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A bipartisan Senate duo introduced legislation on Thursday that would both allow businesses to once again fully deduct R&D expenses in the year they are made and expand the refundable R&D tax credit.

What’s going on: The American Innovation and Jobs Act, sponsored by Sens. Maggie Hassan (D-NH) and Todd Young (R-IN), would restore the immediate deductibility of R&D expenses. Last year, a tax change went into effect requiring companies to amortize or deduct their R&D investments over a period of years, making R&D more costly.

Why it’s important: According to a recent 51�Թ��� analysis, the sector would lose nearly 60,000 jobs and face an output decline of more than $31 billion this year alone if the change is not reversed.

• The U.S. has now become a global outlier, joining Belgium as the only other developed country requiring the amortization of R&D expenses.
• Meanwhile, China provides a 200% “super deduction”—20 times the amount allowed in the U.S. tax code—for its manufacturers’ research.

The 51�Թ��� says: “Manufacturers applaud the introduction of the American Innovation and Jobs Act, which will help the U.S. out-compete China,” said 51�Թ��� Managing Vice President of Tax and Domestic Economic Policy Chris Netram.

• “Across the country, manufacturers are hiring workers, investing in communities and creating the products, materials and processes that drive us forward. Congress should approve the American Innovation and Jobs Act quickly to support critical research that allows manufacturers to improve lives in America and for people around the world.”

Learn more: Read our stories on how the 2022 expensing requirement is impacting , , , ���Ի��� (whose story was also covered today by , subscription).

Washington, D.C. – Following the introduction of the American Innovation and Jobs Act by Sens. Maggie Hassan (D-NH) and Todd Young (R-IN), 51�Թ��� Managing Vice President of Tax and Domestic Economic Policy Chris Netram released the following statement:

“Manufacturers are hiring workers, investing in communities across the United States and creating the products, materials and processes that drive America forward. Manufacturers applaud the introduction of the bipartisan American Innovation and Jobs Act, which restores full deductions for research, helping the American industry out-compete China, which provides a 200% super deduction for manufacturers’ research—20 times the amount in the U.S. tax code,” said Netram. “Manufacturers, the vast majority of which are quite small, perform 55% of private-sector research and development. These investments in innovation spur economic growth and support the creation of high-paying jobs across the country. Congress should approve the American Innovation and Jobs Act quickly to support critical research that allows manufacturers to improve lives in America and for people around the world.”

Background: As of 2022, manufacturers can no longer immediately deduct their R&D expenses in the year in which they are incurred. Instead, manufacturers must deduct or amortize their expenses over a number of years, which makes R&D much more expensive to undertake. The American Innovation and Jobs Act would restore the immediate deductibility of R&D expenses, a policy that was in place for nearly 70 years. In the 117th Congress, the American Innovation and Jobs Act garnered 35 cosponsors: 17 Democrats and 18 Republicans. A recent analysis released by the 51�Թ��� finds that the industry would lose 59,392 jobs and face a decline in output of $31.69 billion this year if Congress does not act.

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The 51�Թ��� 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 $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – 51�Թ��� President and CEO Jay Timmons released the following statement on President Biden’s fiscal 2024 budget plan:

“There is no escaping the fact that the tax increases in President Biden’s new budget proposal would reverse the recent significant growth we’ve achieved in American manufacturing jobs and investment.

“After the 2017 tax reform made rates more competitive, manufacturers kept their promises to raise wages and invest in their communities. In fact, 2018 was the best year for manufacturing job creation in the previous 21 years. And in the past two years, as we rebuilt from the pandemic, we’ve created more jobs in the sector than at any point since the Reagan administration. So it comes as a surprise that President Biden, who has vocally championed manufacturing growth in pushing successfully for infrastructure investment and the CHIPS and Science Act, wants to pursue policies that would undo our progress.

“We have to get serious about competing with China; the president’s budget does the opposite. This proposal further undermines manufacturing in America by failing to reverse tax policies that make it more difficult for our industry to perform research, while China currently employs a 200% super deduction on R&D for manufacturing. It’s also now more expensive to buy critical machinery and finance new investments. If these lapsed deductions aren’t reinstated, it will mean lost jobs, less innovation and fewer opportunities for our communities.

“As manufacturers work to lead our economy forward, we also remain committed to lowering health care costs through market-based solutions that deliver choice and flexibility. Unfortunately, this administration’s insistence on imposing drug pricing requirements is an abdication of free market principles that poses serious risks to the development of new treatments and therapies—the very type of innovation that saves lives in America and around the world.

“Manufacturers are committed to growing investment, jobs and wages here in America. We need our government leaders to share that commitment.”

Background: Read more about how these critical tax priorities impact manufacturers across the country here.

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The 51�Թ��� 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 $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit www.nam.org.

