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

Why Policymakers Should Support—Not Hinder—R&D

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Manufacturing is an industry built on innovation—but with a recent change in tax law, manufacturers are encountering a new and major obstacle to the critical research and development investments they need to make in order to compete at home and around the world.

The background: Up until January 2022, a business could deduct 100% of their R&D expenses in the same year those expenses were incurred. But a change to the law that took effect this year now requires businesses to spread those deductions over a period of years, making investment in innovation more expensive.

The manufacturer: At Brewer Science—a Missouri-based manufacturer in the semiconductor industry—this issue has become an urgent challenge. The company is a top producer of materials needed to make semiconductor chips.

  • In such a fast-moving industry, staying competitive requires nonstop innovation—and that demands constant investment in new products and processes. According to Brewer Science Executive Vice President Dan Brewer, a significant percentage of the company’s revenue goes back into R&D every year.
  • “Semiconductors are everywhere, and new generations are constantly being created,” said Mr. Brewer. “The only way to compete abroad in our industry is to out-invent the competition.”

The impact: By making R&D investments more expensive, the tax code hinders manufacturers’ ability to make necessary expenditures not only on innovation, but also on other kinds of growth. Already, the harmful tax change has impacted Brewer Science’s bottom line and put a hitch in its plans for the future.

  • Because the new law requires a deduction to be spread out over five years, companies are paying more in taxes than they were a year ago—a result that is causing them to reassess future investments.
  • “We have a long list of new hires that we’re trying to bring on board and new projects we’d like to begin, and now we’re looking to make adjustments,” said Mr. Brewer. “Which projects can we put on hold? Which hires can we delay? It’s unfortunate that the same people who want investment in onshoring our industry are penalizing those that are already here.”

The ask: Brewer Science’s request is simple: return the tax treatment of R&D expenses to the way it was so that manufacturers are not penalized for pursuing the R&D that is necessary to spur economic growth and maintain America’s global leadership in innovation. There is still time to undo this for the current 2022 tax year, but time is quickly running out.

  • “We’re not asking for a handout,” said Mr. Brewer. “We’re just asking Congress to allow us to immediately deduct these expenses as has been the case for nearly 70 years, since before Brewer Science was even a company.”

The big picture: Mr. Brewer is also quick to point out the widespread impact of this change, especially for smaller companies.

  • “There are some companies that can’t make it five years without the ability to immediately deduct their R&D expenses,” he said.

Our move: The NAM has been leading the charge to ensure the tax code continues to support innovation by allowing businesses to fully deduct their R&D expenses in the year in which they are incurred.

The last word: “Our industry moves extremely fast,” said Mr. Brewer. “We must invest aggressively in research and development to stay relevant and stay competitive.”

Press Releases

Manufacturers: A Windfall Profits Tax Would Be a Dangerous and Destructive Policy

Washington, D.C. – Following President Biden’s call for a windfall tax on America’s energy producers, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Raising taxes on American energy manufacturers is dangerous and destructive for the American people and the manufacturers who depend on access to reliable energy. It would disrupt domestic supply at a time of severe geopolitical uncertainty. Indeed, history has shown that this is a failed policy that could lead to more imports and even higher prices.

“Manufacturers have provided real solutions and specific recommendations for improving energy security and taking an all-of-the-above approach to developing all forms of American energy. Manufacturers will continue doing everything in our power to be part of the solution, and we hope our elected officials will too.”

-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 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% 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

What Manufacturers Want Out of an Immigration System

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Generations of immigrants have enriched and strengthened manufacturing in the United States. That’s why the NAM has long focused on supporting an immigration system that offers opportunity for workers, support for businesses and certainty for our economic future.

Our priorities: The NAM is interested in immigration rules that prioritize national security and address workforce realities, while also dealing compassionately with the people seeking to come here for a better life.

  • That means establishing a safe and secure border, making reforms to the legal immigration system, offering opportunities to attract and keep talent in the U.S., addressing uncertainty in immigration status and clearing immigration backlogs so that new cases can be addressed efficiently.

Our solutions: To accomplish these goals, the NAM has offered a series of solutions for national policymakers and other leaders, including:

  • Fund border security via consistent appropriations;
  • Increase employment-based immigration;
  • Reform nonimmigrant visas and temporary worker programs to reflect employer needs, including a fund to support domestic STEM education programs;
  • Provide a permanent and compassionate solution for people facing uncertainty, including Dreamers (people brought here as children); and
  • Reform asylum and refugee programs for a more orderly and humane system.

