Regulatory and Legal Reform

The NAM is standing up for manufacturers in courtrooms nationwide. Funded by voluntary contributions from NAM members, the NAM Legal Center is the leading voice for manufacturers in the courts, promoting manufacturing interests by reining in regulatory overreach, protecting vital manufacturing priorities and litigating on behalf of manufacturers across the United States.

As part of that work, the Legal Center brings the powerful voice of manufacturing into ongoing cases and helps shape the legal environment for the entire sector. That’s where the Legal Center’s Amicus Program comes in.

What it does: The Legal Center’s Amicus Program is focused on supporting NAM members in their litigation—whether they are pushing back against harmful rules that are impacting their operations or defending themselves in lawsuits with broader implications for the manufacturing sector.

The wins: The Amicus Program has achieved a series of critical wins for manufacturers in recent months, including the following:

• Save Jobs USA v. DHS: The Legal Center helped turn back an anti-immigration challenge in the District of Columbia, thus preserving the ability of H-4 visa-holders to work in the U.S. The victory protected manufacturing employees and their families, along with employers and the health of the overall economy.
• Brown v. Saint-Gobain Performance Plastics Corporation: The Legal Center successfully pushed back against an effort to invent a new type of legal claim for so-called “medical monitoring” that would have forced the company to compensate individuals with no current injuries. The victory protected manufacturers from unpredictable and potentially unbounded liability in New Hampshire and avoided setting a dangerous precedent that other states might follow.
• PhRMA v. Williams: The Legal Center effectively blocked an attempt by the state of Minnesota to force manufacturers to provide their products for free in a lawsuit against an insulin manufacturer. By helping defeat this effort, the NAM helped protect property rights for businesses in every sector.
• CRA v. City of Berkeley: The Legal Center stood with manufacturers in Berkeley, California, who faced a backdoor ban on gas appliances in new construction. The victory averted a regulatory patchwork and safeguarded appliance manufacturers.

The last word: “The breadth of the subject matter shows how expansive and effective the Legal Center is,” said Michael Tilghman of the NAM Legal Center. “Our national Amicus Program is addressing issues before federal and state courts ranging from government overreach to high-skilled immigration and product liability—and manufacturers can be confident that we have their backs.”

Contact us: As a member-driven program, the Legal Center pursues cases that are important to NAM members, whether they’re a party in the case or the case will have an important impact on manufacturing. To share potential opportunities for our involvement, email Tilghman at [email protected].

Manufacturers are becoming increasingly concerned about the unprecedented number of unbalanced, unworkable regulations being handed down by federal agencies, according to the NAM’s Q2 2023 Manufacturers’ Outlook Survey.

• Sixty-five percent reported that if regulatory burdens were reduced, they would purchase more equipment; more than 46% said they would pay their workers more.
• Over sixty-three percent said they spend more than 2,000 hours complying with federal regulations.

Also notable: Other key conclusions from the quarterly analysis, which was conducted from May 18 to June 1, 2023, include:

• Sixty-seven percent of manufacturers reported being positive about their company’s outlook, a decrease of more than 11% since Q1 (74.7%) and the lowest in nearly three years.
• Seventy-five percent of manufacturers polled said comprehensive permitting reform would help their businesses, allowing them to hire more employees, expand their operations and/or boost wages.

Persistent challenges: As they have in the past three surveys, manufacturers this quarter again cited attracting top talent as their number-one workforce challenge (74.4%).

• The next biggest hurdles reported were a weaker U.S. economy (55.7%), rising health care or insurance costs (53.1%), an unfavorable business climate (52.1%), increased raw materials costs (50.8%) and supply chain challenges (44.9%).

The last word: “Congress and the administration have taken bold steps to support manufacturing in the United States,” NAM President and CEO Jay Timmons said.

• “But the positive effects of tax reform, the Bipartisan Infrastructure Law and the CHIPS and Science Act are being undermined by the growing regulatory burden. The unrelenting barrage of regulations threatens to undermine manufacturers’ competitiveness. If the administration’s regulatory onslaught continues, its manufacturing agenda will fail. Unfortunately, we are seeing the signs of exactly that happening.”

The Save Our Gas Stoves Act—which is expected to pass the House in the near future, though it has been temporarily blocked due to an argument over the debt ceiling—would prevent the Department of Energy from moving forward with its overly stringent efficiency threshold for gas stoves.

That would be a win for reining in DOE overreach, but work remains in the fight against a regulatory onslaught by the agency. The NAM and its association partners are leading the way.

What’s going on: Since January, the DOE has undertaken an unprecedented slew of regulations aimed at home appliances—and if implemented, these measures would yield little in the way of energy savings for consumers and result in appliances that cost more.