Boca Raton, FL—The 51�Թ��� today honored 51�Թ��� board member and Snap-on Chairman and CEO Nick Pinchuk with the Manufacturing Icon Award during the 51�Թ���’s spring board meeting in Boca Raton, Florida. The award recognizes leaders who inspire Americans to promote, perpetuate and preserve manufacturing in America.

“Across the industry and across the business community, executives and employees alike look up to Nick Pinchuk. His storied career is a source of inspiration, and he is a wealth of knowledge, a wise counselor and a tireless advocate for the rewarding careers found in modern manufacturing. He has been a tremendous supporter of the 51�Թ��� and the Manufacturing Institute’s Creators Wanted campaign to build the manufacturing workforce of today and tomorrow, and his policy advocacy on behalf of the industry is best-in-class,” said 51�Թ��� President and CEO Jay Timmons.

“His presence on television and in the public eye as a principled manufacturing leader, as well as his unwavering service to the 51�Թ��� and to our industry, makes Nick a true model for business leaders in America. In whatever he does, he demonstrates an unshakeable commitment to the values that have made our country exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity. We’re honored to present this award to Nick in recognition of his outstanding leadership.”

Pinchuk serves on the 51�Թ��� Executive Committee as the 51�Թ��� tax, domestic economic and regulatory reform policy vice chair and on the board of directors of the Manufacturing Institute, the workforce development and education partner of the 51�Թ���.

-51�Թ���-

The 51�Թ��� 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 more than 13 million men and women, contributes $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – 51�Թ��� President and CEO Jay Timmons released the following statement on President Biden’s visit to Ukraine:

“President Biden’s visit to Ukraine the week of the anniversary of Russia’s brutal and unprovoked invasion shows the world that the United States stands with the Ukrainian people and that our support is unwavering.

“The struggle in Ukraine is more than a war between two countries. It’s a struggle between freedom and tyranny. Manufacturers believe that there are two systems evolving in this world—one that enriches lives and lifts people up into freedom and prosperity, and the other that is oppressive and robs people of their liberty. We must continue to support the Ukrainian people, ensuring that critical supplies keep moving and investing in and rebuilding this war-torn country.

“Manufacturers in the U.S. have a long and proud history of standing firm in support of democracy, the rule of law, transparency, freedom and opportunity. The 51�Թ��� and our members have demonstrated our unwavering support for Ukraine and its people, and the 51�Թ��� spoke out firmly against the war with our Board of Directors passing unanimously a at our meeting in March 2022. We supported sanctions against Russia, called for the suspension of Permanent Normal Trade Relations with Russia and mobilized humanitarian relief to Ukraine. Additionally, the 51�Թ���’s Emergency Response Committee has worked with 51�Թ��� members and Project HOPE to support the resettlement of Ukrainians in the U.S. As an industry, we are committed to working with our partners to ensure that the Ukrainian people have the support they need to build a future of freedom and prosperity.”

-51�Թ���-

The 51�Թ��� 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 $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit 

Presented by Jay Timmons, President and CEO of the 51�Թ���, the 2023 State of Manufacturing Address was given from Husco International in Waukesha, Wisconsin. Special remarks were given by Kurt Bauer, President and CEO, Wisconsin Manufacturers & Commerce. Special thanks to Husco President and CEO Austin Ramirez and his team for hosting this year’s address.

Read the official remarks here.

We’re hitting the road. This year’s 51�Թ��� State of Manufacturing Address officially kicked off the 2023 leg of the 51�Թ���’s Competing to Win Tour. The tour will continue to spotlight the industry’s rapid transformation, while also focusing on manufacturing’s well-paying careers, diverse workforce and real-world solutions for the industry’s continued growth.

Upcoming stops: Waukesha and Pewaukee, Wisconsin (Tue, Feb 21); Fishers, Indiana (Wed, Feb 22); Harahan and Avery Island, Louisiana (Thurs, Feb 23)

VISIT THE COMPETING TO WIN AGENDA

Marlin Steel Wire Products spent its first 30 years making bagel baskets. When Drew Greenblatt bought the custom wire and metal fabrication company in 1998, he thought it would be making bagel baskets for the next 30 years as well—but soon, international competition changed the math.

“Suddenly, China started manufacturing bagel baskets and shipping them to New York City for cheaper than I could get the steel,” said Greenblatt, Marlin’s president and owner. “But then, we got a phone call from an engineer at Boeing who needed an innovative, customizable basket. And that was the eureka moment.”

The shift: Greenblatt recognized that innovation would help him outcompete foreign companies that could manufacture products more cheaply.

