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Manufacturers Speak Out About Regulation

The NAM’s annual Manufacturing Summit was held June 10-11. The event brought more than 500 manufacturers of every size and representing dozens of industries to Washington to meet with Members of Congress. Over two days, manufacturers participated in 220 hill meetings and were able to tell their stories to lawmakers about the impact of federal policies on their abilities to provide jobs, expand their businesses and compete in a global economy. A common theme for many manufacturers through the summit was the challenges they face with inefficient and outdated regulations—especially from small- and medium-sized manufacturers.

Richard Gimmel is the President of Atlas Machine and Supply, a small manufacturer of complex compressor equipment and industrial components in Louisville, Kentucky. He discussed why our regulatory system is placing manufacturers in the U.S. at a competitive disadvantage:

“Work force regulations, environmental regulations, [and] tax regulations – the cost of compliance with all of these regulations is extremely burdensome, particularly for a small company like ours. We have 200 employees, and by standards of most manufacturers, we’re below average in size. So, we have to employ resources, disproportionate to our size, just to ensure the paperwork is in order.”

Unnecessary regulatory burdens weigh heavily on the minds of manufacturers. In a NAM/IndustryWeek Survey of Manufacturers released in March, nearly 80 percent of respondents cited an unfavorable business climate due to regulations, taxes and government uncertainties as a primary challenge facing businesses, up from 67.7 percent in the first quarter of 2013 and 62.2 percent in March 2012. The unfavorable business climate due to government policies exceeded rising health care and insurance costs, which ranked second (77.1 percent).

Manufacturing in America is making a comeback, but this comeback could be much stronger if federal policies did not impede growth. If we are to succeed in creating a more competitive economy, we must reform our regulatory system so that manufacturers can innovate and make better products instead of spending hours and resources complying with inefficient, duplicative and unnecessary regulations. Manufacturers are committed to commonsense regulatory reforms that protect the environment and public health and safety as well as prioritize economic growth and job creation. The time is now for members of both parties to work together to find ways to improve the regulatory system.

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House Committee Approves SCRUB Act (H.R. 4874), Would Remove Unnecessary Regulatory Costs

On Wednesday, the House Judiciary Committee approved the Searching for and Cutting Regulations that are Unnecessarily Burdensome Act of 2014 (H.R. 4874, the SCRUB Act). Introduced by Rep. Jason Smith (R-MO), the SCRUB Act would establish a Retrospective Regulatory Review Commission to identify regulations that impose unnecessary costs and develop recommendations for their repeal. The bill has four original cosponsors, including Rep. Spencer Bachus (R-AL), Chairman of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. The NAM appreciates the leadership of Rep. Smith and Chairman Bachus and their efforts to improve the regulatory environment in the United States. Manufacturers are disproportionately impacted by regulations, so the unnecessary burdens imposed by regulators greatly impact their ability to grow their businesses, create jobs and compete in the global economy.

H.R. 4874 would task the Retrospective Regulatory Review Commission with a goal of reducing the cumulative, government-wide costs of regulations by 15 percent. It also would direct the commission to focus on major rules that have been in effect for more than 15 years, impose unnecessary paperwork burdens and impose disproportionately high costs on small entities. Additional guidelines for the commission as it conducts its review are included in the bill as well. For example, the commission should focus on a regulation or set of regulations that is ineffective, unnecessary or obsolete; duplicates or conflicts with other federal rules and, to the extent feasible, with state or local rules; has costs or burdens that are overly excessive as compared to regulatory alternatives; or harms economic competitiveness or inhibits innovation or economic growth.

Though President Obama’s Executive Order 13563 on retrospective review has yielded some positive reforms, the effort and similar campaigns before have not yielded the desired result of reducing unnecessary costs and improving the regulatory environment in which manufacturers and business in the U.S. operate. Agencies need incentives to devote the needed resources for retrospective reviews that would yield reforms and decrease unnecessary regulatory burdens. The SCRUB Act would help provide incentive by instituting a mechanism for statutorily requiring agencies to repeal rules that provide no benefit or are unnecessarily burdensome.

Further, any cost reductions as a result of current retrospective reviews are dwarfed by the continuous rulemaking activities of federal agencies. Through the end of May, the Obama Administration has finalized 433 major regulations, defined as rules that would each result in an annual effect on the economy of $100 million or more. In order to succeed in achieving actual reduction in costs, institutional reform to our regulatory system is necessary. H.R. 4748 takes a novel approach to reducing regulatory costs by directing the regulatory review commission to designate rules that are eligible for repeal when agencies promulgate new rules. Under the bill, an agency would be required to repeal a designated rule before issuing its new regulation. Finally, the bill would require agencies, whenever feasible, to develop plans for conducting retrospective reviews of a newly proposed rules. Importantly, retrospective reviews could provide agencies an opportunity to analyze, revise and improve techniques and models used for predicting more accurate benefit and cost estimates for future regulations.

