General

New plans from internet providers are part of the Biden administration’s effort to increase access to broadband and reach more users, according to The Wall Street Journal (subscription).

What’s happening: “Twenty internet providers, including AT&T Inc. [and] Comcast Corp. … agreed to improve subsidized high-speed internet plans they offer to millions of unconnected households.”

• The move is part of the Affordable Connectivity Program that was launched as part of last year’s bipartisan infrastructure plan.
• The infrastructure plan allocated $14 billion to the program as part of the effort to bolster America’s broadband network.

The goal: The Affordable Connectivity Program has failed to reach most of its eligible subscribers because people most in need have no access to the internet and aren’t aware that they’re eligible for a major discount. An important part of the new plans is ensuring that they’re accessible to the most users.

• “Many of the companies, which cover more than 80% of the U.S. population, agreed Monday to either boost the internet speeds that they offer through the program or to cut their rates to $30 a month for low-income and other households that qualify.”

Who’s eligible: An estimated 48 million households are eligible for the subsidy. According to the Federal Communications Commission, about 11.5 million households have already signed up for the subsidy.

• The Biden administration has launched a new website, GetInternet.gov, to provide information to Americans about signing up for the subsidies.

The NAM’s view: The NAM has been a strong supporter of expanded access to broadband for years, citing its importance in the policy blueprint “Building to Win.”

Wyoming is partnering with Battelle Energy Alliance to “‘collaborate in the research, development, demonstration and deployment of advanced energy technologies and approaches,’” including nuclear power, according to The Casper Star-Tribune (subscription).

What’s happening: Wyoming Gov. Mark Gordon intends for the state to “establish a nuclear industry and a sophisticated and advanced manufacturing capacity using Wyoming uranium, Wyoming technology and Wyoming workers,” according to a statement.

• Wyoming is the chosen home for the planned Natrium project, an advanced nuclear reactor to be developed by TerraPower.
• Battelle operates the Idaho National Laboratory.

Memorandum of understanding: A five-year memorandum of understanding between the Wyoming Energy Authority and the Idaho National Laboratory “specifies 14 shared areas of interest,” many of which are related to nuclear and hydrogen power.

Common goal: “According to the memorandum, the shared target is to ‘collaboratively develop a path to global leadership in a carbon-constrained economy ’ and place the state ‘at the forefront’  of the advanced energy sector.”

Owing to Beijing’s “Covid Zero” policy, China’s economy may be facing slowed growth that mimics a recession, according to The Wall Street Journal (subscription).

What’s happening: “Millions of new graduates are struggling to find a job. Business confidence has fallen. Imports have plummeted, and nervous Chinese are socking away more savings.”

• Purchasing manager indices released last weekend by China’s government showed contractions in factory and service-sector activity for April, the second straight month of declines.
• Also dropping are cement production, smartphone shipments and intra-country sales of excavators.
• Youth unemployment is reported at 16%.

Beyond lockdowns: Fallout from the war in Ukraine has increased costs for Chinese businesses and led to less demand for China’s exports.

• Meanwhile, “[r]eal estate, a primary driver of the nation’s economy, went into free fall last year as developers buckled under heavy debts and home sales slumped.”

Why it matters: Long-term slowdowns in China are felt internationally.

• “China was projected to account for a quarter of global economic growth in the five years through 2026, according to data released by the International Monetary Fund last year.”

How to fix it: Loosened “Covid Zero” policies, which have hamstrung supply chains and kept consumers home, would be likely to jumpstart a partial recovery, according to the Journal.

• However, “Chinese officials are pledging to get the economy back on track, without abandoning their tough Covid-control policies. President Xi Jinping … has called for an all-out campaign to rev up growth through more infrastructure spending.”

As most of the world grapples with inflation, China is facing deflation that could push it into “an economic trap,” according to The Wall Street Journal (subscription).

What’s going on: “Prices charged by Chinese factories that make products ranging from steel to cement to chemicals have been falling for months. Consumer prices, meanwhile, have gone flat, with prices for certain goods—including sugar, eggs, clothes and household appliances—now falling on a month-over-month basis amid weak demand.”

• China’s economy is growing, but slowly, and the government recently announced a series of stimulus programs to help.

Parallels with Japan: While most economists see China avoiding a prolonged recession, some “see alarming parallels between China’s current predicament and the experience of Japan, which struggled for years with deflation and stagnant growth” in the 1990s, following collapses in stock market and real estate value.

• If Japan’s fate were to befall China, the latter would face another hurdle: the usual methods for combating these problems would be either unpopular or toothless “due to the country’s heavy debt load.”

​​​​​​​ A mixed bag: A long period of lower prices in China could help bring down inflation elsewhere in the global economy, including the U.S.

