Tax

Key House Committees this week advanced pro-manufacturing provisions that will make up the “one big, beautiful bill” that President Trump and House Republicans are advancing through the congressional reconciliation process—bringing the package another step closer to a vote.

What’s going on: The House Ways and Means Committee advanced legislation to make permanent crucial tax measures from the 2017 tax reform bill, while the House Energy and Commerce Committee approved a bill with much-needed permitting reform and energy provisions.

NAM in the driver’s seat: The NAM has been leading the campaign to extend and make permanent pro-manufacturing tax policies. Each of the NAM’s tax priorities was included in the legislation approved by the Ways and Means Committee—along with additional pro-manufacturing provisions. In advance of the markup, the NAM made clear that the bill “will protect manufacturers from devastating tax increases and empower the industry to invest, grow and create jobs here in the United States.”

• Manufacturers were top of mind for policymakers during the session. In his opening statement, Ways and Means Committee Chairman Jason Smith (R-MO) cited the testimony of Courtney Silver—president and owner of North Carolina–based family-owned precision machining firm Ketchie and a member of the NAM Executive Committee—as an example of the benefits of the 2017 tax reform.

Ways and Means: NAM priorities featured in the Ways and Means bill include:

• Tax certainty for small and family-owned manufacturers, including a permanent increase in the pass-through deduction and permanent individual tax rates and protections from the estate tax;
• Revived investment and innovation incentives for R&D, capital equipment purchases and debt financing, with additional support for small and medium-sized manufacturers and a new incentive for factory construction and refurbishment; and
• The preservation of the corporate tax rate and tax reform’s international tax system.

Ahead of the successful markup of the tax legislation, the NAM emphasized that failing to preserve these provisions “will cost the U.S. economy nearly 6 million jobs.”

Energy and Commerce: The NAM’s priorities were also front and center at a markup of the Energy and Commerce Committee, which has jurisdiction over the health, energy and technology provisions in the reconciliation package. The NAM voiced support for several key manufacturing priorities in the legislation, including:

• Pharmacy benefit manager reforms that will increase transparency and prevent PBMs from driving up health care costs for manufacturing workers;
• Permitting reforms that will allow for the buildout of much-needed pipeline and energy transportation infrastructure; and
• Provisions to rebalance burdensome environmental regulations that have harmed manufacturers’ ability to grow.

The NAM also welcomed the committee’s recognition that regulations should support manufacturers’ development and use of artificial intelligence—rather than slowing progress via “a patchwork of divergent state laws and regulations.”

How to add more rocket fuel: The NAM also offered suggestions to improve the bills, highlighting potentially harmful changes to strategic manufacturing incentives in the tax code—including ending the hydrogen production tax credit, imposing overly harsh restrictions on manufacturing and energy production regarding foreign sourcing and licensing which will keep manufacturers from bringing back supply chains and know-how to America, and ending credit transferability—as well as a provision targeting foreign headquartered manufacturers investing in the U.S.

• The NAM emphasized that manufacturers have used these targeted energy and manufacturing incentives to invest billions and employ thousands across the country.

What’s next: The committees’ bills will now be combined by the House Budget Committee in advance of a House floor vote in the coming weeks.

The bottom line: NAM President and CEO Jay Timmons underlined   the importance of this bill on NewsNation this morning. “If we really want to supercharge our economy and provide the rocket fuel that the president’s talked about in the past … [We have] to get [these tax provisions] reenacted. … [The] longer we wait, the harder it is for businesses to make decisions based on tax policy for 2026, so we want to see Congress move this really expeditiously so we can plan for investment and job creation in the next few years, too.”

• “[T]he priorities I believe that we all need to embrace are making sure that we are investing in creating new facilities for manufacturing, growing jobs and, most importantly, growing wages. That leads to a much more productive and successful society.”
• “There are some things that the House didn’t do that we hope the Senate does to ensure that we have the ongoing investments for energy infrastructure and other energy projects here in the United States,” he added.
• Policymakers’ main priority should be “policies [that] encourage businesses to invest here, to make it possible for them to invest here and to create jobs here,” he concluded.