State of the Union

SOTU: Innovation Drives Manufacturing Growth

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Tonight the President furthered his commitment to manufacturing hubs around the United States, announcing that he plans to place 6 more of them this year.  Manufacturing technology and innovation are the lifeblood behind manufacturing growth, and we have long supported public-private partnership that will spur advancements in manufacturing.

The first two hubs, in Ohio and North Carolina, have the ground floor support and involvement of NAM members and we’re expect that NAM members will continue to lead the way as these hubs progress. We’re committed to continuing working with the Administration on these and other priorities in a fiscally responsible manner.

The President’s Ideas on Tax Reform Will Hurt, Not Help Manufacturers

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Manufacturers haven’t been shy in pushing for pro-growth, pro-competitiveness and pro-manufacturing tax reform.  We know firsthand how our current complicated and antiquated tax code, with the highest corporate tax rate among developed countries, makes it more difficult for manufacturers and other businesses in the United States to compete and succeed in a global economy. So our ears perk up when we hear the President mention tax reform, though tonight he touched only around the edges.

Previously, President Obama has called for a 28 percent tax rate for corporations – it is simply not enough. That wouldn’t even put US companies on a par with the rest of the developed countries whose average corporate tax rate is about 25 percent—and why should we be average? NAM supports a corporate tax rate of 25 percent or lower—with an accent on the lower.

We’re also more than a bit concerned about his talk of unspecified “loophole closers” or the more technical term, “base-broadening.”  Manufacturers are pragmatic enough to recognize that broadening the income tax base will be part of any debate over lowering corporate tax rates, but policy makers need to consider the potential impact of expanding the tax base on economic growth and the competitiveness of capital-intensive industries like manufacturing. Some current tax rules are key to a strong manufacturing sector, and the benefits of these provisions should be maintained in a new system.

The NAM supports greater investment in infrastructure but the tax code isn’t the place to look for financing.  The President’s proposal to repatriate overseas earnings as a means to direct additional investments in infrastructure is a very complicated financing tool that will make it even harder to achieve a modern international tax system that’s so important for U.S. manufacturers.

Like the President, manufacturers support an “all of the above” energy strategy. And we truly mean “all.” so we were concerned that the President again is suggesting we create winners and losers in the energy sector by increasing taxes on the oil and gas industry. It’s time to retire that tired, inaccurate talking point and acknowledge that manufacturers consume one-third of our nation’s energy ad know that higher taxes on some energy producers will translate into higher energy prices.

Finally, with his focus solely on corporate tax reform, the President totally ignores two-thirds of manufacturers—companies organized as “flow throughs,” like S corps and pay taxes at the individual level.  These companies are a critical part of the manufacturing ecosystem and dealing them out of the tax reform effort could leave them with a higher tax bill.

Here’s the bottom line for us: a new system should not result in a net increase in manufacturers’ U.S. tax burden—a change that would undoubtedly derail efforts to enhance U.S. economic growth, investment and jobs.  Unfortunately, the ideas the President outlined tonight are not good news for U.S. manufacturers.

President Continues Commitment to Infrastructure; More Work Ahead and No Easy Solutions

By | Economy, Infrastructure, State of the Union, Transportation | No Comments

The President has been a consistent advocate for increased investment in America’s infrastructure and we appreciate the President’s continued attention to the deteriorating condition of our roads, bridges, transit systems, airports, ports and inland waterways.  Like the President, manufacturers recognize that America’s infrastructure is resting on a legacy of past investments that have created great economic advantages and it is now time to reverse the deteriorating condition of our nation’s infrastructure.

This is not something that can be accomplished in a year, two years or even with a quick infusion of funding to supplement ongoing infrastructure investments. Manufacturers are eager for Congress and the Administration to work together to develop a long-term investment strategy that will make smart and strategic infrastructure investments designed to enhance our global competitiveness. While the NAM supports the President’s call to streamline environmental reviews and expedite infrastructure project delivery, the proposal to use savings from tax reform as a means to direct additional investments in infrastructure complicates efforts to overhaul our tax code and distracts from the goal of achieving a sustainable stream of funding for our nation’s surface transportation network.

