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Regulations

Manufacturers on Infrastructure: Get It Done

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If you are going to get cut off during an interview, it might as well be for the president of the United States.

Just before President Donald Trump discussed his vision to modernize America’s infrastructure and continue to support manufacturers in the United States, I joined Stuart Varney on “Fox Business” to offer the perspective of our nation’s 12 million manufacturers on the urgent need to advance infrastructure investment and remove job-crushing regulations.

As I told Stu, the bottom line is that the American people want to get things done. Manufacturers are encouraged that the president is getting things done, incorporating elements of the National Association of Manufacturers’ (NAM) “Building to Win” strategy, and we hope Washington comes together to get a big, jobs-first, trillion-dollar infrastructure plan done.

There’s a reason 93 percent of the NAM’s members recently surveyed are optimistic about their outlook on their economy—a 20-year record high. It’s because President Trump is not just delivering speeches like he did today. He’s listening to manufacturers and putting actions behind his words—to create jobs and lift standards of living for everyone.

Manufacturers Support Revisiting Dodd-Frank

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The House this week will vote on the Financial CHOICE Act (H.R. 10), a bill that would roll back a number of job-killing, anti-investment provisions in the Dodd-Frank Act. During the legislative consideration of the Dodd-Frank Act in 2009 and 2010, the National Association of Manufacturers (NAM) repeatedly urged Congress to focus its efforts on strengthening the U.S. financial system. Unfortunately, this didn’t happen, and we are pleased that the House is revisiting a number of these ill-conceived provisions.

The bill would repeal the so-called “pay ratio” rule, which requires companies to regularly disclose the ratio of employees’ median pay to the compensation of the company’s chief executive. Despite the absence of a clear benefit, this rule would require thousands of manufacturers in the United States to incur significant financial cost, dedicate substantial man-hour resources and overcome numerous administrative challenges to comply with the rule.

The CHOICE Act also raises the threshold so that only shareholders who hold at least 1 percent of the company’s stock for three years can submit a proposal on a company’s ballot and excludes a shareholder proposal if a similar proposal appeared on the ballot and was defeated within the past five years.

It also brings transparency to proxy advisory firms by requiring them to register with the Securities and Exchange Commission (SEC) and adopt conflict-of-interest policies. Proxy advisory firms are third-party groups that provide proxy voting advice for investors. Two firms—Institutional Shareholder Services, Inc. and Glass, Lewis & Co.—control 97 percent of the proxy advisory market and wield tremendous power in shaping corporate governance, yet they are virtually unregulated entities.

Finally, H.R. 10 would repeal a Dodd-Frank provision that requires companies publicly traded in the United States to disclose annually to the SEC any use of conflict minerals in their supply chains, including minerals originating in the Democratic Republic of the Congo (DRC) and its adjoining countries.

While the NAM supports addressing the atrocities occurring in the DRC, it has underscored that the conflict minerals disclosure requirements pose costly, burdensome and impracticable financial and reporting burdens, and potentially a substantial auditing burden, on NAM members of all sizes—and in all sectors of the manufacturing economy. The NAM strongly supports the repeal of the conflict minerals disclosure requirement in the CHOICE Act.

Manufacturers struggle under an enormous regulatory burden. Indeed, an NAM report released earlier this year found that manufacturers in the United States face 297,696 federal regulations. The NAM supports efforts to reduce this regulatory burden and make businesses in the United States more competitive in the global marketplace and free up additional resources for investment and job creation. Passing the CHOICE Act will help bring us closer to our goal.

FCC Takes Another Step Toward Restoring Internet Freedom

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The members of the Federal Communications Commission (FCC) voted today to continue their efforts to free the internet from regulation by moving forward on their “Restoring Internet Freedom” order (proceeding 17-108). The agency is now officially accepting public feedback on the decision. The National Association of Manufacturers (NAM) intends to file comments in support of ending the regulation of the internet. All of you who agree that overregulation stifles private-sector investment and innovation are encouraged to join us in sending that message. The deadline to make your voice heard is July 17.

When the FCC announced the decision a few weeks ago to consider this issue at their meeting today, we made the point then that internet-driven technology is now ubiquitous across all manufacturing sectors. We argued that our industry needs to see continued investment in our telecommunications infrastructure so we can maintain our global innovation leadership position that connectivity to the internet enables. The best way to ensure investment continues to flow is for Congress to act and create clear rules of the road. But the FCC’s decision to begin the process to roll back a 1930s-era regulation will help facilitate that investment and support innovation in our sector.

