Treasury Secretary Tim Geithner took a new tack this afternoon in encouraging Congress to act to raise the government’s debt ceiling. Earlier this week, Geithner sent a much-expected letter to Congress making it official that the United States had maxed out on it’s ability to borrow to meet its financial obligations.

At an event hosted by the Harvard’s Shorenstein Center, Geithner reminded Congress that the level of the national debt reflects funds already committed and spent.  In short, this is water under the bridge and we need address this and to move on to the future. Here at the NAM, we, too have found it’s easier to navigate the ongoing budget debate by breaking it down into the Past, Present and Future. 

In typical Washington fashion, legislators went first to the Present and after more than six months agreed on legislation that funds the federal government until the end of the current fiscal year.  We feel strongly that Congress needs to go back to the Past and raise the debt limit so that the federal government can meet its financial obligations. 

But we can’t stop there.  One reason we are in a fiscal bind is because of high levels of government spending and we must take a look hard look at federal outlays and how we can control federal spending.

Finally, on to the Future, fiscal 2012 and beyond.  The House last month approved a budget blue print and we commend House members for taking on the difficult and challenging task of identifying policies to improve the fiscal situation and to achieve fiscal soundness over the long run. Manufacturers urge the Senate to follow suit so we can start looking ahead.

Click here to view Secretary Geithner’s remarks in full

Dorothy Coleman is vice president for tax and domestic economic policy, National Association of Manufacturers.

Tonight, Senate Majority Leader Reid is planning a “test” vote, to gauge the support for on increasing taxes by 20 billion dollars on major oil companies in the United States. While the odds are against get the support of 60 Senators to move forward on this legislation, this is political theater, pure and simple. The purpose of the vote is to demonize successful companies that are working hard every day to increase domestic energy production to help reduce our dependence on foreign oil.

The Senators pushing S. 940 know that increasing taxes on oil companies will not lower gas prices. In fact, members on both sides of the aisle have already acknowledged this. This is simply another ruse for Senator Reid to continue his tax and spend policies that have failed, time and again. And the suggestion that any increased revenue from raising taxes has absolutely no merit and is simply laughable!

This legislation would impose punitive and discriminatory taxes on specific companies within one industry. Congress should not be in the business of picking winners and losers. Who is next, could it be your company – what is your profit margin? If Congress decides to step on this slippery slope, any business should be worried that they will be punished with excessive and targeted taxation as a result of their success.

Unfortunately, the Senate leadership has taken their eye off the ball and decided to focus their energy on impeding job growth and discouraging future investment, when they should be working alongside energy companies that are seeking to produce new domestic energy to reduce our dependence on foreign oil.

The end result of this legislation would be to punish those who have succeeded in the free market and an increase in the cost of energy. This would increase in the cost of doing business, affecting the global competitiveness of manufacturers, and their ability to create jobs. This will ultimately hurt the consumer. S. 940 will only stifle any potential economic growth, which is yet another slippery slope as our nation is in the midst of crawling out of a serious recession.

Dorothy Coleman is vice president for tax and domestic economic policy. National Association of Manufacturers.

An op-ed  in today’s Investor’s Business Daily titled “Reverse Business Flight, Reform Corporate Code” by Walter Galvin echoes NAM’s sentiments that lowering our corporate tax rate would allow the U.S. to be more competitive in the global marketplace and attract business. This in turn, would create much-needed jobs. 

NAM members firmly believe that we need to reform our tax structure. The U.S. is the world’s largest manufacturing economy. In order to maintain that, we need to enact measures that will continue to drive us down a path of prosperity. Further delay on lowering our corporate tax rate will setback our economy, businesses and American workers.

As Galvin so aptly notes:

Over the past 25 years, OECD countries have slashed their average corporate tax rates nearly in half – from over 45 percent to about 25 percent. Other countries have followed their lead.

During a time when the U.S. is still on the rebound from an economic recession, we can and need to do more to help our economy. Lowering the corporate tax rate, now the highest among developed countries, is a good start.

Dorothy Coleman is Vice President of Tax and Domestic Economic Policy at the National Association of Manufacturers.

Manufacturers know that the future of their industry and their ability to compete in a global marketplace is tied closely to the deployment of new broadband lines and high-speed wireless data services across the United States and we need an environment that encourages innovation and investment in these critical areas.  That’s why manufacturers are concerned that the rules approved today by the Federal Communications Commission could inject more uncertainty into broadband policy and have a chilling impact on investment.

NAM members strongly agree with the statement by Commissioner Baker that “Preserving the open Internet is non-negotiable; it is a bedrock principle shared by all in the Internet economy, a building block on which we can all agree.”  

We also share Commissioner Baker’s concern about intervening “in the one sector of the economy that is working so well to create high-paying jobs, untold consumer choice, and entrepreneurial opportunity.”

As we’ve said many times before, Congress, not the regulators, needs to step in and adopt a comprehensive broadband policy aimed at the deployment of services, open access and smart resource allocation , including policies that:

• Remove barriers to entry that prevent broadband providers from offering high-speed information services to homes and businesses;
• Balance the need for regulations against the potential to dampen private industry’s incentive to invest in broadband technology;
• Encourage federal and state regulators to monitor the rollout of broadband services;
• Support a federal framework to ensure fair, technology-neutral competition for all providers; and
• Allow for the continued public/private collaboration to improve the security of the network through incentive-based legislative and regulatory tools.

