[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
MADE IN THE USA: HOW MAIN STREET IS
REVITALIZING DOMESTIC MANUFACTURING
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
NOVEMBER 20, 2025
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 119-023
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
62-203 WASHINGTON : 2026
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
NICK LALOTA, New York
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
TROY DOWNING, Montana
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
JIMMY PATRONIS, Florida
NYDIA VELAZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
HERB CONAWAY, New Jersey
MAGGIE GOODLANDER, New Hampshire
Lauren Holmes, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Roger Williams.............................................. 1
Hon. Nydia Velazquez............................................. 3
WITNESSES
Mr. Charles Crain, Managing Vice President, Policy, National
Association of Manufacturers, Washington, DC................... 6
Mr. Harry Moser, Founder & President, Reshoring Initiative,
Sarasota, FL................................................... 7
Mr. Kurt Voss, Owner & Chief Executive Officer, The AmeriLux
Family of Companies, De Pere, WI............................... 9
Ms. Shirley Modlin, Co-Owner, 3D Design and Manufacturing,
Powhatan, VA................................................... 11
APPENDIX
Prepared Statements:
Mr. Charles Crain, Managing Vice President, Policy, National
Association of Manufacturers, Washington, DC............... 46
Mr. Harry Moser, Founder & President, Reshoring Initiative,
Sarasota, FL............................................... 59
Mr. Kurt Voss, Owner & Chief Executive Officer, The AmeriLux
Family of Companies, De Pere, WI........................... 71
Ms. Shirley Modlin, Co-Owner, 3D Design and Manufacturing,
Powhatan, VA............................................... 73
Questions and Answers for the Record:
Questions from Hon. Nydia Velazquez to Mr. Charles Crain and
Responses from Mr. Charles Crain........................... 75
Additional Material for the Record:
NEMA Letter.................................................. 77
MADE IN THE USA: HOW MAIN STREET IS
REVITALIZING DOMESTIC MANUFACTURING
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THURSDAY, NOVEMBER 20, 2025
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:01 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams
[chairman of the Committee] presiding.
Present: Representatives Williams, Stauber, Meuser, Van
Duyne, Alford, LaLota, Finstad, Wied, Bresnahan, Jack, Downing,
King-Hinds, Schmidt, Patronis, Velazquez, McGarvey, Scholten,
Cisneros, Morrison, Simon, Olszewski, and Conaway.
Chairman WILLIAMS. I would like to welcome everybody to our
hearing today, and a couple items before we actually get
started.
I first want to make aware to all the Members here you have
an invitation on your desk right here for a Christmas reception
for the Committee, December 11, and I hope everybody can come
and book that, and we will have some fun with that.
And then the other thing is we have a birthday in the house
today, beautiful Nicholle.
Where is Nicholle?
Stand up, Nicholle.
So I promised Nicholle I would sing her happy birthday.
[Laughter.]
If you all want to join in, it is fine. You ready?
[Singing] This is your birthday song. It does not last too
long. Hey.
Happy birthday, Nicholle.
All right. Good morning, everyone. And before we get
started, I would like to--I will lead us in the pledge and the
prayer. If you would stand, please.
Heavenly Father, God of all people, thank you for allowing
us to meet today and discuss things that will make life better
not only for ourself but those in the future, and thank you for
being able to represent the greatest country in the world, the
United States of America. We love you and we strive to follow
you in your life and not in your shadow. In your name, we pray.
Amen.
ALL. I pledge allegiance to the Flag of the United States
of America, and to the Republic for which it stands, one
nation, under God, indivisible, with liberty and justice for
all.
Chairman WILLIAMS. I now call the Committee on Small
Business to order, and without objection, the Chair is
authorized to declare a recess of the Committee at any time.
I recognize myself for my opening statement.
Welcome to today's hearing titled, ``Made in the USA: How
Main Street is Revitalizing Domestic Manufacturing.''
I want to begin by thanking our witnesses for being here
today.
Across the country, made-in-the-USA businesses are driving
local economic growth, strengthening domestic policy change,
and revitalizing communities. They build, innovate, and create
good-paying jobs in every corner of this country.
Domestic manufacturing is critical to our economic
strength, national security, and job creation. In the first
quarter of 2025, the manufacturing sector alone added $2.9
trillion in value to our economy and employed over 13 million
Americans. Small manufacturers make up nearly three-quarters of
the industry and are driving local innovation and resilience.
Revitalizing and expanding U.S. manufacturing isn't just an
economic priority. It is a national imperative. That is why
President Trump made bringing production back home a
cornerstone of his economic agenda.
And, earlier this year, I introduced H.R. 3174, the Made in
America Manufacturing Finance Act. This legislation supports
President Trump's onshoring and reshoring efforts by increasing
access to capital for America's small manufacturers.
By helping small businesses access the capital they need,
they can modernize, expand, and compete effectively on a global
scale.
In addition, technology will continue to help these small
businesses modernize the industry, and advanced tools, such as
automation and AI, are essential for U.S. manufacturers to
remain competitive and attract a new generation of the
workforce.
So, yet, small firms face regulatory burdens that cost
small manufacturers nearly $50,000 per employee, which is twice
as much as large manufacturers. Washington must cut red tape so
Main Street America and main street manufacturers can
successfully innovate and they can grow.
All of this depends on a strong and skilled American
workforce, and with 437,000 manufacturing job openings today
and a projected 3.8 million new positions by 2033, we must
invest in the next generation of American manufacturing.
Manufacturers need robust skills training, apprenticeships,
and public-private partnerships to meet industry demand.
Programs like the Department of Labor's Registered
Apprenticeships and the SBA's new partnerships with trade
schools and workforce programs are helping to prepare the next
generation of skilled workers to invest in America's
manufacturing future.
This Committee is committed to supporting made-in-the-USA
manufacturing by removing barriers to growth, strengthening
supply chains, and empowering the workforce. When American
manufacturers succeed, America succeeds.
So I want to thank our witnesses today for coming and
joining us today, and I look forward to our discussion on how
main street is revitalizing American manufacturing. The future
of Main Street America is made in the USA.
So I now recognize our distinguished Ranking Member and my
friend from New York, Ms. Velazquez, for her opening remarks.
Ms. VELAZQUEZ. Good morning, and thank you, Mr. Chairman. I
appreciate the Committee, and I want to thank all the witnesses
for being here today.
I appreciate the Committee focusing this hearing today on
the state of manufacturing, an important role that small
businesses play both in our national economy and our local
communities.
While manufacturing is incredibly important, so is farming
and ranching. I hope we can hold a hearing on the
administration's decisions on this because, as the Small
Business Committee, we owe it to the ranchers in this country
to elevate the harm of this decision.
According to the SBA's Office of Advocacy, the U.S. is home
to over 600,000 small manufacturing firms. These small
businesses create good-paying jobs, contribute over $277
billion annually to payrolls, and supply components and
products that fuel American industry, from aerospace to
healthcare.
I look forward to hearing from the small businesses on our
panel about their challenges and what we can do to ensure small
manufacturers remain competitive and innovative despite the
difficult environment in which they operate.
Unfortunately, we continue to see warning signs that policy
decisions from the administration are making the environment
more difficult for all U.S. manufacturers, not less. This is
especially true for small businesses in this sector.
Despite the administration's claim of a manufacturing
resurgence and booming economy, the manufacturing sector
continues to decline.
This morning, the Bureau of Labor Statistics released job
data showing the U.S. lost an additional 6,000 manufacturing
jobs in September. The revised August numbers show a total loss
of 92,000 manufacturing jobs over the past year, with nearly a
third coming in the past months. These month-over-month
decreases are a cause for great concern.
I would also like to talk about the elephant in the room.
While some may call tariffs short-term pain for long-term gain,
history shows that small manufacturers and their employees are
unlikely to see benefits even if--and it is a big ``if''--any
so-called long-term gains are realized.
The Office of Advocacy further points out that when the
overall manufacturing sector began to recover from earlier
losses in 2010 and large manufacturers began to grow again,
there was no equivalent rebound for small firms.
Once manufacturing jobs are lost, it is the small firms
that are unlikely to recover. That is why we must take a
holistic approach to retaining small manufacturers and their
workforces rather than implement whack-a-mole policies that do
not account for the disproportionate and negative impacts on
small businesses.
This is most prevalent right now with tariffs. Chaotic
tariff policies continue to be a major pain for small firms.
I also share the concerns of our panelists on the ability
of small manufacturers to attract, compete for, and train a
skilled workforce.
Manufacturing is a highly competitive labor market.
According to NAM, there were 409,000 manufacturing job openings
in August of this year, and the U.S. will face a shortfall of
1.9 million manufacturing workers by 2033.
Working for small businesses, especially for family-owned
firms like 3D, has many advantages. To be frank, most small
businesses cannot match the pay and benefits packages that
large corporations offer.
This puts small firms at a disadvantage when competing for
talent as all manufacturers seek to feel the current and
looming shortfalls of skilled workers.
Therefore, I look forward to hearing from the panel about
these issues and additional ways we can help to create an
environment that provides businesses with opportunities for
success.
Thank you, Mr. Chairman. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
And I will now introduce our witnesses.
Our first witness here with us today is Mr. Charles Crain.
Mr. Crain is the managing vice president of policy at the
National Association of Manufacturers here in Washington, D.C.
In this role, he leads the Association's best-in-class team of
policy experts and advocates working to achieve legislative and
regulatory outcomes that support the growth and success of
manufacturers in America. Prior to this, Mr. Crain served as
the Association's vice president of domestic policy.
Mr. Crain began his career on Capitol Hill working for
Members of the House Committee on Financial Services and Senate
Committee on Finance. Mr. Crain received a bachelor of arts in
political science from Mercer University, and that is--Toby the
Bear is at Mercer, isn't he?
Mr. CRAIN. That is exactly right.
Chairman WILLIAMS. Okay. Great.
I want to thank you for being with us today.
Our next witness here with us today is Mr. Harry Moser. Mr.
Moser is the founder and president of Reshoring Initiative in
Sarasota, Florida. Mr. Moser founded the Reshoring Initiative
in 2010 to bring back American manufacturing and strengthen the
nation's skilled workforce. His efforts have earned national
recognition for him, including an induction into the Industry
Week Manufacturing Hall of Fame and honors from Quality
Magazine, The Economist, and the Manufacturing Leadership
Council.
Before starting the Reshoring Initiative, he served in
leadership roles at GF Machining Solutions, joining as
president in 1985 and retiring as Chairman Emeritus in 2010.
Mr. Moser holds a bachelor of science in mechanical
engineering and a master of science in engineering from the
Massachusetts Institute of Technology, as well as a master of
business administration from the University of Chicago.
I am looking forward to having your testimony and having
you here today, Mr. Moser. Thank you.
I now recognize my colleague, Representative Wied from the
great State of Wisconsin, to briefly introduce his constituent
who is appearing before us today.
Mr. Wied?
Mr. WIED. Good morning, and thank you, Mr. Chairman.
Today, I have the privilege of introducing my constituent
and friend, Kurt Voss.
Mr. Voss is the owner and chief executive officer of
AmeriLux Family of Companies, headquartered in my hometown of
De Pere, Wisconsin.
Mr. Voss founded AmeriLux over 20 years ago and has guided
its growth from a small start-up in 2004 to a multicompany
entity that includes manufacturing services, distribution,
logistics, and warehousing services, and employing over 350
people.
Earlier this year, AmeriLux International announced a
partnership with Brett Martin, a company based in Ireland, to
form American Polycarbonate Company and to reshore
polycarbonate manufacturing right in northeastern Wisconsin.
Outside of his work at AmeriLux, Mr. Voss serves on the
board of directors for the Green Bay Packers and the board of
trustees of St. Norbert College.
As a member of the board of trustees, he helped lead the
St. Norbert Church restoration project, which is now known as
the Cassandra Voss Center in memory of his daughter.
Entrepreneurs and great leaders like Mr. Voss are what make
northeastern Wisconsin and the United States of America the
greatest place in the world.
Thank you for joining us today, Mr. Voss. I am looking
forward to our important conversation.
Chairman WILLIAMS. The gentleman yields back. I thank you
for that nice introduction.
I now recognize the Ranking Member from the great State of
New York, Ms. Velazquez, to briefly introduce our last witness
appearing before us today.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
It is my pleasure to introduce our witness today, Ms.
Shirley Modlin.
Ms. Modlin is the co-owner of 3D Design and Manufacturing,
a family-owned business in Powhatan, Virginia. She studied
management and accounting before launching 3D Design and
Manufacturing, starting the firm with her husband, David, in
2005.
For 20 years, 3D has applied both mechanical engineering
design services and manufacturing engineering design services.
3D Design employs 15 skilled engineers, mechanical technicians,
and electrical specialists.
They work frequently with large corporations, supplying
their high-quality products to the beverage, pharmaceutical,
automotive, and space technology industries.
3D is a longtime Member of Small Business Majority and a
strong and vocal advocate on behalf of small business
manufacturers.
Thank you for being with us this morning.
Chairman WILLIAMS. The gentlelady yields back.
And before recognizing the witnesses, we will go over the
ground rules here.
I would like to remind them that their oral testimony is
restricted to 5 minutes in length. You have got a clock in
front of you, so watch that.
If you begin to go over, you will hear this. [Chairman
Williams bangs gavel.] And that means to wind it down. If you
see the light turn red in front of you, it means your 5 minutes
has concluded and you should wrap up your testimony.
So with that in mind, I now recognize Mr. Crain for his 5-
minute opening remarks.
