NAM Takes On Unlikely Foe in Tariff Scrum

Posted June 18, 2010 at 4:40pm

The National Association of Manufacturers is blaming House Republicans for forcing its members to pay import taxes on obscure ingredients used in making their wares.

A NAM trade expert recently issued a rare rebuke of Republican leaders, traditional political allies who the manufacturing community now claims are holding up the passage of a miscellaneous tariff bill over ethical concerns.

The legislation, which was last passed in 2006, provides a three-year tax moratorium on the importation of chemicals, dyes and other non-domestically produced components used by companies during the manufacturing process.

“Traditionally this bill has had a lot of bipartisan support,” NAM’s director of international trade policy, Doug Goudie, said last week. “The Republican decision to not allow Members to advocate for earmarks … this bill has gotten caught [up] in there.”

Michael Steel, a spokesman for House Minority Leader John Boehner (Ohio), disputed that Republicans even have the power to hold up any legislation — least of which a bill that is near and dear to such an important constituency.

“There are 178 Republicans in the House. A majority is 218 votes,” Steel wrote in a e-mail. “We are not the problem. If anyone is concerned that this legislation has not yet moved, I suggest they discuss it with the Democratic leadership, which controls the House floor.”

House Republicans in March attempted to one-up their Democratic counterparts by enacting a strict one-year freeze on tax carve-outs, spending authority and appropriations. A day before the GOP enacted its earmarking moratorium last winter, House Democrats attempted to position themselves for the November midterms by banning for-profit organizations from receiving federal earmarks.

A Democratic Ways and Means spokesman declined to give a deadline for the bill, saying that aides continue to assemble the massive omnibus proposal. According to Congressional guidelines provided to Roll Call, all tariff suspension requests go through a lengthy vetting process that susses out whether there are any domestic producers of the materials and whether the tax suspension will cost less than $500,000. The requests are reviewed by the White House, Congressional Budget Office, the U.S. International Trade Commission, the U.S. Customs and Border Protection and the U.S. Trade Representative’s Office. Members must also indicate “anticipated beneficiaries” and “certify that neither they nor their spouse have a financial interest in the provision,” according to guidelines.

“Ways and Means Committee members are working with their colleagues in the Senate to advance a [miscellaneous tariff bill] in the near future. MTBs are not earmarks — they are, first and foremost, jobs bills,” said Matthew Beck, a Democratic Ways and Means spokesman. “In the past, MTBs have received strong bipartisan support because they support American businesses and jobs. In fact, a recent study estimates that the MTB provisions under consideration by the House would increase U.S. production by $4.6 billion, expand GDP by $3.5 billion and support roughly 90,000 jobs.”

Using similar language in a letter earlier this month, Ways and Means Chairman Sander Levin (D-Mich.) also pitched his colleagues on the tax package, touting it as an economic elixir and downplaying ethical concerns about the appearance of federal giveaways.

“In recent weeks, some have attempted to characterize MTB provisions as ‘Congressional earmarks.’ That characterization is incorrect,” Levin wrote on June 7. “House Rules do not define individual MTB provisions as Congressional earmarks, and in fact, the two terms have different definitions. … This makes sense, as MTB provisions do not direct how U.S. government funds are spent; MTB provisions reduce duties on imports.”

Goudie said his strong complaints about GOPers came after more than a month of pleading by NAM and other organizations for lawmakers to hurry up and pass the bundled tax proposal. Along with dozens of its corporate members, NAM President John Engler asked Members last month to renew the tax cuts, which he also claimed keep tens of thousands of workers employed.

But in his letter, Engler did not specifically identify Republicans as the primary obstacle. “The last MTB, passed by Congress in 2006 has expired. As a result, manufacturers and businesses of all sizes across the country now face higher tariffs on inputs and other products not otherwise available in the United States,” Engler wrote on May 5. “These higher costs translate to lost revenue and lower wages. The cost-savings achieved by the MTB allow U.S. manufacturers and businesses to maintain competitive operations,invest in new facilities, retrain workers, and preserve our manufacturing base.”

The NAM letter was sent to Boehner, Levin, Speaker Nancy Pelosi (D-Calif.) and Ways and Means ranking member Dave Camp (R-Mich.). It was also signed by the U.S. Chamber of Commerce, Caterpillar Inc., the American Chemistry Council, Applied Materials, Honeywell International, Proctor & Gamble and Whirlpool Corp.

“The whole business community would like to see this thing moved as quickly as possible,” Goudie said last week. “Manufacturers in America are paying taxes on goods that they need to produce here in the United States.”