We urge Congress to pass the SCRUB Act and force agencies to reduce the inefficiencies of our regulatory system and the unnecessary costs imposed on manufacturers and other businesses.

 

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Former Sen. Blanche Lincoln discusses the regulatory challenges facing manufacturers

On Tuesday, former U.S. Senator Blanche Lincoln (D-AR)—who serves as co-chair of the NAM’s Manufacturing Competitiveness Initiative with former Senator George Allen (R-VA)—spoke to Rick Jenson on Delaware’s WDEL radio that airs statewide.  Sen. Lincoln discussed our nation’s unnecessarily complex federal regulatory system and the impact it has on the state’s manufacturers and economic development. She emphasized that the growing complexity of the rulemaking process is restraining the ability of manufacturers and other businesses to expand our economy. Click here to listen to the interview.

According to Sen. Lincoln, “We all have to face the fact that the regulatory system is inefficient, overly complex, and it’s not operating as lawmakers intended—both Democrats and Republicans. Navigating federal regulations that are out there continues to be the top problem that faces small businesses and manufacturers.”  The Senator continued, “The U.S. productivity growth rate is nearly half of the historical rate. The regulatory costs are nearly outpacing our industrial growth. And, the annual rate of new business start-ups is about 28 percent lower today than it was in the 1980s. All of this shows that Washington is sending out too complex regulations.”

The NAM advocates for regulatory reform that will reduce unnecessary regulatory burdens placed on manufacturers. We ensure that the voice of manufacturers in the U.S. is heard throughout the regulatory process—weighing in with public comments, participating in public hearings to express manufacturers’ concerns with agency regulatory actions and advocating for commonsense reform proposals that would address the regulatory challenges that manufacturers face.

Regulations play an important role in the well-being of our communities to be sure. However, the rulemaking process has too often become a hindrance to economic development. Reforming the rulemaking process is essential to strengthening our economy. It’s time Washington gets to work to change the regulatory climate.

 

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Streamlining Regulation and Eliminating Unnecessary Burdens

Reps. Patrick Murphy (D-FL) and Mick Mulvaney (R-SC) introduced the Regulatory Improvement Act of 2014 (H.R. 4646), which is bipartisan legislation that will help reduce the unnecessary regulatory burdens imposed by federal agencies on manufacturers and other sectors of the economy  The NAM applauds Reps. Murphy and Mulvaney and the cosponsors for their leadership in advancing reforms to our regulatory system that support economic growth and our ability to compete in a global marketplace.

The Regulatory Improvement Act would create a mechanism for reviewing the accumulation of rules and mandates that have often unintentionally been imposed on top of each other without reflection. It would establish a bipartisan and bicameral Regulatory Improvement Commission that will review our regulatory system and provide recommendations for how to reform existing regulations and decrease the unnecessary burdens imposed by the federal government. The commission would “evaluate and provide recommendations for modification, consolidation or repeal of covered regulations with the aim of reducing compliance costs, encouraging growth and innovation and improving competitiveness, all while protecting public health and safety.” In addition to conducting its own reviews, the commission would solicit recommendations for review from the public and federal agencies and other relevant entities.

H.R. 4646 builds upon an ideal—retrospective review—that is a key component of the President’s Executive Order 13563, which required executive branch agencies to conduct reviews of existing regulations and implement reforms. However, the level of burden reduction through that initiative has been, to date, modest at best. Agencies lack a real incentive to implement similar reforms because their focus is often on the latest and the loudest.

H.R. 4646 is the companion to S. 1390, which was introduced last year by Sens. Angus King (I-ME) and Roy Blunt (R-MO). Reform of our regulatory system is vital to the competitiveness of manufacturers in the U.S. This proposal is just the formal establishment of best practices in the federal government that every business already understands—policies and programs must be regularly reviewed and evaluated to make sure they are meeting today’s needs. The NAM urges Congress to pass the Regulatory Improvement Act and create a more efficient regulatory system.

