Regulatory and Legal Reform

Washington, D.C. – Today, the National Association of Manufacturers, members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations launched Manufacturers for Sensible Regulations, a coalition addressing the impact of the current regulatory onslaught coming from federal agencies.

According to the NAM’s Q2 2023 Manufacturers’ Outlook Survey, more than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations, while more than 17% of manufacturers report spending more than 10,000 hours.

“President Biden and Congress have prioritized strengthening the manufacturing sector in America through historic legislation like the Bipartisan Infrastructure Law, the CHIPS and Science Act, initial permitting reform actions in the Fiscal Responsibility Act and even some energy provisions in the Inflation Reduction Act,” said NAM President and CEO Jay Timmons. “Unfortunately, the continued onslaught of regulations is having a chilling effect on investment, curtailing our ability to hire new workers and suppressing wage growth, especially for small and medium-sized manufacturers. The recently released regulatory agenda from the administration shows this barrage isn’t stopping.”

“Washington is creating tremendous doubt across our sector at a time when we’re still dealing with economic uncertainty. And the unbalanced regulations coming out of this administration threaten to undermine our ability to grow, compete and win on a global scale,” said American Cleaning Institute President and CEO, NAM board member and CMA Chair Melissa Hockstad. “We want President Biden’s manufacturing agenda to succeed. Unfortunately, we are seeing the signs that the regulatory agenda is jeopardizing the investments enacted over the past 18 months.”

“U.S. pulp and paper manufacturers recognize the need to address the challenges of our changing climate and share the administration’s goal to secure a more sustainable future,” said American Forest & Paper Association President and CEO Heidi Brock. “This can only be achieved by working with—not against—manufacturers to craft achievable and balanced regulations that address environmental challenges without threatening manufacturing jobs.”

“Manufacturers have proven to be extraordinarily resilient in recent years, leading Utah and the entire country coming out of the pandemic and through times of geopolitical turmoil,” said Utah Manufacturers Association President and CEO, NAM board member and COSMA Chair Todd Bingham. “But the regulatory agenda currently coming out of our nation’s capital has the potential to derail the gains we’ve made during this administration. We will work with our state partners and the White House to find solutions to help grow our sector in the most responsible way possible.”

The NAM survey also highlighted that only 67% of manufacturers are positive about their own company’s outlook, the lowest since Q3 2019. It shows the consequences of regulations: If the regulatory burden on manufacturers decreased, 65% of manufacturers would purchase more capital equipment, and more than 46% would increase compensation.

The group has been meeting with key members of the Biden administration and Congress to highlight the devastating impact of unbalanced regulations.

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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.

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With a membership including 260 national manufacturing trade associations representing 130,000 companies worldwide, the Council of Manufacturing Associations creates partnerships across the industry, amplifies manufacturers’ voices and connects members to experts and trade association executives. CMA members gain insights, share perspectives, form coalitions and ensure manufacturers have a strong voice in national policy.

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Members of the Conference of State Manufacturers Associations serve as the NAM’s official state partners and drive manufacturers’ priorities on state issues, mobilize local communities and help move federal policy from the ground up in all 50 states and Puerto Rico.

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.”

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.

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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

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.”

Washington, D.C. – Following the U.S. Supreme Court’s decision in Sackett vs. Environmental Protection Agency, National Association of Manufacturers Vice President of Energy and Resources Policy Brandon Farris released the following statement:

“The Supreme Court’s decision today will help put us on a path to regulatory certainty for manufacturers across the country as all the justices agreed that the EPA had overstepped its authority under the Clean Water Act. Manufacturers are committed to keeping our waters clean and demonstrating environmental stewardship, but Clean Water Act enforcement has been rife with ambiguities and inconsistencies, often allowing the EPA to overreach and attempt to regulate water—and even dry land—that is far beyond the scope of the law. 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.”

Background:

Previously, the NAM submitted multiple sets of comments regarding the 2015 WOTUS rule to better inform policymakers. In addition, the NAM supported the 2017 executive order instructing the EPA to rescind the rule, and the NAM Legal Center had been in active litigation against the rule starting in 2015. The legal battle included a unanimous victory for the NAM at the U.S. Supreme Court on a key procedural issue, and in 2019, federal judges invalidated the rule.

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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.

Washington, D.C. – Today, the National Association of Manufacturers filed a motion to intervene in National Center for Public Policy Research v. SEC, a case about the Securities and Exchange Commission’s authority to dictate the content of public company proxy ballots and the topics on which shareholders are required to cast votes. If granted intervenor status, the NAM will argue that the SEC’s rules requiring companies to include activist proposals on the proxy ballot violate federal securities law and the First Amendment. Following the filing of the motion to intervene, NAM Chief Legal Officer Linda Kelly released the following statement:

“Manufacturers are facing an onslaught of activists seeking to hijack the proxy ballot to advance narrow political agendas, and the SEC has become a willing partner in the effort. The corporate proxy ballot is not the appropriate venue for policy decisions better made by America’s elected representatives, and manufacturers are regularly caught in the middle as activists on the left and the right bring fights from the political arena into the boardroom. The NAM Legal Center is standing up for manufacturers to ensure they can focus on growing their businesses, driving economic expansion and job creation and creating value for shareholders.”

Background:

• Under SEC Rule 14a-8, public companies are required to include most shareholder proposals on their proxy ballot—proposals that in recent years have skewed increasingly toward social or political topics unrelated from a company’s business and its long-term value.
• The SEC evaluates company requests to exclude certain proposals from the ballot and increasingly requires companies to include and take a position on these proposals. For example, the NAM strongly opposed recent SEC guidance preventing companies from excluding proposals on environmental, social and governance topics of “broad societal impact”—irrespective of whether the proposal has any connection to the company’s operations.
• As intervenor in National Center for Public Policy Research v. SEC, the NAM would argue that the SEC cannot compel corporate speech, in violation of the First Amendment and federal securities laws, by forcing companies to include activist proposals on their proxy ballots.

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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.