Manufacturers are urging Congress to move forward as soon as possible with the bipartisan Miscellaneous Tariff Bill (MTB) to support jobs and enhance our competitiveness. Failure to pass an MTB will result in a tax increase on manufacturers in the United States.

The legislation gives manufacturers in the U.S. relief on duties for imported inputs necessary to manufacture products but are not available domestically. The MTB process is extremely transparent. All of the benefits companies receive are disclosed throughout the process.

On Friday a group of 65 House freshman members sent a letter to Speaker Boehner voicing their support for the MTB.  

The MTB has been an important tool for making American manufacturing more competitive for 30 years by suspending import taxes on necessary manufacturing inputs not available in this country. Given the fragile state of our economic recovery, the MTB remains critical to expanding manufacturing employment. In other words, it’s a jobs bill. The MTB has been estimated to support 90,000 American jobs, increase U.S. production by $4.6 billion and expand U.S. GDP by $3.5 billion.

The fiscally conservative members who signed onto the letter state how the MTB is cleary not an earmark.

Over the past two years, there has been paralysis on moving forward on the MTB over whether or not MTB provisions are prohibited as “limited tariff benefits” under House rules. As fiscal conservatives, we appreciate these concerns. However, we believe it is an error to view duty suspension bills in that manner. Unlike spending earmarks, as they are sometimes erroneously characterized, a duty suspension included in the MTB is available to any U.S. manufacturer – including small businesses – importing the covered product because it is not available domestically. Downstream producers, distribution service providers, and consumers benefit as well from the tax reductions.

Manufacturers have been leading our economic recovery and look to continue to lead the way when it comes to job creation and economic growth. The MTB can help make manufacturers more competitive and support jobs.

President Obama stood in the Rose Garden today to ask Congress to pass legislation to increase regulation of the oil market. Interestingly, the federal government already has the necessary tools to protect consumers from market manipulation.   

Manufacturers, who use one-third of the all energy consumed in the U.S., would have preferred an announcement laying out a comprehensive energy plan that truly is an “all of the above” energy strategy that will lower energy costs and create jobs.

So manufacturers simply ask, instead of re-regulating what is already being regulated, when will the President put forward a comprehensive energy strategy?

New Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics show that manufacturing hiring increased slightly in February. There were 259,000 hires and 236,000 separations in the month. This suggests net hiring of 23,000 workers in February, a drop-off from January’s net increase of 36,000 due mainly to increased separations activity.

In terms of job postings – an indicator of possible future hiring – manufacturers posted 253,000 new job openings in February, down from 261,000 the previous month.

For the overall economy, the number of job openings rose from 3,477,000 in January to 3,498,000 in February. This represents 2.6 percent of total employment, which has been roughly unchanged for the past three months. Both hirings and separations also rose, with 4,385,000 net new hires and 4,092,000 net new separations.

Of course, it should be noted that these labor turnover data have been somewhat supplanted by more recent jobs data which was released on Friday. Manufacturers added 37,000 net new jobs in March, or 148,000 in the past four months. As such, manufacturing has been a bright spot, especially as the larger nonfarm payroll growth in March was largely disappointing.

Chad Moutray is chief economist, National Association of Manufacturers.

Today the Wall Street Journal editorial board ran an editorial about the harm of the recently announced Environmental Protection Agency’s (EPA) proposed regulation on new coal power plants called the New Source Performance Standard. The piece is titled “Killing Coal” which is exactly what the EPA is doing with this proposed regulation.

The WSJ appropriately points out that according to the EPA this regulation will have zero cost so they have not done an economic analysis of the potential impact of the regulation. From the piece: 

But great news: The EPA estimates that the total cost of this rule will be $0. It will have no major effect on the economy. Not a single job will be lost.

How can that be? In its cost estimates, the EPA assumes the U.S. will never complete another coal-fired project. Ever. The agency is conceding that coal development has been shut down as a result of its many new regulations, such as the recent mercury rule and the illegal permitting delays that a federal appeals court slapped down last week.

If President Obama and his Administration are serious about an “all of the above” energy strategy then it must also include clean coal. To take this important source of energy off the table at a time when we need to be lowering energy costs is detrimental to our competitiveness.

Yesterday a post on National Review’s The Corner blog contains some clear inaccuracies regarding the Export-Import Bank and what it means to manufacturers, both large and small.

This post would have you believe that the Bank only helps large companies when in fact the Bank is doing more and more every year for small manufacturers. In fact, more than 85 percent of the Bank’s transactions in 2011 were in direct support of small businesses. Thousands of small and medium-sized manufacturer rely heavily on the Ex-Im Bank to be able to compete globally. Without the Bank many of these companies will lose out on deals to overseas competitors, costing jobs here at home.

