Manufacture This

The blog of the Alliance for American Manufacturing

It’s a new day on Capitol Hill, as Republicans picked up at least 10 seats in the Senate to gain majority control. Even as the votes were still being counted, many prominent GOP leaders were already discussing the need to end partisan gridlock in Washington and address some of the nation’s most pressing issues.

We’re here to help. We put together a to-do list for the 114th Congress, highlighting key places where lawmakers can work across the aisle and advance policy to support American manufacturing and increase job growth.

Tackle America’s Infrastructure Crisis. Few issues attract more bipartisan support than infrastructure investment, and that’s because Congress realizes that in a strong economy, manufacturers and other businesses need an efficient, reliable transportation network to get their goods into the market. Federal infrastructure investment returns 21,671 jobs per $1 billion, and each dollar spent yields $3.54 in economic impact. Infrastructure investment is good public policy and there is a bipartisan chorus of members pushing for action. Yet, as our transportation network ages and congestion increases, Congress’ “kick the can down the road” approach to investment in recent years has been making matters worse – harming global competitiveness and forgoing upwards of a million new jobs. Current funding under a short-term “patch” expires in May 2015, but Congress shouldn’t wait until then to agree on a long-term solution. This is an issue that could be taken up in the coming weeks of the lame duck session. Tackling America’s infrastructure crisis should be a top priority and will put upward of 2.5 million Americans to work while boosting competitiveness among our trading partners.

Keep it Made in America. “No more outsourcing” was heard loud and clear on the campaign trail, as voters continued to be disappointed by seeing their hard-earned tax dollars spent on Chinese steel and other foreign components for major infrastructure projects. With an eye on creating more U.S. manufacturing jobs, members in both parties will continue to build upon existing Buy America preferences to ensure that public investments in our roads, bridges, rail, and other infrastructure are truly American-made. There are also important opportunities to help businesses and workers upgrade their capacity and capabilities, so that short-term market limitations never stand in the way of building American-made infrastructure.

Tax Reform Should Encourage, Not Punish, Manufacturing. Corporate tax reform can make America more prosperous by creating or enhancing policies that encourage American manufacturing. A key to achieving prosperity and growth is to ensure that manufacturers are able to quickly recover the costs of their capital investments, have the flexibility to weather the natural ups and downs of the business cycle, and have the certainty to locate production in the U.S. for the long-term. However, there are ill-advised plans put forward in Congress to eliminate deductions and credits used by the manufacturing sector as a means of lowering tax rates for other sectors, such as Wall Street. The tax code must recognize the critical role manufacturing plays in our economy or we will see another wave of factory jobs lost as a consequence of ill-founded public policy. Fortunately, there are many members in both parties who recognize the critical importance of having a balanced economy – one that encourages investments in factories and workers here in America, rather than abroad.

Deter and Penalize China’s Currency Manipulation. The new GOP-controlled Congress should continue to press the Obama administration to pressure trade cheats such as China to play by the rules and allow market forces — like hard work, productivity and innovation — to determine winners and losers. Republicans in Congress, and even the last GOP Presidential nominee, have supported taking more decisive action to crack down on China’s currency manipulation, which artificially makes China’s exports cheaper and our products more expensive. Yet, the Treasury Department continues to avoid this issue and is now zero for 12 in even naming China as a currency manipulator – despite eager 2008 campaign promises to the contrary by then-Sen. Obama. It’s time to put an end to currency manipulation. Congress should immediately take up and pass bipartisan legislation to deter and penalize countries that manipulate their currency in order to gain an artificial trade advantage over American products.

Open Foreign Markets, but Enforce the Rules. Trade agreements and trade policy have enormous impacts on the flow of goods and the location of production and jobs. As Congress and the President consider the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), additional trade pacts, and Trade Promotion Authority (TPA), extra attention must be given to America’s manufacturing sector, which is still recovering from staggering job losses and plant closures, much of which has been the direct result of our government’s unwillingness to stop unfair trade practices. Opening foreign markets to U.S. goods is a good thing. But for trade to be fair, there needs to be a strong set of rules on issues such currency manipulation, competition with state-owned enterprises, and rules of origin. These rules need to be strictly enforced, and trade agreements should not be a venue to negotiate away Buy America laws that have been passed by Congress with overwhelming bipartisan support.

Foster Innovation. American competitiveness depends on the ability of manufacturers to innovate, adopt, and produce next-generation technologies and products. Facilitating the transfer of new technologies and techniques to U.S. manufacturers and fabricators is critical to our nation’s long-term economic success. Bipartisan legislation from Sens. Sherrod Brown (D-Ohio) and Roy Blunt (R-Mo.) would establish a National Network of Manufacturing Innovation (NNMI) to leverage resources of industry, academia, federal agencies, and other stakeholders to bridge the gap between basic research and product development in America. The House version of the Revitalize American Manufacturing and Innovation Act — sponsored by Rep. Tom Reed (R-N.Y.) – has already seen action, but has yet to cross the finish line in the Senate, making it ripe for action either in the lame duck session or in the next Congress.