• They would pile on the costs for manufacturers, too—more than $2.5 billion, according to the DOE’s own estimates, in a package of standards that could go into effect as early as 2027.
• “There are currently nine open rules [from the DOE] on appliance products that have very little energy savings for the consumer while they have really significant cost to the industry,” said Association of Home Appliance Manufacturers Vice President of Communications and Marketing Jill Notini, whose organization isurging consumers to call on Congress to support the Save Our Gas Stoves Act.

The background: Under the Energy Policy and Conservation Act, the DOE is required to review appliance-efficiency standards every six years—but it’s not required to tighten them, Notini said, adding that the last time reviews were done for gas cooking appliances, the agency opted against making any changes.

Higher costs for all: These new DOE standards would significantly raise production costs for manufacturers while reducing features, performance and affordability for consumers, according to AHAM calculations based on DOE data.

• Consumers would save just $1.51 a year in energy costs, or 12.5 cents a month.

Too tight: It’s no surprise, then, that the proposed standards are so stringent as to make almost all on-the-market gas ranges noncompliant, Notini said.

• According to the DOE’s own technical analysis, 96% of gas cooking appliances would fail to meet the proposed efficiency threshold.
• The standards would have a significant effect on consumers, too. Redesigned gas stoves would only be able to have a single high-input burner, increasing the amount of time it would take to boil water or cook a meal, Notini said.

Washing machines: Another recently proposed DOE regulation requires that washing machines use almost 25% less water and cooler water temperatures, a restriction that would also hit consumers hard.

• The point-of-purchase price tag for washing machines would increase $150 per washer—while saving consumers just $7.85 a year, according to the DOE.
• Inflation has become a major concern for consumers across income segments, but particularly among low- to middle-income households, which will see the biggest impact from the proposed standard, Notini pointed out.

The last word: “Manufacturers rely on regulatory clarity and certainty. Unfortunately, DOE’s proposals only add to the regulatory onslaught manufacturers are currently facing,” said NAM Director of Energy and Resources Policy Chris Morris.

• “The NAM remains committed to working with all federal agencies, including the DOE, to ensure that rules and regulations are practical and feasible and do not harm manufacturers.”

Washington, D.C. – The National Association of Manufacturers released its Manufacturers’ Outlook Survey for the second quarter of 2023, which reveals manufacturers’ mounting concerns over the onslaught of unbalanced federal regulations and the threat that poses to sustaining manufacturing investment, job creation and wage growth.

“Congress and the administration have taken bold steps to support manufacturing in the United States. But the positive effects of tax reform, the Bipartisan Infrastructure Law and the CHIPS and Science Act are being undermined by the growing regulatory burden. The unrelenting barrage of regulations threatens to undermine manufacturers’ competitiveness. If the administration’s regulatory onslaught continues, its manufacturing agenda will fail. Unfortunately, we are seeing the signs of exactly that happening,” said NAM President and CEO Jay Timmons.

Currently, the NAM is engaged actively on nearly 100 regulations that have been proposed or announced by 30 different agencies.

Key Survey Findings:

• Only 67% of manufacturers are positive about their own company’s outlook. This is down from 74.7% in Q1, making it the lowest since Q3 2020, and before the pandemic, the lowest since Q3 2019.
• If the regulatory burden on manufacturers decreased, 65% of manufacturers would purchase more capital equipment, and more than 46% would increase compensation.
• More than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations.
• If Congress were to enact comprehensive permitting reform, simplifying and speeding up the approval process for new projects, 75.1% of manufacturers say it would be helpful, allowing their company to hire more workers, expand business and/or increase wages and benefits.
• The top challenges facing manufacturers include attracting and retaining a quality workforce (74.4%), weaker domestic economy (55.7%), rising health care/insurance costs (53.1%), unfavorable business climate (52.1%), increased raw material costs (50.8%) and supply chain challenges (44.9%).

You can learn more at the NAM’s online regulatory action center here.

The NAM releases these results to the public each quarter. Further information on the survey is available here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.90 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org

The Save Our Gas Stoves Act—which is expected to pass the House in the near future, though it has been temporarily blocked due to an argument over the debt ceiling—would prevent the Department of Energy from moving forward with its overly stringent efficiency threshold for gas stoves.

That would be a win for reining in DOE overreach, but work remains in the fight against a regulatory onslaught by the agency. The NAM and its association partners are leading the way.

What’s going on: Since January, the DOE has undertaken an unprecedented slew of regulations aimed at home appliances—and if implemented, these measures would yield little in the way of energy savings for consumers and result in appliances that cost more.

• They would pile on the costs for manufacturers, too—more than $2.5 billion, according to the DOE’s own estimates, in a package of standards that could go into effect as early as 2027.
• “There are currently nine open rules [from the DOE] on appliance products that have very little energy savings for the consumer while they have really significant cost to the industry,” said Association of Home Appliance Manufacturers Vice President of Communications and Marketing Jill Notini, whose organization is urging consumers to call on Congress to support the Save Our Gas Stoves Act.