• “We realized we couldn’t thrive in a commodities market,” said Greenblatt. “We had to come up with novel ways to make a basket so that it would make no financial sense to buy from China or Mexico.”
• “We wanted to be able to say to buyers, you must buy from the American innovative company, because we’re coming up with such slick ideas that our product blows the competition away.”

The growth: Today, Marlin Steel is nearly 30 times larger than it was when Greenblatt bought it and heavily invested in research and development.

• “Today, Marlin is 15% degreed mechanical engineers,” said Greenblatt. “We have chemical engineers. We’re coming up with the most innovative racks and systems out there.”
• “People are showing us their operations and asking us to reverse-engineer solutions that will work for them. And we’re doing it.”

However . . . A recent tax change threatens to throttle the company’s progress. Until about a year ago, businesses could deduct 100% of their R&D costs in the same year they incurred those expenses.

• But since last year, a tax policy change now requires businesses to spread their R&D deductions out over a period of five years, making it much more expensive to invest in innovation.

The impact: “Our taxes will be $600,000 higher than they should have been this year—we’ll pay four and a half times more on taxes,” said Greenblatt.

• “What that means is that it makes sense for us not to hire six more engineers. Not to buy three more press brakes [machines for bending metal parts] or hire people to work them. It’s incredibly shortsighted, a horrible policy screwup, and the ripple effects are massive.”

The scope: Greenblatt also emphasizes that the tax change will harm many small businesses.

• “People tend to focus on the bigger companies and how it will hurt them—and it will hurt them—but it will also hurt the little guy,” said Greenblatt. “And the little guy is the job creator in America.”

The last word: “American innovation—that’s our secret sauce,” said Greenblatt. “That’s how we’re going to grow jobs and pay people well and give good benefits and steady employment without layoffs. That’s how we’re going to beat a recession. We need to have the coolest, most innovative products in the world. For us, innovation is key.”

Washington, D.C. – The 51�Թ��� will kick off its 2023 Competing to Win Tour on Tuesday, Feb. 21, 2023, traveling to three states and visiting four manufacturing facilities along the way.

The tour will begin in Wisconsin, where 51�Թ��� President and CEO Jay Timmons will deliver the 2023 51�Թ��� State of Manufacturing Address at Husco.

Throughout the week, Timmons will join local manufacturers, employees, media, community leaders and elected officials to discuss the challenging environment facing manufacturers and the urgent need for solutions on issues including immigration reform, permitting reform, workforce development, tax policy and more.

The tour comes as nearly two-thirds of manufacturers are concerned about the challenging economic environment characterized by inflation, supply chain disruption and the workforce crisis, according to the 51�Թ���’s latest Manufacturers’ Outlook Survey. More than three-quarters of respondents said pushing back against regulatory overreach should be the top priority of the 118th Congress.

“Our focus on this tour is telling the story of resilient, modern manufacturing—and the tools we need from policymakers to continue leading our economy forward and making the world a better place,” said Timmons. “To unleash our full potential, we need to reinstate critical tax provisions, a smarter, balanced approach to regulations, immigration reform and significant permitting reform, and reject top-down air regulations that cost jobs and snarl supply chains.”

For more than a decade, the annual 51�Թ��� State of Manufacturing Address has focused the nation’s attention on the industry that is the backbone of the American economy, highlighting the 13 million men and women who are building our future.

The 51�Թ��� has frequently traveled the country, bringing policy discussions and conversations about the future of work to shop floors, schools, economic clubs, televisions studios, the White House and more.

At a time when the future of work is top of mind for workers and thought leaders alike, the tour will also spotlight the industry’s rapid transformation, while also focusing on manufacturing’s well-paying careers, the industry’s diverse workforce and the real-world solutions for manufacturing’s continued growth.

Tour events will take place in Wisconsin, Indiana and Louisiana. Details are as follows:

Tuesday, Feb. 21 // Wisconsin

8:30 a.m. – 10:30 a.m. CST
Husco
2239 Pewaukee Road
Waukesha, Wisconsin  53188

11:00 a.m. – 12:00 p.m. CST
Waukesha County Technical College
800 Main Street
Pewaukee, Wisconsin  53072

Wednesday, Feb. 22 // Indiana

9:00 a.m. – 11:00 a.m. EST
INCOG BioPharma Services
12050 Exit 5 Parkway
Fishers, Indiana  46037
Timmons will be joined by Sen. Todd Young (R-IN)

Thursday, Feb. 23 // Louisiana

8:30 a.m. – 10:00 a.m. CST
Laitram
200 Laitram Lane
Harahan, Louisiana  70123

2:00 p.m. – 3:30 p.m. CST
McIlhenny Company
Highway 329
Avery Island, Louisiana  70513

MEDIA RSVP: Members of the media interested in covering the tour or attending an event should contact [email protected].

