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For more than two years, manufacturers have not been able to immediately deduct their R&D expenses—and it’s taken a toll, particularly on small businesses.

What’s going on: For more than 70 years, the U.S. tax code allowed manufacturers to immediately deduct their R&D expenditures. But since the expiration of this key provision in 2022, manufacturers have been required to amortize their R&D costs over a period of years.

Why it’s important: As a direct result of the expiration, manufacturers’ tax bills have increased, according to a new released as part of the 51�Թ���’s “” campaign. This means manufacturers are now less able to conduct groundbreaking research and support well-paying R&D jobs.

Uneven playing field: The U.S. is now one of just two developed nations that requires the amortization of R&D expenses.

• The policy makes the U.S. less competitive against China, which offers companies a 200% “super deduction” for R&D costs.
• In 2022, the first full year after the expiration of immediate R&D expensing, the European Union’s R&D growth surpassed that of the U.S. for the first time in nearly a decade—and China’s R&D growth was triple that of the U.S.

What should be done: The 51�Թ��� is calling on Congress to restore immediate R&D expensing, along with pro-growth tax provisions.

The last word: “It is imperative that the U.S. tax code support job-creating, life-changing R&D,” said 51�Թ��� Vice President of Domestic Policy Charles Crain. “Congress must act to bolster manufacturing innovation and American competitiveness by reinstating immediate R&D expensing.”

Washington, D.C. – Following comments from President Biden that he will not intervene in the strike at East and Gulf Coast ports, 51�Թ��� President and CEO Jay Timmons released the following statement:

“Manufacturers call on President Biden to intervene by invoking the Taft-Hartley Act, which will force ports to resume operations while negotiations continue.

“There will be dire economic consequences on the manufacturing supply chain if a strike occurs for even a brief period. 51�Թ��� estimates show a strike at the East and Gulf Coast ports would jeopardize $2.1 billion in trade daily, and the total economic damage could reduce GDP by as much as $5 billion per day.

“The president can protect manufacturers and consumers by exercising his authority, and we hope he will act quickly.”

Background:

51�Թ��� find that $2.1 billion worth of trade would be at risk every day, and additional estimates have indicated that a strike would reduce GDP by up to $5 billion per day, only some of which could be recovered as goods are rerouted or after a shutdown ends.

Major Commodities Moving Through East and Gulf Coast Ports

• Imports
  • 77.6% of coffee and tea
  • 77.2% of beverages and spirits
  • 58.5% of medical/surgical instruments
• Exports
  • 62.1% of fertilizers
  • 76.3% of vehicles
  • 78.5% of wood pulp used in Europe for heat, diapers, etc.
  • 62.5% of medical/surgical instruments

-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 $2.87 trillion to the U.S. economy annually and accounts for 53% 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��.

Drug price controls will “chill” critical innovation in pharmaceutical manufacturing and do nothing to address the underlying causes of high medication costs, Johnson & Johnson leaders said recently.

What’s going on: J&J Chairman and CEO Joaquin Duato and Executive Vice President and Chief Financial Officer Joseph Wolk told Bloomberg TV earlier this month that the pharmaceutical price controls mandated by the 2022 Inflation Reduction Act do a disservice to patients everywhere.

• “[T]he Inflation Reduction Act … is something that is misguided, and it’s going to chill innovation,” Duato Bloomberg’s David Gura earlier this month. “When you chill innovation on investment in [research and development], then you have [fewer] cures.”
• The IRA gave the federal government authority to set prices for certain prescription medications in Medicare. In August, the Biden administration the first 10 Medicare prescription drugs subject to those price controls, which go into effect in 2026.
• “I’d like to see a much more fact-based dialogue around the topic of drug pricing,” Wolk added. “About six years ago, Johnson & Johnson … was paying about 25% in discounts and rebates off [the] list price [of medications]. Today, that [figure is] 60%, yet the patients aren’t receiving the benefit of those discounts.”

The background: Pharmacy benefit managers are supposed to pass the manufacturer discounts they receive on to health plans and patients—but instead, they frequently pocket the discounts, the 51�Թ��� has Congress on several occasions.

