The following is a comprehensive report from MTI Past President, Bob Hill from Solar Atmospheres of Western PA who is in his second year of serving on the Board of Directors of the National Association of Manufacturers. With the 2018 mid-term elections just 13 months away, it is important for MTI members’ employees to be informed on issues related to manufacturing, and how those they will vote for voted on the issues. It is also important that members open up their plants for tours with your legislators. MTI and NAM will be providing information and resources in the coming months that help to inform your employees and legislator(s) on issues related to manufacturing.
BOB HILL NAM REPORT
The latest NAM Board meeting was held in Washington DC. The first day is always dedicated exclusively to the SMM (Small and Medium Manufacturers) group of NAM. This group is truly the heartbeat of America because 91% of NAM members are SMM’s. The optimism within the room of over 200 SMM owners was overwhelming. The current administration, especially since the stabilizing influence of General John Kelly as the White House Chief of Staff, has been using NAM on a daily basis as a sounding board for what manufacturers need. The much needed relief from burdensome regulations enacted by the previous administration is real and is happening every day. NAM’s influence is more relevant and important to small business today more than ever!
The second day, the entire NAM Board (including large corporations) heard the following people speak:
Secretary of Treasury Steve Mnuchin:
- We are definitely seeing stronger economic growth (3% GDP).
- Being part of the “Big 6” as an author of the Tax Reform Bill, Mnuchin is happy to get the “horse out of the barn.”
- This is a pass/fail bill. Hopefully it will be bipartisan.
- His desire is to have it through the House in October, Senate in November, on the President’s desk in December.
- We currently have the highest corporate taxes in the world.
- Reducing corporate taxes from 35% to 20% would make us more competitive with the rest of the world.
- They designed a more simplified tax code (from 7 tax brackets down to 3) with tax cuts to middle class.
- They want the Estate Tax eliminated.
- Full depreciation of new equipment in the first year.
- GDP may take a .5 % hit due to the recent hurricane events, however he believes if the government gets the foot off the neck of manufacturers, a 4% GDP is clearly in sight.
Senate Majority Leader Mitch McConnell:
- He started with a humorous analogy – “Being a leader in the Senate is much like being a groundskeeper in a cemetery. Everyone is under you but nobody is listening.”
- He reminded the group that every dictator in the world has a bill of rights but what makes America great is the separation of power.
- There is no doubt that Obama tilted the field toward a government centered administration.
- He feels that we must turn the tide back to free enterprise.
- The political map is looking good for Republicans in the 2018 mid-term elections. There are 25 Democratic Senate seats and 8 Republican seats that are up for election.
- The question is will the electorate be, and remain, impatient?
- There is an attitude in the electorate that if you are making a profit you are up to no good.
- 65% Americans polled do not think corporate taxes are high enough!
- He said there are two kinds of politicians – those who want to make a point…and those who want to make a difference.
- The D’s will craft the “point” on tax reform that the R’s are always giving rich people more money.
- The “difference” that he really wants to make at 75 years of age is to get Americans fired up for tax reform that is so desperately needed.
- He believes his best accomplishment (difference) thus far in his political career is actually what he did not do - not to nominate a Supreme Court Justice during the Obama administration. He waited for the D’s to lower the vote to a simple majority and was then able to get Neil Gorsuch confirmed.
- He also said that the Senate does actually pass successful bipartisan bills such as the Highway bill, Opioid bill, and the Stem Cell bill, but this never gets the news coverage.
Ian Bremmer – President Eurasia Group:
- I learned that many NAM members subscribe and receive Bremmer’s weekly geopolitical reports. He meets with many world leaders to identify risks in the world and many business owners say he is spot on.
- Geopolitics are problematic especially for business owners with plants in other countries – and we will see more problems in the future.
- He is NOT worried about “Rocket Man” and his threat of nuclear attacks.
- Contrary to what he says, Trump really has no military options. Seoul, South Korea is very stable with a good economy. They are welcoming people to South Korea.
- Ian is much more concerned about North Korea’s ability to inflict cyber-attacks.
- As far as the Iran deal – Trump may say he will pull out, but he will never unilaterally rip up the deal.
- Germany – you can no longer count on Merkel.
- China – has surpassed the US in having more political/economic clout. Why? Because the Chinese government is more aligned with business. The government will employ their people if jobs are needed.
- The Chinese will control “Big Data.” China will not have Google, but a Chinese system based on how you behave and consume.
- France – Macron desperately needs labor reform. You cannot fire anyone in France.
- Is the destiny of our world more walls or iron domes? Within the next 10 years we will see.
Jon Meacham – Presidential Historian and Author:
- Not since George Washington have we had a President like Trump – with no political or military background.
- Reviewed the critical traits that are needed for the Presidency – optimism, curiosity, humility, candor, and empathy, and gave historical examples of each.
- Gallup poll question – Do you trust the politicians in DC to do the right thing? Twenty years ago 19% replied “no”...today 70% replied “no”. So there exists a real distrust for politicians in the beltway.
Finally, President Donald J. Trump saw the NAM conference as a perfect venue to discuss tax reform, so he contacted Jay Timmons the week before. As you can imagine the President’s presence and security detail disrupted the agenda for the final day. The President, for most of his speech, stayed on topic by following the teleprompter. Some of the local NAM members were asked to send some of their employees to serve as a backdrop for the President’s speech. His speech was dynamic and was very well received. He emphasized that we need a tax code that encourages companies to stay in America, grow in America, and hire in America.
In conclusion, the overall sentiment of this meeting was very encouraging for business. NAM presented their 2017 Manufacturers Outlook survey results. The survey revealed that a record of 91.4% of the respondents felt extremely positive about their company’s outlook. In contrast, the 2016 NAM Outlook Survey recorded an all-time low of 56.6%. Manufacturers added 16,000 workers in July, and added 100,000 employees in total since November! This stands in stark contrast to the loss of 16,000 workers in 2016 as a whole.
Tax reform remains a critical issue for manufacturers and for the broader US economy. It is imperative that our policy makers take advantage of this critical opportunity and act upon comprehensive tax reform now.