STATEMENTS OF MR. CHARLES CRAIN, MANAGING VICE PRESIDENT,
POLICY, NATIONAL ASSOCIATION OF MANUFACTURERS; MR. HARRY MOSER,
FOUNDER AND PRESIDENT, RESHORING INITIATIVE; MR. KURT VOSS,
OWNER AND CHIEF EXECUTIVE OFFICER, THE AMERILUX FAMILY OF
COMPANIES; AND MS. SHIRLEY MODLIN, CO-OWNER, 3D DESIGN AND
MANUFACTURING
STATEMENT OF CHARLES CRAIN
Mr. CRAIN. Good morning, Chairman Williams, Ranking Member
Velazquez, and Members of the Committee. My name is Charles
Crain, and I am the managing vice president of policy at the
National Association of Manufacturers.
Manufacturing is a powerhouse for American prosperity. If
U.S. manufacturing were its own nation, it would be the eighth-
largest economy in the entire world, and that economy would be
principally driven by small businesses, which make up 98
percent of our industry.
These are start-ups with new and innovative business models
disrupting markets, and they are family-owned businesses passed
down through the generations as pillars of their communities.
The most important investment that Congress can make in
these small businesses is smart public policy, policy that
lowers the cost of doing business in the United States, policy
that creates the certainty that manufacturers need to invest
millions of dollars in decades-long projects, policy that puts
more people to work, puts more shovels in the ground, and that
strengthens our nation's hand on the world stage.
Congress has already taken a historic step in that
direction with a pro-growth tax bill that incentivizes and
supports manufacturing investment.
By reinforcing and making permanent the 2017 tax reform
that led to record job creation and wage growth and capital
investment across our industry, H.R. 1 strengthened America's
leadership as a manufacturing superpower--and it saved 6
million American jobs.
Now, more must be done to unlock the benefits of this
historic and transformative achievement.
This Committee has already approved the Made in America
Manufacturing Finance Act to ensure that the SBA's loan
programs are working as well as possible for small
manufacturers who need capital to grow here at home.
This bill is a great example of how Congress and the
administration can pursue what we have called a comprehensive
manufacturing strategy.
That means rebalancing unworkable regulations and reforming
America's broken permitting process; it means investing in our
nation's infrastructure and supporting American energy
dominance; it means providing trade certainty that empowers
manufacturers to make things in America; and it means investing
in the manufacturing workforce of the future.
We need all of these policies to build on the success of
tax reform, to unlock small manufacturing growth, and to drive
a true manufacturing renaissance.
Let's start with permitting reform.
We cannot become the best place in the world to build
things if it takes us 80 percent longer to permit projects here
in the U.S. as compared to other advanced economies.
Unclear timelines, overlapping statutes, excessive
litigation--these all raise costs for manufacturers or they
halt manufacturing projects entirely.
Another roadblock to getting shovels in the ground is the
burden of federal regulation. Small manufacturers spend, on
average, $50,000 per employee every single year just on
compliance.
This administration has already made tremendous progress in
rightsizing the federal regulatory environment, meaning that
more projects will get off the ground, not get stuck in
quicksand.
We also need both energy dominance and trade certainty to
further unlock manufacturing investment. An all-of-the-above
energy strategy that harnesses America's abundant natural
resources can power manufacturing into the future, while smart
trade policy can ensure that we have the inputs and the
machinery that we need to make things here at home as well as
the export markets to sell things around the world.
Finally, for these investments to take root, we need a
highly skilled manufacturing workforce. With 400,000 jobs open
across the sector, manufacturers are committed to upskilling
and training programs, and we need policymakers to deliver
workforce and immigration policy solutions to help us fill jobs
with the skilled workers that we need.
This is the road to a manufacturing renaissance. It runs
through a comprehensive manufacturing strategy, ensuring that
all parts of the federal government are rowing in the same
direction--toward an empowered, emboldened, exceptional
manufacturing industry.
Backed by the right policy choices, small manufacturers
will deliver--for our communities, for our country, and for our
preeminence on the world stage--because when manufacturing
wins, America wins.
Thank you.
Chairman WILLIAMS. Thank you.
And I now recognize Mr. Moser for his 5-minute opening
remarks.
STATEMENT OF HARRY MOSER
Mr. MOSER. Thank you, Chairman Williams, Ranking Member
Velazquez, and the Members of the Committee. I am honored to be
here. I am Harry Moser, the founder and president of the
Reshoring Initiative.
So I would first like to summarize what has been happening.
Manufacturing reshoring plus FDI, foreign direct investment
jobs, we track them, and they increased from about 11,000 in
2010 to 240,000 per year last year.
It is an annual rate. So compounded 25 percent per year. So
it has been a very aggressive, successful trend.
About 50 percent of the jobs that come back are in small
business. So the major way through reshoring to bring jobs to
small business is for big companies to reshore, decide to
produce products here, source the components, the tooling, et
cetera, from the small businesses.
More effective industrial policy--something like what
Charles recommended--can dramatically increase that rate of
reshoring and FDI--perhaps double it--and if we did that, we
could by, say, 2040, increase U.S. manufacturing by about 40
percent, eliminating the goods trade deficit. That is our
mission.
A little background. The big companies make the reshoring
decisions. There are certainly some small companies that import
things, but it is basically the big companies that do most of
the importing. They can make the reshoring decisions, and then
the work goes to the small companies. So it is essential to
convince those big companies to reshore and then feed the
market.
An excellent example of this--a company I know well--is GE
Appliances, headquartered in Louisville, Kentucky. They have
been consistently reshoring and investing here, and they were
the co-recipient of the 2025 National Metalworking Reshoring
Award.
They have done a great job. They have invested--their
current announcements come to a total of about $6.5 billion
dollars in investments, primarily for reshoring, primarily
coming back from Mexico and China.
And as a result of that, they now have relationships with
about 6,500 U.S. suppliers--mostly small companies, the kind of
companies we are concerned about--across all States, and they
buy about $4.6 billion in materials, components, and services
each year from those companies.
My perspective is feed the big--help the big companies
reshore, the small companies will win.
The root causes of reshoring are essential to understand.
In 2025, we surveyed the big and the small companies and asked
them why they offshored and why they now reshore, and the
biggest barrier is price.
The U.S. price, the manufacturing cost of making something
here, is 10 to 20 percent higher than in most developed
countries, and 50 percent higher, 60 percent higher than in
countries like China, and unless we overcome that differential,
companies will always be attracted to source their components
offshore.
That price, that cost differential, is primarily driven by
a U.S. dollar that is consistently 20 percent or more
overvalued, making our cost higher expressed in common
currency.
The trend in 2025 started out well, softened a little bit
in April with Liberation Day, recovered, and we project the
total of reshoring and FDI to be about 10 percent lower this
year than last year but still about 220,000 jobs announced. So
still a good year for the trend.
We believe that one of the keys to reshoring is utilization
of total cost of ownership. We have companies who are starting
to recognize all the costs and risks associated with
offshoring, and when they do that, they find out that much of
what they now import they can reshore without government
subsidies, et cetera.
For example, comparing 190 cases of China versus the U.S.,
the U.S. win rate goes from 8 percent based on price to 32
percent based on total cost to 46 percent if there is also a 15
percent tariff on the product.
So getting companies to do that, to use those
methodologies, is the simplest, least expensive way to achieve
what we want.
Some things that the U.S. Government and State and local
governments can do.
The Department of Labor still pushes college for all rather
than a good career for everyone. And they have charts that talk
about university education pays a million dollars more lifetime
income than a high school graduate.
And if they would change that to include the income of
apprentices, apprentice graduates, then the parents and the
guidance counselors would see that that kind of career is
feasible.
Thank you.
Chairman WILLIAMS. Thank you.
I now recognize Mr. Voss for his 5-minute opening remarks.
STATEMENT OF KURT VOSS
Mr. VOSS. Hi, everyone. Thanks for inviting me to testify.
I appreciate you soliciting feedback from those of us that are
in the trenches with an eye towards finding additional ways the
government can support, encourage, and enhance the success of
small business.
We all know the positive impact that a healthy small
business community can have on our society, and part of that
health includes creating an environment that encourages all of
us to chase our potential.
I assume you have read my submissions, but my story
involves a hyper-optimistic and hyper-entrepreneurial guy--me--
with a young family, quitting a very good job and deciding to
take a shot at starting a business in 2004.
Twenty-one years later, our enterprise, the AmeriLux Family
of Companies, employs over 350 people and serves markets
throughout the United States and Canada.
For perspective, the data tells us that, of all the
businesses that were started in 2004, only 20 percent of them
are in business today. We feel very blessed to be one of that
20 percent.
So you have an idea what frames my mindset, we have 10
culture statements which guide and inform how we run our
business. They were part of the submission to you. We wrote
them not to be in Harvard business speak, but we wrote them in
what we call AmeriLux speak.
One of them is, quote, ``Is this a great country or
what!?'' The statement describes an intentionality around
creating a culture of optimism and positivity, as optimistic
and positive teams produce greater results than negative and
pessimistic teams.
If the business book said that to be successful you needed
to be negative and pessimistic, I would probably be one that
would try to beat the odds. But, thankfully, I don't have to
because it is good business to be positive and optimistic.
The other part of the meaning of this culture statement for
us refers to this country that we have been fortunate enough to
be born in. I don't believe the AmeriLux story could have been
written--at least in its current form--in any other country.
This country is exceptional, meaning it is the exception.
Our rights come from God, and our government is created to
protect those rights.
Our free enterprise system is an extension of those
individual rights. In every other country in the world, rights
come from the government, and those rights can be taken away or
granted based on government edicts.
So while this country is far from perfect, we have been on
a continuous improvement journey for about 250 years. We
operate from the premise that the glass is 80 percent full, and
our focus is to help it get to 81 percent and more. So we don't
spend our time with a hyper-focus on the 20 percent that is
empty.
In my submission, I articulated a few items that I feel
this Committee should focus on which could significantly
improve things within the small business community.
To be clear, we don't assume a victim mentality when facing
challenges or look to the government to solve all of our
problems. I suggest a focus on the following, and I can
certainly give you my two cents related to these issues.
I mentioned the easing of banking regulations and
compliance costs for small banks to allow them to better serve
their customers.
Obviously, capital formation is critical in the starting
and the growing of businesses.
The cost of healthcare continues to escalate, and the
current structure is broken. Real reform needs to take place,
enabling employers and employees to obtain affordable care and
for them to become better educated consumers of medical
services. We don't need more insurance reform. We need
healthcare reform.
Also, I am acutely aware of the importance that small
business plays in providing for societal needs. The capital
derived from successful small businesses benefits this country
and its citizens in a variety of ways. It is literally the
engine that runs this country.
In many ways, this is underpublicized, and I encourage this
Committee to use its influence to magnify that point.
And, finally, in my submission, I mentioned the current
situation with our newest, recently formed company, American
Polycarbonate Company. It is a joint venture with a company in
Ireland called Brett Martin.
We literally unplug manufacturing equipment that was being
utilized in Ireland and reshore that equipment to De Pere,
Wisconsin, a suburb of Green Bay. This equipment cannot be
procured in the United States.
Now, I fully support the tariff strategy which has had
other positive effects on our businesses. I also understand
that, with all significant positive policy changes, there will
be some unintended consequences. But subjecting financial
penalties like tariffs on equipment needed to reshore
manufacturing to the United States obviously doesn't make sense
and should be corrected.
So thanks again for having me, and I look forward to your
questions.
Chairman WILLIAMS. I now recognize Ms. Modlin for her 5-
minute opening remarks.
STATEMENT OF SHIRLEY MODLIN
Ms. MODLIN. Thank you, Mr. Chairman and Ranking Member
Velazquez and the Members of the Committee. Thank you for this
opportunity to speak today.
I am the owner of 3D Design and Manufacturing located in
Powhatan, Virginia, and I also am a Member of the Small
Business Majority. I have been for a number of years.
3D Design and Manufacturing provides manufacturing
engineering, design services, and, obviously, engineering
design services. We work with large corporations in the
beverage, pharmaceutical, automotive, and space technology
industries.
I want to emphasize the small manufacturers being a
critical part of America's economy. Large corporations rely on
the small businesses like mine to solve a lot of their
problems.
For example, when an assembly line at a large business
breaks down, they will call us, and we will go out very
quickly, diagnose the problem, make the repairment part, and
actually go back and repair the machinery and equipment.
This happens very quickly to keep these lines moving in
these large corporations in these big plants. So I appreciate
the opportunity here to bring this to your desk.
The importance of the small business in domestic
manufacturing is essential. I do tell you that small business
is struggling under the current economic conditions.
We have been--3D Design and Manufacturing has been in
business since 2005, and we have never experienced such
turmoil. This is largely due, unfortunately, to the tariffs.
Our products are made in America, but we rely on aluminum,
steel, and alloys, which are imported from Canada and Mexico.
In addition to the bottom line hit, tariffs create this
uncertainty. So that is that I never know what tomorrow will
hold. A 25 percent tariff, a 50 percent tariff, no tariff, a
tariff on aluminum, tariff on steel, uncertain. It is very
difficult in this environment to set prices for my customers.
And this hurts. This hurts the small business.
While we are being battered about, we can't do that to our
customers. We quote our jobs and we hold our prices for at
least 5 days. If in that 5-day period prices rise, we are going
to take that hit. We can't pass that on to our customers
because we are in a highly competitive industry as a small
manufacturer, and these customers could take their business
elsewhere.
