Lawmakers Can Enable a Pro-growth Agenda
To the 45th President of the United States and Members of the 115th Congress:
The National Electrical Manufacturers Association (NEMA) represents electrical and medical imaging manufacturers, innovators, job creators, and voters. We speak on behalf of pro-growth American industries that envision a modern electrical infrastructure and affordable, reliable health programs.
As you take on your sworn duties in service to the American people, we ask that you bear in mind five basic priorities that will expand the economy, increase employment rates, improve healthcare, and ensure access to safe and efficient electricity—all while protecting our natural environment.
1. Energy Efficiency and Electricity Use
NEMA member companies manufacture products and offer services that make energy efficiency possible in tangible ways. We recognize that efficiency should be the energy resource of first choice. According to the U.S. Energy Information Administration, each year about six percent of the electricity in the U.S. is lost through transmission and distribution before getting to end use. Energy-efficient technologies are available that can reduce loss, save money, minimize burdens on the grid, and benefit the environment and society.
We know firsthand that efficiency improvements are by necessity incremental and arise from market rationale and physical science. Government should be mindful of these realities, especially since the cost of efficiency is borne by end-user citizens, either directly in prices or indirectly by taxes. Some constraints on the growth of electricity use—however well-intended—may have the perverse effect of denying safe, reliable, and economical energy to those who might benefit most from it.
2. Grid Reliability
Transporting electricity safely and reliably from where it is produced to where it is used calls for one of the most complex networks yet devised by humans: the electric grid. Its evolution, however, occasionally has been dogged by inadequate reliability and efficiency. As renewable energy technologies proliferate and are integrated into the extant grid, even more demands will be placed on it, and a significant amount of attainable efficiency will likely be missed.
While the market may send clear signals with regards to demand, the government will continue its historic role of overseer, preferably in ways that reflect the pace of this century and anticipate the future. Since most electric utilities are regulated by public utility commissions or similar bodies, government should craft incentives that allow them to reap the benefits of making the necessary modernization investments to keep pace with a fast-evolving grid.
Reliability also mandates cyber- and physical security for the electrical system. This is an area that presents an ideal opportunity for business and government collaboration, since cyber risks are a reality in the connected world. Government security policies that offer common, risk-based approaches to problematic events should empower utilities, grid operators, and manufacturers to respond quickly and decisively without fear of post-incident retribution.
3. Regulations and Trade
Electrical manufacturers recognize the importance of and need for specific regulations since improperly installed or used equipment could result in harm. As an industry, we not only promote the importance of voluntary regulations by developing performance standards but also actively support their incorporation into building and safety codes when it is sensible to do so.
We also know that market-driven, industry-supported product performance and efficiency standards can reduce energy costs. Conversely, an overly prescriptive regulatory environment inevitably inhibits growth and can unreasonably restrict consumer choice and innovation. A dollar spent on compliance with marginal or duplicative government regulation is a dollar better spent elsewhere, such as capital investment or hiring a new employee. Likewise, if a regulation is not meeting its purpose—which can only be ascertained by objective analysis—then that rule should be withdrawn and only modified after full public and stakeholder engagement justify trying again.
More than 90 percent of the world's people live outside North America. Well-negotiated, equitable, and enforceable U.S. trade agreements enable U.S. companies—large, medium, and small—to access, compete in, and serve a growing foreign market. Trade agreements that remove unjustified barriers to trade, such as customs tariffs and redundant testing requirements, and otherwise lower export costs are important to the business aspirations of American companies to participate in overseas markets.
Our companies employ talented people who make the products that are essential to the American dream. Even though electrotechnical jobs pay some 20 percent more than most service jobs, finding work-ready employees is a nationwide challenge. This is partly because today's production environment has changed drastically over the last couple of decades—and is still changing.
We recognize our responsibility to train employees in the finer techniques of specialized manufacturing processes, but too often potential employees are ill-prepared to grasp essential elements of the twenty-first-century work environment. Our industries have championed dramatic advancements in manufacturing technologies, such as systems automation, mechatronics, medical imaging device production, and 3D printing.
Our secondary-level educational system would do well to develop a better understanding of modern production needs and the vibrant opportunities in manufacturing for young people with a wide variety of aptitudes – it is not sufficient to simply encourage some students to pursue technician jobs. While many community colleges have acted to fill this need, they should be further encouraged in tangible ways to continue their progress. In contrast, government retraining programs, while laudable, often lag behind. Creating incentives for businesses to satisfy this role may be a good alternative. Not only do companies know the necessary experience and skills required for a particular job, but they also know the community.
Arguably, medical imaging is one of the preeminent developments of the last millennium. Affording people ready access to this technology, from screening to diagnosis to guided therapy, is in the country's best interest because it is clearly in the citizenry's best interest.
The federal government enacted a controversial 2.3 percent excise tax on the sale of medical devices. This tax should be repealed. We know that understanding and treating some of the most daunting diseases of our time absolutely depends on the availability of modern imaging services. The medical device tax exemplifies a scenario in which an increase in cost, unfortunately, leads to decreased use. With an estimated $194 million per month flowing from the device manufacturers to the government as a result of this tax, research and development and job growth have suffered.
Both the executive and legislative branches will grapple with this and other health-related matters early in your service, and we welcome that. Few matters are so fundamental and so important, but this issue will require the highest levels of statesmanship and nonpartisanship.
Former U.S. Senator S.I. Hayakawa once observed that one of the basic goals of education for everyone in America was:
"…to learn, to understand, appreciate and take care of the natural world we live in…[to be] aware of the fascinating complex of events around them, of climate and terrain and vegetation and animals and people and their interrelatedness. Civilized people need to know not only what the environment is like, but how to keep it habitable."
Our Member companies toil to understand the interrelatedness of their manufacturing process with the environment and to act responsibly on that understanding. As environmental science has advanced—often with help from various industries—so has production science and engineering, leading to observable benefits across America and beyond. Progress in this area has been, and will continue to be, the result of patient, sustained, and iterative work guided by science.
Soon you will be challenged to actuate the aspirations you outlined in your campaign. Embracing pro-growth policies based on these five priorities should be part of your calculus. Our nation's economy is resilient, but improved and sustainable growth will require that government and business work hand in hand. We believe that energy efficiency, a modernized and secure grid, reasonable regulations, a future-focused workforce, increased access to life-improving medical technology—all the while respecting the natural environment—will be essential ingredients of any successful body of work over the coming years.
Best wishes for every success.
National Electrical Manufacturers Association