WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) and Policy Matters Ohio discussed steps for job creation and the future of Ohio manufacturing. Policy Matters Ohio released a new report showing that more than 52,000 jobs would be created in Ohio under Brown's bill that would help former auto suppliers and other small and mid-d manufacturers retool for the clean energy industry.
"We need to work alongside the private sector - particularly the manufacturing industry - to create jobs," said Brown, who was recently described as ‘Congress' leading proponent of American manufacturing.' "That's why we're passing the HIRE Act, which would provide direct incentives to businesses that hire and retain unemployed workers. But we need to do more. The next step is providing direct assistance to manufacturers to help them retool for the clean energy industry. One manufacturing job supports four others in our economy, and clean energy production will help define future of the Ohio manufacturing. The IMPACT Act could create more than 52,000 direct jobs in our state while helping to revitalize Ohio's manufacturing base."
"Manufacturing jobs are important because they play an outd role in generating other jobs from suppliers and from other sectors," Wendy Patton, Policy Matters Senior Associate said. "Average weekly earnings in manufacturing are 21 percent higher than in other jobs. This means employees spend more, supporting the rest of the economy. Assistance to manufacturers can jump-start job creation in Ohio."
As the Senate prepares to vote on the first bill in a series of jobs legislation today, Brown discussed his efforts to create jobs in Ohio. Today, the Senate passed The Hiring Incentives to Restore Employment Act (HIRE Act), a bipartisan bill which would provide incentives to employers to hire unemployed workers and free up capital for businesses to expand operations and hire new employees. The HIRE Act would provide a payroll tax holiday to businesses for each worker they hire who has been unemployed for at least 60 days, allow small businesses to write-off expenses so they can expand operations and hire new workers, and create jobs through investments in highway and transportation infrastructure. A more detailed summary of the legislation can be found below.
The HIRE Act is the first in a series of jobs bills the Senate will debate this year. Brown is working to attach his landmark bill - The Investment for Manufacturing Progress and Clean Technology (IMPACT) Act - into future jobs legislation. The bill would establish a $30 billion Manufacturing Revolving Loan Fund to help small and medium manufacturers transition to the clean energy economy through retooling. The bill would also expand the Manufacturing Extension Partnership (MEP) in order to help manufacturers access new export markets. The bill could potentially generate more than $100 billion in revenue for clean energy businesses and create 680,000 direct manufacturing jobs and nearly two million indirect jobs nationwide over five years.
Policy Matters Ohio released a new report today showing that the IMPACT Act could create between 41,063 and 52,214 new jobs in Ohio over ten years. This report examines Ohio's economy, describes the legislation, and concludes that the IMPACT Act could help revitalize Ohio's manufacturing industry.
The Hiring Incentives to Restore Employment Act (HIRE Act)
Incentives for Hiring and Retaining Unemployed Workers: The bill would offer employers an exemption from Social Security payroll taxes for each worker they hire in 2010 who has been unemployed for at least 60 days. The maximum value of this incentive is $6,621, which is equal to 6.2 percent of wages paid in 2010 up to the FICA wage cap of $106,800. This means that the longer a business has a new worker on its payroll, the greater the tax benefit they will receive. In order to promote long-term employment, there would be an additional $1,000 income tax credit for every new employee retained for 52 weeks.
Freeing Up Capital for Small Business So They Can Expand Operations, Hire New Workers: To help business make the investments they need to grow and hire more workers, the bill would extend a Recovery Act provision on expensing. This would allow small businesses to deduct up to $250,000 of the cost of qualifying property in the year it is purchased, rather than waiting to recover their costs through depreciation deductions over a number of years.
Investing in Transportation Infrastructure, Highways, and Public Transportation: The HIRE Act would extend surface transportation projects - investing in our nation's infrastructure and helping states and localities make capital-intensive decisions. The bill would also transfer $20 billion to the Highway Trust Fund. By investing in infrastructure, the HIRE Act would boost the manufacturing and construction sectors.
Expanding Build America Bonds: Under current law, Congress provides tax credit bonds to state and local governments for certain school and energy projects - rather than getting interest payments from the bonds, investors get tax credits. Build America Bonds (BAB) is a separate program that helps state and local governments fund government works projects. When state and local governments issue these bonds, the Treasury pays a portion of the interest that the state/local government ordinarily pays to the bond holders. The HIRE Act would allow state and local governments to finance more projects that put people to work.
The Investment for Manufacturing Progress and Clean Technology (IMPACT) Act
The domestic manufacturing industry helped build our nation's middle class and is critical to national security. It accounts for 12 percent - $1.6 trillion - of the U.S. gross domestic product (GDP) and nearly three-fourths of the nation's research and development. Despite this, the U.S. manufacturing industry has contracted for 16 consecutive months. Since 1987, manufacturing's share of GDP has declined by more than 30 percent. According to the Federal Reserve Board, manufacturing output fell 2.7 percent in January 2009, to a level 13.1 percent below that of one year before. Last month, nearly half of the nation's job losses were tied to manufacturing. Manufacturers continue to face a reduction in demand and a lack of capital due to the financial crisis. A May 2009 survey found that more than 70 percent of manufacturers anticipate difficulties securing credit to purchase raw material and rehire workers as business conditions improve.
The IMPACT Act would establish a $30 billion Manufacturing Revolving Loan Fund. States would receive funds for the establishment of revolving loan programs to assist small and medium-d firms in retooling, expanding or establishing domestic clean energy manufacturing operations, and improving energy efficiency.
The bill would also modernize the Manufacturing Extension Partnership (MEP), the federal-state partnership which provides support to small and mid-d manufacturers. Currently, our nation's 59 MEP centers receive slightly more than $100 million in federal funds each year, with states matching the federal contribution two-to-one. Brown's bill would provide the MEP program with $1.5 billion in federal funds over five years to help manufacturers diversify to clean energy markets and adopt innovative, energy efficient manufacturing technologies. Under the bill, the federal share of MEP funding would increase to 50 percent. Based on the MEP's current average cost per consultation, the additional federal funding in this bill could enable MEP to reach at least 10,000 additional U.S. manufacturers each year.
"Without a program to support our own domestic manufacturers, policies that create new demand for clean energy will just lead to more imports," said Phil Angelides, chairman of the Apollo Alliance. "Senator Brown's IMPACT Act will help put Americans back to work by allowing manufacturers in Ohio and across the country to tap into clean and efficient energy markets."
"PERI's analysis finds that investing in the retooling and conversion of small and medium-d manufacturing firms in Ohio would create a robust engine of job growth for the state," said Heidi Garrett-Peltier, the economist who conducted the analysis. "We find that the investments from IMPACT would not only retain current jobs, but they would also create new jobs that utilize the skills of the workers of Ohio. These investments are a potentially powerful way to revitalize the manufacturing sector in the state."
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