So tariffs are an essential challenge also in finding
employees--after the tariffs, rather. One of our challenges is
finding employees because small manufacturers have to rely on a
skilled workforce. They have to hit the floor and be able to
work. And there is a tremendous shortage of these workers in
manufacturing.
It takes a minimum of a month to 3 months to see that
employee put on the floor and begin to succeed in what they are
being asked and expected to do.
We invest a great deal of money in training that employee,
and, unfortunately, once the employee gets onto the floor,
sometimes they don't work out. Sometimes they are not able to
cut the mustard, if you will.
So this shortage of workforce in our small manufacturing
community is essential. Our 30-year veterans are retiring, and
we do not have that up-and-coming skilled workforce to take
their place. This is very, very important.
So to recruit positions for what we need, it is not easy.
They have to have a great deal of training and experience. And
unlike the large corporations, they have these employees more
ready to go on the floor.
We find ourselves challenged to hire because we are
competing against large corporations who offer the big, robust
packages and benefits.
So I suggest that we have some interest here to ask
Congress to assist by exempting small businesses, not just
industries, but exempting from tariffs.
I am going to close by suggesting that we also--if small
manufacturing can continue to exceed and grow in the workforce,
if Congress will take a look at this small community and
invest----
Chairman WILLIAMS. The gentlelady's time is up. Thank you
for that.
Ms. MODLIN. Thank you very much.
Chairman WILLIAMS. You all did great. This is going to be a
good hearing.
I will say this. Every now and then, you will see some
people move in and out, go out doors. You haven't made anybody
mad. It is just we have got a lot of people and a lot of
Committee hearings going on today, so that will happen.
I now recognize myself for 5 minutes.
Mr. Crain, your organization has highlighted how excessive
federal regulations stifle small manufacturers.
Can you discuss how reducing red tape would directly
improve the competitiveness of small and medium-size
manufacturers nationwide?
Mr. CRAIN. Absolutely. Thank you for that question, Mr.
Chairman.
As you mentioned in your opening remarks, small
manufacturers bear the brunt of the federal regulatory burden
that our industry faces. As an industry writ large, we face
about $350 billion every year in federal regulatory cost. For
small manufacturers, it is about $50,000 per employee per year.
We don't always have in-house--I am sure the small
manufacturers on the panel can speak to this--in-house counsel,
in-house accountants to comply with those burdens, so you have
got to hire out expensive consultants, and those are resources
that are diverted from more productive uses: growing your
business, investing in R&D, hiring new people, purchasing
capital equipment.
These are the pro-growth activities that drive the
industry, and so dollars diverted from those to regulatory
burdens that don't really work for small manufacturers anyway
is really wasted cost.
Chairman WILLIAMS. Thank you.
Mr. Moser, the 2025 Reshoring Survey reveals that 30
percent of regional equipment manufacturers have reshored or
are working to reshore their operation in the last 10 years,
and 43 percent of contract manufacturers have reshored or are
actively reshoring for their customers, and you touched a
little bit on that.
What are the benefits of reshoring to the United States for
manufacturers and for the U.S. economy as a whole?
Mr. MOSER. Thanks for asking.
For the country, it is very obvious. It is more jobs. It is
less income inequality. It is better, a smaller budget deficit.
It is defense preparedness. Almost everything that should be on
our priority list is achieved by reshoring.
For the companies, it is quicker delivery. It is the
benefit of having engineering and manufacturing close to each
other, able to speak in the same language, and optimize both
the design of the product and the process for making the
product.
It is delivery. The survey showed that U.S. manufacturers
were willing to pay 10 to--many of them were willing to pay 10
to 20 percent more for a 1-week delivery instead of a 6-week
delivery. So if you make it here, you bring some extra value to
your customer.
I have got a much longer list than that, but those are the
primary benefits.
Chairman WILLIAMS. Thank you.
Mr. Voss, what barriers do small manufacturers like
AmeriLux face when trying to adopt automation and advanced
manufacturing tools?
Mr. VOSS. By the way, I would add one thing to reshoring.
That is just having control of your future. As organizations
are looking to build sustainable companies, you want to be able
to control your future, and reshoring certainly does that and
was primary in my mind of doing that.
As it relates to your question, Mr. Williams, I think it is
education more than anything, not only for the workforce, but
for us. I think we are all learning how we can use that
automation and AI, et cetera. And a lot of us are taking fast-
track courses through various sources to be able to do that and
stay ahead.
At the end of the day, we are all in a competitive world
and a competitive environment, and it is no different than
being out in the woods with 10 of your friends and a bear shows
up. You have got to make sure you can run faster than a couple
of your friends. Well, it is the same thing in business. And I
hope that responds to your question.
But we are going to have to do that if we are going to
remain competitive for sure.
Chairman WILLIAMS. Thank you.
Last question.
Mr. Crain, small manufacturers are key to modernizing
American manufacturing. So what are you hearing from NAM
members about workforce development opportunities and to ensure
that they can train and retain talent for the next generation
of manufacturers?
Mr. CRAIN. Having skilled workers is absolutely an
imperative for manufacturers, and, specifically, we need
manufacturing skilled workers to fill the 400,000 open jobs
that we have. These are machinists, they are technicians, they
are welders, they are electricians that make our factory floors
run.
And so the manufacturing industry has invested heavily in
training and upskilling programs to ensure that we can meet
that workforce need.
What we need from federal policymakers is to do their part:
to ensure that our companies have the resources to offer those
programs, to ensure that federal agencies are supporting
programs, to do education efforts as low as middle and high
school to talk about the promise of a manufacturing career.
There is so much to be done on the domestic workforce side
and on the immigration side to ensure that we have workers and
that we have skilled workers for the manufacturing industry of
the future.
Chairman WILLIAMS. All right. My time is up. And I now
recognize the Ranking Member for 5 minutes of questions.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Ms. Modlin, in your testimony you state that the workforce
shortage is urgent and will only worsen in the coming years.
The National Association of Manufacturers has also referenced
this structural workforce deficit, citing the need for almost 2
million more employees over the next decade.
What could happen to small manufacturers if we do not
properly invest in workforce development?
Ms. MODLIN. Thank you, Ranking Member Velazquez.
If we do not have a workforce in small manufacturing--
remembering that we do not have the resources to train on the
floor. They need to come to the small manufacturer ready to hit
the floor with a minimal amount of training to move forward.
If we do not prepare our workforce and encourage our
younger generation to come out of the technical and community
colleges and come into the smaller manufacturing environment,
we are going to be at a deficit.
Small manufacturers support the large plants, the large
corporations. And so it is going to be a fallout if we do not
have that workforce prepared, we are going to--the small
manufacturers are going to suffer, which is going to fall
down--flow down, if you will--to the large corporations that we
support.
Ms. VELAZQUEZ. Thank you.
We hear from small businesses that the President's tariff
policies are harmful in and of themselves, but also that the
uncertainty and unpredictability are causing as much harm.
Can you please briefly speak to the impact of tariffs on
your business?
Ms. MODLIN. Yes.
Unfortunately, tariffs do create--especially today in this
environment--this unpredictability. So as I prepare for the
next year, I am uncertain what I need to do, where my revenue
needs to go, what my costs are going to be.
Ms. VELAZQUEZ. Thank you.
Ms. MODLIN. That is the bottom line.
Ms. VELAZQUEZ. After the tariff costs were passed on to you
and your prices went up, have you seen any of those costs go
back down as deals have been announced by the White House?
Ms. MODLIN. No. They do not go down. Prices do not go down.
Ms. VELAZQUEZ. Ms. Modlin, this Committee passed
legislation to raise the SBA's loan guarantee limit from 5
million to 10 million for small manufacturers. How would that
impact your firm?
Ms. MODLIN. Unfortunately, it wouldn't impact me. I
couldn't take on that level of debt, especially in this
economy, especially with this uncertainty.
Ms. VELAZQUEZ. Okay.
Mr. Crain, one of the aspects that you mentioned was
immigration. What aspects of immigration were you referring to?
Mr. CRAIN. Thank you for that question, Madam Ranking
Member.
As I said earlier, manufacturers need skilled talent to
fill the open jobs that we have that both you and the Chairman
have referenced.
When we think about immigration, we think about
supplementing the domestic workforce. We are invested in
training and reskilling that workforce, but we do still have
open jobs despite those efforts.
And so having foreign-born workers both at the sort of what
is called high-skilled level of scientists and engineers to
design programs and design products but also with the
manufacturing skilled talent coming out of career and technical
education systems that are machinists and technicians and
electricians, we think there is a role for immigration policy
to play as we continue as an industry to invest in the domestic
workforce.
Ms. VELAZQUEZ. Well, I guess that the administration is
failing in that respect because they are unwilling to deal with
immigration policy, and, of course, that will have a direct
impact not only on manufacturers but also farming and other
aspects of our economy.
Mr. Voss, in your testimony you show that tariffs are
having a counterproductive effect. These financial penalties
are making your previous plan to reshore domestic manufacturing
more costly and difficult. Seventy-four percent of
manufacturing firms have fewer than 20 employees.
How can smaller companies deal with such dramatic cost
increases if even larger small businesses are challenged in
their onshoring attempts?
Mr. VOSS. Well, to be balanced, I said that there were also
many positive consequences of the tariffs. We have had
customers who have--their businesses have expanded as a result
of the foreign competition being tariffed. Our prices actually
have not gone up for the things that we bring in from overseas
because the manufacturers overseas have largely ate those
increases or the cost of the tariff.
Ms. VELAZQUEZ. Interesting.
Mr. VOSS. All I would say is that we are all in competitive
businesses. We have to find ways to compete. Uncertainty is all
around us. Unpredictability is all around us.
Chairman WILLIAMS. The gentlelady's time is up.
Mr. VOSS. It is called being in business.
Ms. VELAZQUEZ. It is around us every single day.
Mr. VOSS. Yes.
Ms. VELAZQUEZ. Yeah.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Meuser from the great State of
Pennsylvania for 5 minutes.
Mr. MEUSER. Thank you, Chairman, very, very much.
And thanks to our witnesses. We appreciate you making the
trip and being here.
It is certainly a very important subject. Most of us up
here are former small business or large business owners, and we
are here to support you and hear from you today what we can
best do to accomplish that.
We spend a lot of time talking to small businesses, so it
is refreshing just to hear your thoughtful remarks and truly
what you would like to see. If you were sitting in our seats,
what would you do to assist small business.
So, Mr. Voss, I will start with you. Impressive company.
Congratulations.
The tax bill that recently passed--bonus depreciation,
199A, and such--how important was that?
Mr. VOSS. Exceptionally important.
Mr. MEUSER. Okay.
Mr. VOSS. And, in fact, just to put it in perspective for
the last question, the costs associated with the imperfection,
I will say, in the tariff of actually tariffing reshoring
equipment was more than offset by the tax implications and tax
savings, which allows us to pour more money into our business.
Mr. MEUSER. Okay.
Do you work with the SBA at all at your size company?
Mr. VOSS. I have not, no.
Mr. MEUSER. Okay.
And from reshoring perspective, what are you seeing--what
are you seeing--well, I guess this question would better go to
Mr. Moser.
What would you like to see us do? From the regulatory
front, the tax end of things is largely accomplished.
Workforce? Litigious nature of things? Healthcare? What is
weighing on you most? What do you think is best----
Mr. VOSS. Are you asking me or Mr. Moser?
Mr. MEUSER. I am asking you, Mr. Voss.
Mr. VOSS. Okay. Well, how much time do you have? I mean,
you have a long list----
Mr. MEUSER. We can start with healthcare. Let's start with
healthcare.
Mr. VOSS. You have a long list of big questions.
So healthcare is--in my opinion, we need to become better
educated consumers of healthcare, period. And a lot of the
reforms have been around insurance and how that works, and we
need to first of all as a country understand that we are all in
this together.
This isn't only on the backs of small businesses or big
businesses to provide healthcare for their employees. The
employees have to participate, too, And the best way they can
do that is to become educated consumers.
And if we can push that, and then, frankly, put it in the
hands of small business and big business instead of
bureaucrats, I think we would come up with a solution.
Mr. MEUSER. And I think employer-based healthcare is so
very important. At my former company, it worked out really
well.
Are you familiar with association health plans?
Mr. VOSS. Uh-huh.
Mr. MEUSER. Okay. So that is something as well we are going
to hope to put in our healthcare plans.
Mr. VOSS. We have gone through the whole gamut, continuing
to try to stay ahead of the curve and come up with new ideas.
And, currently, we are self-insured with a $100,000 deductible
plan. But we are at the mercy of medical claims, and we
constantly are educating ourselves on how we can keep those
claims down by being better consumers of that medical care.
Mr. MEUSER. Okay. Thank you.
Mr. Crain, from your more macro perspective of National
Association of Manufacturers, is manufacturing growing? Are we
reshoring? Are we expanding? And is there a particular sector
that seems to be more so than others?
Mr. CRAIN. It is a great question, Congressman. I will go
back to what you said in your previous question, is that the
tax bill really laid the foundation for exactly the types of
onshoring, reshoring, and domestic growth that we want to see
across the industry, and we have seen benefits from that tax
bill from the smallest of small business all the way up the
supply chain.
Given the incentives that you all put in that law for
research investment, for capital equipment investment, for new
factory construction, that is driving capital investment. It is
driving wage growth. It is driving job creation. That is what
we saw back in 2017, 2018. That is what we are already seeing
now early signs of.
Shortly after the tax bill passed, our quarterly outlook
survey, the optimism of the manufacturing industry jumped 10
points just immediately following the tax survey--excuse me,
following the tax bill. And so we expect that to continue to
manifest in additional investment across the sector.