It’s a timely coincidence that this FCC decision occurred during Infrastructure Week. Industries and individuals from across the country and political spectrum have rallied together and are calling on Washington to work together to address our infrastructure challenges. Broadband is part of manufacturing’s critical infrastructure, and the biggest challenge it faces is government policies and regulations slowing its deployment. We encourage you to join the NAM and tell the FCC the time is now to free the internet from regulation and ensure our broadband infrastructure remains the best in the world.

 

New Study: Manufacturers Face 297,696 Regulatory Restrictions

By | Communications, Media Relations, Regulations, Shopfloor Main | No Comments

As the incoming Trump administration prepares to reform and roll back many misguided federal regulations, the National Association of Manufacturers (NAM) has released a new study revealing the sheer number of business and operational hurdles that manufacturers face on a daily basis as a result of the nation’s current regulatory structure. Read More

Manufacturers Say Get the Turnaround Started at the Labor Department: Confirm President-Elect Trump’s Nominee

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Manufacturers can’t wait for Inauguration Day. Like the first hours of New Year’s Day and baseball’s Opening Day, anything feels possible. And when you’ve been battling eight years of volatility and policy uncertainty in the rules governing the workplace, a new way forward is exactly what we need—to help American workers and families with more jobs and higher pay.

A recent National Association of Manufacturers (NAM) study calculated the cost of recent labor regulations to the economy to be $85 billion, more than 400 million hours of paperwork and up to 155,000 jobs lost over the next 10 years. That’s more jobs lost than the entire populations of Green Bay and La Crosse, Wis., combined.

The right type of change starts with a confirmation vote—to get the U.S. Labor Department working smarter and functioning at the level Americans expect and deserve. The Senate should move swiftly to confirm President-elect Donald Trump’s choice for labor secretary, Andrew Puzder. The president-elect was wise to choose the leader who turned around Hardee’s and Carl’s Jr., saving not only brick-and-mortar businesses but also jobs that jumpstart better lives. There’s no reason to delay another turnaround—at the Labor Department—that needs to start on day one.

How bad has it been? Here are some of the worst-offending policies:

  • President Obama’s Labor Department has hindered the ability of employers, particularly smaller-sized firms, to seek advice on how to comply with labor laws, which can harm manufacturing workers, as much as their employers.
  • The administration tried to more than double the minimum salary threshold for employees exempted from overtime pay and add a costly automatic increase provision. Small and rural businesses were hit especially hard by the change—and the rule failed to account for the varied types of work done by affected employees and the increasing need for flexible work arrangements.
  • They’ve prevented employers from incentivizing safe workplace practices.
  • And they’ve tried to turn back the clock on labor law, refusing to allow modernizations to take place that best fit the modern workplace.

It’s time for more balance: a labor policy that can achieve both a positive work environment and create new job openings in manufacturing and in other sectors for all Americans. It’s the type of labor policy we lay out in the NAM’s new “Competing to Win” blueprint on labor policy and the agenda we’re confident President-elect Trump and Andrew Puzder can get working on right away—if senators act in manufacturing’s and the people’s interest.

Make Regulations and Our Legal System Great Again

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Regulatory and legal reform are key components of our “Competing to Win” agenda, and with a new Congress and new president taking office next month, we are proposing detailed solutions to create a smarter and efficient system of governance and eliminate government-imposed barriers to economic growth and job creation.

President-elect Donald Trump has asserted that regulatory reform is a “cornerstone of the Trump administration” and that his team will be “committed to regulatory reform that will produce sensible regulations that allow America to be great.” This is music to manufacturers’ ears.

Manufacturers Face an Immense Regulatory Burden

  • In constant 2009 dollars, federal spending for regulatory agencies tripled from $16.46 billion ($72.44 per person) in 1980 to $50.09 billion ($155.84 per person) in 2015.
  • Through October 2016, the current administration has issued 637 major new regulations, translating to a new major regulation once every 4.46 days.
  • These regulations are placed on top of the thousands of requirements with which manufacturers must already comply, and regulators make no effort to repeal or modify duplicative or unnecessary requirements that exist.

Reforming Our Regulatory System Equals Jobs

  • Regulatory decisions must focus on outcomes to improve the quality of regulations: Agencies should be forced to thoughtfully examine existing regulations and their cumulative costs to improve the effectiveness of existing and new rules. Importantly, sound regulatory analysis should be strengthened and codified so that regulatory decisions are based on the best available science.
  • Regulators must be held accountable with improved oversight to improve the quality of the regulations they issue. Independent regulatory agencies should comply with universally accepted sound regulatory principles, and Congress should improve its oversight of all regulating agencies.
  • Fairness should be restored to our legal system so that manufacturers and individuals in need of relief do not fall victim to opportunism. There should be clear standards for liability, and disincentives for filing frivolous lawsuits should be reinstated.

