There will be more of a focus on jobs and the competitiveness of U.S. companies than on regulations in Congress and a slower pace of regulatory activity than last year, especially in light of President Barack Obama's recent executive order that all federal agencies review the impact on business of all government regulations.
There will also be a greater receptivity on Capitol Hill to messages from the business community because of the enormous 2010 election changeover 108 new members of Congress, most of them Republican which gave the party control of the House. The elections also left Democrats clinging to a slim majority in the Senate, rather than controlling both chambers and the White House.
I'm optimistic about 2011 because we've beaten back so many threats to the industry over the past couple of years, said Bill Carteaux, president and CEO of the Washington-based Society of the Plastics Industry Inc. More and more policy makers are understanding manufacturing's importance in bringing about improved health to the total economy.
At the same time, he said: Now is not the time for us to be complacent. We want to be playing offense as much as we can, even as we defend against proposals that would impact us negatively.
One item near the top of the list for 2011 is the review of federal agencies and regulations that legislators plan.
The new Congress will have a renewed role in oversight of the federal agencies that deeply impact us EPA, OSHA, FDA and a host of others, Carteaux said. We welcome [it] as long as the substance of the oversight isn't overshadowed by politics.
There are dozens of industry-specific issues impacting the plastics industry that could use a good airing, he said. Our members tell us they need greater predictability on the regulatory front in order to make long-term investments.
Bill Allmond, vice president of government relations for the Society of Chemical Manufacturers and Affiliates in Washington, concurred. We want to ensure that Congress conducts a thorough oversight of regulations that negatively impact our industry.
That includes the Environmental Protection Agency's plan to regulate greenhouse gases from stationary sources.
EPA has certainly dug its heels in on this as they have been backed by the White House, said Allmond. But their progress on moving forward will be stymied by Congress' attention on EPA and the Republicans' control of the House. They are not going to be able to proceed without congressional scrutiny and oversight. They will have to proceed much slower.
How much that oversight of existing regulations will accomplish and whether the plastics industry and the business community gets the predictability it wants on that front is unclear. However, it is likely the pace of new regulations will slow down given the executive order Jan. 18 for agencies to review their regulations.
That is a very interesting development, given that it came from the same president that was the driving force for the passage of the health-care and financial reform laws both massive pieces of regulations, said Allmond. He pivoted suddenly to tell everyone to look at their regulations to see how they impact business.
An immediate impact: The Occupational Safety and Health Administration pulled back its pending noise regulation and a planned new reporting requirement for ergonomic injuries. We had concerns about the extra cost to business and questioned the public gains, Allmond said. We are glad to see OSHA pull this off the table.
Mike Lynch, vice president of government affairs for Illinois Tool Works Inc. in Glenview, Ill., agreed. But he said it is too early to see whether the executive order makes an impact. Let's move forward three to six months and see whether they find ways to lower the cost of doing business, Lynch said. I'm willing to give them time to demonstrate they mean it. But the proof is in the pudding.
Still, when you add together Obama's reconciliatory pronouncement, his order to review regulations and the January appointments of William Daley to chief of staff, Gene Sperling to director of the National Economic Council, General Electric Co.'s Jeffrey Immelt to head the President's Council on Job Competitiveness and AOL founder Stephen Case as chairman of the newly created Startup America Partnership, which will focus on creating a culture of investment in the United States it is already starting to shape up as an interesting year, Allmond said.
I don't see the executive order as public posturing, he said. I think the president is serious about reducing the regulatory burden on business. The regulatory review will help.
But SOCMA's Allmond said he will reserve judgment on the impact of the presidential appointments. This may be more political posturing than anything else, he said. These are safe appointees of people who've supported his policies in the past.
SPI's Carteaux is much more positive that the appointments will help manufacturers.
I'm optimistic, he said. With respect to the Daley and Sperling appointments, these are people who've been around the block and who'll have enormous responsibilities. Daley's background as a facilitator on Capitol Hill will be particularly important in the second half of the president's term.
He also called the elevation of Ron Bloom from his previous Treasury Department position to the White House staff's senior on manufacturing policy potentially significant and said Immelt understands the importance of long-range planning and innovation, and the tie-in to economic growth and improved U.S. competitiveness in the global marketplace. [That] is good news for our industry.
Steve Russell, president of the plastics division of the American Chemistry Council in Washington, concurred. The recent outreach to business leaders is a very welcome sign, he said. We appreciate the president's statement in the state-of-the-union address on keeping good manufacturing jobs in the U.S.
Yet, Lynch is not convinced that there has been a serious shift in direction by either legislators or the administration, even though he said the new round of legislators on Capitol Hill is more organized than any group I've seen in 20 years.
Until the government takes the actions that will make manufacturing more competitive, things aren't going to change, Lynch said. Until the government really looks at regulatory laws and decides to update then, there are going to continue to be problems. Such problems retard the competitiveness of employers and their ability to create jobs.
I am not seeing anything from the Republicans or the [Obama] administration that they are serious about cutting costs and that doesn't mean we have to put people's safety at risk.
Legislatively, many of the hot issues from last year, including climate change, rigid carbon taxes, an energy policy and a card-check bill to make it easier for unions to organize, are unlikely to be at forefront of congressional activities.
Broad energy legislation is unlikely in this Congress, Russell said.
Allmond noted that Congress will approach the issues that do surface such as reform of the federal chemical management system, known as the Toxic Substances Reform Act differently.
Things will move a lot slower compared to last year when a lot of things moved very quickly, he said. They want to make sure legislation and amendments to legislation are put before the public for their view. They will be spending more time deliberating on bills.
Allmond thinks it is clear that the first order of business for Congress is how do we grow jobs. They want to ensure that manufacturing has the tools to grow jobs, and that businesses are on track and not impeded by the federal government, he said.
It doesn't matter what issue I go to meet on at Capitol Hill, said Allmond. The first thing they ask me is how these things are working and are there aspects impeding your ability to expand your business.
The industry also will be keeping an eye on Congress as it reviews agency budgets and asks them to justify their programs and policies. SPI will continue to drive the plastics industry's issues and concerns as that oversight unfolds, Carteaux said.
Allmond agreed: We have some concerns about much this Congress will cut and what programs they will cut. Funding levels for some programs need to be maintained or increased, he said. One example: The program to approve new chemicals under TSCA.
If that program had more resources to approve chemicals, we could get more new products and chemicals on the market, Allmond said. We will be watching the appropriations process pretty closely.
As for TSCA in particular, he said SOCMA will make sure Congress does not pass reform legislation that threatens the industry's ability to be competitive in innovation.
Carteaux pointed out that SPI opposed proposals in the last Congress that blurred lines between 'manufacturing' and 'use,' and contained questionable time lines for industry compliance.
We're hopeful for a meaningfully stakeholder process on Capitol Hill, Carteaux said.
We intend to be a constructive partner in that dialogue, echoed ACC's Russell.
Other industry priorities for 2011 are a more permanent extension of the research and development tax credit, the approval of more free-trade agreements, a reduction in federal spending and an emphasis on the importance of plastics in job creation and energy efficiency.
We are looking forward to a year where we have some advocacy successes and some opportunities to tell some good stories about plastics around energy efficiency, resource utilization and how plastics can lightweight cars and advance CAFE [corporate average fuel economy] standards, Russell said.