51�Թ���

Manufacturers have long been partners of the Consumer Product Safety Commission—working with the agency to keep the public informed and protected—but a lack of transparency at the CPSC in the past few years has stymied businesses’ attempts “to understand how [they] will be regulated,” the 51�Թ��� the House Energy and Commerce Subcommittee on Innovation, Data and Commerce ahead of a hearing Tuesday.

What’s going on: The 51�Թ��� has regularly called for congressional oversight of the CPSC in recent years. Ahead of the “Fiscal Year 2025 Consumer Product Safety Commission Budget” subcommittee hearing, the 51�Թ��� highlighted several areas of concern for legislators to address:

• Section 6(b) of the Consumer Product Safety Act: “Manufacturers strongly support maintaining the crucial, balanced and effective information disclosure procedures currently mandated in the Consumer Product Safety Act,” said 51�Թ��� Vice President of Domestic Policy Charles Crain. “Unfortunately, in recent years, the CPSC has attempted to circumvent these standards, releasing statements that lack any scientific data or research or by taking actions without official agency rulemaking.”
• Effective communication of rulemaking and research with regulated businesses: Despite a CPSA requirement that the agency defer to voluntary standards in certain safety-measure compliance cases, “there are recent examples of the agency commencing a proposed rulemaking in an apparent rush to regulate.” The agency has also begun unnecessarily withholding from manufacturers the test reports and analysis they need to create voluntary standards, while giving manufacturers “reduced time … to implement proposed and final rules.”
• Public engagement by CPSC commissioners and staff: “One of the benefits of a small federal agency with multiple commissioners is the availability of��commissioners and senior staff to meet with interested parties on relevant topics,” Crain continued. “Unfortunately, in recent years, the CPSC has been less willing to engage in productive conversations with regulated entities.”

The last word: “It is critical that the CPSC effectively communicate and work with manufacturers to ensure that our shared goal of consumer safety is maintained,” said Crain. “The 51�Թ��� will continue engaging with both the CPSC and Congress to see that the agency is effectively engaging with the manufacturing community.”

Middlemen created to manage the price of prescription drugs are instead driving up health care costs for manufacturers and manufacturing workers, the 51�Թ��� the House Committee on Oversight and Accountability on Tuesday, the same day the committee released a on pharmacy benefit managers’ practices and held a hearing on the matter.

What’s going on: “PBMs’ business models have the direct effect of increasing health care costs at the expense of manufacturers and manufacturing workers,” 51�Թ��� Vice President of Domestic Policy Charles Crain said in advance of the hearing, the latest in a series examining PBM practices.

Crain told lawmakers PBM reform legislation should include:

• “Increased transparency into PBMs’ business models and the many factors that contribute to a drug’s costs, formulary placement and the PBMs’ compensation;
• Rebate passthrough, which will ensure 100% of negotiated pharmaceutical savings are passed from the PBM to the health plan sponsor and workers; and
• Delinking of PBM compensation from the list price of medication.”

Report highlights: The committee’s report, the culmination of a 16-month investigation, is with the 51�Թ���’s longstanding advocacy. The report found that PBMs:

• Drive increased drug prices, which inflate PBM profits;
• Extract high rebates from biopharmaceutical manufacturers, often pocketing a significant portion of any savings rather than reducing costs for patients;
• Dictate whether and how medicines appear on formularies, which determine insurance companies’ coverage decisions and patients’ out-of-pocket costs;
• Steer patients toward drugs based on PBMs’ profit margins rather than patient costs; and
• Operate without sufficient transparency into their business practices.

What it all means: The committee “identified numerous instances where the federal government, states and private payers have found PBMs to have utilized opaque pricing and utilization schemes to overcharge plans and payers by hundreds of millions of dollars,” the report states.

• The report indicates that the present role of PBMs in prescription drug markets is failing and requires change, something the 51�Թ��� has long advocated. “Congress and states must implement legislative reforms to increase the transparency of the PBM market and ensure patients are placed at the center of our health care system, rather than PBMs’ profits.”

The last word: “Manufacturers provide health care benefits so they can effectively attract and retain employees, to maintain a healthy and productive workforce and because they believe it is the right thing to do—but PBMs are a meaningful cause of the skyrocketing costs of health care,” Crain said.

• “Congress must enact reforms to the PBM system so that employers can negotiate, compete and achieve health care savings for their workers.”

