February 2026 Volume 8

WASHINGTON UPDATE

BRINGING YOUR GOVERNMENT DOLLARS BACK HOME By Omar S. Nashashibi

D espite an overwhelming emphasis on tariffs over the past decade, there is more to a manufacturing strategy than trade. As recognized by this administration and others in the past, industrial policy crosses multiple departments and agencies. The website manufacturing.gov identifies ninety-five programs across the federal government to support industry. Manufacturers of all sizes should take a moment to familiarize themselves with opportunities provided by the federal government and key changes in policies that impact their operations. In the past few months, we have seen a flurry of new programs and initiatives announced. On December 19, 2025, the U.S. Department of Labor launched its American Manufacturing Apprenticeship Incentive Fund to encourage employers nationwide to develop, expand, or join existing advanced manufacturing registered apprenticeship programs through a pay-for-performance model. Employers and registered apprenticeship sponsoring organizations are eligible to receive $3,500 for each new apprentice hired. Companies can find a list of eligible occupations, which include maintenance technician, precision machinist, and CNC operator, on apprenticeship.gov. These funds are in addition to $145 million announced on January 6, 2026, to further expand the national apprenticeship system and $98 million for pre-apprenticeship programs targeting 16- to 24-year-olds. Taken together, the actions are a key component of the Trump administration’s initiative to support employers hiring 1 million registered apprenticeships. This is an important distinction – registered versus non-registered apprenticeships. During the first Trump administration, the Department of Labor established a program specifically to support employers employing non-registered apprentices. The exclusive focus on registered apprentices marks a reversal, sending a clear message to manufacturers where the federal government intends to spend its resources. The Small Business Administration is also expanding its focus on manufacturing. Late last year, the SBA approved its initial round of Manufacturers’ Access to Revolving Credit (MARC) loans under the 7(a) program. The loan program is the first ever SBA loan offered exclusively to manufacturers. Businesses may use the MARC loans, which are supported by community and regional banks, for “any short-term working capital need.” Critically, borrowers can combine MARC with conventional commercial loans. Also at the SBA, in support of the Made in America Manufacturing Initiative, the agency awarded $1.1 million in grants to organizations for providing training and technical assistance to support small manufacturers in the SBA’s Empower to Grow (E2G) Program. From a broader policy approach, the Commerce Department’s National Institute of Standards and Technology (NIST), is expanding its efforts by investing millions to establish a center

to advance the use of Artificial Intelligence to boost productivity and increase supply chain resiliency. The AI Economic Security Center for U.S. Manufacturing Productivity is in addition to the expected launch of the AI for Resilient Manufacturing Institute in the coming months. The tax code presents numerous opportunities following the changes in policy for which FIA lobbied in 2025. Last year, Congress passed and the President signed legislation into law that made permanent Research and Development expensing, after 48 percent of FIA members said in a January 2025 survey that they would reduce R&D activities without expensing reinstated. This same law made 100 percent bonus depreciation permanent, increasing the purchasing power of FIA members, one-third of whom reduced capital expenditures due to the depreciation rate falling to 40 percent. To support workforce recruitment and training for manufacturers, the law made permanent the exclusion from an employee’s gross income employer payments towards student loans of up to $5,250 under Section 127 of the Internal Revenue Code. In addition, it expands Pell Grants to short-term, workforce aligned programs of 150-600 hours or 8-15 weeks and also expands Section 529 education savings accounts for “qualified postsecondary credentialing expenses” in connection with “recognized postsecondary credential programs”. As we begin 2026, forging employers should help their workforce better understand the no tax on overtime provision included in the 2025 tax law (Section 70202). Effective 2025 through 2028, individuals with a modified adjusted gross income under $150,000 ($300,000 for joint filers) may fully deduct $12,500 of their overtime, with $25,000 being the maximum annual deduction for joint filers. All these provisions collectively incentivize forging businesses to invest in their facilities, their process, and the people producing forgings on their shop floor. Manufacturers should also look to their state capitals in addition to opportunities from Washington, D.C. Members of the FIA have access to a list of grant programs and tax incentives our firm identifies each month to support manufacturing in America. The Wisconsin Fast Forward program offers up to $400,000 per grantee to reimburse the business for costs of customized occupational training for unemployed, underemployed, and incumbent workers, with applications due February 18, 2026. In Minnesota, employers and associations have until April 30, 2026 to apply for up to $30,000 for a grant program that seeks to aid employers with the development of new registered apprenticeship programs (RAP) or to expand existing programs in apprenticeable occupations. Starting in 2020, Illinois allows on a first-come, first-served basis a tax credit of up to $3,500 for educational expenses for qualifying apprentices, with an additional $1,500 per apprentice if the individual or the employer is located in an underserved area. Ohio’s annual TechCred program reimburses up to $2,000 per

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FIA MAGAZINE | FEBRUARY 2026