Will Manufacturing Win?

By: Mark Shortt, Design-2-Part

Many issues are at stake as the 2012 U.S. Presidential election approaches. Both candidates for President–the incumbent Pres. Barack Obama and the presumptive Republican nominee Mitt Romney–know that a healthy and growing U.S. manufacturing sector is vital to the success of the U.S. economy. But only time will tell whose leadership will better enable American manufacturers to thrive.

No matter whom you’re supporting, the election will help set the stage for a good deal of political confrontation and, perhaps, compromise on many important policy issues over the next four years. For manufacturers, the question is not so much “Who will win the election?” as it is “Will manufacturing win?”

The answer will depend not just on who’s elected President, but on the composition of the House of Representatives and the Senate. Most important, it will hinge on how well the two houses can work together to craft policies that will support manufacturers by lightening corporate tax burdens (especially for companies that are bringing manufacturing operations back to the U.S.), increasing the available pool of qualified workers, strengthening our nation’s resources for research, development, and innovation, and eliminating unfair international trade practices.

But in order for manufacturing to win, both houses of Congress will need to work together more effectively to enact legislation that has been shown to have wide public support. An example is H.R. 639, the Currency Reform for Fair Trade Act, a bipartisan bill that would “crack down on Chinese currency manipulation by giving the United States the power to respond appropriately to unfairly subsidized exports from countries,” such as China, according to a statement released last September by the office of Senator Sherrod Brown (D-OH), who co-authored the Senate version of the bill with Senator Olympia Snowe (R-ME). The bill seeks to “amend title VII of the Tariff Act of 1930 to clarify that countervailing duties may be imposed to address subsidies relating to a fundamentally undervalued currency of any foreign country.”

The bad news is that the bill, which has languished in the House since being introduced in February 2011, has only a “2% chance of being enacte,” according to GovTrack.us, an online tool for following legislation in the United States Congress. All told, only about 5% of the 11,553 bills and resolutions currently before Congress are expected to become law.

“The good news is that it (H.R. 639) cleared the Senate last year, which is a huge hurdle because it required 60 votes, and there was an impressive majority that supported it, including about 15 Republican senators,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM), in an interview with D2P. “So it overcame the Senate hurdle, which is not an insignificant hurdle. In the House of Representatives, we have a lot of co-sponsors of this legislation. The only reason that it hasn’t come up for a vote is that the House leadership has been unwilling to schedule it yet.

“Now, here’s where I think it gets interesting,” Paul continued. “Mitt Romney has made China’s currency a pretty significant issue in the campaign and he said, ‘On Day One of my Administration, I will name China as a currency manipulator.’ That is something that this Administration has been unwilling to do so far. My only question to Mitt Romney, and we’ve posed this in a number of ways, is ‘Why wait for Day One of your Administration? You can get the Republican majority in the House of Representatives to pass this thing. And it would pass; it would pass with 300 votes if they brought this bill up and put it back on the President’s plate there.”

Getting H.R. 639 out onto the floor of the House should be the first priority for rectifying the nation’s trade imbalance. “I think that sends a clear signal to China that we’re not messing around,” said Paul. “If you look at the Yuan-dollar exchange rate this year, it’s actually deteriorated; it hasn’t moved in the right direction. So I think that it would also send a clear signal to China that we’re not going to tolerate China exporting its way out of its current ‘weakness,’ because if it does that, it’s going to harm employment in the United States.”

Business people throughout the U.S. have been thinking a great deal this year about the possible impacts–both positive and negative–that public policies could have on their companies. To get a sense of where manufacturers stand on issues ranging from taxation and trade policy to workforce skills training and growth (investment) incentives, D2P surveyed its readers–American manufacturers large and small. We asked questions such as “What public policies would you like to see enacted to aid the growth of product manufacturing businesses, whether they are small, medium, or large companies?” The most common answers included preferences for lower business taxes, as well as tax incentives for investments in plant and equipment; creation of an equal playing field in international trade; and the creation and expansion of workforce skills training programs that can help eliminate the shortage of skilled workers available for today’s advanced manufacturing job openings.

The survey results were reinforced by the findings of a bipartisan national poll commissioned earlier this year by AAM, which confirmed that voters see manufacturing as “the irreplaceable core of a strong economy.” Conducted between June 28 and July 2 by the Mellman Group and North Star Opinion Research, the poll found voters saying that creating jobs, specifically in manufacturing, and strengthening manufacturing in the U.S., are top economic priorities. According to AAM, voters rate manufacturing as the industry “most important to the overall strength of the American economy” and support a national strategy to restore America’s global leadership in manufacturing. On trade with China, the poll also found that voters emphatically support tough action in response to cheating on currency and other trade obligations.

“It’s striking how clearly voters–Republican and Democrat alike–see strengthening manufacturing as the key to rebuilding the U.S. economy,” said Paul. “These findings make clear that a strong majority of voters believe Washington should stand up to China’s unfair trade practices, and that there is overwhelming support for a national strategy to restore U.S. leadership in manufacturing.”

How You Can Help Manufacturing Win
You can do your part to help strengthen U.S. manufacturing by contacting your senators and representatives in Congress. Below is a sample letter that you can email to your representative using the following link: www.house.gov/representatives/find/. Another way to contact your representative is through www.opencongress.org/. Click on “Contact Congress” and go from there. It will bring you to www.opencongress.org/about/version3, where you can write a letter to all of your members of the U.S. Congress.

Dear Representative (name):

Strengthening the U.S. manufacturing industry–the industry most important to the overall strength of the American economy–is a top economic priority. A national strategy to restore America’s global leadership in manufacturing is essential. I, as a voter and a manufacturing professional, ask that you please work to enact policies that strengthen U.S. manufacturing in the following ways:

  • Provide tax credits for companies that reshore
  • Make permanent the Research & Development Tax credit to support innovation
  • Expand the tax credit for capital investments
  • Impose trade tariffs and enact a trade policy that effectively combats foreign      mercantilist practices
  • Expand tax cuts for small businesses
  • Reduce the corporate tax rate
  • Reduce unnecessarily restrictive regulations on small businesses
  • Encourage businesses and schools to team up and develop new talent to fill high-tech manufacturing jobs


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