Mr. MEUSER. Sure. Taxes. Regulatory reform. Workforce. What
about interest rates?
Mr. CRAIN. Absolutely. The cost of capital continues to be
a significant burden for manufacturers given inflation and
rising interest rates.
So anything that the Congress can do and the administration
writ large to reduce the cost of capital. We already talked
about the SBA legislation that you all have already approved.
That continues to be an issue for manufacturing.
Mr. MEUSER. Probably the best way of bringing down
inflation is for supply to exceed demand, right? The consumer
purchasing is there. We need to increase the supply side.
Mr. Moser, unfortunately, I only have a few seconds left,
but maybe we will get back to you on what is being reshored
these days and how you see that impacting our economy.
But my time has run out, and I will yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. McGarvey from the great State of
Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman.
Thank you all for being here today.
I am proud to come from a place where people still make
things with their hands. I am from Louisville, Kentucky. We
make every Ford F-250 and above right there in Louisville. We
make Ford Escapes, Lincoln Corsairs, Louisville Slugger
baseball bats made by the steelworkers in Louisville, Kentucky,
right there on main street. We have got GE. We are a
manufacturing hub in Louisville, Kentucky.
And so when the President actually says he has a stated
goal of having more manufacturing jobs in the United States, I
agree with him. That is a goal I have had for a very long time.
I want more people. I want more steelworkers. I want a third
shift at Ford. I want more United Auto Workers. I want more
people making stuff with their hands, good-paying jobs where
people can provide for their families in Louisville.
So let's talk about tariffs and how this impacts this. I
have always said tariffs are neither good nor bad. Tariffs are
a tool. A hammer is neither good nor bad. A hammer is a tool.
It is really good for building a house. It is not so good for
fixing your iPhone. Because how you use a tool matters.
And so when you see a President who is putting a 40 percent
tariff on Brazilian coffee and bananas, things that don't grow
here in the United States, or a 50 percent tariff on Lesotho,
or a grand total of tariffs on the McDonald Islands or the
Heard Islands where the population is zero unless you count
penguins, this is not common sense from a guy who claims to be
the President of common sense.
So let's talk about how this is impacting people across
this country and how this is impacting people right in my
district in Louisville, Kentucky.
Mr. Moser, if you are a company that wants to make a $500
million investment in U.S. manufacturing but in order to make
that investment you need to import a German stamping press or
an Italian six-axis robot or a Japanese injection mold line, do
you have to wait until we start making those things in the U.S.
before you make your investment, or are you just expected to
pay an exorbitant tax on importing these machines?
Mr. MOSER. We feel very strongly that the tariffs should
not apply to capital equipment such as you describe.
Mr. MCGARVEY. But they do right now.
Mr. MOSER. I agree.
Mr. MCGARVEY. Yeah.
Mr. MOSER. What we should do is we should have it not
apply. The rate of U.S. manufacturing labor productivity has
grown at 0 to 1 percent per year for 15 years, but China's
productivity is growing at 6 percent per year.
If we expect to catch up with them in terms of cost, if we
expect to be competitive, we need massively greater investments
in our factories, and a tariff on the machines does not allow
that to happen.
Mr. MCGARVEY. Got it. And there are some things right now.
To get those businesses going, you have to get them somewhere
else, but the jobs are here.
I mean, I see this in Louisville all the time. We have got
Bigelow Tea in Louisville. They make over a billion tea bags a
year. Every job they have is in the United States. They have
got to buy the tea, because tea can't grow in the United
States, they have got to buy it from somewhere else. The tariff
coming in is debilitating.
We have got a great shower door manufacturer, 310
Tempering. They make glass custom shower doors. But a lot of
that equipment that they have to use to make that glass comes
from Italy. You can't get it here. But every single job they
have is in America.
I have heard from so many companies they want to bring jobs
back to Louisville--a major auto supplier who currently
operates in Mexico, a cardboard manufacturer with operations in
Northern Europe, and even iconic American brands like GE
Appliances, as Mr. Moser pointed out.
But to set up a new factory or to expand a current one, you
need machines, machines that are so specialized they are only
made in a few places.
So what do you do if you need a machine and it is only made
in an ally country--an ally country like Germany or Japan or
Italy--where you have tariffs upwards of 15 percent? Or what if
it is only made in China or Vietnam where the tariff rates go
up over 100 percent and change every single week?
Mr. Crain, what can we do for a company like GE Appliances
or others such as I mentioned that want to build in the United
States but are facing such staggering start-up costs? Is there
a way to get them relief?
Mr. CRAIN. Thank you for that question, Congressman. I
think it is the right framing as we think about tariffs as a
tool in the President's toolbox, as you indicated.
The most important thing that we have heard from
manufacturers is rising input costs. So if you look at our
outlook survey that I referenced earlier, the top concern has
been trade uncertainty. The second concern is rising input
cost.
Manufacturers want to make things here in America. We are
committed to that vision. The tax bill incentivizes that. There
is immediate expensing both for capital equipment purchases and
for the factories that you are going to build or expand to put
the equipment in.
So we want policies to support and encourage further
investment along those lines. And I think having the tariffs be
less impactful for those pieces of equipment that you are
bringing in to invest here in America would be a step in the
right direction, as my fellow panelists have said.
Mr. MCGARVEY. And so what I hear you saying is how we use
these tariffs matters, and the way the President is using these
tariffs right now, they are making things more expensive for
people to buy, they are making it harder for businesses to
expand, and they are making it harder for businesses to provide
the things we need at a cost people can afford. Because how you
use a tariff matters, and the President is not using them in a
way that makes sense for American people or American
businesses.
Thank you, Mr. Chairman. I yield back.
Mr. VOSS. Could I respond to that? Because what you asked
is exactly what I am going through. You said, what does a
business do when they are tariffed on equipment coming in from
overseas? What they do is they pay the tariff.
Chairman WILLIAMS. The gentleman's time is up.
Mr. VOSS. And maybe they get invited to Washington, D.C.,
to talk about--maybe not necessarily throwing the baby out with
the bathwater and calling everything about tariffs bad, but
instead making a modification of tariff policy that applies to
specific things.
Chairman WILLIAMS. The gentleman's time is up.
Mr. MCGARVEY. Using the tool correctly. Yeah.
Mr. VOSS. Right.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Van Duyne from the great State of Texas
for 5 minutes.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
Thank you to the witnesses for joining us today.
I think today's hearing comes at a pivotal time as small
business manufacturers are leading a resurgence in American
manufacturing powered by new export opportunities, strengthened
supply chains, major new investments, and new tools from the
Small Business Administration that are helping firms to reshore
and scale here in the United States.
The Trump administration is taking meaningful steps to
create an environment where this revival can flourish, and
House Republicans have complemented these efforts most notably
through the One Big Beautiful Bill, which ensures small
businesses can keep more of what they earn and reinvest in
their operations and workforce.
As part of that broader agenda, and in conjunction with
today's hearing, I will be introducing my Made in America
Integrity Act.
This bill strengthens penalties for companies that falsely
claim that their goods or services are made in America to win
federal contracts, because it is that kind of fraud that
directly undermines the manufacturers who actually invest in
American workers. This bill protects the integrity of that
designation for those who have truly earned it.
And, of course, manufacturing grows dependent on tax
certainty. The One Big Beautiful Bill Act made permanent key
provisions, like bonus depreciation, 20 percent small business
deduction under Section 199A, and immediate R&D expensing.
Manufacturers have been very clear that without these
policies we would see fewer jobs, lower wages, and slower
growth. And I appreciate, Mr. Crain, you and your association's
comments today.
You and your association members will know that the tax
provisions in the One Big Beautiful Act Bill--One Big Beautiful
Bill, particularly permanent bonus depreciation in section 199A
small business deduction and the R&D expensing, have been
critical to manufacturers. So can you speak a little bit to
what making the 20 percent passthrough deduction permanent,
what that means for small and midsized manufacturers?
Mr. CRAIN. Absolutely. Thank you for that question,
Congresswoman.
Taking a step back, coming into this year, the 199A
deduction was scheduled to expire, as well as so many other
provisions from the Tax Cuts and Jobs Act. Our analysis showed
that, had those provisions been allowed to expire, we would
have lost six million American jobs. Not a cost the economy
could bear, and certainly not one that you all were willing to
let it bear, which is what lead to the passage of H.R. 1.
When we think about the passthrough deduction, the 199A
deductions specifically that you mentioned, 96 percent of
manufacturers are organized as passthroughs. So their effective
tax rate----
Ms. VAN DUYNE. What percentage?
Mr. CRAIN. Ninety-six percent of manufacturers are
organized as passthroughs. So their effective tax rate is
dictated by whether or not the 20 percent passthrough deduction
exists. Thanks to the One Big Beautiful Bill Act, it does
exist. It is made permanent. So we have a lower effective tax
rate on a permanent basis that allows manufacturers to keep
more of what they have earned and invest those dollars in their
communities across the country.
Ms. VAN DUYNE. Thank you.
Mr. Moser, you were--I know that Congressman Meuser had
asked you a question, basically what reshoring trends that you
have seen and, in your experience, what motivates some
companies to be able reshore operations back to the U.S. Can
you just expand on that?
Mr. MOSER. In our survey this year, we asked companies--we
gave them five choices of policy actions that could drive them
to bring back what percentage of what they now import. And they
gave nice responses for lower taxes, less regulations, lower
dollar, things like that. They gave the highest priority to
skilled workforce, significantly higher than any of the other
things that politicians typically talk about.
And because they understand that if we are going to
increase significantly in manufacturing, you need more people
to do it, and you need better-trained people. Because we don't
do as good a job of training our workers as, say, Germany,
Switzerland, Austria, China do, where they have good apprentice
programs, excellent training. So the combination of more and
better-trained people is the number one priority to make it
happen.
Ms. VAN DUYNE. I think that should be a wakeup call, by the
way, to our universities and our high schools. And this is
exactly what we are trying to take on in Ways and Means to make
sure that, if you are getting federal dollars, that we are
actually training a workforce that can get jobs and be
successful----
Mr. MOSER. Exactly.
Ms. VAN DUYNE.--and meet the needs of our growing American
businesses.
Mr. Voss, I appreciate you being here today. And I want to
give you an opportunity to actually answer the question that
you got stopped on during the last questioning about, you know,
the tariff concerns.
I look at this as almost like a Rubik's Cube. It is tariffs
trade on--and, you know, our taxes. And tariffs trade taxes
being able to, like, be able to be flexible, knowing what is
working, when it is working, and being able to move on a dime,
as opposed to doubling down on failure is really a smart
approach. What have you found as far as our tax policies and
how it is being affected with other tariffs?
Mr. VOSS. Well, there is many puts and takes as it relates
to an income statement of a business. Taxes are one of the
takes. Tariffs are one of the takes. The current tax incentives
made it a put for us. So these things--we are constantly
balancing those things.
My point is that--you know, I am not here as a political
person. I am here as a businessperson. And no one can debate
the fact that manufacturers in the U.S. have been at a huge
disadvantage for decades. That has been--it started to be
corrected.
We have been competing against foreign competitors since
our existence. It has been very tough because of the unfairness
associated with, you know, how they are treated. So it is a
breath of fresh air. We are gaining business as a result of the
tariffs.
Ms. VAN DUYNE. Thank you.
Mr. VOSS. We----
Chairman WILLIAMS. The gentlelady's time is up.
Mr. VOSS. The things that we buy from overseas, we have not
paid a very small fraction of what the tariffs is. They have
eaten most of them.
Now, on the other hand, tariffs have been bad for me
because----
Chairman WILLIAMS. The gentlelady's time is up.
Mr. VOSS.--we brought in equipment that I got tariffed on
that I probably shouldn't have.
Ms. VAN DUYNE. Thank you very much. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Ms. Simon, from the great State of
California, for 5 minutes.
Ms. SIMON. Thank you, Mr. Chairman and Ranking Member
Velazquez, for holding this hearing. And thank you all for
coming out today. This has been very thoughtful and helpful.
I am proud to represent the East Bay in California,
California's 12th District, and it is a district where
innovators are building technologies that will power and define
both this and the next generation. From artificial intelligence
that can diagnose early-stage disease to clean energy,
solutions that are powering the transition away from fossil
fuels, our small businesses are proving day and day that they
are the backbone and the lifeblood of our economy.
This summer, I had the privilege of spending time and
touring a remarkable small business in my district that
manufactures autonomous maritime drones. I know, it is a thing.
Maritime autonomous drones. The incredible technology this
small business has designed and manufactured, however, receives
components sourced from 43 States across this great nation. And
this small business is a model for how businesses can create
hometown jobs, drive technological advancement, and support
local communities. Their story serves as a powerful reminder
that when we invest in small businesses deep in our communities
we are investing, truly, in the national supply chain.
But even cutting-edge technologies like these in my
district face very similar challenges, some challenges that we
heard today. Manufacturers across the country have been
speaking out to, I think, Members on both sides of the aisle on
this Committee about these challenges. How can they compete
with larger businesses in recruiting and retaining a skilled
workforce when employees and their families require and
deserve, not only fair wages, but affordable comprehensive
healthcare.
Ms. Modlin, I have a question for you--actually a couple.
Do your employees use ACA Marketplace?
Ms. MODLIN. Yes, they do.
Ms. SIMON. I love when you answer quickly. Thank you.
Definitely not a politician. I appreciate that.
The Kaiser Family Foundation, Ms. Modlin, estimates that
nearly half of all adults enrolled in ACA, half of all adults
who are enrolled in the ACA Marketplace are directly tied to
small businesses.
