As Congress weighs energy and climate legislation, U.S. Sen. Sherrod Brown (D-OH) announced a new bill that would create a $30 billion revolving loan program to help auto suppliers and other small and mid-sized manufacturers retool for the clean energy industry. Brown's bill would also expand the focus of the Hollings Manufacturing Extension Partnership (MEP) to include support for manufacturers transitioning to the clean energy economy.

"We can revive American manufacturing through investments in clean energy," Brown said. "This bill will help our manufacturers retool, put our auto suppliers back to work and produce clean energy technologies."

The Investments for Manufacturing Progress and Clean Technology (IMPACT) Act of 2009 would establish a $30 billion Manufacturing Revolving Loan Fund. States would receive funds for the establishment of revolving loan programs to assist small and medium-sized firms in retooling, expanding or establishing domestic clean energy manufacturing operations and improving energy efficiency.

The bill would also modernize the MEP, the federal-state partnership which provides support to small and mid-sized manufacturers. Currently, 59 MEP centers receive slightly more than $100 million in federal funds each year, with states matching the federal contribution two-to-one. The new bill would provide the MEP program with $1.5 billion in federal funds over five years to help manufacturers diversify to clean energy markets and adopt innovative, energy efficient manufacturing technologies. Under the bill, the federal share of MEP funding would increase to 50%. Based on the MEP's current average cost per consultation, the additional federal funding in this bill could enable MEP to reach at least 10,000 additional U.S. manufacturers each year.

Manufacturers continue to face a reduction in demand and a lack of capital due to the financial crisis. A May survey found that more than 70% of manufacturers anticipate difficulties securing credit to purchase raw material and rehire workers as business conditions improve.

The manufacturing industry, which accounts for 12% -- $1.6 trillion -- of the U.S. gross domestic product (GDP) and nearly three-fourths of the nation's research and development, has been contracting for 16 consecutive months. Since 1987, manufacturing's share of GDP has declined more than 30%. According to the Federal Reserve Board, manufacturing output fell 2.7% in January 2009 to a level 13.1% below that of only 12 months earlier. Last month, nearly half of the nation's job losses were tied to manufacturing.