• But … “[a] deflationary spell in China would also likely mean weaker Chinese demand for food, energy and raw materials, which big chunks of the world rely on for export earnings.”

Effects of uncertainty: And the longer that prices fall and stay down, the more entrenched deflation becomes—making debts “harder to bear and profits and incomes fall. Companies shed workers to fatten shrinking margins.”
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Manufacturing job openings inched down in June, U.S. Bureau of Labor Statistics data showed, and manufacturers continued to see business challenges in July, according to the ISM® Manufacturing Purchasing Managers’ Index®.

What’s going on: Open positions in the manufacturing sector declined approximately 4.28%, to 582,000 in June from 608,000 in May. Meanwhile, economic activity in the manufacturing industry declined for the ninth month in a row in July.

• While the Manufacturing Purchasing Managers’ Index was 46.4 in July, up from 46.0 in June, any number under 50 indicates contraction.
• In employment, durable goods job openings decreased to 356,000 in June from 379,000 in May. In nondurable goods, openings fell to 226,000 from 229,000 in the same period.

The details: New orders (up to 47.3 from 45.6) and production (up to 48.3 from 46.7) declined more slowly in July, according to the ISM®.

• However, employment fell to 44.4 from 48.1, and exports declined to 46.2 from 47.3.

Hiring: Manufacturing’s net hiring—hires minus separations—in June was 6,000, the same as the pace in May.

• Job openings in the sector remained above pre-pandemic levels.

A new Commerce Department office tasked with dispensing tens of billions of federal funding for domestic semiconductor manufacturing faces a challenging job, according to Roll Call.

What’s going on: “The experts at the CHIPS program office are charged with enticing the world’s largest chipmakers to the U.S. to fashion cutting-edge semiconductors used in weapons and supercomputers, as well as in more ordinary devices like thermostats. The goal is to break the dependence that many American manufacturers of missiles, spy satellites, telecom gear and medical devices have on suppliers primarily based in Taiwan and South Korea.”

• Congress allocated $52 billion for the effort last year.

Why it’s important: “Deploying taxpayer funds and the federal government’s power puts the department and the CHIPS office in a unique position of executing a novel industrial policy: one focused on both national security as well as economic well-being, and one that is expected to back manufacturing plants as well [as] research and development efforts.”

• In recent decades, the most successful U.S. industrial policy interventions have been similar to this one: funding for “high-risk, high-reward” R&D, according to a Peterson Institute study cited by Roll Call.

Making it count: Sens. Mark Warner (D-VA) and John Cornyn (R-TX) are adamant that the money must be doled out judiciously.

• “This is not an economic proposition,” Sen. Cornyn said. “It’s obviously important from an economic standpoint, but national security is the main reason why Sen. Warner and I undertook the legislation.”

​​​​​​​​​​​​​Keen interest:  The new office has received more than 400 statements of interest from semiconductor manufacturers. Preliminary applications will be accepted starting in September.

• Top chipmakers, including Intel and others, “have indicated they may invest as much as $400 billion in the U.S. provided they get some support from the government.”
• Six expert teams will review the applications and decide on the amounts each firm will receive. National security experts will weigh applications based on companies’ security measures and supply chain resiliency capabilities.

The NAM says: “Bolstering domestic chip manufacturing is a security and economic imperative for the U.S.,” NAM Director of Domestic Policy Julia Bogue said.

• “That’s why the NAM supported passage of the CHIPS and Science Act and continues to advocate for actions that will see the U.S. manufacturing more semiconductors.”

The House Financial Services Committee has spent the last month holding hearings about environmental, social and governance policies that impact American businesses—and the NAM has been fighting for manufacturers every step of the way. This week, the committee held a markup to pass a package of legislation on the topic, and the NAM’s priorities were front and center.

The issue: Manufacturers in the U.S. are at the forefront of climate stewardship and innovation even as they power the U.S. economy, yet politically motivated activists and proxy advisory firms are making it difficult for manufacturers to succeed.

• Recent actions from the U.S. Securities and Exchange Commission have empowered these groups. From unworkable ESG disclosure mandates to new standards encouraging shareholder activism to a lack of oversight of proxy firms, manufacturers are getting squeezed.

NAM in action: The NAM has advocated aggressively on behalf of manufacturers, pressing Congress to curb the impact of activists, proxy firms and the SEC on public company governance.

• NAM President and CEO Jay Timmons urged Congress to make changes that would protect manufacturers and Main Street investors, while NAM Managing Vice President of Policy Chris Netram testified before the Financial Services Committee about the need for action.
• “Congress must step in to depoliticize the business decisions that impact the lives and life savings of millions of Americans,” said Timmons. “Manufacturers are determined to create jobs, lead the economy and improve the quality of life for all Americans. We are counting on [Congress’] leadership to counter the SEC’s regulatory overreach and help us achieve these goals.”

Read the full story here.

