Washington, D.C. – The National Association of Manufacturers released a new economic analysis on the damaging impact of the Securities and Exchange Commission’s attempt to force private companies to disclose financial information publicly.
The SEC’s new rule interpretation would apply to private companies that raise capital via corporate bond issuances under SEC Rule 144A. If the new interpretation takes effect as scheduled in January 2023, these businesses will face decreased liquidity and increased borrowing costs—leading to significant job losses and a decline in U.S. GDP.
These impacts will be felt across the economy, resulting in 30,000 jobs lost each year over the first five years the new interpretation is in effect. The job losses will increase over time—rising to 50,000 jobs lost each year after five years and 100,000 jobs lost each year after 10 years.
These job losses are attributable directly to the decreased liquidity and increased borrowing costs associated with the SEC’s new interpretation.
NAM Speaks Out:
NAM Managing Vice President of Tax and Domestic Economic Policy Chris Netram released the following statement:
“At a time of rising interest rates and economic uncertainty, manufacturers cannot afford for the SEC to roil the bond markets arbitrarily. With tens of thousands of jobs at stake, the SEC must act by year’s end to reverse this misguided interpretation.”
The NAM and the KAM are calling on the SEC to reverse course by clarifying—either by rule or by exemptive order—that Rule 144A issuers are not required to make public financial disclosures. The NAM and the KAM are also seeking emergency interim relief to prevent the new interpretation from taking effect in January.
- SEC Rule 15c2-11 requires broker dealers to ensure that key information about issuers of over-the-counter equity securities is current and publicly available prior to quoting those issuers’ securities freely.
- SEC Rule 144A allows for resales of securities (primarily corporate debt issuances) to qualified institutional buyers—large financial institutions that own or manage more than $100 million in securities. Retail investors cannot purchase Rule 144A securities. Notably, under Rule 144A, issuers are obligated to make their financial and operational information available to QIBs.
- In September 2021 and December 2021, the SEC’s Division of Trading and Markets issued no-action letters applying Rule 15c2-11 to Rule 144A debt; the new requirements take effect in January 2023. This decision contradicted the historical application of Rule 15c2-11 to OTC equity securities and bypassed important rulemaking safeguards required by the Administrative Procedure Act.
- The NAM has weighed in with the SEC and Congress seeking to reverse this damaging interpretation.
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.
Washington, D.C. – Today, the National Association of Manufacturers released the following statement calling for passage of the Respect for Marriage Act:
“Manufacturers know that individuals truly thrive in their careers when they can bring their authentic selves to work and feel confident that their families will be safe from discrimination or worse in the places they have chosen to live. The Respect for Marriage Act would ensure that the legal protections around which so many Americans, including manufacturing workers, have ordered their lives will not be suddenly rolled back. Codifying federal protections for interracial marriages and same-gender marriages with appropriate protections for religious liberty will help keep all families equal under the law and ensure that manufacturers can continue to hire and retain a diverse and talented workforce. It will deliver families and businesses the certainty they need and deserve.”
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
Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement as negotiators work to reach an agreement between Class I railroads and all labor unions representing the freight rail workforce. Several organizations have not yet ratified the deal tentatively agreed to by union leadership and rail industry representatives in September that delayed the possibility of a strike.
“Manufacturers are urging congressional leaders to be prepared to bring stability and predictability to the economy if a rail strike and shutdown occurs. We already face economic turmoil with rising costs, product shortages and high inflation. Any nationwide rail strike or shutdown will cause even more economic pain. Manufacturers urge all parties to work rapidly—for the good of the country—to conclude this collective bargaining process.”
Background: A rail strike could begin as soon as 12:01 a.m. EST on Saturday, Nov. 19. Currently, the majority of the unions representing the rail workers have agreed to extend that deadline to Friday, Dec. 9, though a unanimous decision to maintain the status quo is required for that extension.
On Thursday, Oct. 27, the NAM joined hundreds of other associations in calling on President Biden to ensure a swift resolution and reiterating support for the work of the Presidential Emergency Board, which has aided in the talks.
Currently, the American freight rail network accounts for nearly 40% of total freight volume, and a strike or delay in finalizing a long-term contract would have devastating impacts across surface supply chain networks and economic output.
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 has the largest economic multiplier of any major sector 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.
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.”
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.
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
Washington, D.C. – Following a 2–1 decision by the D.C. Circuit affirming the validity of a program that provides hundreds of thousands of skilled workers for manufacturers and other American businesses, National Association of Manufacturers Chief Legal Officer Linda Kelly released the following statement:
“The NAM Legal Center is incredibly proud of today’s victory, which helps ensure the continued availability of hundreds of thousands of highly skilled workers for manufacturing roles. As manufacturers continue to experience significant labor shortages, the STEM OPT program remains a critical talent pipeline, providing opportunities for high-skilled graduates to enhance their education through hands-on work. Today’s win builds on the NAM’s impressive track record of defeating unlawful restrictions and meritless attacks on critical visa programs.”
Without the STEM OPT program, manufacturers would be unable to fill critical positions requiring specialized training in science, technology, engineering and math. So, in 2018, after an anti-immigration activist group brought a lawsuit against the Department of Homeland Security seeking to invalidate the entire STEM OPT program, the NAM and two other business groups moved to intervene as defendants in the case. That motion was granted, and in December 2020, the District Court for the District of Columbia granted the NAM and its co-intervenor defendants’ motion for summary judgment, ruling that DHS acted within its statutory authority and in accordance with the Administrative Procedure Act by continuing the STEM OPT program. The plaintiff activist group appealed to the D.C. Circuit, and today, the court issued its decision—rejecting the plaintiff’s bases for invalidating the STEM OPT rule and affirming the lower court’s judgment.