The Corner post also misses a key fact that Ex-Im Bank actually makes money for the taxpayers. It’s difficult to make the argument that Ex-Im is a costly program when over the past five years the Bank has returned more than $3.4 billion to the Treasury. The numbers show the facts loud and clear. And if the Bank isn’t reauthorized it would actually increase the deficit, and an offset would be needed to fill the void left from the money Ex-Im returns to Treasury. 

The bottom line is our competitors overseas are outpacing us when it comes to export financing. Our competitiveness, jobs and ability to grow exports will be hurt if the Bank is not reauthorized. The Bank is essential to the engine that drives our economy, small businesses. Just click here to read first-hand testimonials about what the Bank means to these businesses.

This morning the ADP National Employment Report for March was released and it showed that private-sector employment increased by 209,000 from February to March. The report showed solid growth for manufacturers stating that manufacturing employment increased by 23,000. 

While this is positive news for manufacturers we still have a long way to go. Manufacturers are still facing a growing number of headwinds which are impacting their ability to compete and grow. Energy costs are increasing and the regulatory burden continues to grow.

The BLS employment numbers are out on Friday so stay tuned for more information following the report’s release.

Today Institute for Supply Chain Management’s Manufacturing ISM Report was released for March and showed growth for the 32^nd consecutive month. This is positive news for manufacturers as they continue to lead our economic recovery. 

The index rose to 53.4 percent in March from 52.4 percent in February. And one particular area of note is the Production Index increased by 3 percentage points to 58.3 percent.

Across manufacturing 15 of the 18 industries reported growth in March including: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Petroleum & Coal Products; Paper Products; Machinery; Miscellaneous Manufacturing; Wood Products; Furniture & Related Products; Transportation Equipment; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. 

The concerning news is that Computer and Electronics Products and the Chemical Products industries reported a contraction. While manufacturing has continued to show growth this has not translated across all sectors. Manufacturers are still facing numerous headwinds which are limiting their ability to grow.

Manufacturers overall are optimistic but it’s clear we have some ground makeup. One company surveyed in the Wood Products industry commented, “Sales appear to be picking up over last year at this time, but still have a ways to go.”

On April 1st the United States will have the highest corporate tax among developed economies after Japan reduced its rate. Today The Daily Caller ran an op-ed from NAM President and CEO Jay Timmons on how our nation’s high corporate tax rate is hurting the competitiveness of manufacturers.

In a victory in the battle against the EPA’s overreach this morning the United States Supreme Court ruled on the Sackett v. EPA case in favor of the plaintiffs. The case was originally brought by an Idaho couple over the right to go to court to challenge an EPA order that blocked construction of their new home.

The couple had graded a small lot for the new house and was ordered by the EPA under the Clean Water Act to fill in the lot, replace vegetation and monitor the land for three years or face a $37,500 penalty for each day of violation. The couple then sought court review of the order but they were denied.

Today the Supreme Court ruled that the couple does have a right to go to court to get a pre-enforcement review of the order and they do not have to wait for the EPA to sue them for violating the order in order to raise their claims. While EPA still has the power to issue these kinds of orders, and most of them will never be challenged, the ruling makes judicial review possible and will help restrain the abuse of EPA’s power. The decision could restrain EPA overreach under other environmental statutes as well.

Of note was Justic Alito’s concurring opinion on the case which agreed completely with the decision but also noted that the reach of the Clean Water Act is unclear. He states that any piece of land that is wet at least part of the year is in danger of being classified by the EPA as wetlands and he says that real relief requires Congress to clarify the rule.

Real relief requires Congress to do what it should have done in the first place: provide a reasonably clear rule re-garding the reach of the Clean Water Act. When Congress passed the Clean Water Act in 1972, it provided that the Act covers “the waters of the United States.” 33 U. S. C. §1362(7). But Congress did not define what it meant by “the waters of the United States”; the phrase was not a term of art with a known meaning; and the words themselves are hopelessly in determinate. Unsur­prisingly, the EPA and the Army Corps of Engineers interpreted the phrase as an essentially limitless grant of authority.

Last week the NAM held it’ annual Spring Board of Directors Meeting. Among the new business that was addressed at the meeting was electing a new member to the NAM’s Board of Directors.

Edward Crumm, the national industry partner BKD, LLP was elected to servce on the Board. We are looking forward to Ed’s experience and input as he joins the NAM Board as we continue to advocate for the issues that are critical to manufacturers competitiveness.

Below is an excerpt from the press release announcing Ed’s election to the Board:

“Ed’s 30-plus years of experience in accounting and consulting services will be of extraordinary value to the NAM and our Board,” said NAM President and CEO Jay Timmons. “We look forward to Ed’s leadership at this critical time in our manufacturing economy.”

BKD, LLP is among the largest U.S. accounting firms with 2,000 employees and approximately 30 offices throughout the heartland states.