The closing of these plants will result in the loss of more than 100 jobs not to mention how it will impact the economies of the communities where the plants are located. We often forget about indirect impact of closings such as this which tends to ripple through the entire community.

Also, the reliability of our power grid is put at risk by the EPA’s regulations. Manufacturers are looking for certainty and regulations such as Utility MACT will only increase energy costs and cause them to at times wonder about the reliability of their power grid. Manufacturers consume one-third of our nation’s power and need access to all sources of energy.

An “All-of-the-Above” approach to energy should include everything including clean coal, manufacturers can’t afford increasing energy prices at a time when they are trying to recover, hire and create new jobs.

The EPA estimates that the rule will have an annual cost of $9.6 billion, making it one of the most costly rules in the history of the agency. Manufacturers, as users of one-third of the energy consumed in this country, are extremely concerned that the regulation will increase electricity rates and also cause grid reliability issues.

One of the witnesses, Anne Smith of the National Economic Research Associates (NERA), argued that the EPA has made some “misleading public statements” about the health benefits of the rule in its Regulatory Impact Analysis (RIA). Her testimony states:

“A closer read of the RIA reveals that all the “saved lives” and virtually all of the $33 billion to $90 billion of estimated benefits EPA has attributed to the MATS [or MACT] Rule are for purported coincidental reductions of . . . fine particulate matter (PM_2.5) that is already regulated to safe levels separately under the [Clean Air Act].”

Thus, the EPA is “padding” its RIA with supposed health benefits that occur because of reductions in emissions not covered by the Utility MACT rule.

Her own economic analysis also indicates that the rule’s net impact to U.S. workers in 2015 will be a reduction in worker income that is the equivalent to approximately 200,000 full-time jobs.

Darren MacDonald, Director of Energy at Gerdau Long Steel North America, expressed concern that the regulations would increase electricity prices, hurt the company’s competitiveness and put jobs in jeopardy. He also noted that the Utility MACT regulation will place increased demand on the suppliers and installers of pollution control technology which could also drive up costs for manufacturers.

The NAM applauds the House of Representatives for passing legislation such as the TRAIN Act (H.R. 2401) which would delay implementation of the Utility MACT rule until an interagency economic study is completed. We urge similar action in the Senate.

Aicia Meads is director of resources and energy policy, National Association of Manufacturers.

The bill’s passage is major news after four years of trial and error, resulting in 23 temporary extensions. It will provide infrastructure improvements, next generation air traffic control and common sense regulatory reforms that won’t hinder growth. This is great news for American manufacturers.

Job creation and infrastructure investment are two of the NAM’s top priorities and this legislation takes important steps toward accomplishing them. The House passed the bill on February 3, by a margin of 248-169. The bill now awaits President Obama’s signature.

New Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics show that manufacturing hiring was up in December, mirroring other employment data released by the agency. There were 264,000 job openings in the sector in December, up from 242,000 in November. The increase occurred in both the durable and nondurable goods sectors.

In addition, there were 261,000 hires and 226,000 separations in the month. This suggests net hiring of 35,000, an improvement from the 19,000 gain in November. This can be seen in the attached graphic.

For the macroeconomy as a whole, the number of job openings rose from 3,118,000 in November to 3,376,000 in December – an increase of 258,000. The hiring rate is currently 2.5 percent of the labor market, up from 2.3 percent in November. This brings it back to its level in September, right before the falloff in October in labor market activity. Despite the uptick, the hiring rate was little changed in December from November.

Given that these numbers overlap with strong improvements in U.S. employment in December and January, there is little new news here. The manufacturing jobs picture is improving, and yet, overall, hiring remains a challenge. With modest growth in production this year, we will hopefully see increased hiring in the coming months.

Chad Moutray is Chief Economist, National Association of Manufacturers.

Jay Timmons addresses the members of Congress on the need for a manufacturing renaissance at a forum held by the Energy and Commerce Committee Republicans

Jay Timmons, the NAM’s President, was an invited guest and he took the opportunity to share the current state of manufacturing – detailing the challenges facing manufacturers as well as their successes.

Jay weighed in on each of the forum’s wide array of topics, including taxes, trade, and the critical need for Washington to develop a coherent “all-of-the-above” energy policy, saying that, “Energy costs are, outside of labor, the number one cost of running a manufacturing business.”

