Policy and Legal

Several last-minute regulatory actions by the outgoing Biden Treasury Department are “clear example[s] of regulatory overreach” that should be withdrawn immediately, the NAM told the Biden administration recently.

What’s going on: The Treasury Department has proposed new guidance and regulations that, if finalized, would change the IRS’s treatment of related-party transactions, particularly as they relate to partnerships.

• The proposed standards would impose significant reporting obligations on manufacturers while also drastically changing the tax treatment of these commonplace payments.
• Additionally, Treasury has proposed new rules governing “dual consolidated losses” that would make it more difficult for manufacturers operating in multiple jurisdictions around the world to utilize their tax losses appropriately.

Why it’s problematic: The proposed standards are outside Treasury’s statutory authority and are “unlikely to withstand inevitable judicial scrutiny,” the NAM told the agency at the end of 2024.

• In December, the NAM laid out the legal issues endemic to Treasury’s proposals, identifying both substantive and process-related issues that undermine each action.
• The submission builds on manufacturers’ comments to the agency on the proposals themselves: The NAM said in July that the related-party guidance was “wholly unauthorized, unsupported and unsupportable” and in August told the agency that the related-party rules “would impose an undue burden on taxpayers that outweighs any potential compliance benefit.”
• It added in October that the dual consolidated loss proposal was “internally inconsistent” and “fail[ed] to reflect reasoned decision-making.”

Regulatory onslaught: The NAM has been at the forefront of pushing back on the Biden administration’s regulatory onslaught, which costs manufacturers upward of $350 billion every year.

• Shortly after the 2024 presidential election, the NAM led a group of more than 100 manufacturing associations in urging the incoming Trump administration to “address burdensome regulations that are stifling investment, making us less competitive in the world, limiting innovation and threatening the very jobs we are all working to create right here in America.”

What’s next: The NAM is calling on the Biden Treasury Department not to finalize these proposals in the administration’s final days, but rather to pause or withdraw the rules in question until the Trump administration takes office.
​​​​​​​

Washington, D.C. – Following the publication of new final guidance by the U.S. Department of Treasury for the hydrogen production tax credit, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“America leads when we unleash all our energy potential, including hydrogen, American natural gas, nuclear and more. With a strong build-out of hydrogen production facilities, we will be able to add more sources of reliable energy for manufacturers, power plants and communities while cementing our energy dominance.

“The NAM has advocated consistently for flexibility in the credit using project-specific emissions data rather than national or regional averages. The Biden administration’s guidance provides manufacturers with an important step forward. But for hydrogen to truly become a game-changing energy source, we need to address restrictions that make it harder to cost-compete on a global scale. A robust and flexible hydrogen industry will also be a major boon to the production and utilization of American natural gas as well as American nuclear power.

“Under President Donald Trump’s leadership, we have an opportunity to cut taxes, slash red tape and unleash permitting reform—turning this credit into a powerful tool for American energy leadership and fuel security. It’s time to build on this momentum and ensure these incentives deliver on their full promise for America’s manufacturers, workers and economy.”

-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 $2.91 trillion to the U.S. economy annually and accounts for 53% 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.

Manufacturers support the policy recommendations laid out in the House of Representatives’ newly released report on artificial intelligence, the NAM said Tuesday.

What’s going on: The Bipartisan House Task Force Report on Artificial Intelligence contains AI-related recommendations for implementation by Congress.

• Drafted by the House AI Task Force—12 Republicans and 12 Democrats—the 273-page document “highlights America’s leadership in its approach to responsible AI innovation while considering guardrails that may be appropriate to safeguard the nation against current and emerging threats,” the task force’s co-chairs, Reps. Jay Obernolte (R-CA) and Ted Lieu (D-CA), wrote in a letter to House Speaker Mike Johnson (R-LA) and House Minority Leader Hakeem Jeffries (D-NY) at the beginning of the report.