We are urging President-elect Trump and our leaders in the government to listen to manufacturers and follow our roadmap to expanding our economy and reforming our system of governance. Regulatory and legal reform alone could dramatically improve companies’ ability to grow in America. We should not miss this opportunity.

This blog is part of the NAM’s 12 Days of Transition series, an effort to provide the presidential transition team and other Washington policymakers with a roadmap to bolster manufacturing in the United States. Read the other blogs in the series here.

IRS Hearing Day on Family-Owned Business Estate Tax Regs

By | Regulations, Shopfloor Main, Shopfloor Policy, Taxation | No Comments

Family-owned businesses and their advocates are watching closely the hearing happening today at the IRS on the so-called “minority valuation proposed regulations.” These proposed regulations, released in August, would alter how families are able to value minority interests in a family-owned company, in some cases resulting in a tax increase of more than 30 percent.

In comments submitted by the NAM and the Family Business Estate Tax Coalition of which the NAM is a co-director and co-founder, we highlighted the numerous concerns manufacturers and family-owned businesses across the economy have about this proposal. Shortly after the release of the proposal, when the potential impact begun to be understood by the business community and as concerns were beginning to be raised, Treasury’s policy team began to assert that the proposal is not meant to reduce the use of minority valuation discounts for lack of marketability and lack of control that are used in determining the value of shares sold to family members in a closely held business. Instead, they were just seeking to target abuses in the valuation discounts utilized by some simply to avoid taxes. However, as the IRS and Treasury teams will hear from the grand majority of the 30 people testifying at today’s hearing, the impact as understood by the tax- and estate-planning community is very different.

Manufacturers appreciate that Treasury is listening and that today’s hearing affords the public another opportunity to weigh in on this rule. However, the negative impact of these proposed regulations on NAM family-owned businesses cannot be overstated. In a recent letter, the third-generation owner of an active manufacturing enterprise explained the potential impact of the regulations:

“Our board has been working an ownership succession plan for years. Stock valuation and financing stock transfer are an ongoing challenge. Stock is transferred through the sales, gifts and redemptions of shares, and the value of the stock is the fair market value at time of transfer. We are within a couple of years of completing the transfer of ownership from the third to the fourth and fifth generations. Our advisers have informed us the proposed regulations will eliminate discounts that have traditionally been applied. If this happens, the cost of transferring the stock will increase by 43 percent. This will put an additional strain on our capital and would lead us to underinvest the capital required to grow or even sustain our company. It means diminished ability to invest in job creating, value creating and value-retaining projects.”

The last line of our member’s letter says it all, and today’s hearing should reinforce what they’ve already heard in the voluminous comments to Treasury, that they should withdraw these proposed regulations and not harm family-owned businesses.

Obama’s Regulations in a Trump Presidency

By | Manufacturers’ Center for Legal Action, Regulations, Shopfloor Legal, Shopfloor Main | No Comments

President Barack Obama has relied on, and expanded, the power of the administrative state by making substantial use of both executive orders and presidential memoranda to achieve policy objectives. Executive orders are appealing to any president because they can be quietly and quickly implemented without hearings, votes or substantive public feedback. President Obama has been direct in favoring this approach, stating, “We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen, and I’ve got a phone.”

The National Association of Manufacturers (NAM) ramped up its litigation in response to the tsunami of regulations coming out of the White House. In this final year of the president’s term, the regulatory spigot has only been turned up. The NAM is currently suing the federal government in 16 cases for overregulation.

The Manufacturers’ Center for Legal Action has argued in the courts that the president overstepped his constitutional power in issuing many memoranda and executive orders affecting labor and environmental law. However, a presidential legacy implemented by the pen can be destroyed by the pen. First, an executive order can be revoked by another executive order, and it is common for presidents to revoke some of their predecessors’ executive orders. Second, Congress can revoke an executive order through legislation. Third, an executive order can be revoked by a federal appeals court or the Supreme Court.