-51�Թ���-

The 51�Թ��� 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 $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – 51�Թ��� President and CEO Jay Timmons released the following statement in response to President Biden’s 2023 State of the Union address:

“President Biden rightly celebrated the significant growth and job creation that manufacturers have achieved in these past two years. Indeed, more manufacturing jobs have been created in the first two years of the Biden administration than at any point since the Reagan administration. Like his recent predecessors, he recognizes manufacturing’s vital role in our economy and our country. America’s success and leadership depend on a strong, competitive manufacturing industry.

“The President should be commended for the historic, bipartisan accomplishments of the past two years—including the infrastructure law and the CHIPS and Science Act. These measures are already making life better and spurring new manufacturing jobs. We agree with President Biden that there is now an urgent need to build on that progress by tackling immigration reform in a smart, bipartisan way. There are millions of people ready to work in the U.S., and manufacturers have hundreds of thousands of unfilled jobs. Not only is the broken immigration system creating a border crisis, but it is also standing in the way of a stronger economy for every American.

“However, the President misses the mark in not recognizing that the historic tax reforms of 2017 and the previous administration’s efforts to promote regulatory certainty helped lay the foundation for the recent success in creating jobs, increasing investment and raising wages. Instead of the Biden administration’s misguided suggestions for restrictions on pharmaceutical innovation and for destructive tax increases, Congress should immediately reinstate critical tax deductions for the costs of research, machinery purchases and key business investments. Restoring these tools is essential to keep up the pace of manufacturing job creation and to out-innovate and outcompete China. And to truly unleash manufacturing investment, fully realize the potential of the infrastructure law and achieve energy security in America, we need a smarter, balanced approach to regulations and significant permitting reform so that projects don’t languish for years in a bureaucratic mess just waiting for government approvals. After all, manufacturers are already making great strides in reducing emissions. Now is not the time to add top-down air regulations that will cost us jobs and snarl supply chains.

“The State of the Union address is one of the sacred traditions of our democracy. And as we approach the one-year mark of Russia’s war on Ukraine, we are reminded just how precious those traditions and our institutions are. Democracy is the foundation of the values that keep our industry strong and have made America exceptional—free enterprise, competitiveness, individual liberty and equal opportunity. And that is why manufacturers stand firm in our belief that democracy must be respected, protected and defended at home and abroad.”

Background: The 51�Թ���’s “Competing to Win” policy agenda for manufacturing competitiveness can be found . Its in-depth proposal for immigration reform, “A Way Forward,” is available . In the 51�Թ���’s most recent , two-thirds of manufacturers said that immigration reform should be a priority for the 118th Congress.

-51�Թ���-

The 51�Թ��� 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 $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� 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 51�Թ��� or to follow us on Twitter and Facebook, please visit 

Innovation is getting more expensive—and that should worry all of us.

Until recently, businesses could deduct 100% of their R&D expenses in the same year they incurred those costs. But a tax law that took effect at the beginning of 2022 requires businesses to spread their deductions out over five years instead, driving up the cost of the innovations that keep our economy strong.

At International Paper—an American supplier of renewable fiber-based recyclable packaging and pulp products—that change is causing serious challenges. We spoke to Vice President of Finance and Corporate Controller Holly Goughnour and Senior Director for Government Affairs Kaitlin Sighinolfi to learn more.

Why it matters: “Our company invests in R&D for two main reasons: making better products for our customers and creating safer, more efficient and sustainable manufacturing processes,” said Goughnour.

• “We spend a lot of time and money working to make a better performing, more sustainable and more durable product, but innovation is about more than the product—it’s also about improving the safety and efficiency, and reducing the environmental impact, of our operations.”

The scale: International Paper devotes a significant portion of its resources to innovation, and as a result, the change in tax law has an outsized impact.

• “Much of our free cash flow goes to R&D activities,” said Goughnour. “The change in tax law has resulted in a significant amount of additional cash taxes in this first year, reducing the amount of capital available to invest back into our business, including additional R&D.”

The competition: Goughnour and Sighinolfi also emphasized the need for a tax system that helps manufacturers in the U.S. to compete with companies abroad. According to Goughnour, the new tax change does the opposite.

• “The new tax law enables European and Chinese competitors to accelerate their R&D faster than us,” said Goughnour. “We’re in a global marketplace, and the new tax law puts U.S. manufacturers at a competitive disadvantage.”
• “Almost nobody else in the world has this policy,” said Goughnour. “R&D is an absolute growth engine for the U.S. economy. Why would we have a tax policy that discourages investment in R&D? It makes no sense.”

The last word: “Ours is a supply chain story,” said Sighinolfi. “Innovation should be part of the overall manufacturing value chain, but the new law reduces the value of innovation, slowing investment in innovation and ultimately hurts American businesses, employees and consumers.”