Over the next few months, manufacturers encourage the President to engage in a robust conversation about long-term transportation funding by putting his Administration’s weight behind an effort to return the Highway Trust Fund to solvency and pass a traditional multiyear surface transportation authorization before September 30, 2014 when MAP-21 expires. These are priority issues for manufacturers and the surface transportation authorization currently offers the best and most efficient method for ensuring stable and continuous investments in roads, bridges and transit systems.

President Makes Bold Promises on Energy; Must Balance Commitment to All-Of-The-Above Strategy with Reasonable Regulations

By | Economy, Energy, State of the Union | No Comments

The President wisely made energy a focus of tonight’s State of the Union address. As well he should: energy is a bright spot in our economy, and with the right policies our competitive advantage on energy can only grow.

Some of the ideas proposed by the President tonight make a lot of sense. The unconventional oil and gas boom has unlocked millions of jobs–many of these in manufacturing in sectors like iron, steel, fertilizer, cement, chemicals and plastics–and the President appears ready to commit real resources to making sure this renaissance continues. He makes strong commitments to energy efficiency–initiatives like a $1 billion performance contracting initiative that comes on the heels of a very successful $2 billion program from 2011-2013 that created manufacturing jobs and saved energy. Perhaps most importantly, the President seems ready to finally make the kind of changes to the permitting process for infrastructure projects that will speed these projects up, get shovels in the ground, and reduce red tape.

That said, it’s hard to reconcile the broad, sweeping promises in speeches like this one with the aggressive–and often conflicting–regulatory agenda put into place by the Administration. Regulations like the greenhouse gas standards praised by the President, which threaten to phase out many of the fuels driving our energy renaissance. Or Ozone, a regulation that by the Administration’s own estimate would cost as much as $90 billion per year. Or the calcified permitting process that continues to plague the Keystone XL pipeline, energy exports and countless energy and infrastructure projects across the country.

And so much will depend on execution. The President has promised to fix permitting and red tape before, but many of the reforms fell short. He’s repeatedly called for an all-of-the-above policy, but in practice it’s really been some-of-the-above. Coal, nuclear, hydropower and others deserve to be part of the equation, alongside oil, gas, renewables and energy efficiency. Yet many of these words were not uttered in tonight’s speech.

Manufacturers Welcome President’s Comments on TPA and Market-opening Trade Agreements

By | Economy, State of the Union, Trade | No Comments

Manufacturers welcome the President’s commitment to seek passage of Trade Promotion Authority and move forward on market-opening trade agreements in the Asia Pacific and with Europe.

For manufacturers, opening new markets overseas is critical. The NAM is working on both sides of Capitol Hill with both Democrats and Republicans to advance a robust trade agenda that will tear down barriers for U.S.-manufactured exports. For too many years, the United States has sat on the sidelines as other countries negotiated trade deals that put our manufacturers at an increasing competitive disadvantage.

We look forward to working with the administration on passage of the Bipartisan Congressional Trade Priorities Act, introduced earlier this month by Ways and Means Chairman Camp, Finance Chairman Baucus and Ranking Member Hatch, which sets forth strong negotiating objectives and the much-needed framework to put the United States in a strong negotiating position for market-opening trade agreements.

The NAM will continue to make the case for robust trade policies and agreements here in Washington and around the country, emphasizing the importance of the elimination of unfair barriers overseas and strong rules on intellectual property, investment, fair competition and other commercial outcomes in new agreements.

Manufacturers also need access to competitive export financing to take advantage of new market opportunities, and the NAM will continue to advocate for a strong U.S. Export-Import Bank that can back exporters when needed. Ex-Im Bank is the only tool American manufacturers have to counter the approximately $1 trillion in export financing that other governments provide their exporters, and Ex-Im Bank helps to level the playing field for exporters to compete on the basis of quality and price rather than on financing terms. The NAM is also working to enhance the competitiveness of manufacturers in the United States through global and national initiatives to cut cross-border transaction costs and address regulatory hurdles abroad.