Making progress: Already, we’ve seen important success. Recently, after NAM President and CEO Jay Timmons pressed Department of Homeland Security Secretary Alejandro Mayorkas about the need to reduce the visa backlog to ensure the industry can get the workers it needs, U.S. Customs and Immigration Services announced that it is on track to disburse all available green cards this year.

  • “Addressing the green card backlog and providing green cards to hardworking and talented immigrants in the manufacturing workforce is an important step to address the current workforce crisis and support a stronger economy,” said Timmons.
  • “With the workforce crisis contributing to inflationary pressures and economic uncertainty, we truly cannot afford to let more green cards go to waste and leave talented individuals who contribute to our economy on the sidelines.”

 

Learn more: The NAM recently released an updated version of its immigration policy roadmap “A Way Forward.” You can also find more information in “Competing to Win”—the NAM’s blueprint for policies that support manufacturing in America.

Policy and Legal

“Fix it Now”: Timmons on Taxes, Immigration and the Workforce

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“Fix it now.” If yesterday’s Port of Los Angeles virtual press conference had a single message, that was it.

NAM President and CEO Jay Timmons joined Port of Los Angeles Executive Director Gene Seroka for a question-and-answer session on the manufacturing supply chain and “Competing to Win,” the NAM’s agenda for bolstering manufacturing competitiveness.

Labor uncertainty: Timmons acknowledged the positive steps taken by leadership of the Port of LA over the past 12 months to improve the flow of goods, but he noted that workforce concerns continue to create supply chain uncertainty across shipping modes.

  • “One of the biggest issues slowing down our domestic supply chains is the labor uncertainty tied to critical infrastructure,” Timmons said. “For example, there was the real danger of a crippling rail shutdown last month. The NAM supported the administration’s efforts to reach an agreement to avert this, but negotiations are still ongoing, and there’s a deadline next month on Nov. 19.”
  • The solution, Timmons said, lies with policymakers and industry, who “have to be vigilant about putting out these sparks before they turn into fires.”

Taxes: Timmons also discussed the need for a more favorable tax code, which plays a major role in the ability of manufacturers in the U.S. to compete, he said.

  • “For example, a longstanding deduction for full and immediate expensing of research and development expenses is being phased out,” Timmons said. “Businesses will now have to amortize their R&D expenses over a number of years; that’s a huge disincentive that makes it costlier to conduct R&D within the U.S.—not to mention a potentially huge tax hike for small and medium-sized manufacturers at the end of the year.”
  • China, meanwhile, allows manufacturers a 200% deduction for R&D expensing, giving that country a major advantage.

Workforce and immigration: Manufacturing is “in the middle of a workforce crisis,” Timmons said. Enacting new, better immigration policy and investing more in certain workforce programs can help solve it.

  • Manufacturing has nearly 800,000 open jobs—and many of them could be filled if legislators would expand work-permit programs, Timmons said. “Clearly, we need border security, but we also need more avenues for people to come legally and to work.”
  • There should be more federal investment in apprenticeship models, too, so that students can “earn while they learn” in manufacturing, he added.

All hands on deck: Congress must work to fix these issues “in a very bipartisan way,” Timmons said. “We hear all the time from elected officials, both Democrat and Republican, and even independent, that they want to be supportive of manufacturing.”

  • “They understand that manufacturing is the lifeblood of any competitive economy … and we appreciate that. But we also need to make sure that in addition to saying good things about manufacturing, that elected officials are actually doing the things they need to do. That’s what [‘Competing to Win’] is all about.”
Policy and Legal

Timmons Talks Energy and Workforce in Michigan

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At a time of economic uncertainty, policy leaders must support energy and workforce development initiatives that can bolster the competitiveness of the manufacturing industry. This week, NAM President and CEO Jay Timmons traveled to Detroit, Michigan, to share that message at Oakland Community College’s campus in Auburn Hills. The Detroit Economic Club hosted the event.

  • The NAM recently released an updated version of its policy blueprint, “Competing to Win,” which Timmons referenced in his remarks.

Energy: Timmons noted that access to abundant energy is a national security issue, especially in the context of Russia’s invasion of Ukraine, and highlighted manufacturers’ all-of-the-above energy strategy. He also laid out some of the key policies that will help achieve manufacturers’ goals.

  • Timmons argued in favor of permitting reform; removing regulatory barriers; promoting reasonable access to federal lands; deploying energy-efficient technology at home and around the world; expediting processes for exporting energy technologies; rejecting new taxes on energy manufacturers; and fixing the tax code to preserve full expensing for equipment and 100% full expensing for research and development.