So my second question, if the ACA's enhanced premium tax
credits expire at the end of this year, which we know they
likely will, with no intervention from this Chamber, how will
small businesses like yours, how will you make it? How will you
absorb these costs? What are these costs? Walk us through.
Ms. MODLIN. Thank you for that question.
Our employees have to be healthy. As individuals they
deserve access to affordable healthcare. So without a healthy
workforce, especially the small manufacturer who does not have
a second person to take the place of that machinist who has
become ill and needs to, you know, have that time off or
doesn't have access to adequate healthcare to be able to come
through that illness and come back on to the floor--so, yes,
affordable healthcare--without affordable healthcare, you are
not going to have a healthy workforce, and small manufacturers
are going to suffer.
Ms. SIMON. You know, I want to double back on the question.
If, in fact--I only have a few seconds left, but if, in fact,
by the end of this year you and your employees will directly be
affected by the decisions made in this Chamber regarding
healthcare, what does that cost you? Are you thinking about
what January will hold for you in terms of providing healthcare
for your employees? What are the costs?
Ms. MODLIN. I know that I cannot afford a group health
policy. That is why my employees--I work on a reimbursement
program----
Ms. SIMON. Right.
Ms. MODLIN.--where I pay my employees a certain amount of
money each month to help them with their premiums for
healthcare. Again, I can only say that if the healthcare is not
available and affordable to our employees, we cannot afford a
group health policy.
Ms. SIMON. Right.
Ms. MODLIN. So we are going to have people that are
uninsured, and you are going to have a loss in the workforce.
It is going to be a fall-down, if you will, or a flow-down,
because the employee without proper healthcare is not going to
be able to come to work. We do not, in small manufacturing,
have access to a second person to slip them into that job. So
small manufacturing definitely will suffer.
Chairman WILLIAMS. The gentlelady's time is up.
Ms. SIMON. I appreciate your answer.
And, thank you, Mr. Chairman. Thank you for being here and
expressing this real need. Thank you.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. LaLota, from the great State of New
York, for 5 minutes.
Mr. LALOTA. Thank you, Mr. Chairman.
Mr. Moser, how are you doing this morning, sir?
Mr. MOSER. I am doing fine. Thanks for having me here.
Mr. LALOTA. But I understand you are the president and the
founder of a company that is in the business of onshoring and
reshoring?
Mr. MOSER. Correct.
Mr. LALOTA. So your business helps bring back manufacturing
jobs to America?
Mr. MOSER. We are nonprofit, and we help companies
understand all the costs and risks of offshoring and provide
them with tools to help them make the decision and implement it
to bring the work back.
Mr. LALOTA. That is noble work. How is business going?
Mr. MOSER. We don't make any money, but we have achieved a
lot. As I mentioned before, the total number of jobs per year
reshored has gone from 11,000 in 2010 to 244,000 per year last
year. So the results are--I am pleased. I am delighted overall.
Mr. LALOTA. Great. We appreciate that work. And I don't
mean to put you on the spot, but I read your biography. I see
that you have a bachelor's in MIT--and a bachelor's and a
master's from MIT and an MBA from the University of Chicago. So
I am going to presume you are our numbers' guy on the panel
this morning, if that is okay with you? I hope it is.
Mr. MOSER. Yes.
Mr. LALOTA. What do you understand about America's trade
deficit internationally?
Mr. MOSER. Current trade deficit is about $1.2 trillion;
the goods trade deficit, 1.2 trillion. And it has been stable
at about 4 percent of GDP for the last 15 years. And that is a
huge amount. One of the results of that is that foreign
entities hold about 20 trillion more U.S. assets than we hold
of foreign assets, and therefore, in effect, we are net paying
out interest and dividends and so on on that 20 trillion that
otherwise could be invested here in our economy.
Mr. LALOTA. And on the 1.2 trillion goods trade deficit--
and I appreciate you making that distinction--about what part
of that is attributable to China?
Mr. MOSER. China was about $300 billion, so about 25
percent of the trade deficit. And now, last year I think, or
this year, one or the other, down to about 218 billion. So it
has definitely come down because we are not buying as much. But
some of what they used to ship to us directly, they ship
through Mexico or Canada or Vietnam or somewhere else. So it is
not quite as big a reduction as I described, but they are still
huge.
Mr. LALOTA. And back to the 1.2 trillion, what would you--
how far back does that go? How long has it been that big of
trade a deficit?
Mr. MOSER. It has been about 15--for about 15 years it has
been 4 percent of GDP, which means, 15 years ago, it was maybe
900 billion as opposed to 1.2 trillion.
Mr. LALOTA. Should Congress care about these trade
deficits? If they are important, why are they important?
Mr. MOSER. They are incredibly important. You know, one of
the things that--one of the people I follow is Ray Dalio,
``Changing World Order''--some of you have probably read--and
he describes how hegemons or empires or countries rise and they
peak out and they fall. And one of the characteristics of being
up here and starting to fall is a declining competitiveness.
When a country or an empire gets into that condition, it is not
competitive, it has got too much debt, it can't pay its bills,
et cetera, that is when you can tell that you are declining.
And so by reshoring, by stabilizing, by reversing those
trends, I am convinced we can stay up here nice and solid
rather than entering a decline.
Mr. LALOTA. And you have explained a little the ways that,
from a policy perspective, we can stabilize that negative trend
and perhaps get back in the right direction. I have read some
of Dalio's material, and this is informative to me, and I am
aware of some of the numbers.
On Long Island, a district I represent, we have lost a heck
of a lot of manufacturing jobs. We used to have about 88,000
manufacturing jobs. Now, we are in the mid-sixties on that
stuff. And we are looking for solutions towards that.
What is the benefit, in your mind, of onshoring, reshoring
jobs from a quality-of-life perspective, from an inflation
perspective, from an affordability perspective? Why should
Congress care to promote policies that onshore and reshore?
Mr. MOSER. From a national perspective, I think at the
bottom line, the defense infrastructure, the ability to produce
the missiles and the bullets and the tanks and everything else
we need--hopefully we will never need--but if we do need them,
we have to be able to produce them, and we don't have anywhere
near the capability to produce them.
But also in terms of excellent jobs. It used to be a
manufacturing job was a great job, and it is not seen as such
anymore, but starting to come back. And especially as we
promote the success of reshoring, the success of manufacturing,
more of our youth will choose that role and have excellent
careers.
Mr. LALOTA. Thank you. I appreciate you being here today.
Mr. MOSER. Thanks for your question.
Mr. LALOTA. My time has expired, Mr. Chairman. Thank you.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Scholten, from the great State of
Michigan, for 5 minutes.
Ms. SCHOLTEN. Thank you so much, Mr. Chair. And thank you
so much to our witnesses today.
You are getting a lot of similar questions around similar
topics, but that is because these are the absolute most
pressing issues to our small businesses and particularly our
small manufacturers around the country. I know that is true in
my home State of Michigan where more than 600,000 manufacturing
jobs are supported by over 12,000 companies. Just think about
that.
The conversations we are having today is absolutely
critical. How to ensure small manufacturers can thrive in an
increasingly globalized economy. In west Michigan, we are home
to a manufacturing plant for the only domestic supplier of the
specific yellow pigments used for road markings. Unfortunately,
an estimated 96 percent of these pigments used for road
markings are sourced from foreign manufacturers, including
China and India, enabling our taxpayer dollars to leave the
U.S. That is why I have introduced the bipartisan Paving the
Way for American Industry Act, which would ensure our roads are
paved using paint that is made in America.
Ms. Modlin, my first question is for you. The current
administration's chaotic tariff policies--my colleague and I,
Mr. McGarvey, we talk all the time about how it is not
inherently good--tariffs are not inherently good or bad, they
are simply a tool. The way they have been used have left many
manufacturers scrambling.
What more can Congress do to protect businesses like yours
and the one in my district that are critical to keeping our
supply chains at home? Congress, specifically. We are here to
hear from you.
Ms. MODLIN. Thank you for the question.
I have to say, to begin, exemption for small manufacturers,
exemptions from those tariffs, that would be the ideal position
to take to encourage the--and support the small manufacturing
environment.
Ms. SCHOLTEN. I have a series of questions. I am going to
kind of go through them quickly. But sticking with you, Ms.
Modlin, your testimony touches on the importance of having
resources to train staff. One thing I really hear about from
small business owners in my district is the need for more
training, resources, in addition for their guidance on how to
utilize the latest technologies for their business.
My bill, the AI-WISE Act, just passed out of this Committee
on a bipartisan basis earlier this week, and it would ensure
that small business--the SBA specifically--adds educational
content on utilizing artificial intelligence so business owners
can have the tools that they need to strengthen their
businesses. It is critical that we support entrepreneurs in
this way.
Are you aware of any programs through the SBA that help
small businesses currently embrace new technologies?
Ms. MODLIN. I have to say that I am not currently aware of
any SBA programs that would directly assist the small
manufacturing environment.
Ms. SCHOLTEN. And moving on--thank you for that. We are
hoping to change that.
Michigan is home to a manufacturing extension partnership
program that has been a critical resource for manufacturers in
our State for decades. The Michigan Manufacturing Technology
Center has been uplifting businesses that support--with the
support of congressionally directed MEP dollars.
In 2024 alone, MMTC helped clients increase sales by over
158 million. Think about that revenue generation. Earlier this
year, the Trump administration notified MMTC that it would not
renew its MEP cooperative agreement, jeopardizing 157
manufacturers in my district, over 16,000 thousand workers.
I fought back, calling on the administration to renew the
MEP agreement. And, one, as the administration later announced
that they renewed this agreement, it was critical.
Ms. Modlin, I want to ask, have you had any experience with
the MEP programs, and do you think SBA could collaborate with
MEP centers to better assist small manufacturers?
Ms. MODLIN. I have not had direct, you know, work--I have
not worked with an MEP, okay, program. But I do think, I do
understand it enough to suggest that it would definitely be
something that would benefit the small manufacturer. And so the
answer to that is, because I have not used the MEP SBA
programs, I just can suggest that it would be beneficial in the
small manufacturing environment.
Ms. SCHOLTEN. Okay. That is very helpful.
My time is up, so I yield back. Thank you.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Wied, from the great State of
Wisconsin, for 5 minutes.
Mr. WIED. Thank you, Mr. Chairman. Thank you to all the
great witnesses here today. This is a very good discussion and
very important to, you know, our priority in reindustrializing
this great country. And I think--I just really appreciate all
of your, you know, expertise.
In my district, from paper to shipbuilding, plastics to
heavy manufacturing, northeast Wisconsin is a manufacturing
powerhouse, employing almost a quarter of the working
population. In my district also, 90 percent of all
manufacturers are small businesses.
We obviously have a lot of challenges. Some of the
challenges that we face are difficulty in finding skilled
workers. And, of course, we see a declining interest in our
trades, and so, obviously, that is one of the major issues that
we are dealing with.
First question I would like to go to, though, Mr. Voss, in
your statement, you talked about the companies that you work
with overseas, in your experience, that you said were eating
the cost of tariffs. Can you expand on your experience in
working with other companies in importing and the cost of
tariffs?
Mr. VOSS. Sure. So through the years, you know, we have
imported from manufacturers abroad. We still do a much lesser
percentage of the goods that we distribute. It comes from
foreign sources. But the ones that we continue to do now, we
have not seen an increase in our costs because we have pushed
back because, frankly, if they would have put the burden of the
tariffs on us, they would have no longer been competitive. So
in that case, the tariff did exactly what it was supposed to do
in that they took a smaller slice of the pie rather than
passing it on to the consumer here.
And moving forward, we are seeing input costs,
polycarbonate resin, for example, the cost of that is coming
down. And that is going to be--that is reflected in our pricing
to our customers and our customers' pricing in the marketplace.
Mr. WIED. What would be the cause of those prices coming
down? What would be the reason for that?
Mr. VOSS. Well, first of all, competition. Second of all,
they are petroleum-based, and the cost of petroleum has come
down over the last couple of years--or the last year for sure.
Not couple.
Mr. WIED. Well, and I also want to expand on your
experience that you have right now in partnering with the Irish
company to reshore the polycarbonate manufacturing. How has
controlling your supply chain benefited you? And tell us about
that experience.
Mr. VOSS. Well, a good example, and I tell this story. You
know, we had--we were the master distributor for a couple of
very large manufacturers, big companies. And we periodically
get the dear valued customer letter that the price is going up
due to various things that they articulate in the letter.
Well, it was just at that time that we were having a
routine review of our business model with our newfound partner,
and our deal was that we were going to buy from--in other
words, the polycarbonate manufacturing company sells to one
of--our company too, our sister company. And we were talking
about the pricing along that. And we were pushing back because
the pricing had come down a little bit since the last time we
had reviewed this. And at the same time, at the same week that
we got letters from two of the major manufacturers saying that
the pricing had gone up, in talking to our partner who buys
polycarbonate resin at one of the biggest polycarbonate
manufacturers in the world, they said, well, that is not
surprising because the cost of resin has actually come down. We
wouldn't have known that as a distributor, but as a
manufacturer we do know that.
So, again, having our future in the hands of either foreign
companies or companies that maybe are owned by private equity
are different than having control of your own future. And so
that was a big driving force in our strategy.
Mr. WIED. Well, how--in your opinion, how are
manufacturers--you know, what is their ability to reshore,
expand their operations? How are they hurt by overregulation?
I hear about regulation. I was in my own business for 30
years. I struggled with overreaching government regulations on
a daily basis. Very, very costly, to $50,000 per employee. Can
you expand?
