House Republicans Question Costly Manufacturing Program

The Obama administration’s proposed $1 billion National Network for Manufacturing Innovation (NNMI) was met with heavy skepticism by House Republicans at a congressional subcommittee hearing Thursday morning.
by | June 4, 2012

The Obama administration’s proposed $1 billion National Network for Manufacturing Innovation (NNMI) was met with heavy skepticism by House Republicans at a congressional subcommittee hearing Thursday morning.

The initiative would build a network of up to fifteen Institutes for Manufacturing Innovation around the country, serving as regional hubs of manufacturing excellence that will help to make our manufacturers more competitive and encourage investment in the United States. President Barack Obama’s fiscal year 2013 budget proposal sets aside $1 billion for the effort. Each of these institutes would combine private companies with public entities such as federal agencies and universities with the goal of closing the gap between basic research and product development.

Patrick Gallagher, Under secretary of Commerce for Standards and Technology, told the House Technology and Innovation Subcommittee that NNMI is essential for the U.S. to remain a global competitor in manufacturing. Committee members argued that cutting the corporate tax rate and overhauling federal regulations on businesses would help the U.S. and that $1 billion could be better spent elsewhere.

“You’re asking for a one-time investment of $1 billion, but as a former small business owner...I would be trying to remove these hurdles to job creation and American competitiveness before I invested $1 billion.“ said Rep. Steven Palazzo, R-Miss. “In the face of the uncertain future of taxation and the regulatory environment on manufacturers in America, what is the NNMI going to do to reduce these burdens on U.S. manufacturers?”

Gallagher agreed that the corporate tax rate is a barrier that prevents the U.S. from being as globally competitive as it could be, but he argued that the tax rate was only one of many barriers.

“The NNMI is really about one type of barrier that they face and the barrier is access to the ideas and the talent that are the new products that they’re going to make,” Gallagher said.

Subcommittee Republicans were mostly concerned with the large price tag on the program. Rep. Lamar Smith, R-Texas, said that NNMI resembled Obama’s stimulus bill.

“I hope this NNMI initiative is not just a smaller version of the stimulus plan. Eight hundred billion dollars there, which we saw did not work, did not keep unemployment below 8 percent...I don’t know why we expect this to perform any better than the other stimulus plans that the administration has advanced.”

Smith also questioned Gallagher about where the $1 billion for the program would come from and who would be writing the legislation. Gallagher said only that the administration would be willing to work with any committees that would be willing to help write the legislation and that the administration had identified, “a number of potential offsets.”

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