Regulatory inertia on self-driving cars is putting manufacturers in the U.S. at a disadvantage, but Congress can help by expanding automakers’ ability to test and ultimately sell the vehicles, industry advocates said at a House Energy and Commerce Committee hearing Wednesday, according to ABC News.

What’s going on: “Currently [automated vehicle] manufacturers can deploy a maximum of 2,500 self-driving vehicles for testing, provided they have permission from the National Highway Traffic Safety Administration. AV advocates have complained that the limits represent a bottleneck that is holding back the growth of the industry at a crucial time.”

What’s being requested: One of the bills considered during Wednesday’s markup is an updated version of a 2017 measure on AV regulations that passed the House but stalled in the Senate.

• AV advocates point to data that shows reports of accidents involving these cars are exaggerated and the cutting-edge safety technology can be more reliable than human drivers in avoiding crashes.
• The issue of liability in case of an accident, however, remains a major point of contention in legislative progress. “Each one of these [crashes] is still going to be subject to a plaintiff’s lawyer, an insurance company and a defense lawyer,” Rep. Kelly Armstrong (R-ND) said. “And until we’ve figured that out, this is just a science project.”

Safety data: An analysis of the first 1 million miles of AV use by Cruise AV—the self-driving vehicle unit of General Motors—showed the cars to have a significantly better safety record than human drivers, CEO Kyle Vogt said on an earnings call this week.

• There were 54% fewer collisions and 92% fewer crashes in which the AV was at fault, Vogt said.

The last word: “The expansion of AVs into our national transportation system is an opportunity to lead by enhancing safety on our roadways, improving transportation mobility and increasing efficient goods movement across our strained supply chains,” said NAM Director of Transportation Policy Ben Siegrist.

• “Manufacturers are on the cutting edge of vehicle technology research and development, and improving the federal regulatory landscape is a necessary step to grow the American AV industry into a global economic engine.”

The Senate voted overwhelmingly to create a Nuclear Fuel Security Program aimed at bolstering U.S. supplies of enriched uranium, according to the Senate Committee on Energy and Natural Resources.

What’s going on: On Thursday, the Senate voted 96–3 to include Sen. John Barrasso’s (R-WY) Nuclear Fuel Security Act amendment in next fiscal year’s National Defense Authorization Act.

• The “[a]mendment … directs the Department of Energy (DOE) to prioritize activities to increase domestic production of low-enriched uranium (LEU) for existing reactors and accelerate efforts to ensure the availability of high-assay, low-enriched uranium (HALEU) for advanced reactors,” according to the committee press release.
• The bipartisan measure was introduced in February by Sens. Barrasso, Joe Manchin (D-WV) and Jim Risch (R-ID); in May, it was passed by voice vote.

Why it’s important: Most of the advanced nuclear reactor concepts set to come online in the next few years require HALEU—and Russia is the only viable commercial supplier, according to E&E News’ ENERGYWIRE (subscription).

• “Russia now supplies 24% of our enriched uranium imports,” Sen. Barrasso said before the committee on Thursday. “We spend nearly $1 billion each year on Russian uranium. Russia uses these revenues to fund its invasion of Ukraine. Here in America, we have the resources to fuel our own reactors. My amendment authorizes the Department of Energy to take the steps necessary to expand U.S. nuclear fuel production.”

​​​​​​​The NAM’s role: The NAM has strongly advocated for the development of nuclear energy, which will play a critical role in U.S. energy security and decarbonization efforts.

• As NAM President and CEO Jay Timmons told Congress in June, “Nuclear energy can help the U.S. generate more clean energy, stabilize our grids and improve our energy security.”

The Federal Reserve on Wednesday raised interest rates to their highest level in more than two decades, according to NBC News.

What’s going on: The central bank increased the target range for the federal funds rate by 25 basis points to 5.25% to 5.5%, the highest level since 2001.

Why it’s important: “Though consumer prices have declined for 12 straight months, in June, consumer prices increased 3% year on year. Even though that’s the lowest the annual inflation rate has been in more than two years, it’s still too high for the Fed, which is looking to wrestle increases down to about 2%.”

• “Supercore” inflation, which excludes shelter, gas and food costs, has remained at the 4% annual rate—far too high for the Fed’s liking—for more than two years.
• The bank’s aim in raising interest rates is to make borrowing and investing costlier, reducing demand for labor, goods and services in the economy.

Recession revision: “After Wednesday’s interest rate announcement, [Federal Reserve Chairman Jerome Powell] affirmed the central bank no longer expects a recession to occur as a result of the increases, adding that it could bump up the key interest rate even further.”

The challenge: U.S. workers are relying on the Fed to “balanc[e] unemployment and inflation. … The Fed believes it can slow the economy to reduce inflation without causing people to lose their jobs en masse.”