What’s going on: On Thursday, as part of its 2025 tax campaign, “,” the 51�Թ��� hosted Noelle Britton, deputy chief of staff for Rep. Lloyd Smucker (R-PA), and Caroline Oakum, tax counsel for Sen. Steve Daines (R-MT), in a virtual roundtable to discuss what’s being done in Congress to maintain the Section 199A .

• The 20% deduction—created by the 2017 Tax Cuts and Jobs Act to help the many small and medium-sized businesses in the U.S.—is among several vital tax provisions scheduled to expire at the end of 2025. (Pass-throughs are companies whose profits are “passed through” to the owners, who then pay taxes on the entities’ incomes on their personal tax returns.)
• Both Rep. Smucker, who leads the House Ways and Means Main Street Tax Team, and Sen. Daines are leaders of legislation that would make the deduction permanent.

What they’re doing: introduced the Main Street Tax Certainty Act in the Senate last May, while introduced the House’s version of the measure last July.

• The legislation would make the pass-through deduction permanent, providing much-needed certainty to the small and medium-sized manufacturers that have relied on it to increase investments and job creation.

What you can do: The House Ways and Means Committee Tax Teams are collecting companies’ perspectives on how the pass-through deduction has helped manufacturers and other businesses. Similarly, the 51�Թ��� is collecting stories that can be used as part of our Manufacturing Wins tax campaign.

• Manufacturers willing to share their own stories about the pass-through deduction can email [email protected] or contact the 51�Թ���’s tax team.

Manufacturing-critical provisions from 2017 tax reform are set to expire at the end of next year—unless Congress acts. As part of our 2025 tax campaign, , the 51�Թ��� recently interviewed Sen. Steve Daines (R-MT)��to learn more about what these expirations would mean for manufacturers and what Congress is doing to prevent the resulting tax hikes.

Here’s the written interview.

51�Թ���: Sen. Daines, many of tax reform’s pro-manufacturing policies expire at the end of 2025—including those with disproportionate impacts on small manufacturers, like the pass-through deduction and the individual income rate cuts. What is Congress doing to prevent these damaging tax increases?

Daines: The best defense against a looming tax hike is a good offense. Senate Finance Republicans have begun organizing to examine the [Tax Cuts and Jobs Act of 2017] policies expiring next year, and the pass-through deduction is at the top of that list. We can’t allow these provisions to expire and let America’s working families, manufacturers and small businesses face a $6 trillion tax hike. That will make manufacturers less competitive against foreign competition by stifling investment and crushing their bottom line at a time when they should be looking for ways to increase wages and invest in innovation.

51�Թ���: You have introduced the Main Street Tax Certainty Act in the Senate and been a champion for pass-throughs since the TCJA was signed into law. How would your bill prevent tax hikes for pass-through manufacturers?

Daines: The Main Street Tax Certainty Act provides much-needed certainty to America’s small businesses by making the permanent. This helps create good-paying jobs and grows the economy. If it’s allowed to expire, small businesses face an immediate 20% tax hike.

51�Թ���: The Senate Finance Committee has established tax working groups to examine the TCJA expirations. What will be your focus as the committee begins examining these scheduled tax changes?

Daines: My focus is on making the Trump era tax cuts permanent, which will create a more stable, growing economy.

Through the 51�Թ���’s recently launched 2025 tax campaign, , manufacturers are calling on Congress to prevent several devastating tax increases from taking effect at the end of next year.

One of those scheduled increases is the expiration of the Section 199A pass-through deduction—a critical incentive, created by tax reform in 2017, designed to help thousands of small and medium-sized manufacturers invest in their businesses.

The 51�Թ��� recently released a on the pass-through deduction, breaking down what it is, what it does and why its preservation is vital to manufacturing in the U.S. ��Here are the highlights.

Pass-through defined: The defining characteristic of a pass-through entity is that its business profits get “passed through” to the company owners, who then pay taxes on the business’s income on their personal tax returns.

• The vast majority of businesses in America—96%—are organized as pass-throughs, including S-corporations, partnerships, LLCs and sole proprietorships.
• In manufacturing, pass-throughs are typically small, family-owned firms.

What it’s done for manufacturers: The Section 199A pass-through deduction allows pass-through manufacturers to deduct up to 20% of their qualified business income, decreasing their effective tax rate.