Manufacturers appreciate efforts at the Federal Communications Commission (FCC) to bring closure to the debate over regulating the Internet. Providing certainty in this area will encourage the deployment of new broadband services and the jobs that go with them. But  comments today by FCC Commissioner Julius Genachowski and his plan for the Commission to adopt a Net Neutrality Order at its December 21^st Open Meeting just create more uncertainty. We share the views of Commissioner Meredith Attwell Baker that the decision of “whether the Internet should be regulated is a decision best left to the directly elected representatives of the American people.”

Ensuring the deployment of new broadband lines and high-speed wireless data services is critical to manufacturers across the nation – these are the companies that can create the jobs we need to strengthen our economy. In the end, Congress needs to step in and adopt a comprehensive broadband policy, and it should be aimed at the deployment of services, open access and smart resource allocation, including policies that:

• Remove barriers to entry that prevent broadband providers from offering high-speed information services to homes and businesses;
• Balance the need for regulations against the potential to dampen private industry’s incentive to invest in broadband technology;
• Encourage federal and state regulators to monitor the rollout of broadband services;
• Support a federal framework to ensure fair, technology-neutral competition for all providers; and
• Allow for the continued public/private collaboration to improve the security of the network through incentive-based legislative and regulatory tools.

In the words of Commissioner Baker, “We all believe in an open Internet.  It is open today, it is fast moving, and it serves as a vibrant growth engine for our economy and job creation.  Let’s not rush to undermine it.”

Dorothy Coleman is vice president of tax and domestic economic policy for the National Association of Manufacturers.

Almost 1,300 organizations this morning joined together in sending a  letter to all members of Congress asking them to “extend the extenders” during the lame-duck session.

Effective Jan. 1, 2010, a number of temporary tax provisions that benefited a wide range of individuals and businesses expired. Despite broad-based support for these provisions, Congress has yet to extend these important tax provisions.

The National Association of Manufacturers and other organizations signing the letter say the current lame-duck session gives legislators one last chance to extend these important tax incentives.  If Congress fails to act, taxes will increase for a wide range of taxpayers and job creators including manufacturers, teachers, developers, retailers and farmers.

Dorothy Coleman is the NAM’s vice president for tax and domestic economic policy.

In today’s Wall Street Journal, John Chambers, chairman and chief executive officer of Cisco Systems and Safra Catz, the president of Oracle Corporation, lay out a strong case for lowering the tax U.S. companies pay when they bring back overseas earnings.  Under current tax policy, U.S. companies could pay almost 40 cents in taxes for every dollar of overseas earnings they decide to “repatriate” back home.  That’s a clear disincentive. 

And as Chambers and Catz point out, “… with corporate bond rates falling below 4%, it’s hard to imagine any responsible corporation repatriating foreign earnings at a combined federal and state tax rate approaching 40%.”  In contrast, lowering the “toll charge” to roughly five percent would unleash as much as one trillion in to the U.S. economy, a private stimulus that could be used for job retention and creation, as well as other types of much-needed  “homeland investment.”

Their op-ed is, “The Overseas Profits Elephant in the Room,” with the sub-headline, “There’s a trillion dollars waiting to be repatriated if tax policy is right.”

Dorothy Coleman is the National Association of Manufacturers’ vice president for tax and domestic economic policy.

Manufacturers have led the charge in recent years to lower corporate tax rates and many others have joined us in pointing out that the U.S. has the second highest corporate tax rate among developed countries.

Well, that could change soon. Japan—the only county that bests us in the corporate tax rate department—is thinking of joining a worldwide trend and lowering the country’s corporate tax rate. In fact, the Japanese government sees a lower corporate tax rate as key to the country’s industrial competitiveness.

So where would that leave us?  Out in front with a uncompetitive worldwide tax system and the highest tax rates in the world—and not a place where you’d want to headquarter your company, perform the bulk of your R&D and use as a manufacturing platform.

In his BusinessWeek.com column this week, “Stimulus of $1 Trillion Adds Nothing to Deficit,” Frank Aquila joins the chorus calling for enactment of Homeland Reinvestment, Part II, a sequel to highly successful legislation enacted in 2004.

When Congress lowered the “toll charge” in 2004 on bringing money back to the United States, companies repatriated some $300 billion to the U.S. economy, about 1.7 percent of the U.S. economy.  The funds reinvested in the United States in 2004 were spent on a host of things including capital investment, job creation, share repurchases, dividend increases and merger and acquisitions. The funds also generated some $17 billion in additional tax revenue to federal coffers—and this figure doesn’t include the increased income, payroll and corporate tax collections from higher levels of economic activity. 

With an anemic economy, an unemployment rate close to 10 percent and a historic federal deficit, an infusion of some $1 trillion in cash from overseas is a move supported by the National Association of Manufacturers.  We agree with Frank Aquila that “[G]iven the weak economy and the debate over the need for additional stimulus and further quantitative easing by the Federal Reserve, bringing home hundreds of billions, possibly trillions, of dollars should be a priority.”

Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers (NAM).

The House did it again yesterday—used an anti-competitiveness tax hike on some businesses in the United States to “pay for” an unrelated, albeit worthy, policy initiative.

The James Zadroga 9/11 Health and Compensation Act of 2010 (H.R. 847) — approved by a vote of 268 to 160—would extend and improve protections and services to individuals whose health was directly affected by the September 2001 attacks in New York.

That’s the good idea. The bad news is that the bill would impose some $7 billion in taxes on foreign-owned companies doing business in the United States by repealing some long-standing treaty benefits. The limit on treaty benefits will violate many of the bilateral tax treaties currently in effect between the United States and foreign countries and could lead to retaliatory actions by other countries or withdrawal by our treaty partners from existing treaties. Tax increases like these would make the United States less attractive for foreign companies to invest and create jobs and that’s a big concern for the 20 percent of manufacturing workers in the United States who work for foreign-owned companies.