Workforce: Timmons spoke to the need for new talent in the manufacturing industry and called on young people to be a part of manufacturing’s future. He also laid out the NAM’s workforce policy agenda.

  • Timmons advocated for expanding the Pell Grant program to include accelerated education for in-demand skills; increasing the level of tax-exempt educational assistance from employers; investing in apprenticeship models; and fixing the broken immigration system to alleviate visa backlogs, bring employer-based immigrants to the United States and provide certainty for Dreamers.

Our approach: “Americans want practical solutions,” said Timmons. “They don’t want to have to choose between the extremes. They don’t want to punish businesses for being successful any more than they want to punish businesses for being good citizens. So, in this season of campaigns, manufacturers have our own campaign to run. It is a campaign for a manufacturing competitiveness agenda, for restoring faith in what’s possible.”

The bottom line: “Since America’s founding, manufacturers have led amid pandemics and disasters, through wars and recessions, during peace and prosperity,” said Timmons. “And we will keep leading for centuries to come, staying true to the values that have made America exceptional and kept manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.”

In case you missed it: Timmons has been on the road promoting manufacturers’ priorities and the NAM’s competitiveness agenda to leaders across the country. You can catch up on his earlier speeches in Phoenix, Arizona, and Minneapolis, Minnesota.

Policy and Legal

Manufacturers Unite to Protect Intellectual Property

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Manufacturing associations across almost 40 states joined with the NAM in calling on the White House to safeguard intellectual property at the World Trade Organization.

What’s happening: The WTO is considering waiving IP rights for COVID-19-related vaccines and treatments—an action that would harm American manufacturers that have led the fight against COVID-19.

What we’re doing: The NAM has previously pushed back aggressively on the proposal, and alongside manufacturers nationwide, we are stepping up our work. In a letter addressed to Secretary of State Antony Blinken, United States Trade Representative Katherine Tai and other senior Biden administration officials, the NAM joined nearly 40 state manufacturing organizations in arguing that waiving these IP rights will negatively affect American manufacturing—as well as the overall fight against COVID-19.

  • “This proposal would weaken critical global rules for IP protections that support innovation in a range of manufacturing sectors by including not only broad new categories of COVID-19 products, but also their upstream supply chains. Furthermore, an expanded waiver allows commercial rivals like China to unfairly seize American innovation to benefit their domestic economies.”

The importance of IP: Those manufacturing associations argue that IP gives an incentive for manufacturers to broaden research and development and a reason to invest in expanding industries. American manufacturers are concerned that the IP waivers would expose them to unfair competition from foreign rivals and would take away employment opportunities from Americans.

The last word: “Our organizations strongly urge the Biden administration and Congress to stand with manufacturers and workers to firmly oppose an expanded IP waiver at the WTO. We stand ready to work with you and your agencies in support of real solutions to the pandemic and future health crises—and to advance U.S. leadership in manufacturing and innovation.”

Policy and Legal

Timmons Talks Immigration in Minnesota

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Manufacturing in the U.S. is advancing, but to grow it needs more workers—including via immigration. That’s why immigration reform is one of the NAM’s key policy priorities to boost the industry’s competitiveness, as NAM President and CEO Jay Timmons told the Minnesota Manufacturers’ Summit yesterday in Minneapolis. The event was hosted by the Minnesota Chamber of Commerce.

  • This week, the NAM released an updated version of its immigration policy blueprint “A Way Forward,” which Timmons highlighted in his speech.

What our immigration system needs: “Despite all the overheated rhetoric, one thing we can agree on is this: the United States has a broken and unreliable immigration system—and it is harming manufacturers’ competitiveness,” said Timmons.

  • He cited the need for more employment-based H-1B visas; more temporary H-2B visas; more programs for foreign-born U.S. students in STEM fields; a new visa category to address temporary economic needs in the U.S.; and protection for Dreamers along with a pathway to legal status for unauthorized U.S. residents.

Other priorities: Timmons also covered other key manufacturing priorities, including energy policy fixes.

  • “Congress can deliver sustainable permitting improvements that can fast-track critical infrastructure projects and speed up the construction of new manufacturing facilities,” he said.
  • “The situation in Europe and the actions of OPEC show us this isn’t just an issue of economic competitiveness. It’s also an issue of national security.”

