Summary of NADCA Government Affairs Activity – January 2012
This Week in
Both the House of Representatives and Senate will be in session this week. The House will consider a Senate-passed bill to strengthen rules against insider trading by members of Congress and executive-branch officials.
House Republican leaders’ continue to push a massive transportation package which faces internal opposition, as well as resistance from Democrats and Senate Republicans (additional information below). Over in the Senate, lawmakers are scheduled to consider a reauthorization of Federal Aviation Administration programs, a bill to extend highway and other surface transportation programs, and possibly, postal reform legislation.
On the regulatory front, the U.S. Department of Labor (DOL) issued a notice of proposed rulemaking that would expand covered leave time for those with relatives in the armed forces. Three business advocacy groups asked a federal judge to allow them to challenge the constitutionality of President Obama’s recent recess appointments of three Board members to the National Labor Relations Board (NLRB).
Because the Senate was not in a “self-declared recess,” the groups argued, the Constitution’s Recess Appointments Clause does not apply and President Obama did not have the power to make appointments without Senate confirmation. The NLRB, which usually has five board members appointed to five-year terms expiring on a rotating basis, accumulated vacancies in August, 2010, August 2011, and on January 3, 2012. The Supreme Court has ruled that the NLRB cannot act with less than three board members.
Highlighted below are some updates of key issues pending before Congress and the regulatory agencies of interest to NADCA members.
TAX & BUDGET MATTERS:
Update on Debate Over Payroll Taxes
At the end of 2011, Congress agreed to a short two-month extension of the reduced Social Security payroll tax rate. Short extensions of Medicare physician reimbursement rates and unemployment benefits were also agreed to in the same bill. In January, lawmakers began negotiations to extend all three of those policies, and possibly others, for the rest of the year. The negotiations revolve around finding offsets for the cost of extending those policies.
Republicans continue to resist tax increases as offsets and Democrats continue to propose them, including surtaxes on income in excess of $1 million. One of the proposals to offset the cost of extending reduced payroll tax rates and other expiring items is a levy on large banks with over $50 billion in assets. This bank tax was first proposed by President Obama in 2010 to pay for costs associated with the Treasury’s Troubled Asset Relief Program (TARP).
While the conference committee could decide to address additional issues, there will be pressure not to exceed the scope of the House and Senate bills being conference. Although not likely, additional tax provisions such as the just-expired 2011 tax extenders could be included in a final conference report. However, should the conferees determine to pay for the bill, which seems likely, the addition of items, such as extenders (costing approximately $30 billion), will make it considerably more difficult to offset the legislation.
The process to find a compromise could remain as contentious as it was in December, and while a full extension for all three policies remains likely, it cannot be guaranteed at this point. Both chambers will need to act before the current package’s Feb. 29 expiration. Anxiety is building that Congress is heading for another eleventh-hour showdown.
The president is required to send his budget to Capitol Hill the first Monday in February, but the White House has announced it will miss that deadline by a week, now targeting February 13 for its delivery. Congress will follow with hearings on the Administration’s plans and get to work on its own budget.
The Administration’s FY 2013 budget proposal is expected to include temporary proposals to extend $5 billion worth of clean energy tax credits, including the Advanced Energy Manufacturing Tax Credit and the Production Tax Credit. Consistent with a point made in his State of the Union Address, the President also is likely to call for the repeal of all tax preferences that benefit the oil and gas industry. While Members of Congress will be under significant pressure to extend expired or expiring green energy tax credits, it will be difficult in the near-term to secure the funding to “pay for” their extension given budgetary constraints and disparate regional interests in an election year.
Passage of an actual Congressional budget, however, has become a thing of the past. In fact, the Senate hasn’t passed a budget in years. To this end, the House is considering a number of budget process reforms, including biennial budgeting, eliminating inflation from baseline spending calculations, and giving budgets the force of actual law. None of these efforts have a very good chance at becoming law any time soon, however. This year’s process will be short-circuited by the debt limit deal of last August, which already set a spending total for fiscal year 2013—generally the most important part of a budget.
Congress Considers Highway Bills and Infrastructure Projects
Competing surface transportation bills could be on the floors of both chambers this week. Both would fund highways and transit programs at about current levels. The House bill funds programs for five years, the Senate for two years. In addition to declining fuel taxes, the Senate bill is funded by a variety of transfers and narrow tax boosts. The House bill is partially financed by expanded oil and gas drilling on public lands, including the Alaska wildlife refuge, which is a poison pill to most Democrats. At this point, a shorter extension of the transportation laws seems more likely than a long term solution.
Administration to Push
Corporate Tax Plan
In February, President Obama plans to propose the framework for an overhaul of the corporate tax system next month. The president’s tax plan has been in the works for about a year. In the State of the Union address, Obama said he wanted to simplify the corporate tax system by broadening the base of taxable income and reducing the tax rate. The plan will also include a permanent extension of the popular research and experimentation tax credit, which has typically been renewed year to year. The administration is likely to announce a minimum tax levied on profits that companies earn overseas. Currently, multinational corporations pay tax on income that they earn in other countries only when that money is transferred home in the form of dividends. Deferral can limit a company’s tax liability indefinitely.
Many U.S.- based corporations have been calling for a tax overhaul, in part because of the relatively high rate paid on U.S. income and because the tax code is replete with special benefits that are not available to all corporations. At 35 percent, the United States has a much higher corporate tax rate than most of its trading partners. At the same time, the effective rate that companies pay after claiming various tax benefits can be considerably lower.
In addition, Obama is pushing a new “manufacturing communities tax credit” for qualified investments in cities and towns that lose jobs because of globalization. That tax credit is expected to cost the government $6 billion over 10 years.