Mr. VOSS. Well, all I can say is, you know, my experience
is that, you know, what starts off as a good idea morphs and
evolves. And you have people that are implementing those
policies and procedures, and they get overzealous and they want
to justify their existence. And those bureaucracies continue to
increase. And many times the regulations expand beyond what the
original scope was intended to be. We haven't, frankly,
encountered that to a large degree. So it is hard for me to
comment specifically on that.
Mr. WIED. All right. Thank you again to all the witnesses.
With that, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Olszewski, from the great State of
Maryland, for 5 minutes.
Mr. OLSZEWSKI. Thank you very much, Mr. Chairman, to our
Ranking Member. And to all our witnesses, I appreciate you all
being here today and to discuss how we can advance domestic
manufacturing for American workers and families.
Mr. Moser, I believe both you and I grew up watching
businesses support our neighbors and families. Some of those
businesses, unfortunately, being removed from global
offshoring.
My story involves growing up in the shadow of a steel plant
in eastern Baltimore County. It was a Bethlehem Steel site. It
was a site that produced steel used to build ships in world
wars, parts of the Empire State Building, the Golden Gate
Bridge, the Chesapeake Bay Bridge. We employed, roughly, 31,000
steelworkers and other employees at the heyday of the plant. I
also watched that plant collapse over several decades, and the
fallout from people losing their healthcare, losing their
pensions after giving a lifetime of service to that
manufacturing here in America.
So we do need to uplift the American manufacturing
industry. Clearly, I was shocked when we saw the tariff
policies of this administration take place. I agree with my
colleague, Mr. McGarvey, earlier, that this is a tool that can
and should be used in important and critical situations. I
would have loved to have seen action with tariffs when China
was dumping steel, very cheap steel, that really put and pushed
that plant towards its closure. And so certainly welcome the
conversation but think that tariffs need to be thoughtful as we
do that.
In 2023, through both the Infrastructure Investment and
Jobs Act and the Inflation Reduction Act, that steel site that
I spoke of earlier received investments to become Maryland's
first permanent offshore wind turbine factory under a new name,
Sparrows Point Steel. Sparrows Point Steel produces the
monopile foundations and other steel components that is needed
for Maryland offshore wind projects and has the capabilities to
serve as the entire U.S. offshore wind market on the East
Coast. It is a job-creating engine there that has the potential
to put thousands of people to work, not in China, not in
Europe, but right here in America.
And my concern is, after we have already gone through this
experience where we have seen a steel plant shut down, we are
now on the cusp of having a revitalization of manufacturing in
my district. We are seeing an administration playing political
games with arbitrary tariffs but also skyrocketing healthcare
costs and even trying to cancel support for the very projects
they profess to believe in--manufacturing.
This administration pulled back a $47.4 million grant from
this project, jeopardizing it. How is that making America great
again?
More recently, we are also dealing with the fallout from
the collapse of the Francis Scott Key Bridge. It is a critical
lifeline, not just for Maryland and the mid-Atlantic, but for
moving goods throughout this country.
And so I stand ready to continue advancing opportunities in
legislation to encourage manufacturing and working on training
that was mentioned earlier and, of course, look forward to
those productive dialogues. So I have a few questions on that
because I am also concerned about the impact of tariffs on that
critical infrastructure project.
So, first, on the bridge, clearly, steel and other
components are a big part of that construction. Would the panel
here support exemptions for large-scale American infrastructure
projects that will rely on tariff goods that are going to drive
up costs for businesses, consumers, and taxpayers alike? Is
that something that we think we could be supportive of in that
work?
Mr. MOSER. Exemptions from what?
Mr. OLSZEWSKI. Large-scale infrastructure projects, such as
the rebuild of the Francis Scott Key Bridge in Baltimore.
Mr. MOSER. Well, I agree that all those components should
be sourced in the U.S.
Mr. OLSZEWSKI. And if not, though, should steel or other
products, if they are not sourced here, should they be charged
a tariff?
Mr. MOSER. Yes.
Mr. OLSZEWSKI. You think they should. Okay.
And then, regardless of where the tariffs are coming or
your positions on tariffs, I am just curious for the panel
here, going back to that grant for Sparrows Point Steel, do you
think we could or should look at ways to use that tariff
revenue to support those projects rather than pull that funding
from them?
Mr. VOSS. That is a policy question. You have got a million
different projects and a lot of hands out. You have got to
decide where it best goes.
Mr. OLSZEWSKI. Well, in general, should we be--but should
we be investing in----
Mr. VOSS. Should we be investing in----
Mr. OLSZEWSKI.--manufacturing in the United States when we
have these kinds of opportunities to reintegrate manufacturing
in the United States?
I mean, is it good policy to pull awards when we have a
$500 million manufacturing project on the books and it is
moving forward to then pull that funding?
Mr. VOSS. I don't know enough about it to respond.
Mr. OLSZEWSKI. All right. Thank you, Mr. Chairman. I yield.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. King-Hinds, from the Northern Mariana
Islands, for 5 minutes--from the great Mariana Islands.
Ms. KING-HINDS. Thank you, Mr. Chairman. And thank you to
all of you for making time to be with us today.
I am from the Marianas, and, you know, we have one economy.
We are trying to diversify to get--because we have seen a lot
of interest with regards to manufacturing, right, folks, who
want to come and set up shop there. So I am very focused on the
conversation with regards to retaining the right amount of
workforce to be able to sustain manufacturing, because that is
our biggest challenge.
And so we have talked about the problems, right. I think a
lot of you have kind of alluded to different things. I am kind
of more focused on, what is it that Congress can do to actually
address the problem, so that, you know, however many years from
now, we don't have this massive amount of shortage, right, that
can't sustain your industry?
And I will open up the floor to whoever wants to answer
first.
Mr. VOSS. I can go first here. I was just going to say, we
haven't talked that much about healthcare, and we know about
these credits that are expiring. I just don't think we should
keep subsidizing a broken system. The healthcare system is
broken. We need a new strategy. So to the extent that we
continue to tax ourselves to pay for a broken strategy--and
then us employers, it costs us more to provide health insurance
for our employees--that is what has got to stop.
So this isn't about whether or not to extend the credit on
a failing system. Throw out the system and start over and find
a system that works and is cost-competitive with the rest of
the world.
Mr. MOSER. Well, I can put that in perspective. It turns
out that the average healthcare cost of a family of four in the
U.S. equals the average wage of a Chinese worker. And the
healthcare cost of a family in the U.S. gets built into the
burden, that gets built into the cost, that gets built into the
price. And, therefore, the higher healthcare costs in the U.S.
is a major reason why our costs are too high and why we lose,
based on cost or price, relevant to countries like China. So I
agree entirely that something has to be done.
Ms. KING-HINDS. Can I follow up then? So are you
attributing that cost to the inability to retain workforce?
Mr. MOSER. It makes our costs--the cost of making a product
too high in the U.S. relative to other countries and,
therefore, U.S. companies choose to import low-price products
from offshore instead of buying higher priced more or less
equivalent products here in the United States.
Mr. CRAIN. So I think there is two angles here. One from
the healthcare perspective; certainly, manufacturers view that
as a critical tool to attract and retain talent. Across the
industry, 95 percent of manufacturing workers are eligible for
a workforce healthcare plan through their employer. North of 80
percent actually participate in one.
We have certainly heard, as has been referenced from our
Members, that the rising costs of healthcare are a significant
cost driver for manufacturers. And so it certainly would help
with the workforce situation to reduce those costs.
On sort of pure workforce policy, we certainly should
support more training programs and apprenticeships. We have
talked some today about education about what the manufacturing
industry is. It is not your grandfather's manufacturing
industry anymore. It is not dark, dirty, and dangerous. It is
cutting-edge, it is innovative, it is well paid. These are
family-sustaining careers.
And so if we are supporting career and technical education
programs to get manufacturing workers out of the CTE programs
and onto manufacturing shop floors, that is a huge step in the
right direction of building the manufacturing workforce of the
future, in addition to immigration policies that help us fill
the jobs that we might not be able to fill with the domestic
workforce.
So there is a lot of pieces to that puzzle to ensure that
we have the skilled workers that we need to drive manufacturing
forward.
Ms. KING-HINDS. Okay. I have a follow-up question for you,
Mr. Crain. So, you know, in your testimony, you describe how
large companies often have the resources to maintain internal
training programs that small businesses lack, and you mention
the need for policies that would allow small businesses to
close that gap. Can you just be a little bit more specific so
that we get an idea of what your thoughts are on that issue?
Mr. CRAIN. Absolutely. What we have heard from so many of
our Members is that they actually partner with local community
colleges, CTE institutions to set up training programs or to
even just ensure that the existing programs that that community
college has are reflective of the skills that manufacturers
need.
And so from my perspective, continued focus on those skills
specifically, and in helping prospective students or adults who
want to go back to school, or even adults who are employed who
want to gain those skills, that we are really focusing from a
policy apparatus on manufacturing-specific skills; so
machinists, technicians, welders, electricians, et cetera. If
you have those certifications, that is going to set you up for
success in manufacturing and help the industry writ large.
Ms. KING-HINDS. I am out of time. Thank you, Mr. Chairman.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Cisneros, from the great State of
California, for 5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman. And thanks to our
witnesses for being here today.
Ms. Modlin, I am going to start with you. My colleagues
always like to say that whenever they ask small businesses, not
one says we need more regulation. However, they ignore that
small businesses share their primary concern in cost and the
uncertainty from tariffs.
Whenever I ask small businesses, not one says they want to
pay more for supplies or increase their costs. Do you want to
pay more for your supplies? Have you ever heard of any small
business owner saying they want to increase their costs?
Ms. MODLIN. Thank you for that question.
No. We don't want to increase our cost. And I cannot fathom
another small manufacturer wanting an increasing in costs.
Mr. CISNEROS. Yeah. So can you--what impact are the tariffs
having, and the uncertainty?
You know, I brought up in a markup yesterday, right, all
the small businesses in my district, the one thing they just
say that they want is stability, stability. But yet when the
President decides he is going to raise tariffs 10 percent on
Canada because he don't like a commercial he saw during the
World Series, there is no stability there.
What impact is the tariffs having, you know, with you and
the other small businesses that you know of?
Ms. MODLIN. The impact of the tariff is--first, you are
absolutely right, it is unpredictable what is going to happen
tomorrow, okay, on the tariff side. We have to set prices. And
we have customers that the price is set and they are not going
to accept an increase in price. Once price increases, it is not
going to really come down.
So the unpredictability in this tariff situation is--is
really puts us in--as I had said before, I am trying to predict
and forecast into 2026 at this time, and I am finding it very
difficult to do because I don't know what to expect. And
because I use several different types of alloys and different
types of metals, and the tariffs are possibly suggested to be--
aluminum tariff might be 25 percent today, might be 45 percent
a week from now.
One of the most expensive tariffs I have is the carbide.
Carbide is used in tooling that goes on all of the equipment
that I use to cut the metal. So carbide right now is under 90
percent tariff. So the tooling that I use is almost
unattainable.
So the bottom line is small manufacturers don't have big
margins, we don't have a lot of cushion. So this
unpredictability in the tariff policies is really causing us to
question sustainability.
Mr. CISNEROS. All right. Thank you.
Mr. Crain, in your testimony, you shared that in the
National Association of Manufacturers Outlook Survey, trade
uncertainty, rising raw material costs, and increasing
healthcare costs topped the list of concerns.
If there was a way for you to share those concerns with the
SBA Office of Advocacy and they then advocated research and
did--or did whatever they could to raise those concerns across
the federal government, would you welcome it?
Mr. CRAIN. Absolutely. The Office of Advocacy is a critical
voice for small manufacturers within the SBA and within the
federal government writ large.
Mr. CISNEROS. Well, thank you very much for that. And so,
you know, we are in the process of putting forth a bill that
will do that, will allow business owners to come forth, and to
raise their concerns when it comes to immigration, tariffs, as
well as healthcare concerns for businesses. And, hopefully,
that will be welcomed by business owners there. So you can
share with them, and then have the Office of Advocacy come out
and report to us what input they are taking in. So that is
coming in the future.
And with that, Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
And I now recognize Mr. Stauber, from the great State of
Minnesota, for 5 minutes.
Mr. STAUBER. Thank you very much, Chairman Williams and
Ranking Member Velazquez, for holding today's hearing. And
thank you to all the witnesses for lending your insight into
the resurgence of America's manufacturing space.
Minnesota's Eighth Congressional District lives and
breathes manufacturing, from the iron ore on the iron range
that feeds our steel mills, to the small shops and fabricators
in Duluth, Hibbing, Brainerd, Forest Lake, and across northern
Minnesota. Manufacturing is our neighbors' livelihoods.
When production moves overseas, it is a lost paycheck, a
shrinking tax base, and one more young person who decides there
is no future for them in the trades back home.
Nationwide we are reminded that manufacturing is
overwhelmingly a small business story. As Mr. Crain notes, 93
percent of manufacturers have fewer than 100 employees, and 75
percent have fewer than 20. These are the kind of employers we
are talking about today--family-owned shops and small firms
that are innovative but are also the most sensitive to tax
hikes, regulatory costs, and permitting delays.
The One Big Beautiful Bill Act gave us a permanent, pro-
growth Tax Code with tools like immediate expensing and
passthrough deduction and higher estate tax exemptions so
family manufacturers can keep investing, hiring, and passing
their business on to that next generation.
Mr. Crain, for these small businesses, what are the top one
or two policy changes beyond the Tax Code that will help them
turn that tax certainty into actual investment and new
equipment and jobs on the ground?