The background: Under the Energy Policy and Conservation Act, the DOE is required to review appliance-efficiency standards every six years—but it’s not required to tighten them, Notini said, adding that the last time reviews were done for gas cooking appliances, the agency opted against making any changes.

Higher costs for all: These new DOE standards would significantly raise production costs for manufacturers while reducing features, performance and affordability for consumers, according to AHAM calculations based on DOE data.

• Consumers would save just $1.51 a year in energy costs, or 12.5 cents a month.

Too tight: It’s no surprise, then, that the proposed standards are so stringent as to make almost all on-the-market gas ranges noncompliant, Notini said.

• According to the DOE’s own technical analysis, 96% of gas cooking appliances would fail to meet the proposed efficiency threshold.
• The standards would have a significant effect on consumers, too. Redesigned gas stoves would only be able to have a single high-input burner, increasing the amount of time it would take to boil water or cook a meal, Notini said.

Washing machines: Another recently proposed DOE regulation requires that washing machines use almost 25% less water and cooler water temperatures, a restriction that would also hit consumers hard.

• The point-of-purchase price tag for washing machines would increase $150 per washer—while saving consumers just $7.85 a year, according to the DOE.
• Inflation has become a major concern for consumers across income segments, but particularly among low- to middle-income households, which will see the biggest impact from the proposed standard, Notini pointed out.

The last word: “Manufacturers rely on regulatory clarity and certainty. Unfortunately, DOE’s proposals only add to the regulatory onslaught manufacturers are currently facing,” said NAM Director of Energy and Resources Policy Chris Morris.

• “The NAM remains committed to working with all federal agencies, including the DOE, to ensure that rules and regulations are practical and feasible and do not harm manufacturers.”

As banks tighten their lending standards in response to turmoil in the industry, it’s small businesses that are suffering, according to The Wall Street Journal (subscription).

What’s going on: “Some entrepreneurs are finding it more difficult to get a new loan or have had existing credit lines cut. Others report stricter terms, higher borrowing costs, longer waits and tougher questions from their bankers.”

Not your imagination: Close to half of all banks reported having tightened their lending standards in the past three months, according to a Federal Reserve Board survey cited by the Journal.

• “The median interest rate for a variable-rate, small-business term loan was 7.44% in the fourth quarter, the last period for which data is available, up 3.42 percentage points from a year earlier, according to the Federal Reserve Bank of Kansas City. Banks have continued to raise rates this year in response to Federal Reserve rate increases,” one source told the newspaper.

​​​​​​​Why it’s important: More stringent loan rules are forcing smaller companies—which tend to borrow from small banks—to put off or cancel expansions and consider bringing in equity investors.

• “‘The alternative to borrowing from your local small bank is another form of financing that is going to be notably more expensive,’ said Goldman Sachs chief U.S. economist David Mericle.”
• Some banks are telling small businesses to seek Small Business Administration loans, which “carry a government guarantee” but tend to have higher interest rates than their conventional counterparts.

The last word: “Manufacturers—particularly small and medium-sized firms—are closely following developments related to access to credit, with an eye on the tightening of lending standards that were occurring even before the recent banking crisis,” said NAM Chief Economist Chad Moutray.

• “Businesses need credit to be able to expand their operations, and any pullback in that access could have consequences.” ​​​​​​​

Advanced nuclear reactors got some good news Wednesday when a measure to speed their development and deployment passed the Senate Environment and Public Works Committee, according to E&E News’ GREENWIRE.

What’s going on: “The ‘Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act,’ S. 1111, passed 16-3, with Chair Tom Carper (D-Del.) and ranking member Shelley Moore Capito (R-W.Va.) leading the effort to revitalize American leadership on nuclear energy.”

What it would mean: Through a series of awards, the bill would encourage companies to develop advanced-reactor technology. In addition, it would seek approval easing for reactor projects on brownfield sites, land that is underused or has been abandoned because of industrial waste.

• “The proposal would also give the Nuclear Regulatory Commission, the nation’s chief nuclear regulator, additional authorities to increase hiring. Lawmakers say current staffing is not enough to effectively deal with the high number of applications for new reactors.”
• And it would supplement “early licensing work” to deploy the reactors more quickly “at critical national security infrastructure sites.”

The bill passed in the House Wednesday to raise the nation’s debt limit and avert a default makes some of the most significant revisions to U.S. environmental law in years, “potentially accelerating new renewable-energy investments championed by the Biden administration,” according to The Wall Street Journal (subscription).

What’s going on: The Fiscal Responsibility Act, which boosts the U.S. debt ceiling until after the 2024 presidential election and now heads to the Senate, includes several energy infrastructure-related moves.