• Combined with a lower individual income tax rate included in the 2017 reform (which reduced the top individual rate from 39.6% to 37%), the pass-through deduction has freed up significant capital for smaller manufacturers to reinvest in their businesses.
• For example, 2018 was the best year for manufacturing job creation in 21 years and the best year for wage growth in 15 years.

What’s in jeopardy: Both the pass-through deduction and the lower individual income tax rates are set to expire at the end of 2025—and they’re certain to hit small and medium-sized manufacturers hard.

• ��In a recent 51�Թ��� survey, 93% of pass-through manufacturers said their ability to grow, create jobs and invest in their companies will be stymied if the expirations are allowed to happen.

What should be done: Congress must make the pass-through deduction permanent and keep individual tax rates as low as possible.

The last word: “Small and medium-sized pass-throughs are the backbone of the manufacturing supply chain,” said 51�Թ��� Vice President of Domestic Policy Charles Crain. “Congress must act before the end of 2025 to preserve the pass-through deduction and prevent devastating tax increases on small businesses throughout the manufacturing sector.”

The Supreme Court’s ruling in the closely watched Loper Bright Enterprises v. Raimondo is a watershed decision for administrative law with significant implications for the business community. The 51�Թ��� Legal Center provided us with an overview.

What’s going on: Late last month, the Supreme Court overturned the “Chevron doctrine,” which since 1984 had required federal courts to defer to an administrative agency’s interpretation of an ambiguous statute—so long as the interpretation was reasonable.

What it means: The end of the doctrine means less power for federal agencies, potentially fewer regulations and a guaranteed surge in regulatory litigation, according to the Legal Center.

• When Congress leaves ambiguities or gaps in statutes, agencies can no longer exploit those gaps to enact overreaching rules or regulations (read the 51�Թ���’s statement on the decision ).

• Although Chevron had not been cited by the Supreme Court since 2016, it is the basis for 70 Supreme Court opinions and approximately 17,000 lower court decisions. Those holdings remain intact for now but could be challenged anew by litigants under the new standard.��

The majority opinion: for the majority, Chief Justice John Roberts relied on a plain-text reading of the Administrative Procedure Act, which directs courts—not agencies—“to decide all questions of law.”

• “The APA, in short, incorporates the traditional understanding of the judicial function, under which courts must exercise independent judgment in determining the meaning of statutory provisions,” he wrote.

• Absent an explicit delegation by Congress, agency interpretations can guide or inform courts, but in keeping with the APA, they cannot be given binding deference. According to the court, all statutes “have a single, best meaning,” and “courts use every tool at their disposal to determine the best reading of the statute and resolve the ambiguity.”��

The dissent: Writing for the liberal justices in dissent, Justice Elena Kagan expressed concerns with overturning this “cornerstone” of regulatory law by shifting interpretative authority from “expert, experienced and politically accountable agenc[ies]” to courts that have “no special competence.”

In sum: The decision will result in a broad reduction in the power of executive branch agencies, with that power shifting to federal courts.

• Thus, regardless of the party in power or its pro- or anti-regulatory leaning, much less regulatory discretion will be afforded to the agencies.

The 51�Թ��� predicts: Looking forward, the 51�Թ��� sees Congress and regulators turning to industry for input as policies are adopted and statutes are interpreted, giving manufacturers an opportunity to play a more significant role in shaping outcomes.

What we’re doing:��The 51�Թ��� Legal Center is currently leading regulatory challenges against the Environmental Protection Agency, the Occupational Safety and Health Administration and the Securities and Exchange Commission. It will continue to push back on overreaching agency actions that threaten manufacturing competitiveness—now on a more even playing field.

Requirements proposed earlier this year by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency are overbroad and would prove burdensome to manufacturers if adopted, the 51�Թ��� the Biden administration last week.

What’s going on: In April, CISA published draft rulemaking under the Cyber Incident Reporting for Critical Infrastructure Act of 2022—scheduled to go into effect next year—that would require “covered entities” in “critical infrastructure sector[s]” to report major cyber incidents to CISA within 72 hours. It also mandated that any ransomware payments be reported within just 24 hours.

Why it’s a problem: The proposed rulemaking could affect more than 300,000 entities, according to CISA’s own estimate��(). Many of these organizations are either not truly “critical infrastructure” or too small to have the resources to undertake the outlined actions in the specified time, the 51�Թ��� told CISA.

• Furthermore, the regulations themselves are too expansive, mandating the reporting of incidents that do not even affect the operation of critical infrastructure.
• They also require huge amounts of information in a short period—from companies in the throes of recovery from devastating cyberattacks.

