President Bush's long-awaited manufacturing policy, released Jan. 16, includes many things manufacturing groups praised, including funding for a government assistance program for small and midsize firms and establishing a presidential advisory council.
The National Association of Manufacturers applauded the policy and said it marks the first time in modern history that the U.S. government is making manufacturing a top priority. It praised some specific steps like tax cuts that NAM says are needed to reduce cost disadvantages faced by U.S. manufacturers against international competitors.
But other groups, like the U.S. Business & Industry Council in Washington, said the report appears to stop short of more activist policies they favor, like tax breaks for companies that keep manufacturing in the United States and tariffs on countries that have chronic trade deficits with the United States, like China.
Commerce Secretary Donald Evans released the 140-page report at an event in Cleveland. The report was based in part on months of roundtable meetings that commerce officials had with manufacturing groups around the country.
``This is our strategy to remove the barriers that are holding back American manufacturers and costing jobs,'' Evans said in a statement.
The report repackages some existing elements of the administration's agenda, such as making recent tax cuts permanent.
NAM President Jerry Jasinowski said the report does not contain everything that Washington-based NAM would have wanted. For example, NAM officials said they would have preferred stronger language on Chinese currency issues.
``This report should be seen as a first step, and we strongly welcome it,'' Jasinowski said.
The report also said the Bush administration would put more support behind the Manufacturing Extension Partnership, a nationwide network of assistance centers for small and medium-size manufacturers.
That's a reversal of the administration policy, which has sought to sharply curtail funding for MEP.
This year, MEP is looking at federal funding of $39.6 million, down from $106.6 million last year.
The debate has clear political ramifications. The manufacturing sector has lost more than 2 million jobs since 2000, and it is a hot issue in many swing states in the 2004 election, particularly in the Midwest.
NAM said in a Jan. 15 economic forecast that it expects the manufacturing industry to rebound in 2004, growing 6 percent and recouping 250,000 jobs.
Jasinowski said NAM would push the government to address early on two principal challenges facing small and midsize firms - China and expanding MEP.
Still, some questioned whether the report will do enough to help American manufacturers, particularly smaller firms.
``We're convinced the Bush administration sees this as a political problem, not a real economic problem,'' said Hawkins of the USBIC.
``To do things to fix it, you'd have to do things that the big transnational companies would not want them to do.''