The details: The task force report includes many recommendations that the NAM supports, including the following:

• Promote innovation: “As the global leader in AI development and deployment, the United States is best positioned to responsibly enable the potential of this transformative technology for all. To maintain this leadership and enable the U.S. economy to harness the full benefits of AI, policymakers should continue to promote AI innovation.”
• Safeguard against harm: “A thoughtful, risk-based approach to AI governance can promote innovation rather than stifle it.”
• Plan for power needs: “Planning properly now for new power generation and transmission is critical for AI innovation and adoption.”
• Develop an AI-ready workforce: “Successful collaborations between educational institutions, government and industries should effectively align education and workforce development with market needs and emerging technologies.”
• Protect privacy: Congress should “[e]nsure privacy laws are generally applicable and technology-neutral.”
• Make compliance feasible: Lawmakers should ensure that AI regulatory compliance is not unduly burdensome for small businesses
• Increase cooperation: Bolster collaboration between the government, industry and academia to boost innovation and expand markets.

NAM alignment: In May, the NAM released “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” its own report on AI’s deployment in the manufacturing sector and an accompanying list of suggested policy actions for Congress to take.

• The NAM briefed legislators on its report in September.

Next steps: The NAM will work closely with policymakers in Congress and the incoming administration to bolster AI innovation in manufacturing, based on shared policy goals.   

Additionally, manufacturers will continue to call on Congress to pass federal data privacy legislation that “preempt[s] state privacy regulations [and] resolve[s] conflicting requirements in different states”—an important issue for the use of AI where the House report does not prescribe a policy solution.

The NAM is urging President Trump to reconsider the Biden administration’s misguided findings regarding new liquefied natural gas export permits, following the release of a Department of Energy study claiming that increased permit numbers would have negative effects on the nation.
 
What’s going on: The Department of Energy’s analysis, released Tuesday, holds “that ‘unfettered’ shipments of the fuel would make domestic prices rise … [and would] displace more renewables” (E&E News).

• However, the “report from Energy Secretary Jennifer Granholm is clearly a politically motivated document designed for an audience who believes no form of carbon-based energy is acceptable,” NAM President and CEO Jay Timmons said. “LNG exports play a crucial role in reducing emissions by providing cleaner energy alternatives to countries reliant on higher emission sources.”   

What the ban’s done: The result of the Biden administration’s moratorium—issued in January—on the issuance of new U.S. LNG export permits has been “chilled energy investment, costing the country manufacturing jobs and holding us back from achieving energy dominance on the world stage,” Timmons continued.

• “The DOE’s report claims to be concerned about security, but the actions of this administration on LNG only serve to incentivize Europe to purchase natural gas from Russia.”  

A popular, key energy source: U.S. LNG is far cleaner than Russian LNG (House Energy and Commerce Committee). Furthermore, an October study by the NAM and PwC found that U.S. LNG is a significant and crucial contributor to gross domestic product, as well as an important source of jobs and federal, state and local taxes.

• What’s more, Americans want to keep exporting it. In a March NAM poll of 1,000 registered voters, more than 87% said they believe the U.S. should continue to export LNG.   

The bottom line: “The data is clear: LNG exports are a driving force for economic growth and job creation in the United States,” Timmons concluded. “Halting LNG export licenses as suggested would threaten nearly a million jobs and undermine our nation’s economic stability. The NAM asks President Trump to end this political war on the energy manufacturers that power our economy, fuel job growth and help ensure America’s national security.” 

Washington, D.C. – Following the release of Congress’ year-end government funding package, National Association of Manufacturers President and CEO Jay Timmons released the following statement on the inclusion of pharmacy benefit manager reforms:

“Manufacturers commend House Speaker Mike Johnson, committee leadership and reform champions for their work on a government funding package that tackles rising health care costs via important PBM reforms. The NAM has long championed congressional efforts to rein in PBMs, underregulated middlemen that increase health care costs for manufacturers and manufacturing workers. The government funding package released today will increase transparency into these powerful actors, ensure they pass rebates on to patients and plan sponsors and delink their compensation from drug costs. These are vital steps toward lowering Americans’ health care costs—the top business challenge facing manufacturers, according to the most recent Manufacturers’ Outlook Survey—and Congress should act swiftly to pass this package of much-needed reforms.

