August 6, 2011

LABOR DEPARTMENT ISSUES SURPRISINGLY UPBEAT NUMBERS ON JOBS
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Job gains occurred in manufacturing, mining, health care and retail trade. Click to continue

MERGERS & ACQUISITIONS HOT IN SECOND QUARTER
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In the transportation and logistics industry, M&A's jumped nearly 15% in the second quarter of 2011 compared to the same period of 2010. Click to continue

UNEMPLOYMENT RATE DIPS
Today in Manufacturing
Hiring picked up slightly in July and the unemployment rate dipped to 9.1 percent, an optimistic sign after worst day on Wall Street in nearly three years ... continue

FOCUS: NAM-SUPPORTED DEBT CEILING BILL SETS STAGE FOR FURTHER DEFICIT REDUCTION
NAM Capital Briefing
After months of debate and weeks of negotiations, Congress and President Obama reached an agreement to raise the debt ceiling at the eleventh hour. Congress sent the final legislation to the White House on Tuesday, August 2—the day of the deadline. The President signed the bill into law the same day.

The Budget Control Act of 2011 (S. 365) raises the debt ceiling, prevents the nation from defaulting on its financial obligations and clears the path for additional deficit reduction. The bipartisan compromise also calls for a two-part deficit reduction plan that provides at least $2.1 trillion in deficit reduction over the next 10 years.

Under the agreement, $917 billion in savings in discretionary spending over 10 years is effective upon enactment. The plan also calls for Democratic and Republican leaders in both chambers to name an equal number of members to a bipartisan 12-member "Super Committee," composed of six senators and six representatives, by August 16. This panel faces a tight timetable. It must hold its first meeting by September 16 and is charged with approving recommendations for up to $1.5 trillion in additional deficit reduction by November 23.

The committee's recommendations—which can include cuts in discretionary and mandatory spending—are guaranteed an up or down vote in both houses by December 23. If the committee does not agree on at least $1.2 trillion in deficit reduction or if the committee's recommendations are not approved by Congress, a broad sequestration process is triggered. Specifically, the plan calls for across-the-board spending cuts of up to $1.2 trillion in discretionary and mandatory spending divided equally between defense and nondefense spending over 10 years beginning in fiscal year 2013. The agreement also calls for votes in the House and Senate on a balanced budget amendment to the Constitution.

In outlining the NAM's support for S. 365 in key vote letters to the House and Senate, the NAM's Senior Vice President for Policy and Government Relations Aric Newhouse said, "The Budget Control Act puts us on a path toward addressing our nation's fiscal crisis over the long term. Moving forward, manufacturers are committed to working with policymakers in addressing our nation's fiscal challenges to ensure a pro-growth, pro-competitiveness, pro-manufacturing economy, with the recognition that some programs are critical to our nation's economic and national security."

Twenty years ago, it cost about $1.3 trillion to run our government. Today, it costs nearly three times that—an estimated $3.4 trillion this year. Our budget deficit this year is projected to be about $1.5 trillion; we are borrowing 44 cents for every dollar we spend from future generations. This kind of deficit spending is not sustainable and already has begun to threaten long-term economic growth. Given the historically high level of the federal deficit, it is imperative that policymakers look both at real and immediate spending cuts and structural changes that address the long-term deficit.

The NAM continues to urge Congress and the President to avoid taking steps that would stifle economic growth. They must eschew the easy political choices and instead opt for a plan that upholds our nation's priorities and puts us on a path toward a strong, growing economy. Our nation's unemployment rate for June was 9.2 percent, and July's unemployment rate is due Friday.

Unfinished business awaits lawmakers when they return to Washington in September. The three free trade agreements—with Panama, Colombia and South Korea—are still pending after four years of delay. Job-killing regulations from the Environmental Protection Agency (EPA) and the National Labor Relations Board (NLRB) threaten manufacturers' competitiveness. And the uncertainty of a permanent R&D tax credit and potential tax hikes hinder job creation. Please click here to visit our August Recess Action Center, which highlights how to engage members of Congress during this time and support a robust manufacturing sector.

HOUSE INTRODUCES NEW LEGISLATION TO COMBAT EPA OVERREACH
NAM Capital Briefing
A bipartisan group of House lawmakers on July 28 introduced legislation to address another unachievable Environmental Protection Agency (EPA) air quality regulation. Reps. John Sullivan (R-OK) and Mike Ross (D-AR) are the main sponsors of the Cement Sector Regulatory Relief Act (H.R. 2681), which would protect the cement industry from these costly regulations. The bill addresses three rules that specifically impact Portland Cement manufacturing facilities, including the Cement MACT rule, regulations tied to commercial and industrial solid waste incineration units and regulations on non-hazardous secondary materials. According to estimates from the Portland Cement Association, these rules could cost over $5.4 billion, put thousands of high-paying manufacturing and construction jobs at risk and may cause the shutdown of 18 plants. H.R. 2681 directs the EPA to simplify the rules to develop achievable and workable standards. The NAM supports this legislation, and urges the introduction of similar legislation in the Senate.

NAM COMMENTS ON THE EPA'S COSTLY UTILITY MACT PROPOSAL
NAM Capital Briefing
The NAM will file comments today on the EPA's proposed Utility MACT rule, which will require the installation of emission control technologies—in particular, scrubbers—by many coal-fueled power plants. The costs for the electric sector to comply with the two rules are projected to be a staggering $18 billion per year, and average retail electricity prices nationwide will rise by 11.5 percent. Heavy manufacturing states such as Ohio can expect prices to rise by approximately 23 percent. As users of approximately one-third of the energy consumed in the United States, manufacturers are extremely concerned with the EPA's proposal. The NAM is urging the EPA to slow promulgation of the rule and extend the timeframe for compliance.

