Today, the Subcommittee on Technology and Innovation held a hearing to examine the proposed National Network for Manufacturing Innovation (NNMI). The Administration requested $1 billion in new mandatory spending for the NNMI in the fiscal year 2013 budget request for the National Institute of Standards and Technology (NIST). While details of the program have been sparse, the NNMI is designed to promote the development of new manufacturing technologies through collaboration between the Federal Government and public and private sector stakeholders.
While very supportive of a strong American manufacturing sector, Subcommittee Chairman Ben Quayle (R-AZ) questioned whether the proposal of a new billion dollar government program is the best way for the Administration to encourage manufacturing. "While all of our major global competitors have been lowering their corporate tax rates, ours has been essentially unchanged for the past twenty years, and is now the highest in the industrialized world," Quayle said. "Rising costs in health care, environmental compliance and litigation all discourage manufacturing from thriving domestically. In the first three years of the Obama Administration, the Federal Government has imposed 106 new major regulations with annual costs of more than $46 billion. When we are discussing manufacturing and innovation, the conversation is really about the conditions that create a better business environment."
The Administration has moved forward this fiscal year by establishing a pilot institute for manufacturing innovation with an initial cost of $45 million. The proposed NNMI would consist of a network of up to 15 institutes, at a cost of one billion dollars. Republicans today questioned Dr. Patrick Gallagher, Under Secretary of Commerce for Standards and Technology and the Director of NIST, on why the Administration has not been more forthcoming with details about this proposed program. Further, Republicans questioned whether the multiple-institute structure would favor one area of manufacturing over another, giving an unfair advantage that is not justified by market forces.
The Administration has devoted significant resources to manufacturing activities at many different federal agencies. Republicans today questioned whether NNMI would potentially duplicate other efforts and whether the new program would overstep the role of government in areas that are more appropriately handled by the private sector.
In his testimony, Dr. Gallagher, defended the Administration's proposal, saying, "The NNMI is a critical piece of innovation infrastructure that can help U.S.-based manufacturing to remain globally competitive by fostering cutting-edge technological advances, solving problems of interest to a wide range of manufacturing sectors, supporting small and medium-size manufacturing enterprises, and strengthening the skills of workers, managers, and entrepreneurs."