Bill Holt, General Manager of Intel’s Technology and Manufacturing Group, raised the issue of the extremely high U.S. corporate tax rate – a rate that, as of April 1^st, will be the highest of any industrialized country.

“Our tax rate is 29% – higher than all of our foreign competitors. That really puts us at a disadvantage.”  

Today’s discussion was a good opportunity to talk with policy makers about what is needed to truly have a Manufacturing Renaissance. As Jay noted, manufacturers need each aspect of the NAM roadmap put into action – the sooner the better.

Dan Santmyer, Director of Operations at the Bayer Pittsburgh site, said in a press release, “the installation of the EV charging station is part of the company’s global commitment to sustainability. We are proud to provide our employees with the infrastructure that supports their efforts to drive, rent or purchase EV’s and reduce their personal footprint on the environment.”

Learn more about Bayer’s comprehensive sustainability program here.

The Senate convenes this afternoon and considers the Federal Aviation Administration reauthorization bill (H.R. 658).

The House meets today to consider several bills on the extension calendar. Later this week, it will consider several budget process reforms as well as the congressional insider trading bill (S. 2038). See the Majority Leader’s schedule here.

Senate Hearings: TUESDAY—The Budget Committee holds a hearing on U.S. monetary and fiscal policy. THURSDAY—The Energy and Natural Resources Committee reviews legislation that would facilitate a mining project. The Budget Committee holds a hearing on income inequality.

House Hearings: TUESDAY—A Homeland Security subcommittee holds a hearing on maritime security and trade. The Education and Workforce Committee considers the recess appointments to the National Labor Relations Board. The Foreign Affairs Committee holds a hearing on export controls. WEDNESDAY—The Ways and Means Committee looks at accounting rules. An Energy and Commerce subcommittee holds a hearing on cybersecurity. The Science, Space and Technology Committee considers “America’s Nuclear Future.” An Energy and Commerce subcommittee holds a hearing on the Utility MACT rule. THURSDAY—An Energy and Commerce subcommittee looks at drug shortages. A Small Business subcommittee holds a hearing on small business contracting.

Executive Branch: Vice President Joe Biden is in Tallahassee, Fla., today to deliver remarks on the cost of college at Florida State University. On Thursday, he is on Ohio for the Ohio Newspaper Association Convention. U.S. Trade Representative Ron Kirk meets with the Singaporean Second Minister of Trade and Industry today. Tomorrow, Acting Deputy Secretary of Commerce Rebecca Blank is in Madison, Wis., to highlight a workforce training program. On Friday, Commerce Secretary John Bryson is in Minneapolis, Minn., to visit a community college and highlight the country’s workforce needs.

Economic Reports: From the New York Times: “Data will include consumer credit for December (Tuesday); weekly jobless claims and wholesale trade inventories for December (Thursday); and the trade deficit for December and the Thomson Reuters/University of Michigan consumer sentiment index for February (Friday).”

The U.S. economy picked up some steam in the past couple of months, with several economic reports showing increased business activity and cautious optimism. Even with that positive trend, the Bureau of Labor Statistics surprised many economists with robust employment growth in January. Manufacturers added 82,000 net new jobs in the past two months, and the unemployment rate fell to 8.3 percent – a level not seen since February 2009.

Much of this recent manufacturing growth occurred in the durable goods sector. The Census Bureau reported a 1.1 percent increase in new orders for manufactured goods in December, which was led by sizable increases from the machinery, metals and transportation sectors. These areas also had the largest employment gains in January. Broadly speaking, though, the gains experienced lately have not been limited to just durables. The Institute for Supply Management’s purchasing managers’ index found that the sector as a whole continues to expand, with new orders growing stronger from the previous month. The Dallas Federal Reserve Bank’s survey had a similar finding.

Of course, businesses and consumers remain cautious in their optimism. Even with an improved economy, weaknesses remain, and the public’s perception of the current environment can often shift with the latest information. As evidence of this, the Conference Board’s measure of consumer confidence dipped in January, mostly on a dampened mood about the current economic climate. The Conference Board cited higher gasoline prices as one explanation, but it was also clear that respondents were more worried about pocketbook issues than in the month before. Perhaps these thoughts crept into their spending habits, as well, with the government reporting personal spending unchanged in December. Even with higher personal income for the month, consumers opted to control their purchases. (We saw this in an earlier report, as well, suggesting that holiday spending was more lackluster than originally hyped.)