“Although permitting reform was not included in the final package, we are confident that President Donald Trump will continue to focus on the urgent need to enact comprehensive permitting reform. We look forward to working with incoming Senate Majority Leader John Thune, Speaker Johnson and their colleagues in congressional leadership to ensure manufacturers can build a more prosperous nation.”

-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 $2.91 trillion to the U.S. economy annually and accounts for 53% 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. – The National Association of Manufacturers today responded to the Department of Energy’s report on liquefied natural gas exports and highlighted the harmful impact of the DOE’s misguided attempts to restrict new LNG export terminals.

A comprehensive study conducted by the NAM, in collaboration with PwC, reveals that robust LNG export operations could support more than 900,000 jobs, contribute up to $216 billion to U.S. GDP and generate $46 billion in tax revenue by 2044. Furthermore, the LNG sector supports approximately 222,450 jobs, resulting in $23.2 billion in labor income, and contributes $43.8 billion to the national GDP.

“Today’s report from Energy Secretary Jennifer Granholm is clearly a politically motivated document designed for an audience who believes no form of carbon-based energy is acceptable. LNG exports play a crucial role in reducing emissions by providing cleaner energy alternatives to countries reliant on higher emission sources,” said NAM President and CEO Jay Timmons.

“The result of the LNG export ban that has been in place since January is chilled energy investment, costing the country manufacturing jobs and holding us back from achieving energy dominance on the world stage. The DOE’s report claims to be concerned about security, but the actions of this administration on LNG only serve to incentivize Europe to purchase natural gas from Russia.

“The data is clear: LNG exports are a driving force for economic growth and job creation in the United States. Halting LNG export licenses as suggested would threaten nearly a million jobs and undermine our nation’s economic stability. The NAM asks President Trump to end this political war on the energy manufacturers that power our economy, fuel job growth and help ensure America’s national security.”

-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 $2.91 trillion to the U.S. economy annually and accounts for 53% 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

In its current form, the Environmental Protection Agency’s recent proposal to add specific per- and polyfluoroalkyl substances and PFAS categories to a database of toxic chemicals would place an unnecessary hardship on manufacturers, the NAM told the agency recently.
 
What’s going on: In October, the EPA published draft rules that would add 16 individual PFAS and 15 PFAS categories representing more than 100 individual PFAS to its Toxic Release Inventory, a list of potentially hazardous chemical release and waste management activities taking place in the U.S.

• Companies producing or manufacturing products with chemistries added to the TRI are required to complete and submit inventory forms each year for the chemicals they make and use over established limits.
• “The NAM believes this proposed rule will create unduly burdensome compliance requirements and increase costs for manufacturers and consumers as written,” NAM Vice President of Domestic Policy Chris Phalen said this month.

What should happen: The EPA should “adopt the following approaches to the proposed rulemaking”:

• Stay the proposal to give the public more time to comment on it.
• Revise the proposed PFAS and PFAS category additions to reflect “a meaningful baseline of scientific evidence” and ensure that “the scientific evidence justifying the listing[s] [is] supported by peer review and public comment.”
• List individually every PFAS added to the TRI and make each one identifiable.
• Narrow the group of PFAS listed as “chemicals of special concern” to reflect the scope of authority granted to the EPA by the fiscal year 2020 National Defense Authorization Act.

Why it’s important: “While the EPA estimates this proposed rule would result in up to 1,110 TRI reporting forms annually at an estimated cost of up to $6.6 million for its first year and up to $3.1 million for subsequent years, we anticipate the compliance costs to manufacturers will be significantly higher,” Phalen continued.

• If finalized as written, the rule will force manufacturers to hire additional workers and consultants, train employees on proper reporting processes, spend huge sums of money on testing and verifying results and much more.
• The result: “a costly drain on [manufacturers’] resources … [that] will lead to a rise in operational and production costs far above the EPA’s cost estimates for the proposed rule.”