Mr. CRAIN. Thank you for that question, Congressman.
I would turn your attention to permitting reform. As you
indicated, the tax bill has a number of incentives for
manufacturing investment. But if you can't get the permit to
get that investment off the ground, then the tax bill hasn't
had the maximum pro-growth effect that we would have wanted it
to, right.
And so with respect to programming reform, if we can reduce
the timelines for permitting review and approval, then that
gives manufacturers more certainty to invest in these long-term
projects. And if we can reduce the uncertainty associated with
never-ending litigation on the back end through judicial
reform, both of those things would improve the permitting
process here in the U.S. Those are both governed by the
National Environmental Policy Act, NEPA.
There is actually a bill, funnily enough, being marked up
today at the Natural Resources Committee called the SPEED Act
to do exactly that. So it is thrilling to see that we have
momentum in the direction of permitting reform to build on the
success of tax reform.
Mr. STAUBER. Thank you, Mr. Crain, for mentioning the SPEED
Act. I just left the National Resources----
Mr. CRAIN. There you go.
Mr. STAUBER.--Committee in support of that. And that is
going to pass in a bipartisan fashion. I really appreciate you
bringing that up because permitting reform is a high priority
for all industries. Thank you.
You know, we have talked about the conditions small
manufacturers are facing here at home. I want to zoom out to
the decision point where companies choose whether to keep
chasing the lowest offshore price or bring production back to
the United States.
Mr. Moser, your testimony shows that reshoring and foreign
direct investments have grown from just a trickle to hundreds
of thousands of announced jobs a year, with roughly half of
those in the small supplier community.
From your experience, what are the main reasons companies
decide to move production back to the United States, and what
more can we in Congress do to push large OEMs to deliberately
bring more of the supply chain back to the small U.S.
manufacturers in places like my hometown and my district,
northern Minnesota?
Mr. MOSER. The main reasons they came back, they say, are,
first, having manufacturing near engineering, so the small
manufacturer can work with the big company and communicate,
work together, partner. The second was duty and freight. And
third was geopolitical risk, the risk of something happening
over Taiwan and being cut off for 5 years or something from
your supply chains. So we came out with a geopolitical risk map
that shows the probability of decoupling with each country so
the companies can calculate the risk of not reshoring and
justify somewhat higher prices here.
In terms of actions that you can take, one of the things in
terms of the tariffs is to firm up the tariffs. Especially for
the big companies, they are thinking about investing a billion
dollars and taking 3 years to build the factory and 6 months to
hire people. And if the tariffs could go away halfway through
that process, the guy who decides to do it gets fired.
We need to firm the tariffs up, make them solid, make them
such that they are going to last at least through this
administration, preferably the next, so the companies will
believe and they will act.
Mr. STAUBER. Yeah. You know, you talk about tariffs. The
232 steel tariffs that both President Trump in his first
administration and then President Biden, they kept the 232
steel tariffs on because we know the Belt and Road Initiative
of the Chinese Communist Party is to destroy our steelmaking
and our mining industries here in the United States. Remember,
we can't do that. We need certainty we can lead the world.
So with that, Mr. Chair, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Dr. Morrison, from the great State of
Minnesota also, for 5 minutes.
Ms. MORRISON. Thank you, Mr. Chair. We are having a
Minnesota minute here.
Chairman WILLIAMS. The queen of Minnesota here.
Ms. MORRISON. I appreciate you, Chairman Williams and
Ranking Member Velazquez. And I am very honored to occupy her
seat for the moment for holding this hearing. And thanks to the
witnesses for being here today to have this important
conversation.
I have been hearing from so many small businesses--small
business manufacturers, specifically, in my district and across
Minnesota about how the tariffs--the Trump administration's
tariff policy are making it impossible for them to plan and to
grow as they work to navigate this level of unprecedented
uncertainty.
And I do just want to know, Mr. Crain, you mentioned that
tariffs are a tool in the President's toolbox. And I just--this
administration is doing many unprecedented things that should
not be normalized. And I just want to take the moment to remind
all of us that tariffs should be a tool in Congress' toolbox
according to our Constitution.
Mr. Crain, the National Association of Manufacturers
Outlook Survey found that trade uncertainty is American
manufacturers' top concern for three quarters, essentially
since the start of the year. Yet there is limited--you didn't
talk so much about tariffs in your testimony or about concerns
or proposed solutions around that.
I just want to give you the opportunity now to speak to the
National Association of Manufacturers recommendations to
address the impacts of tariffs and uncertainty on its small
business members.
Mr. CRAIN. Thank you for that question, Congressman.
I will start with the uncertainty piece, which is that
manufacturers need certainty to plan for the long term. That is
true with respect to tariffs. It is also true with respect to
regulations. It is true with respect to tax. And so a lot of
the policies that we have supported as an industry are designed
to provide manufacturers, especially small manufacturers, with
that certainty so they can make those long-term job-creating
investment decisions.
With respect to tariffs specifically, the conversation we
have had today I think is really instructive. With respect to
how tariffs are a tool in policymakers' toolbox, the dynamic
that we have heard so often from our members is that they want
to invest here in America, which is a goal that we obviously
share with Congress and share with the President to grow
domestic manufacturing. But if you need an input from elsewhere
to do that, there can be costs associated with that under the
current tariff environment. In many cases, that specialized
equipment and machinery that comes from elsewhere, in some
instances it is raw materials, it is energy resources, it is
critical minerals.
So what we have focused on is ensuring that manufacturers
can bring those inputs and machinery here to make things in
America, and, in fact, tying that to your ability to make
things here in America, which we think would allow the
administration to maintain a tariff--a strong tariff
environment but also allow manufacturers to make things here in
America.
Ms. MORRISON. Thank you for that.
Today, I am introducing the Small Business RELIEF Act,
which would exempt small businesses from President Trump's
baseline global tariffs and provide refunds to small businesses
that were forced to pay them. I am wondering if any of you have
a perspective on that idea.
Mr. VOSS. Can you repeat exactly what the bill would do?
Ms. MORRISON. Sure. It would exempt small businesses from
President Trump's baseline tariffs, so liberation day tariffs,
and then provide refunds to the small businesses that were
forced to pay them.
Mr. VOSS. How do you define small business?
Ms. MORRISON. By the way the SBA defines them.
Mr. VOSS. Which is how?
Ms. MORRISON. It depends on the industry, but it is usually
less than 500 employees. I think less than 7.5 million in
revenues.
Mr. VOSS. You guys have an opinion on that?
Ms. MORRISON. Something to ponder.
Mr. MOSER. I will throw in an opinion. First, it is a nice
idea, but my fear----
Ms. MORRISON. Thank you.
Mr. MOSER.--would be that instead of the big companies
importing material, they would have their suppliers import the
material, claim exemption under the Small Business Act, and
then sell it up to the big companies, and they would have
avoided--they would have made the tariffs totally ineffective.
Unless you have something in it to prevent that from happening,
then that would be a concern.
Ms. MORRISON. Okay. Thank you.
Mr. VOSS. I could add too. I think, with all due respect,
you are exaggerating the effect on small business and the
negative effect on tariff. We haven't had a negative effect; we
have had a positive effect. We have customers that are able to
compete more effectively so they buy more product from us.
Ms. MORRISON. Respectively, sir, that is not what I am
hearing from small businesses in my district.
Ms. Modlin, could you speak to the National Association of
Manufacturers' proposal, the U.S. Manufacturing Investment
Program, what that would mean for small businesses like yours?
Ms. MODLIN. Thank you very much for the question.
National Association of Manufacturers in any way, shape,
and form to assist the small manufacturing environment would be
welcomed. So I can say that I would definitely encourage some
conversation to include the small manufacturing industry.
Ms. MORRISON. Thank you. Thank you.
And I see my time has expired. I yield back. Thank you, Mr.
Chair.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Downing, from the great State of
Montana, for 5 minutes.
Mr. DOWNING. Thank you, Mr. Chair. Thank you for holding
this hearing. And thank you to the witnesses.
I wasn't planning on talking about health insurance at all,
but some of the comments by Messrs. Voss and Crain kind of just
sparked some thoughts here.
You know, one of the things, Mr. Voss, that you mentioned
is you didn't want businesses or taxpayers through tax credits
to be paying into a broken system. And one of the things I just
want to be clear on that is the tax credits that have gotten so
much press the last couple of months, these enhanced premium
tax credits, only affect the individual market. So that is not
affecting, you know, the small groups which, you know, is
probably mostly what you are talking about in terms of the
costs for an employer for a small business.
But what we have seen--we do have a broken system, and
those premium tax credits are trying to, you know, mask a
broken system. But what we have seen are 15 years of rising
provider costs, 15 years of rising drug costs. And because of
that we have seen 15 years of adverse selection which has
concentrated the risk, which is driving those costs up. But I
agree with you 100 percent, small businesses and taxpayers
shouldn't be bearing the brunt of those costs. So I appreciate
those comments.
Now on to my prepared remarks.
You know, first of all, I am going to start with you, Mr.
Crain. In your testimony, you mentioned that 44 percent of U.S.
manufacturers plan to increase their AI and smart factory
technology investments this year. What areas of manufacturing
business operations has AI technology been the most effective
in streamlining?
Mr. CRAIN. We have really seen this across the industry,
and thank you for that question. You know, I know a lot of
times folks think about Silicon Valley when they think about
AI, and I understand why that is the case. But it really has
been transformative for the manufacturing shop floor. It is
making workers more productive. It is making supply chains more
efficient. It is making shop floors safer for those workers. We
have really seen it across the industry.
From a small business perspective, we want to make sure
that small businesses aren't left behind from this
transformative activity.
And so anything we can do to ensure that they aren't
burdened from seeking to adopt or understand these technologies
will be a huge step in the right direction----
Mr. DOWNING. And what do you see is the biggest hurdles for
manufacturers in adopting AI technologies and incorporating
these into their business?
Mr. CRAIN. So if you look at the present AI action plan,
which is designed to support American AI dominance, which is
obviously a goal I--that NAM supports, I assume many of you do
as well--he is focused, and we are as well as, preventing one-
size-fits-all regulations. There are certainly risks associated
with AI, but those are risk case-specific risks. Manufacturers
using AI to make their supply chain more efficient doesn't
present the same risk as generative AI, for instance.
And so we want to be sure that any regulations that are
applied to the AI space don't impact manufacturers' ability to
invest in this technology.
Mr. DOWNING. Obviously, AI is going to have incredible
power demands moving forward, and we need to be able to power
this. We need the energy production in the United States.
What should Congress do to support increased energy
production so that we can fuel this economic growth?
Mr. CRAIN. So manufacturers are both producers and users of
energy. We are disproportionately users of energy because of
the energy-intensive nature of manufacturing production. And
that is even more true thanks to AI. So we need an all-of-the-
above energy strategy. We need to unleash America's natural
resources; think offshore and onshore leases. We need more
investment and critical minerals to improve battery technology.
We need to invest in nuclear fuel so that we have more baseload
power generation.
But it is not just production, it is also transmission. Do
we have a reliable, resilient, affordable grid that can get the
electrons where we need them to go? And, finally, do we have
permitting reform to get these energy projects off the ground
to ensure that we can invest in these energy resources that we
need to power our industry?
Mr. DOWNING. Thank you very much. Running out of time
quickly here. Thank you for those answers.
I am going to move to Mr. Moser. Thank you for being here
today. In your testimony, you highlighted a survey from this
year showing that manufacturing costs are, on average, 50
percent higher in the United States than in China.
What have been the most effective policies and arguments to
overcome this financial incentive to offshoring, convince
businesses to--or I am sorry--yeah, to convince businesses to
return their manufacturing operations to the U.S.?
Mr. MOSER. What has probably been the most----
Mr. DOWNING. Microphone, please.
Mr. MOSER. What has probably been the most effective so
far, I would say--I believe the tariffs are starting. It is a
difficult start, but starting to become effective. In the long
run, we advocate most strongly the use of total cost of
ownership instead of price for making the sourcing decision.
And if all the Congressmen and the President were to urge their
constituent companies to do that, that alone could bring back a
millions jobs without Congress having to spend a penny.
Mr. DOWNING. Outstanding. Unfortunately, I have run out of
time. Thank you all for your participation and your answers.
And on that, Mr. Chair, I yield.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Patronis, from the great State of
Florida, for 5 minutes.
Mr. PATRONIS. Thank you, Mr. Chairman. This has been great.
I have just really enjoyed all of the commentary, the
questions, and especially y'all's participation.
I was back in the Florida Legislature years ago and, at
that time, Governor Rick Scott was just adamant about trying to
find advantages for manufacturers in the State. So we were
successful on passing a sales tax exemption on manufacturing
equipment, and just trying to compete with the Joneses of what
other States are doing.
But I have never kind of thought about here, you know, or--
are there advantages? I am all about--look, I am in the
restaurant business for 30 years, and I am all about, you know,
not trying to reinvent the wheel, especially if I can steal
somebody else's wheel and make, you know, a version of it that
works for me.
Are we doing the same thing for y'all? Are we taking
advantage of other ideas? Or I mean--look, an idea you may have
in one of your State markets that you are in, there is no
reason why that can't be federal policy either. I mean, I would
just loving anybody to chime in with whatever.
And I really--Mr. Voss, I wrote it all down. You blasting
the healthcare system is something I totally take to heart as a
family in a small business. That is something we feel every
single day. How am I going to be competitive in the most
competitive business when you can go anywhere to serve dinner
for your family?
So but any comments y'all have regarding solutions that we
should be stealing from somewhere else, I am good with that.