This year’s election will have a profound impact on future NAM litigation efforts to limit executive overregulation through the courts. President-elect Donald Trump will fill the Supreme Court vacancy created by Justice Antonin Scalia’s death and potentially two or more additional seats as justices retire. If multiple vacancies occur, the Supreme Court will shift from its previous makeup of five conservative and four liberal justices that shaped some of the nation’s most significant issues on social norms, individual rights, the balance of government powers and business and workplace matters. Several, if not all, of the cases in which the NAM is suing the government for executive overreach may end up in a newly configured Supreme Court, and the outcome of President Obama’s regulatory legacy will largely rest on the Supreme Court nominees of President-elect Trump.

The Supreme Court has not had a liberal majority since the retirement of Chief Justice Earl Warren in 1969, and during the past 48-year period, the Supreme Court has made a modest shift to curtail executive overreach. Without a majority conservative Supreme Court, many pro-business decisions on labor and environmental issues would likely not have been rendered. It is generally thought that President-elect Trump will support Supreme Court nominees who believe the Founders’ words in the Constitution mean what they say, not that the Constitution should be seen as a living document. Justices in this mold will likely not support broad deference to executive authority and agency actions. The issues at stake range from the ability of citizens to challenge regulations by administrative fiat to the ability of workers to unionize.

The morning after the election brought with it discussion of whether Democrats will filibuster the Trump administration’s Supreme Court nominees. The Senate confirmation process will offer a critical view into the Supreme Court’s future and the legacy of President Obama’s executive orders.

Manufacturers Applaud Signing of GMO Labeling Law

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Today, President Obama signed into law bipartisan legislation (S. 764) that will establish a mandatory federal standard for the labeling of food and beverage products that contain ingredients derived from genetically modified organisms (GMO). The bill was sent to the president for his signature after the House passed the bill on July 14. The Senate passed the bill on July 7.

The National Association of Manufacturers (NAM) supported S. 764 as amended and praises the leadership of Senate Agriculture Committee Chairman Pat Roberts (R-KS) and Ranking Member Debbie Stabenow (D-MI) in crafting the compromise bill. Before votes in the Senate and House, the NAM sent a key-vote letter in support of the measure and issued action alerts that enable individuals to contact lawmakers directly.

Importantly, the law preempts state or local laws on GMO labeling for human and animal food and for seeds. The food and beverage supply chain is highly complex, and without a national standard, manufacturers and their suppliers were facing myriad conflicting state standards that would harm the ability of manufacturers, suppliers, distributors and farmers to produce and transport agricultural and food products efficiently. In addition to preemption, the new law accomplishes the following:

  • Directs the U.S. Department of Agriculture to establish a mandatory national standard for GMO labeling within two years and provides the agency the authority to establish a minimal amount of GMO substance within a product for disclosure to be required;
  • Prohibits any requirement that animal products be labeled GMO solely because the animal consumed GMO feed;
  • Allows food and beverage manufacturers flexibility in disclosing GMO ingredients on a label through one of the following methods: text or symbol indicating the presence of a GMO ingredient; or an electronic/digital link (e.g., QR codes), which must include explanatory text and a telephone number;
  • Provides small food manufacturers one additional year to comply after the national standard takes effect, along with additional labeling disclosure options;
  • Exempts “very small food manufacturers” from disclosure requirements; and
  • Prohibits a company from making a “non-GMO” claim solely because the food is not GMO but preserves the ability for organic foods to be labeled “non-GMO” or similarly.

Food and beverage manufacturing accounts for 1.704 million jobs in the United States and is critical 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 United States than anyone else does, contributing billions of dollars every year in food and cash to fight hunger and malnutrition.

Biotechnology has fostered a revolution in American agriculture that has benefitted consumers in the United States 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.

New Added Sugars Label Rule Risks Manufacturers’ Trade Secrets

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On Friday, the Food and Drug Administration (FDA) released a 1,000-page rule creating new requirements for nutrition labels. Manufacturers have serious concerns about the FDA’s new mandate to place “added sugars” on the list of nutrients declared on the facts panel.

Despite the FDA’s own admission that there is no nutritional difference between added sugars and naturally occurring sugars, the agency has issued a misguided mandate that is immensely burdensome for manufacturers. Consumers already have nutritional information about sugars. The addition of added sugars on the facts panel implies that a nutritional difference exists. This can actually misinform the public.

Manufacturers are also concerned about the burdensome recordkeeping and reporting requirements that would require the disclosure of protected and confidential information. The FDA’s demand that a manufacturer be forced to hand over proprietary information upon request to an inspector creates a dangerous precedent.

President Obama’s Executive Order 13563 reaffirms the principles for sound rulemaking, stating that our regulatory system “must be based on the best available science.” The FDA clearly has not developed this costly and unnecessarily burdensome regulation in accordance with this principle.