-quality medicines and therapies, and we know that importing policies that have failed elsewhere won’t achieve that goal.”

To view the ad, click here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 11.7 million men and women, contributes $2.37 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org

Press Releases

Manufacturers Seek to Immediately Halt Administration’s Unlawful Visa Restrictions with Injunction

Washington, D.C. – The National Association of Manufacturers released this statement after filing a motion for preliminary injunction in federal court today. The motion would call for an immediate hold on a series of damaging visa restrictions that prevent manufacturers from filling crucial, hard-to-fill jobs to support economic recovery, growth and innovation when we most need it.

“These unlawful visa restrictions hurt manufacturers and their workers at a time when we need driven, high-skilled innovators more than ever,” said NAM Senior Vice President and General Counsel Linda Kelly. “Destroying the investments we have made to find and grow talent will only stifle American innovation while serving up crucial talent and a competitive advantage to other nations on a silver platter. We are asking the court to put an immediate stop to this bad policy. We know our case is strong, and we must prevent irreparable harm to American manufacturing while we await our day in court.”

To read the motion for preliminary injunction, click here.

NOTE: Last week, the NAM was joined by industry associations representing much of the American economy in filing a lawsuit in federal court opposing the Trump administration’s proclamation suspending new nonimmigrant visas.

Read the NAM’s plan for comprehensive immigration reform, “A Way Forward.” To learn more about the Manufacturers’ Center for Legal Action, click here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 11.7 million men and women, contributes $2.37 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Policy and Legal

FDA Issues Guidance for Rapid At-Home Tests

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The FDA announced new standards for companies seeking regulatory approval of rapid at-home COVID-19 tests, reports Bloomberg Law.

Why it’s good: Creating a fast, cheap test that can be used regularly at home would allow people to test themselves once or twice a week, or before coming into contact with others—giving them the ability to quarantine when necessary and reduce the likelihood of spreading the illness.

But not so fast: The FDA’S rules for rapid at-home COVID-19 tests are pretty strict, which could discourage some companies from giving it a try, according to USA Today.

Xtra help: On Tuesday, The XPRIZE—a nonprofit organization that hosts public competitions— announced a $5 million prize for “five winners who can produce a test that delivers results in as little as 15 minutes and costs less than $15” (also from USA Today). An additional $50 million will be available to help scale up manufacturing for any contestant.

The NAM’s view: “Long wait times for tests can present a personnel challenge for manufacturers that have workers who might have been exposed outside the workplace,” said NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling. “The NAM recently joined a letter to ensure more federal resources are committed to testing. We are focusing our advocacy efforts on solutions that will provide more robust and reliable testing solutions in every community.”

Policy and Legal

A Tax Victory for Manufacturers

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After a year of pushing back on an IRS rule that would have made it more difficult for manufacturers to invest in new equipment, the NAM can declare a win, according to Bloomberg Government (subscription).

Here’s a recap:

  • Before 2017, businesses could pretty much subtract their full interest payments on debt—but the 2017 tax reform law limited the business interest deduction to 30% of earnings before interest, tax, depreciation and amortization (EBITDA) for tax years starting in 2018.
  • Starting in 2022, the deduction was limited even more, to earnings before interest and tax (EBIT). Excluding depreciation and amortization would make it more expensive for businesses like manufacturers to finance capital equipment purchases.
  • Here’s where it could’ve gotten worse: The Treasury Department had proposed a rule that would have effectively imposed the EBIT standard now instead of two years from now.

For a capital-intensive industry like manufacturing, where businesses use debt to finance important investments in critical technology, that was going to cause a lot of strain even before COVID-19. Throw in a pandemic and a tough economic environment, and that proposed rule looks even worse.

The NAM aggressively pushed back, leading more than 80 trade associations to oppose that change. On Tuesday, the Treasury Department released its final rules—without that provision.

The NAM says: “Congress’s goal in reforming our tax system was to help businesses invest and grow, but the proposed rule would have had the opposite effect,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram. “We are pleased that Treasury did the right thing, helping support the men and women who make things in America.”

The bottom line: Because of this rule, it will be easier for manufacturers to invest in their business, their employees and their communities.

Policy and Legal

Second Quarter GDP Is Terrible; The Fed Stays Put

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The bad news is that GDP cratered in the second quarter of 2020, falling by a record 32.9% (on an annualized basis). The good news is . . . it wasn’t as bad as expected? Not much of an upside, but true: economists were expecting a 34.7% drop. Neither the Depression nor the Recession—nor, in fact, any economic slump in two centuries—caused such an extreme, sudden decline.

Meanwhile, the officers of the Federal Reserve met yesterday, and things pretty much went as expected, according to CNBC.

  • The Fed stuck with its low interest rates, holding its overnight lending rate around 0%.
  • It also said it would maintain bond purchases, as well as a range of lending and liquidity programs that have been part of its response to COVID-19.
  • Their statement said the rate would stay where it is until officials are “confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

The bottom line: While the state of growth has improved over the worst months of the COVID-19 pandemic—when businesses were shut down across the country—we’re still well below the level of economic activity and employment at the beginning of the year.

Policy and Legal

How to Measure the Threat of Liability Lawsuits

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How many lawsuits have been filed over alleged COVID-19 exposure at businesses? That’s not the real question, say the NAM’s legal experts. The real question is: how many will be filed over the next three to five years?

A recent legal analysis shows that only 5% of lawsuits filed since March fall into the category of COVID-19 liability—but don’t be misled by that, says NAM Vice President of Legal and Deputy General Counsel Patrick Hedren.

Here are some pertinent facts to keep in mind:

  • The vast majority of states have a two- or four-year statute of limitations period for bringing tort lawsuits.
  • No state has a limitation of less than one year, and some allow lawsuits after four or even six years. Which means . . .
  • The flood of COVID-19-exposure litigation isn’t expected until spring 2022 when these claims start to expire.