• That’s one of several problematic business practices Congress by enacting comprehensive , the 51�Թ��� has said.
• Such legislation would do to benefit consumers than capping drug prices.

Cause and effect: The result of price controls will be fewer breakthrough cures and treatments for patients suffering from various illnesses, J&J told Bloomberg TV.

• “The number of medicines that will be there will be [lower], just because [fewer] investors would be putting money into developing new medicines,” Duato continued. “It’s going to be less attractive for investors to put money there.”
• And as Wolk in another Bloomberg segment: “Investing in R&D, prioritizing R&D years in advance for [a drug] that may happen 10 years down the road is critically important.”

What should be done: If Congress truly wants to help patients with the cost of medications, it must focus on “the middlemen who are really driving up prices: pharmacy benefit managers,” 51�Թ��� President and CEO Jay Timmons recently.

As part of its “Manufacturing Wins” campaign to preserve pro-manufacturing tax provisions, the 51�Թ��� hosted a roundtable this week with Reps. Carol Miller (R-WV) and David Kustoff (R-TN)—respectively the chair and a member of the Ways and Means Committee Supply Chain Tax Team.

Preparing for 2025: The Supply Chain Tax Team has jurisdiction over the corporate income tax rate. Tax reform reduced the corporate rate to 21%, spurring the creation of thousands of new manufacturing jobs—and the 51�Թ��� is working with Congress to ensure the U.S. maintains a competitive corporate rate as policymakers debate next year’s “tax Armageddon.”��

Understanding the benefits: Rep. Miller emphasized that the dollars saved due to tax reform’s lower corporate rate have supported job creation, higher wages and the flourishing of local communities.

• As a business owner herself, she said she believes it’s important for members of Congress in charge of tax policy to understand the risks businesses take, the communities they support and the certainty they need to be successful.

Measuring the impact: Rep. Kustoff emphasized the importance of real-world data on the benefits of the lower corporate tax rate—from the number of jobs created to the work businesses have done to provide their employees with bonuses and higher wages.

• According to Rep. Kustoff, real-world metrics are important for educating policymakers about the need for action, as crucial, pro-manufacturing tax provisions are set to expire at the end of 2025.

Recognizing the ripples: The discussion also touched on the wider impact of tax increases on global supply chains and the broader U.S. economy.

• Participants noted that a higher corporate income tax rate’s ripple effects would hurt companies throughout the economy—even when those companies are pass-throughs and not explicitly affected by the corporate income tax rate.
• That’s because these small businesses often sell to and partner with larger corporations that would have less capital available under a higher corporate rate.

Our take: “Prior to 2017 tax reform, the U.S. had the highest corporate tax rate among the more than three dozen countries in the Organisation for Economic Cooperation and Development and the third highest in the entire world,” said 51�Թ��� Vice President of Economic Policy Charles Crain.

• “That put manufacturers in America at an alarming disadvantage. A competitive tax rate helps business compete in the global economy, leads to job creation, investments and purchases of new equipment and allows manufacturers to give back to their communities.”
• “If Congress were to raise the corporate rate, it would force America to take a step back on the global stage—at a time when other countries around the world are implementing more competitive tax agendas.”

The 51�Թ��� this week advocated the passage of two pieces of manufacturing-critical legislation, successfully driving the agenda of a Wednesday House Energy and Commerce Committee markup.

What’s going on: The committee—with the 51�Թ���’s strong support—approved two bills that address longstanding manufacturing priorities:

• A congressional resolution disapproving of the Environmental Protection Agency’s harmful PM2.5 rule
• A bill instituting important pharmacy benefit manager reforms

Reversing an unworkable PM2.5 standard: The EPA announced a new, more restrictive particulate matter standard in February, reducing allowable levels from 12 micrograms per cubic meter of air to 9 micrograms—despite a standard of 9 being “essentially background levels in some of the country,” as the 51�Թ��� has pointed out.