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Manufacturers applaud introduction of the Safe and Accurate Food Labeling Act

On Wednesday, Reps. Mike Pompeo (R-KS) and G.K. Butterfield (D-NC) introduced bipartisan legislation (H.R. 4432) that would create a federal standard for the labeling of foods and beverages made with genetically modified ingredients (GMOs). The bill, known as the Safe and Accurate Food Labeling Act of 2014, is a commonsense measure that would establish uniformity in food and beverage labeling and ensure the labeling of products addresses health and consumer safety concerns. Currently, no such standard exists and, as states consider their own labeling standards, a myriad of conflicting state standards could dramatically increase costs for both producers and consumers. The National Association of Manufacturers (NAM) supports the legislation and praises Reps. Pompeo and Butterfield—and original cosponsors Reps. Marsha Blackburn (R-TN), Jim Matheson (D-UT) and Ed Whitfield (R-KY)—for their leadership in advancing federal policies that will ensure a safe and affordable food supply.

The U.S. Food and Drug Administration (FDA) is the nation’s foremost food safety agency. The Safe and Accurate Food Labeling Act would provide the agency with the authority it needs to establish voluntary standards for GMO products and to require mandatory labeling of GMO products if they are found to be unsafe or materially different from foods produced without GMOs. The Safe and Accurate Food Labeling Act of 2014 will ensure that federal policies on food labeling protect consumers and allow them to make the best food and beverage choices for their families. H.R. 4432 would accomplish the following:

  • Ensure food safety: Requires FDA to determine the safety of a GMO and whether the GMO is materially different from traditional food before it can be introduced into commerce.
  • Establish labeling standards: Provides FDA authority to issue regulations for the voluntary labeling of food and beverage products containing GMO ingredients.
  • Require mandatory labeling based on health and safety: Directs FDA specify labeling requirements for GMO foods to protect health and safety or to prevent the label of a GMO food from being false or misleading, based on any material difference between the GMO and the comparable traditional food.
  • Provide consistency in labeling: Requires FDA to issue regulations defining the term “natural” so that food and beverage companies and consumers have a consistent legal framework that will guide food labels and inform consumer choice.
  • Eliminate confusion: Preempts state labeling standards to avoid the confusion and uncertainty of a 50-state patchwork of GMO safety and labeling laws and affirms the FDA as the nation’s authority for the use and labeling of genetically modified food ingredients.

Food and beverage manufacturing accounts for 1.65 million jobs in the United States and is critically important to the success of the federal government’s domestic and global feeding programs, including SNAP, school nutrition, WIC and direct U.S. foreign food aid. The food and beverage industry does more to combat hunger and malnutrition in the U.S. than anyone else. In the past 3 years, the food sector has contributed $3 billion in food and cash to fight hunger and malnutrition.

GMO technology has fostered a revolution in American agriculture that has benefitted consumers in the U.S. and around the world. GMOs enable America’s food producers to more efficiently use resources and allow farmers to withstand crippling droughts and ward off disease or pestilence while reducing their use of pesticides and chemicals. Click here to contact Congress to urge support for the Safe and Accurate Food Labeling Act of 2014.

For more information about GMOs and the need for a federal labeling standard, visit www.CFSAF.org.

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Important Sunscreen Innovation Act Before the House Energy & Commerce Committee

The House Energy and Commerce Committee will hold a hearing today at 3:00 PM about the Sunscreen Innovation Act. You can watch the hearing live here. On March 13, Congress took an historic step forward as Senators Jack Reed (D-RI) and Johnny Isakson (R-GA), and Congressmen Ed Whitfield (R-KY) and John Dingell (D-MI) introduced the bipartisan, bicameral Sunscreen Innovation Act (S. 2141 and H.R.4250). This legislation is a responsible way to alleviate the current backlog of sunscreen ingredients, and streamline the review process so the public can gain access to the most effective and innovative sunscreen products.

The Public Access to SunScreens Coalition (PASS) Coalition is a multi-stakeholder coalition formed to advocate for a regulatory pathway that guarantees a transparent and timely review of new over-the-counter (OTC) sunscreen ingredients by the Food & Drug Administration (FDA). The PASS Coalition is committed to working with the FDA, Congress, the White House, health providers, consumer organizations and stakeholders to establish a regulatory pathway for timely pre-market review of new, safe and effective sunscreen ingredients.

Although there are a variety of sunscreen products currently available in the market for Americans to protect themselves from the sun’s harmful UV rays, consumers have limited choices when it comes to broad-spectrum sunscreen products. That’s because FDA has not approved a new sunscreen ingredient since the 1990s.  Eight new sunscreen applications are currently pending at FDA, some for over a decade.  Each of the eight sunscreen products currently stuck in the FDA backlog have been used in Europe, Canada or Asia for at least five years and in some cases for over 15 years.

Make sure to urge your member of Congress and Senators to co-sponsor the Sunscreen Innovation Act.

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House Subcommittee Examines Legislation to Prevent Fraud of the Asbestos Trust System

On Wednesday, March 13, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing on H.R. 982, the Furthering Asbestos Claim Transparency (FACT) Act of 2013. Introduced by Rep. Blake Farenthold (R-TX) with Rep. Jim Matheson (D-UT), the FACT Act is bipartisan legislation that would combat fraud and abuse of the asbestos trust system.

