Signed, Sealed, Time To Deliver

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The U.S. Postal Service is in trouble. It has been for a long time. And that’s worrying for a lot of people in our country, including manufacturers. Affordable mail service is critical to American manufacturers, even in the internet age – perhaps especially so. Production, billing, advertising and other important needs of a successful company depend on a reliable, affordable, and efficient postal system with universal service. Many manufacturers rely directly or indirectly on USPS to get their products to customers. Others make indirect inputs like shipping products designed to support our country’s modern logistics backbone. All told, the Postal Service supports a $1.4 trillion industry on which millions of jobs depend.  Yet today the USPS is functionally broke, reporting net financial losses for the last eleven years straight, and it’s trapped in a bizarre legal straightjacket—a legal mandate to massively pre-fund its retiree healthcare plans — that prevents the service from getting itself out of that hole. In response, the Post Office has cut costs in areas that harm its service standards, has misattributed costs among product categories, and has asked for significant short-sighted stamp price increases that could threaten the manufacturing economy. It’s time to finally get the Postal Service back on its feet.

The problems afflicting USPS are serious but fixable. That’s why the NAM applauds Senators Tom Carper (D-Del.), Jerry Moran (R-KS), Heidi Heitkamp (D-ND), and Claire McCaskill (D-MO) for introducing legislation that would take a big step toward achieving real and bipartisan postal reform.  The Postal Service Reform Act of 2018: Improving Postal Operations, Service, and Transparency bill, like its House companion the Postal Service Reform Act of 2017, is the result of years of hearings, fact-finding, negotiation, and compromise between members of House and the Senate from across the political spectrum. The legislation would provide a more rational schedule for pre-funding the Postal Service’s retiree obligations, while giving the USPS more of the flexibility it needs to adapt to a changing economy and run its service more like a regular business. Legislation like this simply underscores the fact that the Postal Service can effectively tackle its problems without resorting to drastic measures— like hiking the price of only a few products like stamps— if Congress gives it some flexibility, and we thank the sponsors of both the Senate and House measures for working hard to put this legislation together.

On a related note, as the postal reform debate moves forward in Congress manufacturers hope members of both parties will take the opportunity to address other problems like international package deliveries too. The Postal Service loses hundreds of millions of dollars per year providing far-below-market rates for inbound packages from countries like China that abuse an international agreement developed by the Universal Postal Union (an international agency based in Switzerland). USPS loses money on every single package it takes inbound from China, and the annual growth in these package deliveries is astounding. Many of these packages contain drugs or other contraband, and yet USPS either does not or cannot collect meaningful data from foreign shippers that would allow U.S. Customs and Border Patrol to effectively screen them. Now is a prime opportunity to make clear to the Postal Service that these mounting losses and dangerous packages are unnecessary, unacceptable, and almost certainly illegal. USPS should not be allowed to raise shipping rates for American shippers to pay for this absurd subsidy for foreign competitors and counterfeiters. And Congress can give them the relief they need by clearly prohibiting the implementation of any agreement that unfairly discriminates against U.S. shippers, and by clearly requiring the Postal Service to collect advanced information on foreign shipments.

We hope Congress will do just these things, just as we hope members of both parties will work together to pass common-sense postal reform legislation so we can ensure the viability of the USPS for years to come.

Manufacturers Urge Maintaining the Value of Present Part D Networks

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As the Centers for Medicare & Medicaid Services (CMS) closes in on finalizing anticipated 2019 changes to Medicare and several other CMS-sponsored programs, the NAM urges CMS to refrain from changing its “Any Willing Pharmacy” requirements. Employers and employees increasingly rely on Medicare, Medicare Advantage (MA) and Part D drug benefit programs for health coverage as some employers are sponsors of Part C and D plans for their retirees.

Competitive principles are a hallmark of the Part D program and have kept the program affordable for seniors over the last decade. This proposal directly conflicts with the Part D spirit and intent by adding new challenges and barriers to the establishment of preferred pharmacy networks. As stated in a public comment submitted earlier this year, we highlighted that preferred pharmacy networks allow for more streamlined management of pharmacy benefits by working to reduce fraud, waste, and abuse, lowering the cost of the benefit for all Medicare beneficiaries and promoting the delivery of high quality pharmacy services.

Most beneficiaries today choose to enroll in Part D plans with preferred pharmacies and this proposal would disrupt their coverage without producing a benefit. Manufacturers strongly support proposals to reduce soaring health care costs, improve the efficiency of the current system and enhance the quality of care. However, the proposed changes by CMS don’t meet those tests. A recent Oliver Wyman report confirms the value of preferred pharmacy networks in the Part D program and employers agree.