• “Manufacturers have sharply reduced particulate matter emissions, or PM2.5; as a result, industry in the United States has some of the cleanest and most efficient operations in the world,” 51�Թ��� Vice President of Domestic Policy Chris Phalen the committee.
• “Now, the vast majority of emissions are from sources well outside of our control, with fires, dirt roads and other nonpoint sources accounting for 84% of PM2.5 emissions,” Phalen continued. “[T]he EPA’s rule will make it more difficult for states to issue permits for the construction of new facilities or expansions of existing factories.”
• The committee’s PM2.5 resolution, offered under the Congressional Review Act, seeks to overturn the EPA’s unworkable standard.

Reforming PBMs: PBMs are unregulated middlemen whose business practices drive up health care costs for manufacturers and manufacturing workers.

• “By applying upward pressure to list prices that dictate what patients pay at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business practices, PBMs increase health care costs at the expense of all patients in America,” 51�Թ��� Vice President of Domestic Policy Charles Crain .
• Provisions in the 51�Թ���-supported Telehealth Modernization Act would increase transparency into PBMs’ business practices and delink their compensation from medicines’ list prices.

The last word: “Manufacturers commend the Energy and Commerce Committee for approving these important bills, which will reduce costs and enhance growth at manufacturers across the country—allowing our industry to continue to create jobs here at home and drive U.S. competitiveness on the world stage,” said 51�Թ��� Managing Vice President of Policy Chris Netram.

To lower drug prices, Congress should undertake comprehensive reform of pharmacy benefit managers, not embrace price controls, the 51�Թ��� the Senate Tuesday.

What’s going on: “Biopharmaceutical manufacturers are a critical part of the manufacturing economy,” 51�Թ��� Vice President of Domestic Policy Charles Crain said ahead of a Senate Finance Committee hearing on health care costs.

• In 2021, biopharmaceutical firms “accounted for $355 billion in value-added output to the U.S. economy … and directly employed 291,000 workers in the United States, with each of these jobs supporting an additional 4.1 jobs.”
• Crucially, biopharma companies are also responsible for the dozens of groundbreaking, lifesaving medications brought to patients annually.
• But their continued innovation and economic impact are under attack by both Inflation Reduction Act–mandated and the largely unchecked actions of PBMs, Crain continued.

Threats to innovation: Instead of benefiting patients, “the IRA pricing mandates announced last month by the Department of Health and Human Services will … limit the capital manufacturers have available to put toward the astronomically high costs of developing a new medicine,” Crain told the committee, adding that the uncertainty introduced by price controls is also likely to dissuade early-stage investment in new treatments.

• Rather than impose further price controls, Congress should address the influence of PBMs, largely unregulated middlemen that “contribute to the skyrocketing cost of health care by applying upward pressure to list prices that dictate what patients pay for medicines at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business models.”

PBM reform: To truly lower health care costs, Congress must rein in PBMs, Crain said. The 51�Թ��� has called on Congress to adopt specific PBM reforms, including:

• Increased transparency into PBMs’ business models;
• Rebate passthrough to ensure that 100% of negotiated savings get passed on to health plan sponsors and employees; and
• Delinking of PBM compensation from medication list prices.

The last word: “Instead of further embracing price controls, it is imperative that Congress act to lower drug prices by reining in PBMs’ problematic business practices and minimizing their ability to further damage the U.S. health care system,” Crain said.

• “All Americans deserve access to high-quality, affordable health care, and PBM reform is an impactful step toward this goal.”

Washington, D.C. – Following the U.S. Trade Representative’s announcement on the continuation of Section 301 tariffs on China and the White House’s announcement on de minimis, 51�Թ��� Vice President of International Policy Andrea Durkin released the following statement:

“A trade war never benefits anyone, and this announcement ignores the realities of today’s economy, potentially harming manufacturers’ ability to grow and invest in the U.S. Manufacturers operate in a rapidly shifting global economy, where tariffs have the potential to affect every industry and every product. To stay competitive, manufacturers must have the flexibility to apply for exclusions as market dynamics change. Without this process, companies of all sizes will be crippled by rigid policies that stifle growth and innovation.