While much has been made of the fiscal challenges in Europe, the Congressional Budget Office (CBO) last week brought the domestic deficit problems back into focus with the release of its latest budget outlook through fiscal year 2022. Its baseline budget for FY 2012 is for a deficit of $1.08 trillion, with total deficits exceeding $3 trillion over the next 10 years. Under an alternate fiscal scenario, these deficits could add to nearly $11 trillion through FY 2022. In looking at this in-depth report, it is clear that budgetary discussions will need to focus on both discretionary and mandatory spending in the years ahead. For instance, defense spending is expected to fall from 4.7 percent of GDP to 3.0 percent in that time frame; meanwhile, entitlement spending (not including interest on the debt) will grow from $2 trillion to $3.5 trillion. Overall, CBO’s baseline analysis paints a picture in which economic growth will be modest at best and the nation’s fiscal budgetary challenges will only become more serious with time.

This week will be slower on the data front. The biggest number will come on Friday, with the release of new export data from the Census Bureau. Given the importance of trade to many manufacturers’ growth plans, we will look for an improvement in manufactured goods exports from the decline in November. In addition to international trade, we will also learn about labor turnover rates, new consumer sentiment data from the University of Michigan and wholesale trade information.

Chad Moutray is Chief Economist, National Association of Manufacturers.

This provision has garnered bipartisan, bicameral support as well as the support of the White House. The broad support is due in part to the fact that bonus depreciation allows manufacturers to write off the full cost of capital investments, e.g. plant machinery and equipment, in the year of purchase rather than over the depreciation life of the capital investment, which typically span 10 to 20 years.

Given our fragile economy, this provision gives a temporary boost to the customers who want to buy and the suppliers who want to manufacture capital equipment in the USA.  Jobs are maintained and created. Just ask small manufacturer Campbell Fittings of Boyertown, PA, about job creation related to this provision effective for past 2 years. Bonus depreciation drove his company’s decision to make more capital investments that resulted in hiring 40 new workers in the past 15 months to run the new equipment. If 100 percent bonus depreciation were extended through 2012, he plans to make more capital investments.  The new equipment allows his company to compete with foreign competitors. 

Today’s Wall Street Journal article “With Tax Break Corporate Rate is Lowest in Decades” was disingenuous in citing a price tag of $55 billion in each of the past two years for bonus depreciation.  Bonus depreciation is a timing issue, and as such, that means companies can write off the cost of a $100,000 piece of new machinery purchased this year and thus would not be taking depreciation for the next nine years for a typical piece of machinery.  

Kudos to Congress and the Administration in recognizing this private sector job creating provision given our abysmal unemployment rate exceeding 8 percent. Capital investments equal putting people back to work.

This new tax appeared during the debate on the Patient Protection and Affordable Care Act, as a way to help “pay for” the bill. The 2.3% tax will have the effect of raising the effective tax rates for medical device companies – over 80% of which are small businesses with fewer than 50 employees – forcing these companies to have to make tough decisions about how to fill the earnings lost to additional taxes.

At a time when so much of the conversation in Washington centers on the need to increase jobs, stimulate growth and encourage innovation, the imposition of this excise tax completely contradicts these messages. U.S. medical device manufacturers are the world-leaders and the imposition of this new tax will have the effect of making the industry less competitive and reducing capital to invest in new R&D, new technologies and new employees. With contradictory actions like these, praising the industry for its life-saving innovations while slapping a new tax on them, it’s no wonder that so many have expressed a lack of faith in what’s going on in Washington.

Perhaps though, a step could be taken in the right direction if Congress can pass legislation, pending in both the House and Senate, to repeal this innovation-stifling tax. H.R. 436 by Rep. Paulsen already has overwhelming support in the House with 227 cosponsors and there are two bills also pending in the Senate, S. 17 by Sen. Hatch with 19 cosponsors and S. 262 by Sen. Brown (MA) with two. It’s time for Congress to repeal this tax.

Carolyn Lee is NAM’s Senior Director of Tax Policy