August 3, 2010
By Richard A. McCormack
The House of Representatives has passed a bill that would make the President responsible for creating a National Manufacturing Strategy. The legislation (HR-4692) received fairly glowing reviews from members of Congress while it was being discussed on the floor of the House on July 28 and at a hearing of a House Energy and Commerce subcommittee on July 12. But others aren't so sure. "We're really doing nothing but creating another study group, and that's about as duplicative as you could get," said Rep. Phil Gingrey (R-Ga.) during the floor debate. "God knows how many study groups we have already created."
Despite the misgivings, the legislation passed by a vote of 379 to 38. It received endorsements from Republicans and Democrats, and it had the backing of 50 co-sponsors. The private sector is also on board, with letters of support entered into the Congressional Record from Motorola and a dozen trade associations.
The bill, sponsored by Rep. Dan Lipinski (D-Ill.), will create a President's Manufacturing Strategy Board that includes individuals from a dozen federal agencies, two governors from different political parties and nine individuals from the private sector. The board will be responsible for assessing all aspects of U.S. manufacturing competitiveness including comparisons of manufacturing policies and strategies relative to other nations' policies and strategies. It would be tasked with identifying emerging and evolving markets, technologies and products "for which the nation's manufacturers could compete"; making forecasts for the manufacturing sector; assessing levels of domestic production, productivity and the trade balance; assessing R&D resources, financing and investment, job creation, workforce skills and the "adequacy of the industrial base for maintaining national security."
The Manufacturing Strategy Board will produce a report one year after the passage of the act, and it will be updated every four years. Adoption of its recommendations will be analyzed by the Government Accountability Office and the National Academy of Sciences.
"The passage of the National Manufacturing Strategy Act will ensure that American manufacturing remains on the national agenda," said Rep. Lipinski during the House debate. China, India, Canada, the UK, Brazil and Germany already have such strategies. "It is about time that America does the same before it is too late for middle class Americans and for our national security," he said.
The bill is part of a "Make-It-In-America" legislative push by Democratic leadership in the House of Representatives. It includes four manufacturing bills aimed at quelling the increasing populist anger over the Democratic majority's refusal to consider legislation related to improving conditions inducive to creating good private-sector jobs. The campaign includes the manufacturing strategy act, a $15-million grant program to help U.S. manufacturers sell green products overseas, a miscellaneous tariff bill and the creation of an Emergency Trade Deficit Commission (see box below).
The initiative was criticized by the Washington group representing domestic manufacturers. Its timing -- "days before the House's summer recess and perilously close to the end of Congress's current session -- strongly indicates that its purpose is less to solve problems than to score political points for the upcoming off-year elections," says Alan Tonelson, research fellow at the United States Business and Industry Council. If the Democrats were serious about job creation in the United States, they would have included the Ryan-Murphy bill in their "Make-It-In America" legislative thrust, he adds. That bill would enable U.S. industry to counter the continuing drain on U.S. manufacturing by allowing it to file trade cases seeking compensatory tariffs against countries for manipulating their currencies.
Republicans said Congress already knows what to do to improve the prospects for U.S. manufacturers: lower the corporate tax rate, start negotiating and approving free trade agreements and reduce the burden of regulations. "There are many task forces in the federal government that are looking at this manufacturing issue," said Rep. Ed Whitfield (R-Ky.). There is the Interagency Working Group on Manufacturing Competitiveness and the Commerce Department's Manufacturing Council. The Manufacturing Extension Partnership program has issued its own recommendations. The Interagency Working Group on Manufacturing Research and Development is engaged in the issue. The Commerce Department conducted an analysis of the manufacturing sector in 2003, publishing "Manufacturing in America." President Obama issued his own "Framework for Revitalizing American Manufacturing" last December. And the National Association of Manufacturers just issued its own report on revitalizing U.S. manufacturing. "I think we need to take concrete action," said Whitfield. "We know the problems. [But] I will say that this legislation will provide an additional study and that may be important."
Rep. Don Manzullo (R-Ill.) was effusive about the bill. "Why is it necessary to have a study?" he asked. "Because Americans need to know the importance of manufacturing, but more importantly to bring to the attention of fellow members of Congress the absolute importance of protecting manufacturing in this country."
At a hearing of the Energy and Commerce Committee's subcommittee on commerce, trade and consumer protection on July 12, William Hickey, president of Lapham-Hickey Steel Corp., said he was perplexed by the lack of a manufacturing strategy in the United States. The U.S. has a "policy of reacting to a crisis instead of planning for the future," he said. With a National Manufacturing Strategy the country "will have the opportunity to have a real debate on how to help Main Street provide jobs to our citizens versus having Wall Street bailed out by taxpayers."
Others at the hearing encouraged Congress to act. Scott Paul, executive director of the Alliance for American Manufacturing, said that his members "respectfully urge you to pass" the bill into law. "As there is no Department of Manufacturing, it makes perfect sense to harness the best minds, as well as to coordinate among the appropriate agencies to focus on a government-wide strategy to advance manufacturing in both employment and output terms."
Others agreed. "The question of whether a National Manufacturing Strategy is needed is crucial, but also simple to answer: absolutely," said Mark Gordon, member of the executive committee of the Manufacturing Division of the National Defense Industrial Association and director of defense programs at the National Center for Advanced Technologies.
Kevin Hassett, director of economic policy studies at the American Enterprise Institute was not supportive. "We tend to appoint task forces and commissions when we know what the right thing to do is, but are unwilling to do it," he said. "Commissions and task forces make for nice speechifying, but almost always have a negative policy impact because they allow elected officials to appear to be addressing key problems without actually doing anything."
Organizations that sent letters of support for the National Manufacturing Strategy Act and were included in the Congressional Record: * AFL/CIO * The Association for Manufacturing Technology * Precision Metalforming Association * National Tooling and Machining Association * The Cold Finished Steel Bar Institute * Aerospace Industries Association * National Defense Industrial Association * Coalition for a Prosperous America * American Manufacturing Trade Action Coalition * American Iron and Steel Institute * United States Business and Industry Council * Motor & Equipment Manufacturers Association * American Foundry Society * Motorola Inc.