EPA TAKES UP SOLID WASTE REGULATIONS
NAM Capital Briefing
The EPA has issued a notice for input (NOI) on municipal waste with a 30-day comment period. The agency is considering adding construction and demolition materials and non-hazardous industrial materials to its annual report on municipal solid waste. This NOI was published a few weeks after the EPA's proposed regulation on revising the Definition of Solid Waste (DSW). The proposed rule focuses on amending certain exclusions from the current definition for hazardous secondary materials. If the revision is adopted, these secondary materials will start being regulated under Subtitle C of the Resource Conservation and Recovery Act (RCRA) and would affect numerous industries that re-use these secondary materials. Further information can be found here. The NAM will be developing and circulating comments on both the NOI on municipal waste as well as the proposed rule on the DSW.

CONGRESS PASSES PRODUCT SAFETY RELIEF, MORE WORK REMAINS
NAM Capital Briefing
In response to the onerous requirements of the Consumer Product Safety Improvement Act (CPSIA), the House and the Senate passed H.R. 2715 on Monday, August 1, to provide relief to certain manufacturing sectors impacted by the three-year-old law. The President is expected to sign the bill before new strict lead limits take effect on August 14. The bill passed the House by a 421-2 margin and the Senate unanimously. It applies the new lead limits prospectively from the time of manufacture and not from the time of sale—meaning retailers will not need to dispose of safe products on the shelf. H.R. 2715 includes an exclusion from lead limits for ATVs, dirt bikes, bicycles and printed materials and provides for additional exemptions based on functional purpose by application. The new law directs the Consumer Product Safety Commission (CPSC) to seek public comment on ways to reduce the burden and cost associated with third-party testing requirements. It also includes a third-party testing exception for small batch manufacturers and does not require third-party testing for phthalates that are inaccessible. Finally, the bill includes modest changes to the consumer product safety database, saferproducts.gov, and creates new procedures for when the CPSC receives notice of materially inaccurate information appearing on the database. While this legislation is an important first step in providing relief to manufacturers, more reform is needed to remove unnecessary and unforeseen burdens imposed by the 2008 law.

SENATE TO CONSIDER PATENT REFORM LEGISLATION IN SEPTEMBER
NAM Capital Briefing
The day before senators left Washington for the August recess, Majority Leader Harry Reid (D-NV) announced that the America Invents Act (H.R. 1249) will be the first legislation the Senate considers when it returns in September. The NAM supports the America Invents Act and key-voted the legislation when it was considered by the House in July. The NAM is urging all senators to support the House-passed bill without amendments so that this job-creating legislation reaches the President's desk and becomes law as quickly as possible.

NAM CUSTOMS AND BORDER TASK FORCE COLLABORATING WITH CBP
NAM Capital Briefing
The NAM Customs and Border Task Force met on Tuesday, August 2, to discuss a new information-sharing pilot project with U.S. Customs and Border Protection (CBP). Maria Luisa O'Connell, senior advisor for trade and public engagement at the CBP, provided a briefing about several new initiatives at the CBP and outlined the pilot project. Over the next six months, the NAM will identify three priorities each month and help shed light on emerging issues within the business community. In turn, the CBP will respond with updates and actions taken to address those priorities.

PENDING FTAS ON THE AGENDA FOLLOWING AUGUST RECESS
NAM Capital Briefing
Given the focus on resolving the debt ceiling, Congress was unable to advance the three pending free trade agreements (FTAs) with Colombia, Korea and Panama and Trade Adjustment Assistance (TAA) before the start of the August recess. However, on Wednesday, August 3, Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) released a joint statement announcing they had reached agreement on a path forward for TAA and the FTAs. House Speaker John Boehner (R-OH) and House Ways and Means Committee Chairman Dave Camp (R-MI) also released statements indicating that House Republicans agreed to the plan and timeline announced by the Senate leaders. As a result, the NAM expects the three FTAs and TAA to move forward in September.

NAM ENCOURAGES PRAGMATIC APPROACH ON CONFLICT MINERALS
NAM Capital Briefing
Last week, House Financial Services Committee Chairman Spencer Bachus (R-AL) and three members of Congress wrote to the Securities and Exchange Commission (SEC) to ask that it take a practical approach to implementing the Dodd-Frank conflict minerals provision by providing a temporary "indeterminate origin" category so that companies subject to the legislation do not have to file expensive and inconclusive reports to the SEC while the necessary information is unavailable. The NAM has been actively pressing the SEC to take this pragmatic approach and has encouraged Congress to weigh in with the SEC to this end.

DEMS: LONG-TERM JOBLESS COULD DERAIL RECOVERY
Today in Manufacturing
Unemployment remains high at just over 9 percent, but alarming number of long-term jobless is causing fresh concern for Democratic lawmakers ... continue

RETAILERS SEE SOLID SALES GAINS IN JULY
Today in Manufacturing
Retailers are reporting solid sales gains for July as deep discounts and sweltering heat drove shoppers to air conditioned malls ... continue

APPLICATIONS FOR UNEMPLOYMENT BENEFITS FALL
Today in Manufacturing
The number of Americans seeking unemployment benefits dipped last week, a sign the job market may be improving slowly ... continue

FACTORY ORDERS DROP AGAIN
Today in Manufacturing
Businesses cut back on orders for airplanes, autos and heavy machinery in June, lowering demand for factory goods for the second time in three months ... continue

CHINA ISN'T SATISFIED WITH U.S. DEBT DEAL
Quick Manufacturing News
In a blistering commentary, China's official news agency says the deal did nothing to curb America's addiction to borrowing. Click to continue