“Raising the cost of critical clean energy inputs, without offering a process for exclusions, directly undermines the Biden administration’s goal of boosting clean energy manufacturing in the U.S. Policymakers must ask tough questions: Are we issuing permits for more domestic aluminum smelters and critical minerals refining for energy production applications? Will wafer and battery production be exempt from regulatory hurdles to ensure automotive and high-tech manufacturing is not slowed? The White House also announced today it will propose a rule significantly altering how goods enter our borders under de minimis, subjecting hundreds of millions of additional packages to scrutiny by CBP—which raises the question of how we will ensure that manufacturing supply chains are not disrupted by this massive new burden on the agency charged with protecting our ports of entry.

“These questions all point to one fact—that tariffs often fail to address the underlying problems they’re supposed to solve, while often complicating manufacturers’ efforts to improve the quality of life for everyone. We are asking the administration to implement an exclusion process that fairly accounts for the unintended consequences of tariffs on our industry’s ability to create jobs and reach the 95% of customers around the world.”

-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 $2.89 trillion to the U.S. economy annually and accounts for 53% 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��

The 51�Թ��� recently interviewed Rep. Randy Feenstra (R-IA), the vice chair of the House Ways and Means Committee’s Rural America Tax Team, about the estate tax and why he’s working with colleagues on Capitol Hill to repeal it.

51�Թ���: Rep. Feenstra, Congress is facing a “Tax Armageddon” next year, as crucial provisions from 2017’s Tax Cuts and Jobs Act are set to expire. As a member of the Ways and Means Committee, what is your focus moving into next year’s debate?��

Rep. Feenstra: One of those crucial provisions from the Tax Cuts and Jobs Act that is set to expire is the doubling of the estate tax exemption amount, which currently sits at $13.6 million in 2024. After 2025, it will return to half that amount, adjusted for inflation. That change in the Tax Cuts and Jobs Act was another important step toward full repeal of the estate tax, which my Death Tax Repeal Act would do. The bill makes the simple recognition that death should not be a taxable event. When a family is grieving, the federal government sends a multimillion-dollar tax bill as condolences. This is simply wrong.

I’m proud to co-chair the Rural America Tax Team, which has dug into this issue of the “death tax” and the impact it is having on family businesses across the country. As the tax team has spoken to family businesses and estate tax experts from across the country, it’s become increasingly clear that we still have a lot of work to do to provide relief from what can be a devastating setback for multigenerational family businesses. Repealing this tax is going to be one of my top priorities in 2025, and I’m proud to have the support of 170 of my colleagues.��

51�Թ���: The estate tax is imposed on family-owned businesses when ownership of the business passes to the next generation following the death of an owner. As you mentioned, the TCJA doubled the exemption threshold, excluding more assets from taxation and thus reducing the burden of the estate tax on businesses. Why is this important and what is Congress doing to preserve this higher threshold?��

Rep. Feenstra: Over the years, various bills have taken steps toward providing relief for taxpayers hit by the death tax. The Tax Cuts and Jobs Act was one of the largest expansions of that relief, significantly reducing the number of family businesses hit by the tax and reducing the tax burden for those businesses that still are. People often don’t realize that businesses over many generations can accumulate assets that can put them over the asset threshold, but that doesn’t mean these businesses have a lot of cash on hand. So when they’re hit with millions in new taxes, that can sink an already cash-strapped business. Fortunately, because of the doubling of the exemption amount, far fewer businesses face that threat. As long as any family business does face that threat, we still have work to do.��

51�Թ���: At the end of 2025, the estate tax is scheduled to be reduced by half, subjecting more of family-owned manufacturers’ assets to taxation and increasing their estate tax liability. As the Ways and Means Committee and tax teams continue meeting with businesses around the country, what are you hearing on the impact this change would have?��

Rep. Feenstra: Two things: A lot more people would be hit by the death tax, and the people who are hit would be paying a much higher tax. These are small family businesses we are talking about, and if the current exemption amount is allowed to return to half its current value, that means the size of the businesses getting hit are much smaller than they are today. People often think of farms, and that’s certainly true, but as you know, manufacturers are hit, family-owned restaurants, auto dealers, you name it. As we go into 2025, we need to be focused on policies that support growth and help these businesses succeed, not create costly obstacles for them to overcome. If the exemption amount falls to its pre–Tax Cuts and Jobs Act level, that’s a lot of new businesses that are going to be hit by this tax.