FY 2018 Omnibus Offers Opportunity to Advance CLOUD

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Manufacturers appreciate lawmakers’ inclusion of the Clarifying Lawful Overseas Use of Data (CLOUD) Act in the FY 2018 Omnibus funding package.  This is a major victory for the delivery of strong standards and achieving much needed government-to-government cooperation to address new challenges presented by the digital age.

Digital information moves globally in ways that were never imagined decades ago. Current laws were written in 1986 and have not kept up to speed with technological advances and the connected world in which we live. Connected products, services and the technology of today demand a high level of certainty and stability so that the competitive needs of commerce are appropriately balanced with efforts to thwart international criminals and those who seek to harm our society.

The CLOUD Act provides law enforcement the tools they need to keep us safe and creates a legally responsible framework to address concerns of international customers and foreign governments to ensure the privacy and security of customer data. The NAM has been a stalwart advocate along with other industries and has previously praised the CLOUD Act in a letter to lawmakers.

Cloud computing is a major growth opportunity for U.S.-based companies selling software and services overseas and a growing technology backbone for small businesses and manufacturers across the United States who are seeking opportunities to sell into overseas markets. Ninety-five percent of the world’s customers reside outside the United States, and the appetite for American-made products and technology continues to be robust, increasingly helping to support well-paying jobs across the country. The CLOUD Act achieves the right balance, and manufacturers are pleased to see advocacy efforts come to fruition

Innovation, Investment—Not Market Access Barriers—Must Be Pillars for U.S.–Saudi Relationship

By | General, Shopfloor Policy, Trade | No Comments

As the White House, government officials and businesses prepare for next week’s Washington visit of Saudi Arabia Crown Prince Mohammad bin Salman, manufacturers across America are calling upon the Saudi government to address a range of outstanding issues that are frustrating manufacturers seeking to export and grow in that market, activities that support good, high-paying jobs here at home.

The United States is Saudi Arabia’s second-largest trading partner, with nearly $35 billion in trade in 2016. In turn, Saudi Arabia is one of the United States’ largest and most important trading partners in the Middle East and the destination for more than $10 billion in investment across a range of business sectors.

Yet, manufacturers are urging the administration and others to raise outstanding commercial issues they face in Saudi Arabia that undermine that partnership and send the wrong signals about Saudi Arabia’s investment environment. Recent decisions by the Saudi Food and Drug Authority to promote local pharmaceutical manufacturing at the expense of U.S. products, for example, undermine Saudi Arabia’s attempts to promote innovation and transform its economy and raise questions about their compliance with both Saudi law and Saudi Arabia’s obligations under the World Trade Organization—questions that are important to a broad range of manufacturers, not just impacted industries.

Manufacturers also face other challenges in Saudi Arabia that directly impact manufacturing exports, such as problematic technical rules in areas from food to product testing as well as revised Saudi regulations that effectively exclude many international standards developed in the United States.

Removing these barriers and recommitting to a pro-business, pro-innovation investment environment must be a priority for these discussions. Manufacturers urge the crown prince and other members of his delegation to work within senior levels of their government to address these concerns and avoid similar steps in the future. These steps are an important part of affirming Saudi Arabia’s continued partnership with the United States.

EPA Clears the Way for Cleaner Equipment at Manufacturing Facilities

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This morning, Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a guidance memorandum fixing ambiguities in the air permitting process that have thwarted manufacturers from installing cleaner equipment. Today’s action clarifies how to properly account for project emissions under step 1 of New Source Review (NSR), a federal air permitting program under the Clean Air Act that applies to new facilities or major modifications to facilities. Until today, the EPA would allow only consideration of emissions increases when determining whether NSR applies, even for projects that had a net emissions decrease because old equipment was being upgraded to new equipment.

As the National Association of Manufacturers (NAM) told the Senate in testimony last fall:

An NAM member company manufactures gas turbine upgrade technology that could improve the vast majority of in-service gas turbines by 2.6 percent and reduce their total CO2 emissions per MWh by 6.5 percent; however, many manufacturers are choosing not to install this equipment simply because it triggers NSR. The same can be said for steam turbine upgrades, which would ensure higher grid efficiency, lower emissions and reduced wear and tear that is occurring from a rapidly changing electric grid.

There is no good reason for the permitting process to create unnecessary obstacles for a manufacturer that wants to make efficiency upgrades or install modern pollution control equipment. In fact, manufacturers have been leaders in this space, working to successfully reduce emissions while adding to the overall economy. The NAM has made NSR a priority in its regulatory reform filings with the EPA and the White House. It’s clear that Administrator Pruitt agrees and is committed to fixing the permitting process for manufacturers.