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Legal Reform Means Jobs

The House of Representatives today passed H.R. 5, the Protecting Access to Healthcare (PATH) Act of 2012, by a vote of 223-181. Manufacturers applaud the important medical liability reform provisions in the bill that will lead to more manufacturing jobs. The NAM has long supported medical liability reform as it reduces the cost of health care insurance for employers and restores fairness to the legal system. Manufacturers in the U.S. are leading the world in innovation when it comes to developing life-saving technology that improves the longevity and quality of life. Our legal system can discourage innovation in the United States and can place our manufacturers at a global competitive disadvantage. Medical liability reform is a commonsense way to reduce health care costs and promote new products and technologies here at home.

The legislation would place a $250,000 cap on non-economic damages and limitations on the maximum amount awarded for punitive damages. The bill also would prohibit punitive damages, which produce inconsistent “jackpot justice” awards, for medical products that comply with Food and Drug Administration (FDA) standards, after all if you are complying with tough federal standards and licensing requirements how can you be acting with malice or gross neglect? H.R. 5 would establish a uniform and fair statute of limitations and would give courts the ability to limit attorneys’ excessive contingency fees to make sure that victims receive fair compensation.

The medical liability reforms of H.R. 5 are modeled after California’s longstanding and successful health care litigation reforms signed into law in 1976 by then and now current governor Jerry Brown. The California reforms have kept in check the rate of increase in medical liability premiums. Meanwhile, the rate of increase in malpractice premiums nationwide has skyrocketed at nearly three times the rate of increase in California. Medical liability reform is also beneficial for the bottom line of the federal government. The nonpartisan Congressional Budget Office (CBO) estimates that the reform provisions of H.R. 5 will save the federal government $48.6 billion over ten years by reducing Medicare and Medicaid spending and lowering the cost of health insurance for federal workers.

This vote is a victory for manufacturing in America.  To see the NAM’s key vote letter on HR 5 click here.

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Highway Bill Extension Critical to Manufacturers Competitiveness

This morning in a Rose Garden address President Obama called for Congress to pass an extension of the surface transportation and aviation programs which are critical to the daily transportation needs of manufacturers. Manufacturers welcome President Obama’s engagement and call for Congress to pass a bipartisan reauthorization which expires on September 30, as well as an extension of the Federal Aviation Administration reauthorization which expires on September 16.  These critical national infrastructure programs require certainty and adequate funding levels to ensure the safety of the public, economic growth and jobs. 

Temporary extensions are not a long-term substitute; the Administration and Congress still need to act on a multi-year surface transportation reauthorization at robust funding levels and a multi-year reauthorization of our civil aviation programs.

The President’s announcement that federal agencies will be tasked to expedite environmental and permitting reviews of high-priority infrastructure projects that will create and sustain jobs now was a welcome first step.  Rebuilding the nation’s infrastructure will require additional and fundamental policy changes in how we finance, permit, build and manage our investments.  Manufacturers expect a bipartisan approach to these issues that will deliver results. 

As our international competitors continue to ramp up investments in transportation infrastructure from modernizing air traffic control systems to expanding highway and transit capacity to accommodate growth, the House and Senate in the coming months must fully embrace these important domestic initiatives that Americans require to keep manufacturers competitive and our economy moving.  Manufacturers grow when the country adopts meaningful policies that support economic growth and expansion.  

Rosario Palmieri is vice president for infrastructure, legal and regulatory policy.

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Additional Regulatory Reforms Still Needed

The Administration’s announcement yesterday to cut several regulations is a step in the right direction. The President and his team recognize that unnecessary burdens placed on the economy can hinder job creation and economic development. The challenge remains to apply these principles consistently across the government to new and proposed regulation.

The net benefits of these reforms, however, could be swallowed up by new, unnecessarily costly regulations that the Administration is considering – the most egregious of which is the reconsideration of the national standards for Ozone.

This is an entirely discretionary action on the part of the EPA that is under consideration. Neither the courts nor Congress can be blamed if the Obama Administration decides to impose a new regulation that imperils 7.3 million jobs and adds $1 trillion in new costs annually between 2020 and 2030. This and an assortment of other EPA rules currently proposed or under consideration can have a devastating impact on job creation and the economy.

Manufacturers hope that this announcement is just the first of many signs that the White House takes these principles seriously and will not impose discretionary or unnecessary regulatory burdens on the economy. To demonstrate their seriousness about regulatory review and job creation, the White House should follow up with another announcement returning the Ozone rule to EPA to defer reconsideration until the next mandated review period. It would be better to stop a bad regulation early than to have to engage in a “look back” to fix it after the economy feels its negative effects.

Rosario Palmieri is vice president for infrastructure, legal and regulatory policy.

Update:

Press coverage on yesterday’s announcement:

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House Debates Amendment to Block Executive Order on Disclosure

Today, Congressman Tom Cole (R-OK) introduced an amendment to the National Defense Authorization Act which would prohibit an executive branch agency from requiring federal contractors to disclose political contributions as a condition of participation. This amendment is a direct response to a draft Executive Order being considered by the Obama Administration which would link political contributions from companies with government contracts.

As proposed, the draft Executive Order brings politics to the forefront of the government contracting process, and creates the impression that any Administration could discriminate against businesses based on past political donations or engagement. The Cole Amendment would not allow an executive agency to require this kind of disclosure which would prevent companies from being unfairly discriminated against if they are bidding for a government contract. 