Anybody? Yes, sir?
Mr. MOSER. Are you asking what Florida can do or what the
U.S. can do?
Mr. PATRONIS. U.S.
Mr. MOSER. Both? U.S.?
Mr. PATRONIS. Yes, sir.
Mr. MOSER. I come back finally to skilled workforce.
Engineers--for example, college loans should be preferentially
awarded to people--Americans that want to study engineering,
physics, et cetera, et cetera. And then those who don't get
loans should be excellent candidates to become toolmakers,
welders, precision machinists, who will have fewer defaulted
loans and we will have more people doing the work that needs to
get done.
Mr. PATRONIS. So let me dovetail off of that. Again, I
don't know if the Chairman sees it in his garage, but do we
have the right temperament in the workforce in order to try--I
mean, I know we can continue to throw money at education, but
are we sending the right type of people into the workforce that
want to work in these type of positions? Are there other
solutions that we are not thinking of?
Mr. MOSER. I think, as the youth and their parents see
manufacturing coming back--and, once again, it is a wonderful
career and a great way to get ahead. I was in a meeting 2 days
ago, and the average service engineer for the machine tool
companies is making somewhere between $100,000 and $150,000 a
year.
Mr. PATRONIS. That is great.
Mr. MOSER. Which is higher than the average for Ph.D.s. But
the kids don't know that because the guidance counselors don't
tell them.
Mr. PATRONIS. So my own story. My first degree was a
culinary arts degree. It was a 2-year certificate program. And
after I got finished with it, I thought, wow, I can do more
with myself than just cook. But I got that immediate
gratification. I just did something with my hands.
So I didn't have to look at a paper and see an A. I saw
somebody enjoying what I just created. So now I am motivated--
to get to your point that you just said--to want to go ahead
and get a bachelor's degree.
And I get these roadblocks by academics because now none of
the classes I took at the same institution would qualify
towards a bachelor's degree because they are too specialized.
So it was crazy.
And I went as far as to the university president. I said to
the college president--I said, ``Why is this the case?'' And he
says, ``Jimmy, there is just a part of our society where we
have got to keep the plumbers out of the classrooms.''
And it broke my heart, but it gave me a reason why I have
got to fight to make sure that, again, the tech schools get
somewhat of equal footing with the glamour of the academic
institutions.
Mr. MOSER. I have got an actual story about that. I met a
VP from Milwaukee Area Technical College, a big community
college.
And he was bragging about the fact that that institution
was the second-largest graduate school in Wisconsin because
only Madison got more people who already had bachelor's degrees
because those with bachelor's degrees who couldn't find a job
to pay off their debt came and learned to become a plumber or a
toolmaker or welder so they could make a good income and have a
good career.
Mr. PATRONIS. Well, I am with you.
Look, I am a big believer in the 2-year degree program. I
am here because of it. But it was a stepping stone and helped
me just become some maturity and understand the importance of
workplace efforts.
Anyway, thank you all for showing up.
Thanks, Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Bresnahan from the great State of
Pennsylvania for 5 minutes.
Mr. BRESNAHAN. Thank you, Mr. Chairman, and to the Ranking
Member.
And thank you all for taking time out of your day to come
spend some time with us up here on Capitol Hill, and to all the
witnesses for appearing before the Committee today.
The need to expand domestic manufacturing in this country
is more important than ever, and we must be clear-eyed about
the challenges that come with it.
Years of offshoring have weakened our economy and left us
vulnerable and overly reliant to foreign entities. In just a
few months of working to bring manufacturing back home, we have
already made tremendous strides to rebuild our domestic base,
especially in northeastern Pennsylvania.
NEPA businesses that make products on American soil
strengthen our economy, maintain a strong local workforce, and
protect our national interests from foreign dependence, from
Sugar Notch's own American Paper Bag company providing shopping
bags and the Amazon shipping bags for families across the
country, to Gentex producing military-grade fighter pilot
helmets for our troops.
And today I am joined with one of our constituents,
Lieutenant Gavin O'Donnell, who is an F-18 Super Hornet pilot
who actually wears one of those helmets that are manufactured
and created in our district.
So thank you for tagging along today as well.
One company that exemplifies the power of domestic
manufacturing is i2M in Mountain Top, Pennsylvania. Under CEO
Chris Hackett's leadership, i2M is producing American-made
flexible polymer films that promote sustainability, bolster
domestic supply chains, and support high-quality, good-paying
local jobs.
I also want to highlight another company, United Envelope
in Monroe County, and their high-quality mailers.
These businesses, along with countless others around the
district, have a profound impact on northeastern Pennsylvania's
economy and communities, but as we continue to expand domestic
manufacturing we must acknowledge the challenges ahead.
Domestic manufacturing is great, but it means nothing if
there is no power to keep the building running or workers to
fill it.
Mr. Crain, I know you had made some comments about
generating power, transmitting power, and ultimately
distributing power, and as a former electrical contractor
before coming to Congress, I am going to be definitely
interested in some of your insight.
But keeping good capacity aligned with industrial growth
will be one of the most difficult, most important aspects of
increasing domestic production. If energy prices skyrocket, if
families can't afford to heat their homes, the benefits of
domestic manufacturing won't mean much.
I guess my first question would be--and to piggyback on a
former question--talking about permitting reform, I sit on the
Build America Caucus, and we just had a bipartisan meeting
yesterday about some intuitive ways.
And something that we are seeing locally--and perhaps you
have some insight as to a way that--when you are talking about
transmission distribution, and construction, you have the
federal government, you have State government and local
government involved. And the majority of new transmission lines
that are being created are usually falling within the
parameters of one utility.
So I would be really curious to see and get your
perspective on opening up transmission distribution, increasing
the permitting time, and ultimately getting shovels in the
ground faster.
Mr. CRAIN. You are absolutely right that we need to reduce
the timelines to get permits reviewed and approved in order to
get any type of manufacturing online, but certainly energy
production and transmission, as you just indicated.
What we are seeing at the federal level as well as at the
local and State level is often a lack of coordination. We have
overlapping statutes. We have different agencies that have
jurisdiction over bits and pieces of a permit or of a statutory
scheme. And so it results in a lot of box-checking and
paperwork for manufacturers who just want to get shovels in the
ground.
And so if we can streamline those processes, if we can
increase coordination, then you are less likely to have those
roadblocks at the outset of a project and less likely to have
delays in terms of getting people actually employed and getting
them to work.
Mr. BRESNAHAN. I appreciate that.
Mr. Voss, based on your experience leading a company that
manufactures domestically, if you had a magic wand for
companies looking to relocate to northeastern Pennsylvania--and
I am going to give a quick plug here that, within a 1-day CDL
drive in northeastern Pennsylvania, you can reach 60 percent of
the United States population, as well within 200 miles you can
reach 50 million Americans, but sometimes that barrier to enter
is extremely troublesome.
What, if you had a magic wand, what is one thing we can do
as Members of Congress to help alleviate some of those
stresses?
Mr. VOSS. Boy, there is a list. Obviously, access to
working capital is really important. There are a lot of great
ideas out there, and many times the reason they fail is because
they ran out of money before they got to the finish line. So, I
mean, that would be one big thing.
Obviously, the business has to have a value proposition
that translates into value in the marketplace. That is also
important.
And then fight, like, for an even playing field. That is
all we can ask for.
There were some comments today like the sky is falling
because of this tariff strategy, and I am here to say it is
exactly the opposite.
In the business world, it is filled with unpredictability.
We have to adjust. And we can't be victimized by whatever
policies or things we can control and what we can't control. We
have got to develop a plan and work our way around it.
And so, from a congressional standpoint, I think the
biggest thing from a big-picture standpoint is to understand
and help everybody----
Chairman WILLIAMS. The gentleman's time is up.
Mr. VOSS.--understand the importance of small business and
what it does, and then support it in every way we can, whether
it is with health insurance reform, whether it is with banking
reform----
Chairman WILLIAMS. The gentleman's time is up.
Mr. VOSS.--whether it is carving out specifics for the
tariff policy that could be improved.
Mr. BRESNAHAN. Thank you. I yield.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Jack from the great State of Georgia
for 5 minutes.
Mr. JACK. Thank you, Mr. Chairman.
And I want to echo many of the things my colleague, Mr.
Bresnahan, said.
I want to thank Gavin for his service, and I hope you are
enjoying this hearing today. Your Congressman is deeply
respected. I am proud to serve alongside him and sit to his
right in this Committee.
And I would like to thank you, Mr. Chairman, for convening
this important hearing. It has been inspiring to hear some of
the testimony today.
Increasing domestic manufacturing is a priority for this
Committee, and we are very proud of our record of success thus
far this Congress, and, likewise, we are proud of our record of
partnership with the Trump administration.
I should note for the record that, under Administrator
Loeffler's leadership, the Small Business Administration is
implementing its Made in America Manufacturing Initiative,
pledging to cut $100 billion in red tape and expand access to
capital.
One of the first legislative victories this Congress had
directly impacted my own district. I have got a company in my
district that manufactures tankless water heaters, and it was
subject to the most onerous, burdensome regulations you could
imagine from the Biden administration.
And, thankfully, we were able to use the Congressional
Review Act and earn a bipartisan majority in not just the House
but also the Senate, sending it to the President's desk for
signature, enabling over hundreds--I would say 300 jobs in my
district to be saved thanks to our legislative action.
So we have a record of success we are proud of in this
Committee.
And I would like to begin my line of questioning with Mr.
Crain, although I should note at the outset I understand you
are a graduate of Mercer University. Am I correct in that
assumption?
Mr. CRAIN. You are. That is correct.
Mr. JACK. Are you a Georgia native, by chance?
Mr. CRAIN. I am not. My grandparents lived in Georgia for a
big chunk of their life. I am from Birmingham, Alabama,
originally.
Mr. JACK. Wonderful. Well, you are from Alabama.
So, Mr. Chairman, we will have to check his allegiances.
Mercer is one of the top-ranked teams in Division 1AA football
and is playing Auburn this weekend, so we are looking forward
to the outcome of that.
Mr. CRAIN. My folks are Auburn grads, and I am a Mercer
grad.
Mr. JACK. Well, I won't put you on the record.
But in that vein, you have discussed today the importance
of innovation for manufacturers and how manufacturers account
for 53 percent of private R&D spending. So despite only making
up 10 percent of GDP, they account for 53 percent of private
R&D spending.
So how do provisions like immediate R&D expensing ensure
that manufacturers are able to continue to lead in innovation?
Mr. CRAIN. Thank you for that question, Congressman.
You are absolutely right that innovation is the lifeblood
of manufacturing. Innovation is so critical that immediate R&D
expensing had been the law of the land for 40 years, reducing
the cost of R&D and empowering manufacturers to invest more in
transformational technologies.
Unfortunately, that policy expired in 2022. And so through
the One Big Beautiful Bill Act, you all revived immediate R&D
expensing and made it permanent, providing manufacturers the
certainty they need to invest in long-term R&D projects and the
capital availability they need to make those projects cheaper,
to have life-changing, lifesaving products on manufacturing
shop floors and manufacturing labs across the country, which is
so critical to our industry's place here in America and on the
world stage.
Mr. JACK. And you mentioned in your written testimony how
the various elements of your comprehensive manufacturing
strategy work together to support economic growth. I was hoping
you could elaborate a little bit more about that comprehensive
manufacturing strategy and where you see us going in the next
few years.
Mr. CRAIN. Absolutely.
Tax reform laid the foundation, but more must be done to
build on the success of tax reform and to truly unlock growth
and investment by small manufacturers.
That means rebalancing regulations at a time when the small
manufacturing industry shoulders a significant burden from
federal compliance.
It means permitting reform, which we have talked about
today, helping companies get shovels in the ground faster and
with less uncertainty on the back end from ongoing, never-
ending litigation.
It means bolstering American energy dominance so we have
the power that we need to drive manufacturing in the future.
And it means the workforce that manufacturers need,
ensuring that they have the skill--and that they exist at all--
to fill the 400,000 open jobs that we need.
All of those policies work together to drive a
manufacturing renaissance, which is something that the industry
supports, you all in Congress support, and the President
supports.
Mr. JACK. Well, I thank you for your testimony today. I
worked with the National Association of Manufacturers in my
previous job. In the first term, I was in the Trump
administration. And I think your mission is noble, and I think
we are all here committed to ensuring that manufacturing in
America continues to thrive.
And if I could close with Mr. Moser. We have 30 seconds.
I would just love for you to share with this Committee in
our remaining time the impact of tax reform that we saw earlier
this year through the One Big Beautiful Bill Act and where you
see our economy headed because of it.
Ms. MODLIN. I have long been in favor of immediate
expensing, and that is absolutely essential because of the
importance of increasing productivity in the U.S. to become
more competitive and to deal with our relatively limited number
of skilled workers.
So that piece of the bill--I support the whole thing, but
that piece especially is important.
Mr. JACK. Thank you both.
And, Mr. Chairman, thank you for convening this hearing. I
yield back.
Chairman WILLIAMS. The gentleman yields back.
And I also want to thank all of our witnesses for their
testimony and for appearing before us today. We appreciate it
greatly.
Without objection, Members have 5 legislative days to
submit additional materials and written questions for the
witnesses to the Chair which will be forwarded to the
witnesses.
I want to, again, ask the witnesses to please respond
promptly if that happens. I want to thank you again for being
here.
If there is no further business, without objection, the
Committee is adjourned.
[Whereupon, at 12:14 p.m., the Committee was adjourned.]
[Ms. Shirley Modlin did not submit her responses to QFR's
in a timely manner.]
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