Washington, D.C. – On Tuesday, Oct. 4, Senator Todd Young (R-IN) is scheduled to visit NAM member company Wabash Castings. Sen. Young will be joined by Wabash Castings CEO and newly elected NAM board member Sachin Shivaram as well as other company leaders and manufacturing workers to discuss policies impacting the manufacturing industry as laid out in the NAM’s “Competing to Win” plan.
Sen. Young has been a champion of key provisions of the NAM’s competitiveness agenda in his support of the CHIPS and Science Act and the Infrastructure Investment and Jobs Act.
Interested media are invited to cover the walking tour of the facility and participate in media availability following the event, time and schedule permitting.
|WHO:||Sen. Todd Young (R-IN)
Sachin Shivaram, CEO, Wabash Castings, NAM Board Member
|WHERE:||Wabash Castings, Wabash, Indiana|
|WHEN:||Tuesday, Oct. 4, 1:00 p.m. – 2:00 p.m. EDT|
|RSVP:||Email [email protected] to RSVP|
Background: The NAM’s policy priorities are outlined in the latest version of “Competing to Win,” a comprehensive blueprint to bolster manufacturers’ competitiveness. The plan includes solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more.
Washington, D.C. – Following a decision granting the National Association of Manufacturers’ motion for summary judgment in NAM v. SEC and vacating the Securities and Exchange Commission’s unlawful suspension of its duly promulgated proxy advisory firm rule, NAM Chief Legal Officer Linda Kelly released the following statement:
“Today’s decision is a victory for the rule of law, and the NAM Legal Center was proud to lead this effort for the industry. Federal agencies are bound by the Administrative Procedure Act—standards the SEC failed to meet by indefinitely delaying the compliance date for the 2020 proxy firm rule without notice-and-comment rulemaking. Manufacturers depend on regulators to promulgate and enforce reliable rules of the road, and the NAM looks forward to similarly holding the SEC to account in our ongoing case against the agency’s unlawful rescission of the 2020 rule.”
The NAM has long called for increased oversight of proxy advisory firms. In July 2020, the SEC issued final regulations to enhance transparency and accountability for proxy firms, a move NAM President and CEO Jay Timmons called a “long-sought, major win for the industry and millions of manufacturing workers.” In October 2020, the NAM filed a motion to intervene in ISS v. SEC (ISS’s attempt to overturn the rule) in support of these reforms.
In June 2021, the SEC announced that it was suspending enforcement of the 2020 rule; the NAM filed suit against the SEC in October 2021 challenging this unlawful suspension. The U.S. District Court for the Western District of Texas today issued an opinion granting the NAM’s motion for summary judgment and vacating the SEC’s suspension of the rule. As the court explained, “[Agencies] do not have the inherent power to stay or delay a final rule absent notice-and-comment rulemaking.”
In July 2022, the SEC rescinded critical portions of the 2020 rule, a move that Timmons said “epitomizes ‘arbitrary and capricious’ rulemaking.” The NAM has filed suit challenging the rescission; a summary judgement hearing in NAM v. SEC is scheduled for December 9, 2022.
Washington, D.C. – Following the release of an analysis on the economic impact of failing to reverse a stricter limitation on deductions for interest on business loans that took effect earlier this year, National Association of Manufacturers Managing Vice President of Tax and Domestic Economic Policy Chris Netram released the following statement.
The stricter EBIT-based 163(j) interest expense limitation before market adjustments would cost:
- 467,000 jobs;
- $23.4 billion of employee compensation; and
- $43.8 billion in GDP.
“Manufacturers are already facing incredible economic headwinds due to increased input costs, rising interest rates, labor shortages and snarled supply chains. This analysis shows that failing to reverse the damaging change to the tax treatment of interest on business loans disproportionately harms manufacturers at a perilous time—costing hundreds of thousands of jobs and billions of dollars in economic growth.
“America is an international outlier in imposing such a strict interest expense limitation. With nearly half a million American jobs at stake, Congress must act by year’s end to reverse the stricter EBIT-based limitation and allow manufacturers to continue to invest for growth.”
EY’s Quantitative Economics and Statistics group prepared the analysis.
Prior to 2022, the interest expense limitation was calculated based on a company’s earnings before interest, tax, depreciation and amortization (EBITDA). This year, a stricter limitation based on a company’s earnings before interest and tax (EBIT) took effect. By excluding depreciation and amortization from the calculation, the stricter limitation increases the tax burden on manufacturers that make investments in long-lived capital equipment.
Washington, D.C. – Following the Senate’s 69–27 vote to ratify the Kigali Amendment to the Montreal Protocol, National Association of Manufacturers Vice President of Energy and Resources Policy Rachel Jones released the following statement:
“The Senate’s vote to ratify the Kigali Amendment is a blueprint for the type of bipartisan climate action that meets science-based targets while strengthening manufacturing competitiveness. It will reduce emissions by the equivalent of 80 billion metric tons of CO2 by 2050, with the potential to create up to 150,000 more U.S. jobs by 2027. This action proves that if we work together—if we rise above politics and partisanship and focus on solving problems—we can make our vision of a brighter tomorrow into reality.
“Manufacturers have supported the ratification of the Kigali Amendment for years. This treaty will be a boon for manufacturing, for global trade and for products that protect health, safety, comfort and productivity worldwide. Ratification further strengthens our global leadership on the phasedown of hydrofluorocarbons and will help the U.S. hold countries like China and India accountable on emissions. This shows that we can tackle climate change while strengthening our global competitiveness as we deploy next-generation technologies.”