There is a lot that goes into making a stable economy. One needs a stable, educated, and skilled workforce, plenty of jobs for them, a portable and stable currency, a calm political climate, and a lack of substantial military conflict. One other element is arguably more significant than all of these. At some point, someone has to be taking something out of the ground and turning it into money. That last element is of great importance to the foundry and metal casting industry.
Things got kicked off for the industry with foundries making use of ore from mines right here in the United States, smelting, casting, and finishing products entirely within this country. That, of course, was great for the American economy. The resources all came from within our borders, everything from iron to miners, even the machinists at the end of the line.
Due to various factors, most of them being the massive number of regulations in the country and the utter lack of even the most rudimentary safety rules elsewhere in the world, it is deemed more economical to outsource as much work as possible overseas. That certainly benefited certain companies and the new host countries but has wound up hurting the American economy.
In response, a “Made in USA” movement has been building for years, with specific legislation being passed that makes it a requirement that many products have to at least in part originate in the USA. Covid has, of course, exposed several weaknesses in the outsourcing system, both from a national security and supply chain standpoint. The foundry industry supplies ships and trucks and the military, so the former is a significant concern.
Make It In America Act
That is why the American Foundry Society has recently been pleased to back the Make it in America Act, a piece of legislation seeking to increase the number of tax dollars that will be spent helping the American economy instead of sending the money overseas. There are two main elements of this legislation that are of interest to the foundry world.
The first is increasing the amount of material that has to originate in America before the federal government can purchase it from 50% to 75%. This will help the American foundry industry by requiring more federal dollars to go to genuinely American-made products. Considering how the federal budget has been increasing, it is more likely that those tax dollars make their way back into the American economy. The downstream effects will include more jobs for more Americans.
The second element in the Make it in America Act of note is that it will make it harder for government agencies to get around the percentage requirement mentioned above. It does this through a variety of means. Still, the point is that it will be harder for the government to get around its own rules, which will result in the legislation being more effective.
Leveraging the Tax Incentive
This is not the only legislation that the AFS finds relevant to American foundries and metal casters. For example, a substantial tax credit is directed towards retaining employees. It can amount to saving $7000 for each employee. Since the credit is based on retention, it creates an incentive for foundries to hold onto employees and work on developing them to ensure that they will contribute to the foundry’s overall growth. As a result, another of the significant elements for a stable American economy will be strengthened, the growth of a stable, educated, and skilled workforce.
With concern for increasing American manufacturing at its highest point in decades both within the government and the public consciousness, the foundry industry must pay attention to legislation like the Make it in American Act to best adapt and help strengthen the national economy and its bottom line.