Washington, D.C. – Today, the National Association of Manufacturers, along with more than 100 manufacturing associations, sent a letter to President Donald Trump laying out a roadmap for regulatory actions across a wide range of agencies that would boost the manufacturing economy and put a stop to the regulatory onslaught that is costing manufacturers $350 billion each year.

Manufacturers have made the case that unbalanced, unworkable regulations severely impact our ability to grow and create jobs. Today’s letter lays out specific steps the new administration can take to reverse the trend of federal agency overreach—providing much-needed regulatory certainty to manufacturers and empowering the industry to continue to make the long-term investments that drive job creation, growth and economic competitiveness here in the United States.

The letter states, in part:

Dear President-elect Trump,

Right now, regulations are strangling our economy. Manufacturers are shouldering enormous regulatory compliance costs—nearly $350 billion annually, or 12% of our entire sector’s contribution to U.S. GDP. For smaller manufacturers with fewer than 50 employees, these costs can exceed $50,000 per employee each year. This means that a small manufacturer with just 20 employees pays $1 million per year to comply with federal regulations—rather than investing those funds in raises or new jobs.

The regulatory onslaught reached a fever pitch during the Biden administration. Prior to the election, the National Association of Manufacturers surveyed the industry and found a significant decline in optimism among manufacturers, with an unfavorable business climate, particularly taxes and regulations, cited as a primary business challenge by more than 60% of respondents.

You have the opportunity to tackle this challenge by addressing burdensome regulations that are stifling investment, making us less competitive in the world, limiting innovation and threatening the very jobs we are all working to create right here in America.

The letter highlights more than three dozen regulatory actions the Trump administration can take to support manufacturing growth, including the following:

• Liquefied Natural Gas Export Ban: On Day One of your administration, lift the pause on LNG exports through an updated national interest assessment.
• Permitting Reform: Appoint an official within your administration to help coordinate policies across the executive branch to ease the permitting burden. Specifically, your administration should start by prioritizing a reconsideration of the “NEPA Phase 2 Rule” and the current implementation of the permitting reform provisions of the Fiscal Responsibility Act.
• National Ambient Air Quality Standards for Particulate Matter and Ozone: Reconsider and relax the Biden administration’s NAAQS for PM2.5 rule and maintain both the primary and secondary standard for the NAAQS for ozone rule at 70 parts per billion.
• Power Plant Rules: Replace the Environmental Protection Agency’s rule for existing coal-fired and new natural gas–fired power plants with workable standards.
• Proxy Advisory Firms and the Proxy Process: Rescind Staff Legal Bulletin 14L and end the politicization of the proxy process. Additionally, enforce and preserve the 2020 proxy advisory firm rule while taking steps to build on its reforms with additional policies modeled on the Securities and Exchange Commission’s 2019 proposal.

To view the full letter and list of regulations, click here.

Background:

In 2023, the NAM, along with members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, launched the Manufacturers for Sensible Regulations coalition to address the impact of the regulatory onslaught coming from federal agencies.

An NAM-commissioned analysis on the cost of federal regulations to the U.S. economy shows the following:

• The total cost of federal regulations exceeds $3 trillion each year, an amount equal to 11% of U.S. GDP.
• Federal regulations cost the manufacturing sector about $350 billion per year.
• Small manufacturers with fewer than 50 employees face disproportionate regulatory burdens, incurring costs of more than $50,000 per employee per year to comply with federal regulations.
• Since 2012, there has been a $465 billion increase in aggregate regulatory compliance costs.

-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 $2.91 trillion to the U.S. economy annually and accounts for 53% 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 voiced manufacturers’ support for efforts led by Rep. Buddy Carter (R-GA) to bring much-needed reform and transparency to pharmacy benefit managers. The NAM is a champion for PBM reform given that these underregulated middlemen drive up health care costs for manufacturers and manufacturing workers.