• Expedites permitting for MVP: The legislation hastens permitting for the Mountain Valley Pipeline, an Appalachian natural-gas project that would bring affordable energy to the Mid- and South Atlantic regions.
• Shortens timelines: It also “tightens the scope of environmental reviews required under the National Environmental Policy Act of 1970 and allows more projects to win approval without having to undergo the most complex types of reviews. It also sets time limits of no more than two years to complete the studies.”
• Streamlines processes: In addition, the bill assigns review of each project to one federal agency rather than multiple agencies and allows infrastructure undertakings “to piggyback on existing reviews for similar projects rather than starting from scratch.”

“Unlocking resources”: Rep. Garret Graves (R-LA), who joined NAM President and CEO Jay Timmons at the recent NAM Competing to Win Tour stop in Harahan, Louisiana, and who wrote a previous measure from which the Fiscal Responsibility Act drew, said the legislation is “all about unlocking America’s resources.” This is a point the NAM has long stressed to Congress, too.

• On Tuesday, after the NAM consistently applied pressure on lawmakers to reach a deal, Timmons urged the House to pass the measure, citing its ability “[t]o strengthen manufacturing in our nation, reach our industry’s full potential and outcompete other nations like China” through permitting reforms.
• Bureaucracy and red tape hamstring plans for critical infrastructure, resulting in “yearslong delays on energy projects, making them unfeasible. The most rigorous type of review takes an average of 4½ years to complete, according to the White House,” the Journal reports.

Something we can all agree on: “‘We see an enormous amount of demand for new clean energy projects that are being held up,’ said Sasha Mackler, who directs the energy program at the Bipartisan Policy Center. ‘That reality has brought Republicans and Democrats together here.’”

The debt ceiling bill finalized on Sunday—and set to go to a vote in the House this evening—includes meaningful permitting reform measures, according to E&E News (subscription).

What’s going on: The legislation would approve the Mountain Valley pipeline and enact changes to the National Environmental Policy Act.

• In addition, “a one-year deadline would be placed on the production of environmental impact assessments for new energy projects seeking permits. A two-year maximum would be applied for environmental impact statements.”
• “The agreement would also expand an existing program to expedite federal permitting for infrastructure projects, known as Fast-41.”
• And last, though the bill will not include provisions for a large-scale transmission buildup, it will call for a study of grid challenges and recommendations that might fix them.

The NAM says: NAM President and CEO Jay Timmons commended policymakers on reaching an agreement:

• “Manufacturers have been a leading voice for permitting reform, so we are encouraged that this legislation takes critical steps to improve our broken permitting system, helping us more fully leverage our domestic energy sources and expand manufacturing in the United States.”
• “We will work with Congress and the administration to build on this progress and create a comprehensive bipartisan permitting reform package that also helps unlock the full potential of laws meant to encourage the growth of manufacturing in America, such as the historic infrastructure law and the CHIPS and Science Act.”

The bigger bill: In case you missed it, the debt legislation as a whole would suspend the borrowing limit for the next two years, while also making some spending cuts, according to The Wall Street Journal (subscription).

• “It would cut spending on domestic priorities favored by Democrats while boosting military spending by about 3%. It also would extend limits on food assistance to some beneficiaries to prod them to find jobs.”

NAM in the news: Timmons’ statements on the debt-limit agreement were picked up by CNN Business and The Hill.

In its Sackett v. EPA ruling yesterday, the Supreme Court handed a victory to congressional Republicans and others who believe the Biden administration’s revised Waters of the United States rule is overly broad, according to E&E News’ Greenwire (subscription).

What’s going on: By unanimous vote, “the court found that EPA and the Army Corps of Engineers wrongfully claimed oversight of the wetland on the Sacketts’ property—located about 300 feet from Idaho’s Priest Lake—and that federal courts had erred in affirming the agencies’ jurisdiction.”

• “The ruling could complicate the Biden administration’s legal defense of its new definition of which wetlands and streams qualify as ‘waters of the U.S.,’ or WOTUS, subject to Clean Water Act permitting.”
• The Sacketts have been prohibited from building on their property for more than 15 years because of the wetlands designation and oversight claims.

Why it’s important: The decision—in which “[t]he court said the EPA can only assert jurisdiction over wetlands that have continuous surface connection to navigable waters, rejecting a more expansive view proposed by the EPA,” according to The Wall Street Journal (subscription)—will give much-needed regulatory certainty to manufacturers, which have been caught in limbo over the unclear and changing WOTUS definition.

The NAM says: The court’s ruling “put[s] us on a path to regulatory certainty for manufacturers across the country,” NAM Vice President of Energy and Resources Policy Brandon Farris said.

• “This case demonstrates yet again why manufacturers and our economy need a sensible Waters of the United States proposal that provides clarity and certainty and allows the industry to continue leading the way on environmental protection. The EPA should heed the court’s ruling and revise its latest WOTUS proposal.”