It was encouraging to hear manufacturing figure prominently in President Barack Obama’s State of the Union address last month. He used the opportunity to announce executive actions on manufacturing innovation and federal job training. He also urged Congress to act on issues important to manufacturers such as tax and immigration reform.
How will Congress respond? Now that the budget is off the table, it’s time for lawmakers to get to work on a pro-manufacturing agenda that helps accomplish three goals: leveling the global playing field for American companies, improving access and support to programs that boost innovation, and providing education and training opportunities for students and job seekers in manufacturing.
Congress should build on bipartisan efforts underway that support manufacturing in several key areas.
Comprehensive Tax Reform
While our competitors in the developed world have made significant strides in lowering tax rates, the U.S. has done little to alleviate the tax burden on American businesses. In fact, it’s done the opposite. The haphazard way our tax policy is legislated and applied continues to be a lag on investment and hiring in an already sluggish economy. Congress should take this opportunity to build on the groundwork already laid by House Ways & Means Chairman Dave Camp and Senate Finance Chairman Max Baucus and pass comprehensive tax reform.
What’s on AMT’s wish list? Ultimately, taxpayers need a simpler system that lowers rates for most individuals and corporations. On the business side, any overhaul of the tax code should include moving to a territorial system of taxation, like most of our trading partners.
Our capital cost recovery system should also be updated to reflect the rapid pace of manufacturing technology innovation, with the goal toward full expensing of capital equipment. In the short term, Congress should improve and make permanent the R&D tax credit and the 2013 Sec. 179 expensing levels. Both of these provisions were allowed to expire last year despite having bipartisan support.
Meaningful Regulatory Reform
Manufacturers need a sound and predictable regulatory system that improves the working environment for businesses and employees. The process for promulgating regulations should be uniform across agencies, transparent to include all stakeholders, and based on cost/benefit analysis and measurable results.
The bipartisan Regulatory Accountability Act (S. 1029) is a step toward accomplishing these goals, with provisions that improve transparency and accountability. It also reduces costs by ensuring the best alternatives are considered and implemented.
Trade Promotion Authority (TPA)
The global market for manufactured goods is worth $11 trillion, and the vast majority of consumers live outside the United States. Trade agreements help build a fair and open trade environment that benefits American companies and workers.
The president’s authority to effectively negotiate these agreements expired in 2007. Congress should act now to pass the Bipartisan Congressional Trade Priorities Act (S. 1900/H.R. 3830),which would renew TPA for up to seven years, giving the United States a critical tool in negotiating market-opening trade agreements.
Support for Rapid Innovation
If the U.S. is to be a world-class competitor, the federal government must raise its game in nurturing a culture of innovation. Two bipartisan initiatives before Congress underscore a commitment to high-risk research and breakthrough innovation.
First, the America COMPETES Act, which supports many cutting-edge federal manufacturing technology R&D programs, should be reauthorized.
Second, Congress should pass the Revitalize American Manufacturing and Innovation Act (S. 1468/H.R. 2996), which creates a network of manufacturing innovation institutes modeled after America Makes, the pilot manufacturing innovation institute focused on additive manufacturing and 3D printing.
In just over a year, America Makes has become a model of public-private collaboration in manufacturing technology. The institute’s second project call has just been awarded, and AMT is proud to have several members working on new and existing projects.
A second institute was recently announced, along with plans for six new ones in 2014. These institutes will be funded with existing appropriations leveraged by partnering with industry and academic stakeholders to develop, implement, and train workers on high-tech manufacturing processes.
In his State of the Union, the president announced several key administration initiatives to prepare students and workers for jobs in the 21st century workplace. At AMT, we call this building our “Smartforce.”
These efforts are based on collaboration between elected officials, business leaders, schools, and philanthropists. Vice President Joe Biden will take the lead by initiating an across-the-board review of how to best reform federal training programs, identifying best practices to make our training programs more jobs-driven and strengthening the role of community colleges in this coalition of stakeholders.
AMT supports the Obama administration’s efforts to educate and train prospective manufacturing workers, and we urge Congress to build on the work being done.
Sensible Immigration Reform
Congress is on the verge of making history by approving immigration reform. The issue has widespread bipartisan support, and the momentum is there to reach a deal. A reasonable bill has already passed the Senate, addressing border security, a pathway to citizenship, and visas for highly skilled workers. House Republicans are working on their version that will most likely also include these provisions in one form or another. Let’s hope they can get the job done.
Jump-starting America’s manufacturing industry is the clear path toward sustainable economic growth, improved national security, and building a 21st century workforce. Congress has the responsibility of ensuring that a competitive manufacturing sector is at the top of our legislative agenda.
Above are just a few of the bipartisan initiatives currently under consideration that would improve the climate for manufacturing growth. Now it is up to Congress to act.
Amber Thomas is vice president of advocacy for AMT — The Association For Manufacturing Technology. Based in McLean, Va., AMT represents and promotes U.S.-based manufacturing technology and its members — those who design, build, sell, and service the continuously evolving technology that lies at the heart of manufacturing. For more, visit AMT’s website at www.amtonline.org.