Following a press conference hosted by Rep. Carter to announce a bipartisan effort with dozens of members of Congress to push for PBM reform in the lame-duck session of Congress, NAM Managing Vice President of Policy Chris Netram released the following statement:

“Manufacturers and manufacturing workers are facing increasing and unsustainable health care costs as a direct result of PBMs. Manufacturers agree with Rep. Carter and the bipartisan, bicameral members of Congress calling for reform: Congress must act urgently—in the lame-duck session—to increase transparency, lower health care costs and protect manufacturing workers.”

Background: Last month, the NAM launched a seven-figure video and digital advertising campaign urging Congress to pass PBM reform legislation this year.

The NAM’s Q3 2024 Manufacturers’ Outlook Survey found that 78% of small manufacturers with fewer than 50 employees cite rising health care costs as a primary business challenge—the top concern among small business respondents in the survey.

To view the NAM’s latest digital ad, click 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 $2.91 trillion to the U.S. economy annually and accounts for 53% 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 U.S. Court of Appeals for the D.C. Circuit should overturn a lower court’s ruling that the Securities and Exchange Commission lacks the authority to regulate proxy advisory firms, the NAM said in a recently filed brief.

What’s going on: The Nov. 15 brief asking the appeals court to overturn a February ruling by the D.C. District Court is the latest in a years-long campaign by the NAM to ensure reasonable regulation of proxy firms. These powerful, unregulated entities often dictate how shareholders vote on proxy ballot proposals that come before public companies.

• “Since the passage of the Securities Exchange Act of 1934 in the wake of the Great Depression, the Securities and Exchange Commission has regulated proxy solicitation, so shareholders can confidently vote based on transparent and reliable information,” according to the NAM brief. “Accordingly, since the proxy voting advice industry emerged four decades ago, those firms have been subject to SEC regulation.”
• Institutional Shareholder Services, the largest and most influential proxy firm, “would rather not be regulated at all”—but “[t]he record overwhelmingly establishes that proxy firms ‘solicit’ proxies under any reasonable definition,” subjecting them to SEC oversight as required by the Exchange Act.

Why it’s important: Proxy firms wield enormous influence over both manufacturers and Main Street investors, the NAM said.

• “ISS and its main competitor, Glass Lewis, control 97% of the proxy advice market and together influence nearly 40% of the U.S. shareholder vote,” the NAM told the court in its brief.
• Further, proxy firms operate with undisclosed conflicts of interest, their reports can contain errors and misleading statements and their “robo-voting” services give them the authority to cast investors’ proxy votes with no review or input by the investors themselves.

NAM on the front lines: In July 2020, after years of NAM advocacy, the SEC finalized a rule instituting critical proxy firm reforms. ISS quickly brought a legal challenge, and the NAM intervened in the case to ensure a robust defense of the rule.

• Following the change in presidential administrations in 2021, in separate lawsuits the NAM successfully challenged the Biden SEC’s refusal to enforce the 2020 rule and its rescission of critical portions of the rule.
• After an unfavorable decision from the D.C. district court in the ISS challenge, the Biden SEC declined to pursue an appeal, effectively disclaiming its authority to regulate proxy firms. The NAM took the lead as intervenor-appellant in the case, so manufacturers are now the sole bulwark against proxy firms’ unchecked power. A victory in the D.C. Circuit for the NAM would make the proxy firms subject to the 2020 rule’s important reforms.

Former SEC officials agree: A group of former SEC commissioners and staff authored an amicus brief in support of the NAM’s position.

• The brief chronicles the commission’s 50-year history of affirming that proxy firms are engaged in solicitation. The officials make clear that “stripping the SEC of its long-standing and Congressionally conferred power to regulate the firms” would “seriously harm the investing public by decreasing fairness and honesty in the markets—exactly the opposite of what Congress was trying to accomplish in the Exchange Act.”

What’s next: ISS’s response to the NAM’s brief is due in the coming weeks, and the court likely will schedule oral argument for early 2025.