Gibbs and Rove Spar Before Manufacturers

By | General, State of the Union | No Comments

While President Obama and Governor Romney may have finished their debates, veteran political strategists Karl Rove and Robert Gibbs went head-to-head during the NAM’s fall board meeting.

Gibbs, a long-time aide to President Obama and a current advisor to his campaign, highlighted the President’s record, pointing to, for example, the half-million manufacturing jobs created since December 2009. The President will win over middle-class voters because he “understands the problems that they face,” Gibbs said.

Rove went on attack against the President’s record, rattling off a series of policies that are detrimental to job creators.  “This Administration has a weird view of what it wants to economy to be like,” said the former advisor to President George W. Bush.

As the nation learned in 2000, the outcome of a presidential election can hinge on just a few votes.  Every vote counts!  And it’s not just the presidential race.  There are a number of House and Senate races that will come down to the wire. For more information about the races and candidates where you live, visit the NAM’s Election Center.

President Obama Continues Discussing Manufacturing

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Fresh off his third State of the Union Address, where he discussed the need for growing manufacturing, President Obama will be touring Intel’s Ocotillo Campus in Chandler, Arizona. The Intel facility in Chandler employs nearly 10,000 people and builds high tech processors. The President is expected to continue to discuss manufacturing and job creation.

Intel is a leading innovator in high-tech manufacturing and is currently expanding their operations in Arizona. The company is building the world’s most advanced, high volume chip fabrication plant in Arizona. The plant is scheduled to be completed in 2013. This is great news for manufacturing in the United States.

Manufacturers are hopeful President Obama will adopt the policies manufacturers have laid out in A Manufacturing Renaissance: Four Goals for Economic Growth. By instituting pro-growth policies companies like Intel will be able to better compete, expand and create good high-paying jobs.

State of the Union Address Live Blog

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Throughout the night we will be updating the blog with live updates and reaction from President Obama’s State of the Union. So stay tuned for updates.

Update: President Obama has begun his third State of the Union Address by thanking all the troops who have served in Iraq and discussing the war in Afghanistan.

Update: President Obama calls for Congress to work together to create, “An America that attracts a new generation of high-tech manufacturing and high-paying jobs.”

Right now we are at a pivitol time for manufacturers in this country. Now is the time to reduce the regulations and burdens that face manufacturers.

Update: President says he wants to lay out a blueprint for an economy that is build to last. Our hope is they will adopt the policies that are laid out in our Manufacturing Renaissance: Four Goals for Economic Growth.

Update: President Obama discussing effort to double exports by 2014. In order to reach this goal we need more trade agreements, export control reforms, and the reauthorization of the Ex-Im Bank.

Update: President Obama mentions one of the First Lady’s Guests, Jackie Bray, a process operator at Siemens Charlotte Energy Hub. She participated in a community college retraining program to learn the skills necessary for her new job. Training programs such as this are essential to the competitiveness.

Update: President Obama says he is directing his Administration to open more than 75 percent of our potential offshore oil and gas resources. Calls for an “All of the Above” strategy. Manufacturers believe that strategy should include the Keystone XL pipeline that he rejected just last week. A mistake that will cost us jobs.

He also called for the development of natural gas development. It’s essential that the EPA does not overreach and continue to allow for shale development. A PwC/NAM study shows that shale development will create 1 million manufacturing jobs.

Update: President Obama calls for an effort to rebuilt our infrastruture. An improved and efficient infrastructure is important to manufacturers competitiveness.

Update: Increas

State of the Union Night

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At 9:00 p.m. EST tonight President Obama will deliver the State of the Union Address. We expect manufacturing to be one of the main topics of the speech.

Several manufacturers have been invited as guests of the First Lady tonight. These guests include Alicia Boler-Davis, a plant manager at General Motors Orion Assembly and Jackie Bray, a process operator at Siemens Charlotte Energy Hub.

Jackie Bray is an example of how important community college training programs are for workers. In June of 2011 President Obama endorsed the Manufacturing Institute’s Skills Certifcation Program which is designed to help retrain workers for careers in manufacturing.

Be sure to stay tuned to Shopfloor tonight and to our twitter feed at @shopfloor for live reaction to the address.