The 51�Թ��� says: “[T]he 51�Թ��� respectfully encourages the agency to drastically reduce the number of entities required to report, and the number of incidents they have to report,” 51�Թ��� Vice President of Domestic Policy Charles Crain told the agency during the public comment period on the proposed regulation, which ended last week.

• “Doing so will ensure that CISA receives useful information about cybersecurity incidents—without overburdening manufacturers with overbroad and unworkable disclosure requirements.”

What to do: In addition to narrowing the scope of “covered entities,” CISA should revise several aspects of the rulemaking before implementing it, the 51�Թ��� said. Changes should include:

• Limiting the volume of reported cyber-incident information;
• Narrowing the scope of reportable cyber incidents; and
• Lightening and safeguarding the contents of cyber-incident reports.

The 51�Թ��� recently “Manufacturing Wins,” the manufacturing industry’s campaign to preserve the benefits of the 2017 tax reforms that are currently scheduled to disappear in 2025—particularly those tax incentives that make it easier for small manufacturers to hire employees and raise wages, invest in equipment, grow their businesses and contribute more to their communities.

51�Թ��� Vice President of Domestic Policy Charles Crain explains what’s at stake in 2025 and how manufacturers can get involved in the effort to prevent tax increases.

Q: Manufacturers are facing “tax Armageddon” at the end of 2025. Can you explain what’s happening?

Crain: Tax reform in 2017 was rocket fuel for manufacturers, leading to record job creation, capital investment and economic growth. For example, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008. Manufacturing capital spending grew 4.5% and 5.7% in 2018 and 2019, respectively—this shows the direct impact of pro-growth tax incentives on manufacturers investing in new equipment and facilities. But many of tax reform’s pro-manufacturing provisions will expire at the end of 2025. If these provisions are allowed to expire, virtually every manufacturer will face devastating tax increases.

Q: What policies will sunset in 2025, and how will their expiration impact SMMs?

Crain: For small manufacturers organized as pass-throughs—meaning the business’s owners pay tax on the business’s income on their personal returns—two key changes are coming down the pike. First, their tax rate will increase, from 37% to 39.6%. Second, they will lose the pass-through deduction, which provides a tax deduction equal to 20% of the business’s income. In combination, these tax hikes will increase pass-throughs’ effective tax rate by at least 10 percentage points (from 29.6% to 39.6%), resulting in significantly less capital available for equipment purchases, job creation and community investment.

For small manufacturers organized as corporations, the 51�Թ��� is fighting to prevent any increases in the corporate tax rate. The corporate rate decreased from 35% to 21% in 2017 and is not scheduled to expire—but President Joe Biden has proposed increasing the rate to 28%. The 51�Թ��� remains staunchly opposed to corporate tax rate increases that punish manufacturers for investing and creating jobs here in America.

For family-owned small manufacturers, their estate tax obligations are scheduled to increase. Tax reform doubled the value of assets that can be passed on without incurring the estate tax; at the end of 2025, the estate tax exemption threshold is scheduled to be reduced by half. The 51�Թ��� is calling on Congress to maintain the increased exemption—or to repeal the estate tax entirely, preventing family-owned businesses from being sold for parts to pay a tax bill when a loved one passes away.

Q: What else is at stake in 2025?

Crain: Manufacturers of all sizes continue to face uncertainty about the tax code’s treatment of R&D expenses, capital equipment purchases and interest on business loans. Immediate R&D expensing—which allows manufacturers to write off the entire cost of R&D spending in the year incurred—expired in 2022. So did a tax reform provision that allowed businesses to deduct more of the interest they pay on loans when they debt finance a project. And in 2023, 100% accelerated depreciation—which reduces the cost of capital equipment purchases—began to phase down. These expired provisions are vital to manufacturing growth, and the 51�Թ��� is working to restore and extend them as Congress prepares for the 2025 tax fight.

Q: How can SMMs learn more?

Crain: The 51�Թ��� recently published “,” which highlights the tax reform provisions that will expire at the end of 2025. The 51�Թ��� calls on Congress to act to prevent these expirations from stunting manufacturing job creation, growth and innovation.

Q: How can SMMs get involved?

Crain: Manufacturing voices are crucial to the 2025 tax fight. 51�Թ��� members with a story to tell about the impact of 2017 tax reform on their business—or the damage that the 2025 expirations could inflict—are encouraged to reach out to their 51�Թ��� membership advisor or to the 51�Թ��� tax team.