The NAM supports H.R. 982 and appreciates the leadership of Reps. Farenthold and Matheson on this important issue. The Subcommittee’s hearing helps expose areas of fraud that plague the asbestos trust system. Without proper oversight and checks on the system, increasing fraud and abuse will harm the truly needy and diminish asbestos trust fund resources.

The FACT Act would require trusts to quarterly disclose information on their claim payments and to cooperate in requests for information on claims and, while protecting a claimant’s sensitive personal information, would deter fraud and abuse without impacting legitimate claims. Opportunistic individuals currently are able to file claims for the same claimant with numerous trusts using different and conflicting theories of exposure, seeking multiple payouts. The FACT Act is a commonsense reform of the system that would inject transparency, creating a disincentive for fraudulent activity and protecting the individuals for whom the trusts were established. We urge Congress to pass this important legislation.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

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President’s New Executive Order Looks to Strengthen Retrospective Reviews of Regs

Today President Obama signed an Executive Order requiring agencies to ask the public for “regulations in need of retrospective review” and semi-annually report to the public and to the Office of Information and Regulatory Affairs (OIRA) on the status of retrospective review efforts. The order also directs agencies, when conducting retrospective reviews, to give priority to initiatives that will significantly reduce costs and burdens imposed on the public. Agencies are also directed to consider the cumulative effects of their regulations and give priority to those reforms that “would make significant progress in reducing those burdens….”

The Executive Order, a follow-up to an earlier order on retrospective review, is aimed at actually reducing the public burden imposed by existing regulations. Manufacturers are encouraged by the requirements placed upon agencies for public participation and for prioritizing review initiatives.

Involving OIRA, the federal government’s regulatory gatekeeper, in the retrospective review process is important. OIRA can hold agencies accountable and help ensure agency efforts result in real reductions of costs and burdens imposed on regulated entities.

The Executive Order’s issuance coincides with the release of a new report on retrospective review by the Council of Economic Advisers. The Council asserts that, with the Executive Order, “the process of retrospective review should become a standard part of the assessment of federal regulations.” (continue reading…)

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President Issues Executive Order to Promote International Regulatory Cooperation

Today President Obama issued an Executive Order to promote international regulatory cooperation and encourage federal agencies to find ways to reduce regulatory inconsistencies with our trading partners. The President’s directive is an encouraging step because regulatory hurdles affecting cross-border trade of goods reduce our global competitiveness and harm manufactures. By reducing these international regulatory burdens, manufacturers in the U.S. will have improved access to foreign markets – a key to the health of our economy.

The Executive Order requires a regulatory working group – chaired by the Administrator of the Office of Information and Regulatory Affairs (OIRA), the federal government’s regulatory gatekeeper – to identify international regulatory cooperation opportunities and develop and issue guidelines that will improve the global regulatory climate for U.S. exporters. The order also requires regulatory agencies to consider the international impact of their rule makings. International cooperation can be invaluable in reducing the regulatory challenges confronting U.S. firms.

With 95 percent of the world’s consumers living outside of the United States, international trade is essential for job creation. Reducing the regulatory barriers with our trading partners will help make trade with manufacturers in the U.S. more competitive and open up even more markets to manufacturers.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

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Keep Politics out of the Federal Contracting Process

Today the National Association of Manufacturers joined 153 other organizations in a letter supporting H.R. 2008, the “Keeping Politics Out of Federal Contracting Act of 2011.”  The legislation would preclude the White House from forcing federal agencies to require entities to disclose their political spending – as well as that of their officers and directors – as a condition of participating in the federal procurement process.

The letter was sent to Chairman Darrell Issa (R-CA) and Ranking Member Elijah Cummings (D-MD) of the House Committee on Oversight and Government Reform, which is scheduled to consider H.R. 2008 tomorrow.

The bill is in response to an April 2011 draft Executive Order that would require disclosures of political contributions by select parties as a condition for bidding on federal contracts. The draft order is an attack on the First Amendment and suffers from severe legal and policy defects that would, if signed, immediately damage the federal contracting process.

From the letter:

The legislation reaffirms the principle, currently embodied in federal procurement laws, that the Executive Branch has an obligation to procure goods and services based on the best value for the American taxpayer, and not on political considerations. It also reaffirms the principle that the Administration cannot enact through executive fiat legislation that Congress has considered and explicitly rejected.

The NAM thanks Rep. Issa for his leadership on this issue and urges members of the Committee on Oversight and Government to approve H.R. 2008.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

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