Reducing the burden: “Policymakers can also help by streamlining regulatory policy in general,” Timmons added. “The annual regulatory cost burden for an average U.S. firm represents 21% of its payroll.”

  • “Manufacturers support smart, sensible regulation to protect our health, our workplaces and the environment. But the more time and resources manufacturers spend on their compliance burden every year, the less we can spend solving our greatest challenges.”

The bottom line: “Whether it’s permitting reform or immigration reform, building on tax reform or advancing workforce solutions, manufacturers are positioned to lead,” said Timmons. “So, our role is to be true to the values that have made America exceptional and kept manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.”

Further reading: Timmons has been hitting the road this week to promote manufacturers’ priorities to leaders across the country. If you missed it, catch up on his earlier speech in Phoenix, Arizona.

Press Releases

Manufacturers Renew Call for Action on Immigration

NAM CEO says broken system is harming manufacturers’ competitiveness

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons addressed the Minnesota Chamber of Commerce’s Manufacturers’ Summit today, where he made another call for policymakers to act on immigration, saying it is time to “fix this problem now.” Timmons called on Congress to act in the year-end government funding bill.  His remarks come as the NAM rereleased its immigration proposal “A Way Forward.”

Excerpts from Timmons’ speech:

“First and foremost, this is a humanitarian issue. We see it play out in tragic ways—including family separations at the border and confusion as families seek to reunite following a harrowing journey.”

“But as manufacturing and business leaders, we also know there are serious economic consequences. Research and development—the cornerstone of innovation and our industry’s success—depends on access to the best and brightest from across the world.”

“The broken immigration status quo is also preventing us from growing our talent pool, leaving jobs unfilled. There are around six job seekers for every 10 job openings in the U.S., and our population growth is slowing. Last year, the U.S. population grew at its slowest rate ever.”

“Last year’s infrastructure law and this year’s CHIPS and Science Act prove that Congress can still get bipartisan things done—and immigration should be next on the list, whether it’s one bill or multiple bills. We would absolutely support a long-term, comprehensive legislative fix that addresses all of these issues, but we also want to be realists. We have a workforce crisis that needs to be addressed now, so let’s take action where we can. We want to focus on the art of the possible. One approach would be to address some of these issues in the year-end government funding bill.”

First released in 2019 and updated to reflect current challenges, the NAM’s “A Way Forward” proposal identifies seven core areas of action for Congress and the administration to take:

  • Strengthen border security through physical infrastructure and best-in-class technology.
  • Prioritize America’s workforce needs through reforms to the legal immigration system.
  • Reform nonimmigrant visas and temporary worker programs to reflect employer needs, including a fund to support STEM programs so that we can reduce the need for these types of visas in the future.
  • Provide a permanent and compassionate solution for populations facing uncertainty, including the Dreamers, who were brought here as children and know no other home.
  • Reform asylum and refugee programs for a more orderly and humane system, including asylum standards consistent with our values.
  • Fix the problem of the unauthorized population with a firm reset, requiring an orderly process of review, including financial penalties for those who seek to become legal and deportation for those who choose to stay in the shadows.
  • Strengthen the rule of law so that it is respected and followed by all, with a focus on gang violence and also on requiring localities to cooperate to advance the enforcement of immigration priorities.

View “A Way Forward” in full 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 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% 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

NAM VP Monahan Talks International Economics

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As the manufacturing industry grapples with disruptive forces in the U.S. and around the world, companies are looking for more certainty and opportunity.

NAM Vice President of International Economic Affairs Ken Monahan spoke about these issues with UPS President of International Public Affairs Penelope Naas in a panel discussion during the UPS Supply Chain Solutions virtual conference on Oct. 5.

The big idea: “Manufacturers of all sizes must be able to compete in a global economy by selling not just to consumers in the U.S., but also to billions of consumers globally,” said Monahan.

  • “For us, international economic growth is core to our DNA—and it is absolutely critical that we increase opportunities for those 95% of the global population that lives outside of the U.S.”
  • The NAM emphasized these broad priorities in its just-released “Competing to Win” policy agenda. 

The challenge: “We’ve just seen wave after wave of supply chain disruptions, and the impact that that’s happening on the ability of manufacturers to operate and engage not just in the U.S. but globally,” said Monahan. “In a recent quarterly survey [of NAM members], 78% of our leaders listed supply chain instructions as a primary business challenge.”

  • According to Monahan, the global nature of manufacturing underscores “the importance of our industry working to ease the types of global supply chain bottlenecks that are impacting so many businesses around the world … easing uncertainty and … knocking down unfair trade barriers that continue to stymie the growth of economic activity globally.”