You can also take a few minutes to record a video testimonial calling on Congress to prevent devastating tax hikes on manufacturers. Instructions for submitting a video testimonial are available —it’s as easy as having a coworker use a smartphone to film a video of you on your shop floor! Completed testimonials can be emailed to the Manufacturing Wins team to be posted to our campaign site:

Washington, D.C. – Today, the United States Supreme Court overruled the Chevron doctrine—a requirement that federal courts defer to an administrative agency’s interpretation of an ambiguous statute—that had proven unworkable and incoherent.

“The legal and regulatory landscape has transformed in the blink of an eye. Manufacturers will not waste a moment in seizing this opportunity—an opportunity that we have never seen before—to leverage this decision to rein in the regulations that are holding back manufacturers from improving lives,” said 51�Թ��� President and CEO Jay Timmons. “The 51�Թ��� Legal Center and our best-in-class advocacy team will be on the field, leveraging this decision and the new tools it gives us, to fight back new regulations we are facing today as well as whatever may come our way in the next administration. For anyone who wants to see manufacturing grow and succeed in America, today heralds the possibility for a much brighter future.”

“Today’s ruling is a game changer for manufacturers as Chevron was at least partly to blame for the unpredictability and overreach that have become synonymous with the modern regulatory state,” said 51�Թ��� Chief Legal Officer Linda Kelly. “We are hopeful that this marks the end of an overbearing regulatory system that had become complex, and compliance in many cases that was contradictory from agency to agency. For the past 40 years, Chevron has tipped the scales in favor of unelected officials and against the regulated public. Now the onus is on Congress to provide clear guardrails and guidelines in its intent to ensure that laws are implemented in a manner that achieves their goal. Manufacturers are eager to work with lawmakers to develop policies that promote innovation, job creation, economic growth and improved quality of life for all Americans.”

“Manufacturers have been the subject of a regulatory onslaught, with agencies’ far-reaching decisions affecting companies of all sizes,” said 51�Թ��� Managing Vice President of Policy Chris Netram. “The EPA, SEC and DOL—the aggressive nature of rulemaking and enforcement actions that exceed authority come from the alphabet soup of regulators. The 51�Թ��� has been successful in fighting key rules in court, and today’s decision gives us the ability to challenge even more actions while ensuring future agency actions do not exceed the authority mandated by 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 $2.89 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��

Raising taxes on manufacturers would damage the industry and the U.S. economy as a whole, the 51�Թ��� told the House Ways and Means Committee this week. That’s why it’s crucial that Congress preserve set-to-expire tax reform provisions.

What’s going on: In a continuation of its Manufacturing Wins campaign, the 51�Թ��� conveyed a clear message to six of the committee’s specialized “Tax Teams”: act now to protect manufacturers from tax increases.

Why it’s important: Failure to act before the end of next year, when key provisions from 2017 tax reform are set to expire, would result in higher taxes on virtually all manufacturers—which “will cost millions of jobs and put the American manufacturing sector at a severe disadvantage globally,” the 51�Թ��� wrote.

What’s at stake: The 51�Թ��� highlighted manufacturers’ top tax priorities for the Tax Teams, discussing why preserving pro-growth tax policy is vital for manufacturers in the United States:

• In communication with the , the 51�Թ��� called on Congress to preserve tax reform’s reduced individual income tax rates and maintain the 20% pass-through deduction. It emphasized for the the importance of tax reform’s reduction in the corporate tax rate, which brought the U.S. from one of the highest rates in the world to a globally competitive 21%. The received a similar message.
• The 51�Թ��� detailed for the the damage the estate tax imposes on family-owned manufacturers, and why Congress should not allow more family-owned businesses’ assets to be subject to the estate tax at the end of 2025.
• The 51�Թ��� continued to push for pro-growth, pro-innovation R&D tax incentives with the , and it enumerated for the the full range of policies that will impact manufacturers at the end of 2025—and called for urgent congressional action to protect manufacturers from tax hikes.

The final word: “Manufacturers of all sizes, throughout the supply chain, are calling on Congress to preserve tax reform in its entirety,” said 51�Թ��� Vice President of Domestic Policy Charles Crain. “Manufacturers and manufacturing families simply cannot afford the devastating tax increases scheduled for the end of 2025 if Congress fails to act.”