A draft Department of Homeland Security rule that certain sectors expedite cyber-incident reporting has several shortcomings that must be addressed before the rule becomes final in the fall of 2025, the 51�Թ��� told Rep. Andrew Garbarino (R-NY) in a meeting this week.

What’s going on: Rep. Garbarino, chair of the House Homeland Security Subcommittee on Cybersecurity and Infrastructure Protection, met with manufacturers and the 51�Թ��� Technology Policy Committee Tuesday to talk cybersecurity issues.

• Much of the discussion focused on draft rulemaking published in April by the DHS’s Cybersecurity and Infrastructure Security Agency. It would require “covered entities” in “critical infrastructure sector[s]” to report any major cybersecurity incidents to CISA within 72 hours.
• Under the Cybersecurity Incident Reporting for Critical Infrastructure Act, CISA must finalize the rule by October 2025.

Why it’s a problem: The 51�Թ��� agrees with the concerns Rep. Garbarino raised with CISA, including:

• The burden associated with imposing onerous reporting mandates on companies recovering from cyberattacks;
• An overbroad scope, which forces into compliance both organizations that are not truly “critical infrastructure” and those that are too small to have the resources needed to complete the required actions;
• An overbroad definition of incidents requiring reporting;
• An excessive amount of required information;
• An unreasonably high cost of compliance and the diversion of resources away from cyber-incident response; and
• The risk that the proposed rule will jeopardize CISA’s role as a trusted partner of industry.

51�Թ��� in action: The 51�Թ��� submitted in response to CISA’s proposal earlier this year outlining these concerns, as well as calling for a reduction in both the number of entities required to file incident notifications and the number of incidents they have to report.

The 51�Թ��� says: “CISA needs to significantly rethink its approach to CIRCIA’s implementation,” said 51�Թ��� Senior Director of Technology Policy Franck Journoud.

• “The proposed rule requires far too much information about far too many incidents from far too many companies. CISA should not mandate that companies under attack from hackers divert precious security resources to generate mountains of incident data that CISA will not have the means to process or act upon.”

Take precautions: If you are looking to strengthen your company’s cyber protections, check out , an affordable, broad security program for 51�Թ��� members that provides proactive monitoring with automated alerts at no extra cost.

Less than three months after scoring a�� for manufacturers against Securities and Exchange Commission overreach, the 51�Թ��� was back in front of Congress to urge regulatory oversight of proxy advisory firms.

What’s going on: On Tuesday, the 51�Թ��� before the House Financial Services Oversight and Investigations Subcommittee on the need to bring oversight and accountability to proxy advisory firms. These are entities that make recommendations regarding the way shareholders should vote on proxy ballot proposals brought before publicly traded companies.

• “Proxy firms are powerful, unaccountable actors that pose a real threat to Americans’ financial security. Manufacturers have been subject to these firms’ outsized influence for far too long,” 51�Թ��� Vice President of Domestic Policy Charles Crain during Tuesday’s hearing.

The background: In 2020, the SEC finalized an 51�Թ���-supported rule instituting important proxy reforms, such as requiring proxy firms to disclose any conflicts of interest. The 51�Թ��� has fought in court to preserve the 2020 rule, successfully defeating the SEC’s attempts to the rule and to its most crucial provisions. The 51�Թ��� is now back in court in a third case, defending the SEC’s authority to regulate these powerful market actors.

Surrendering to ISS: Institutional Shareholder Services Inc., the largest and most influential proxy advisory firm, is now “suing the SEC over its authority to issue the 2020 rule—not just the rule’s particulars, but the SEC’s ability to regulate proxy firms at all,” Crain continued.

• Troublingly, “the SEC is waving the white flag in the face of [the] challenge,” he told lawmakers, referring to the agency’s decision not to appeal after a district court sided with ISS earlier this year.

“Sole defender”: The 51�Թ���—now the “sole defender of the 2020 rule”—is appealing the district court’s decision.

What Congress should do: Legislators must take up the mantle, too, Crain concluded.

• “Congress should do what the SEC will not: affirm the SEC’s clear authority, provide much-needed oversight and accountability and help manufacturers and Main Street investors escape the outsized influence of proxy advisory firms.”