Problems and solutions: Monahan named COVID-19, the Russian invasion of Ukraine and disclosure requirements that require more scrutiny of supply chains as key factors impacting manufacturers—and emphasized the need for diverse sources of products to ensure supply chain resiliency in the future.

Building partnerships: Monahan pointed to the importance of robust trade agreements and partnerships with economic allies to secure resilient supply chains and promote fair competition.

  • “When it comes to trade, we need to think through ways in which we can deepen our partnerships with our friends and allies,” said Monahan. That means “seeking trade agreements and cutting-edge, best-in-class frameworks with our trading partners to encourage increasing standards to U.S. levels.”

Monahan also noted a series of ongoing U.S. efforts with global trading partners, including in the Indo-Pacific region, Europe, the Americas and Kenya. He made clear that the NAM is working to promote new agreements that open markets, strengthen U.S. innovation and technology standards and increase global standards around trade rules, among other priorities.

  • Such U.S. global engagement is “demonstrating to manufacturers that the U.S. is back on the field,” said Monahan. “But at every opportunity, we are pushing the administration to think bigger, be even more ambitious and take this opportunity in front of it.”

Promoting transparency: Monahan spoke about the importance of manufacturers’ insight into their supply chains.

  • “Companies need to be knowledgeable about as many tiers of their supply chains as possible and have strong due diligence and compliance programs in place to ensure to the maximum extent possible that goods are not being sourced or sold to entities that use forced labor or are on various export control lists,” he said.

The last word: “We need to be able to really put forward and advance the same principles globally that we do here at home as manufacturers: nondiscrimination, fairness, equal opportunity and competition,” said Monahan. “We are at our best when we are advancing those priorities globally and in the U.S.”

Policy and Legal

Timmons Lays Out Manufacturing Priorities

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NAM President and CEO Jay Timmons is on a barnstorming tour of the U.S., to raise more support among leaders for addressing supply chain challenges, creating more manufacturing jobs and making the country more resilient. He brought this message to the 2022 Arizona Manufacturing Summit in Phoenix, Arizona, yesterday.

Manufacturing’s strength: “I’m pleased to report that manufacturers are shattering expectations across the United States,” said Timmons. “Here’s one encouraging fact: manufacturers have now recovered all the jobs the industry lost at the start of the pandemic—and then some. There are more than 12.8 million people working in manufacturing… And that’s because we’re doing what we’ve always done. We’re solving problems, we’re innovating and leading into the future.”

Challenges ahead: “Inflation has reached the highest level in decades,” said Timmons. “Supply chains are still strained, making it harder to move resources and products. Global instability—especially Russia’s war on Ukraine—shows us it’s more important than ever that we secure domestic energy supplies.”

  • “We’re facing a workforce crisis, with less than six job seekers for every ten jobs in America. And almost 70% of Americans today say the country is on the wrong track. Now, we’ve seen some moments of historic bipartisan action in Washington … But there is so much more to be done.”

Competing to Win: Timmons pointed to the NAM’s policy roadmap, “Competing to Win,” which offers an agenda for manufacturing competitiveness on issues including the following:

  • Taxes: “We need U.S. tax policy to keep up and encourage more industrial investment here,” said Timmons. “So, we’re calling for making the 20% deduction for pass-through income permanent—and expanding it. The small and medium-sized businesses here deserve confidence that they won’t lose that all-important tool. And we need to fix provisions of the tax law that are making R&D and capital investment more expensive starting this tax year.”
  • Trade: “While we’re working on tax policy here at home, we also need to expand opportunities to sell our products overseas,” said Timmons. “Exports are part of our industry’s lifeblood. That means policymakers should hold countries accountable for practices that harm manufacturers in the U.S. We should continue pursuing cutting-edge trade deals, while ensuring that the agreements already in place are delivering for our industry. And we should reject policies at international bodies like the World Trade Organization that would take away intellectual property rights.”
  • Immigration: “We need Congress to fix the broken, unreliable immigration system,” said Timmons. “Clearly, we need border security, and we need more avenues for people to come legally and work. It’s critical to our economic competitiveness—and consistent with our values.”

The way forward: “It can be disheartening to know that so many Americans don’t believe the country is on the right track,” said Timmons. “But a focus on policy—getting things done, rather than blaming each other—can change that. And manufacturers are positioned to lead. The work we do to create jobs and to improve the quality of life is essential, and we can’t let up. We won’t let up.”

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