In other words, focusing on today’s numbers obscures a coming wave that could overwhelm businesses at a time when they can least afford it.

And here’s the case for targeted liability protections, says Hedren:

  • Business leaders have been doing the best they can with the information they have in an evolving situation.
  • Guidelines from the early days of the pandemic have been refined, rewritten and sometimes replaced.
  • In many cases, local, state and federal guidelines have all conflicted with one another, creating a no-win situation for businesses that could face trouble no matter what they do.

The solution: Legislation offered by Senate Republicans—and vigorously pursued by the NAM—actually gives teeth to evolving safety measures by shielding businesses from liability if they make reasonable efforts to follow public health guidelines. (In many ways, it seems that Senate Majority Leader Mitch McConnell (R-KY) is reading from the NAM’s liability playbook.) If businesses engage in “gross negligence or willful misconduct that caused an actual exposure to coronavirus,” they remain open to lawsuits.

The last word: “The way to deal with safety is through thoughtful guidance that can stay fresh as the science evolves—not through a mess of court cases in thousands of jurisdictions across the country,” said Hedren. “Businesses across the country need commonsense liability protections that depend on adherence to safety standards, promote certainty and strengthen their ability to serve their community and the country.”

Policy and Legal

What’s Going on in China?

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U.S.–China relations are at a low ebb, after a matched pair of consulate closings in recent days. Last week, the U.S. ordered the Chinese consulate in Houston to be closed, whereupon the Chinese closed the U.S. consulate in Chengdu.

That’s the headline story, but a number of other stories are important for evaluating U.S.–China relationships—and Chinese strength—going forward. Here are some recent data points.

A potential catastrophe: First, there’s another horrible development for 2020: China’s massive Three Gorges dam is under some strain, thanks to the worst rains the surrounding region has seen in decades. Though Chinese officials assure the public and the world that the dam is holding, its reservoir is alarmingly full. Tens of millions of people have already been affected by severe flooding.

COVID-19 returns? On Sunday, China reported its highest rate of infections since March 6. (Though the emphasis there should probably be on reported).

Meanwhile, on the diplomatic front . . .

Human rights abuses: The United States has sanctioned 11 Chinese companies for involvement in the persecution of Muslim minorities, including for the use of forced labor. The sanctions forbid U.S. companies from selling parts or technology to these Chinese companies, not from purchasing anything. But in practice, The New York Times (subscription) says, American firms are likely to forgo doing business with them entirely.

Competition over rare earths: In a bid to find sources for rare earths that aren’t in China (which now supplies 80% of what the United States uses), the U.S. Department of Defense is funding Lynas Corp.’s rare earths processing plant in Texas—slated to be completed by mid next year.

And lastly . . .

Now that’s just weird: Bewilderingly, many Americans are receiving unsolicited packets of unidentified seeds in the mail—sent from China. Several states have had to warn residents not to plant them.

Policy and Legal

What Will the Fed Say?

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With the end to the COVID-19 pandemic nowhere in sight, all eyes are on the Federal Reserve as officials meet today.

The Fed is expected to stick with its low interest rates, according to Yahoo! News. This week’s meeting could give us a clue about how long rates are likely to remain where they are and what the Fed’s approach will be as infections increase around the country.

Here’s something we do know: the Fed is extending its emergency lending programs until the end of the year. According to CNBC, a series of initiatives that were set to expire on Sept. 30 will now run until at least Dec. 31. Those programs include:

Some good news: CNBC reports that June’s new orders for U.S.-made capital goods saw their biggest increase in nearly two years. Non-defense capital goods gained 3.3%—the biggest increase since July 2018. The rise was likely driven by renewed demand as businesses began to open after months of closures.

But it’s not all good news. While the U.S. manufacturing sector has been showing strength, the surge of COVID-19 cases across the country threatens to wipe out gains as businesses nationwide are forced to close or pause reopenings. That threat to the industry—and to the reopening—continues to spur the NAM’s PSA campaign. Take a look at the latest artwork making the simple but powerful point: #MasksEqualMoney.

Press Releases

Manufacturers on SAFE TO WORK Act

Washington, D.C. – Manufacturers of all kinds have been called on to continue to operate as critical infrastructure to support our nation’s response to the COVID-19 crisis. For that reason, they risk becoming targets in a wave of COVID-19-related lawsuits or enforcement actions based on product liability, alleged workplace transmission and even Good Samaritan efforts. National Association of Manufacturers Senior Vice President and General Counsel Linda Kelly released this statement after lawmakers announced the Safeguarding America’s Frontline Employees To Offer Work Opportunities Required to Kickstart the Economy (SAFE TO WORK) Act:

“Throughout this crisis, we have seen clear bipartisan support for provisions like these that protect companies doing their very best to implement the latest guidance, even in a difficult and confusing environment. The SAFE TO WORK Act mirrors the liability recommendations proposed by manufacturers as part of our ‘American Renewal Action Plan’ in April.

“Importantly, the SAFE TO WORK Act also provides clear avenues for holding bad actors responsible for reckless behavior, while providing powerful incentives for all employers to do everything they can to prevent the spread of COVID-19. This is the type of thoughtful, responsible approach we need that will provide manufacturers and other frontline businesses with targeted protections limited only to the COVID-19 pandemic. It’s about supporting manufacturers that have risen to the challenge and supported our nation during this unprecedented crisis, finding solutions to make PPE for health care workers, to produce food and supplies for families and to develop vaccines and treatments for us all.”

NOTE: In April, manufacturers laid out their “Pandemic Liability Policy Recommendations” as part of the NAM’s “American Renewal Action Plan.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 11.7 million men and women, contributes $2.37 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

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