We are opposed to the current draft Executive Order and will continue to oppose any effort by the Administration to infringe on the rights of individuals which allows them to freely participate in the political process. 

The Cole Amendment was just debated on the House floor a short time ago and the vote could come this evening. We will post more information as it becomes available. 

Rosario Palmieri is vice president of infrastructure, legal and regulatory policy, National Association of Manufacturers.

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House Panel Approves Reforms to Consumer Protection Law

Today the House Energy & Commerce Committee’s Subcommittee on Commerce, Manufacturing & Trade favorably reported out sensible reforms to the Consumer Product Safety Improvement Act. Since the law’s passage in 2008, the CPSC has had to stay significant portions of the law to prevent several unintended consequences. The most troubling of those unintended effects was to ban safe children’s products like bicycles, ATVs, musical instruments and even library books. None of the supporters of the law believe that these actions were intentional, nor did they intend to eliminate the sale of all children’s products by charitable organizations like Goodwill.

Another unintended consequence has been the amount and cost of unnecessary testing which has forced some micro-businesses to close their doors and continues to provide costly uncertainty to small manufacturers throughout the supply chain. Additionally, the CPSC overreached on its implementation of a public database and failed to incorporate congressionally-mandated protections to prevent its improper use by trial lawyers and advocacy groups. The CPSC also failed to implement appropriate controls to prevent false information from being included in the database. The National Association of Manufacturers applauds the Subcommittee for this legislative effort and will continue to work with Democrats and Republicans on the Committee to ensure swift passage of needed reforms.

Rosario Palmieri is vice president for infrastructure, legal and regulatory policy, National Association of Manufacturers.

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For Food Safety and Regulatory Certainty, House Should Pass S. 510

The Senate this week provided a strong and bipartisan 73-25 vote to pass S. 510, the Food Safety Modernization Act, and the House is up next to consider the bill. This is important legislation that can and should be enacted into law during the current lame-duck session of Congress.

The National Association of Manufacturers and other trade associations sent a letter to House leadership on Tuesday urging quick passage. Excerpt:

Strong food-safety legislation will reduce the risk of contamination and provide FDA with the resources and authorities the agency needs to help make prevention the focus of our food safety strategies. Among other things, S. 510 requires food companies to develop a food safety plan, improves the safety of imported food and food ingredients, and adopts a risk-based approach to inspection.

Manufacturers believe that the legislation strikes the right balance of additional authorities and resources for the Food and Drug Administration. Consumers should have confidence in our food safety and surveillance system and this legislation will further improve it.

Swift passage is also crucial to give companies clarity about the regulatory environment they will be facing in food manufacturing and processing, so that investments can be made in new technology and facilities. Without passage of this law, the industry will face continuing uncertainty which creates havoc for business planning and investment. One of the many elements necessary for economic recovery is regulatory certainty. Congress has the ability to provide a measure of that before it adjourns.

Rosario Palmieri is the National Association of Manufacturers’ vice president for infrastructure, legal and regulatory policy.

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Debased Database: CPSC Approves Rule That Will Invite Bogus Complaints

The Consumer Product Safety Commission met today to review the staff proposal for a final rule on the Publicly Available Consumer Product Safety Information Database, one of the many new federal regulations created by the 2008 law, the Consumer Product Safety Improvement Act.

The CPSC’s commissioners had a particularly vigorous discussion about the proposal and the alternative proposal offered by Commissioners Nancy Nord and Anne Northup. The Nord-Northup amendment was defeated 2-3, and a substitute amendment by Commissioner Robert S. Adler was adopted 3-2. The upshot is that the final rule was approved for promulgation without the CPSC fixing the most significant concerns raised by a large number of parties.

Extensive debate took place both in Congress and then within the Commission on the appropriate types of “reporters” to the database, that is, which individuals or groups would be recognized for registering legitimate complaints. The CPSC staff’s final proposal acknowledged that Congress provided an exhaustive list of reporters but strained credulity by expanding the definitions of “consumers” and “public safety entities” beyond their clear public meaning and the intent of the drafters of the legislation. The new definition includes attorneys, investigators, professional engineers, agents of a user of a consumer product, observers of the consumer products being used, consumer advocates, and consumer advocacy organizations, among others. As a result, the database with be filled with bogus reports inspired by political or financial motives rather than safety.

Congress also struck an appropriate balance between the speed of publication of reports and the desire for accuracy as well as the protection of confidential business information. The final rule provides for no such balance and creates a default for immediate publication before any meritorious claims regarding trade secrets or material inaccuracy are resolved. An alternative was offered that provides for the opportunity for staff to make determinations about such claims prior to posting the reports to the database, but it was rejected. Once a trade secret is posted within a report, for example, no remedy is available to undo the damage. These claims as well as claims of inaccuracy, impossibility, or product misidentification should be resolved before the information is made public if the database is to provide helpful information to the public.

Unfortunately, the Commission rejected a common sense approach today. It is now up to Congress to reclaim its authority and correct these errors.

Rosario Palmieri is the National Association of Manufacturers’ vice president for infrastructure, legal and regulatory policy.

UPDATE (1:35 p.m.): Commissioners Tenenbaum, Adler and Moore have issued a statement on their vote to approve the final rule. Commissioners Nord and Northup have posted their statement here. The majority three are Democratic appointees, the minority two are Republicans.

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