To further encourage domestic manufacturing, Obama would extend temporary renewable-energy tax credits at a cost of $5 billion over 10 years. He would also prevent oil companies from claiming an existing manufacturing deduction, while increasing the value of the deduction for high-technology companies and other types of businesses.
Although an exact release date has not been determined, a discussion draft will be made available around the same time as the president’s fiscal 2013 budget request - February 13.
ENERGY & ENVIRONMENTAL
EPA Releases New Tool with
Information About Water Pollution
The U.S. Environmental Protection Agency (EPA) released a new tool in January that provides the public with information about pollutants that are released into local waterways. The Discharge Monitoring Report (DMR) Pollutant Loading Tool combines records and enables searching and mapping of water pollution by local area, watershed, company, industry sector and pollutant.
The tool is intended as an aid for states, local municipalities and the public in planning for the protection of the health of their communities. Searches using the DMR Pollutant Loading Tool result in “top ten” lists to help users identify facilities and industries that are discharging the most pollution impacted water bodies. DMR data has long been a key source of citizen suits under the Clean Water Act. With the creation of this new tool, this data will be more easily obtained and available in a more user friendly format.
When discharges are above permitted levels, users can view details about enforcement actions that EPA and states have taken to address violations. Here is the link to the DMR Pollutant Loading Tool - http://cfpub.epa.gov/dmr/.
Keystone XL Pipeline
Before House Committee
Key lawmakers are growing more interested in the idea that Congress could approve the controversial Keystone XL pipeline with a condition that the oil would stay inside the United States rather than be exported after it reaches the Gulf Coast.
House Republicans are marking up legislation the week of February 6 that would mandate approval of the Keystone XL by transferring authority over Keystone to the Federal Energy Regulatory Commission (FERC) and bypassing the president’s executive authority.
Senate Republicans are also pushing ahead on legislation, sponsored by Sen. John Hoeven, (R-ND), that would simply override Obama’s executive authority and mandate that the pipeline be approved by Congress. Both measures face the same problem: Republicans need to convince Democrats to include it in a must-pass bill, such as the extension of the payroll-tax holiday that Congress hopes to approve by month’s end.
SAFETY & HEALTHH
OSHA Issues 2012 Regulatory Priorities
In January, the Occupational Safety and Health Administration (OSHA) finally released its fall 2011 regulatory agenda. It reveals that OSHA’s top priorities include the development of an injury and illness prevention program rule, a request for information on revision of OSHA’s permissible chemical exposure limits, and a projected release date for long-awaited regulations which would align the current Hazard Communication standard with the Globally Harmonized Hazard Communication System. In addition, the agency is considering more stringent record-keeping requirements.
Die casters could be impacted by OSHA’s development of a rule which would require employers to implement an Injury and Illness Prevention Program. Flagged as OSHA’s highest-priority rulemaking, the rule would require employers to locate and correct workplace hazards, even where no specific OSHA standards are violated. From OSHA's perspective, if an injury occurs, OSHA can either cite the employer for failing to identify the hazardous condition and cover it in a plan, or, if the condition has been identified, for failing to develop an adequate program.
Also on the horizon is OSHA’s effort to re-evaluate and possibly update its permissible exposure limits (PELs) for numerous chemicals, most of which were set in 1971 based upon science dating back to the 1960s. OSHA’s latest regulatory agenda revealed that it is planning an information request in August 2012 to seek input from the public in order to identify options and alternatives for addressing occupational hazards posed by outdated exposure limits.
In February 2012, OSHA also hopes to propose recordkeeping rules to improve the reporting and tracking of workplace injuries and illnesses. These rules will require employers to report all amputations within 24 hours and inpatient hospitalizations of one employee within 8 hours to OSHA. This is much more stringent than the current standard. The recordkeeping proposal is also likely to reflect OSHA’s efforts to move to a real-time, electronic approach for injury reporting.
View the full OSHA regulatory agenda.
CLASS Act Repeal Passes House
On February 1, the House voted to repeal a financially troubled part of the 2010 health care law that was designed to provide affordable long-term care insurance by a vote of 267-159. The legislation (H.R. 1173) specifically repeals the unsustainable Community Living Assistance Services and Supports Act (CLASS Act), The House vote comes months after the Obama administration suspended the program.
Late last year, Health and Human Services (HHS) Secretary Kathleen Sebelius declared the program actuarially unsound and cancelled it. Proponents of the legislation to repeal the program argue that its passage is necessary to prevent the initiative from languishing at the HHS and possibly being re-started later. This legislation is expected to stall in the Senate, where there is not enough support to kill the program officially at this time.
House Bill to Require Companies to
Report Number of Employees Per State, Country
Legislation recently introduced by Rep. Gary Peters (D-MI) in the House of Representatives would require most publically traded companies to report how many employees they have who work domestically by state and abroad. The measure, the Outsourcing Accountability Act of 2012 (H.R. 3875), would call for a company to report:
- the total number of their employees and those of their subsidiaries who live and work in the U.S. by state;;
- the total number of their employees who physically live and work abroad, broken down by country; and,
- the percentage increase or decrease in the number of employees reported in the above categories from the previous year.
Exempt from these requirements would be newer public companies, defined in the bill as those fewer than five years old, and smaller employers (those with gross revenues of less than $1 billion during the last completed fiscal year). Under current law, publically traded companies are required to report to the SEC the number of employees they have, but not where these individuals work.
In recent years, with high unemployment, there has been an increased interest in the number of jobs being outsourced. Providing tax incentives to employers that create domestic jobs while eliminating tax breaks for outsourcing was one of the components of the President’s State of the Union Address. No hearings have been held on this matter yet.
If you have any questions or comments, please feel free to contact Stephanie Salmon or Tim Powers, NADCA Washington Office, 202.783.1080.