The National Association of Manufacturers (NAM) sharply criticized Congress last week for failing to pass a bill that would've prevented a tax increase on the industry.
Each year, Congress conducts the Miscellaneous Tariff Bill (MTB) process, which cobbles together thousands of tiny pieces of tax and tariff reduction legislation, proposed by lawmakers in both chambers, into one omnibus package. The resulting bill typically lowers the cost of certain manufacturing inputs and some finished products not made or available here in the United States, and usually passes the House of Representatives and the Senate overwhelmingly.
However, the last-minute rush to avert the so-called "fiscal cliff," among other legislative quandaries that frequently left Congress paralyzed, led lawmakers to delay the completion of the MTB process until after 2012 had ended. This means that on January 1, 2013, a number of tax and tariff reductions from the previous year's MTB expired, leaving manufacturers holding the bill.
"Congress’s failure to pass the MTB has resulted in a tax increase on manufacturers in the United States, hurting their global competitiveness and putting jobs at risk," said NAM vice president of international economic affairs Linda Dempsey. "It is currently 20% more expensive to manufacture in the United States compared to our largest trading partners, and the lack of an MTB will only widen that gap."
A new MTB bill has already been drafted by the current Congress. The U.S. Job Creation and Manufacturing Competitiveness Act of 2013 (H.R. 6727) is aimed at addressing NAM's concerns and is expected to eventually pass with bipartisan support. While the content of the bill is uncontroversial, its late arrival, as well as any continued delays, will have a negative effect on the industry.
"Manufacturers of all sizes benefit from these important tariff suspensions to obtain raw materials and inputs that are not available in the United States," said Dempsey. "In failing to enact this important legislation, Congress has increased costs on manufacturers and made it more difficult for manufacturers to maintain and grow production and jobs in the United States."
- Jacob Barron, CICP, NACM staff writer