Industry Insight

Industry Insight

December 2009

 

Divided Senate Debates Amendments to Healthcare Bill

The Senate began debate on the first amendments to Majority Leader Harry Reid's healthcare proposal on Tuesday, and media reports note that, as expected, the rhetoric contained a heavy dose of partisanship. However, several media outlets noted that Senate Democrats continue, behind closed doors, to negotiate in an effort to convince 60 members to support the legislation. The AP reported GOP Sen. Tom Coburn of Oklahoma "asserted Tuesday during a rancorous floor debate that President Barack Obama's health care overhaul will shorten the lives of America 's seniors by cutting Medicare." Coburn said, "I have a message for you: You're going to die sooner." The AP added Finance Committee Chairman Max Baucus, D-Mont., "defended the health care legislation, saying it would make Medicare a smarter buyer and improve prescription coverage and preventive benefits for seniors."

The New York Times reported that in a "day of desultory debate on sweeping health care legislation, senators appealed to two potent political constituencies on Tuesday, with Democrats seeking additional medical benefits for women and Republicans vowing to preserve and protect Medicare for older Americans." The Democrats' "first amendment, offered by Senator Barbara A. Mikulski of Maryland , would require insurers to cover more screenings and preventive care for women, with no co-payments."

The Washington Post reported "even as partisan divisions hardened and contentious amendments stacked up, Democrats increasingly expressed optimism that they would succeed in passing a bill before Christmas." The "second amendment, authored by Sen. John McCain (R-AZ), would strip out the bill's primary revenue source, nearly $500 billion in Medicare cost savings. Although AARP and other seniors groups have said otherwise, Republicans are attacking the cuts as a threat that could eventually shorten lives." McCain said, "They've paid all their working lives into the Medicare trust fund, and now they're in danger of having $483 billion cut out of it, which would eventually lead to rationing of health care for seniors in order to fund a new, government-run health-care system in America ."

In his Washington Post column, Dana Milbank said Democrats are "using the floor debate to buy time as they work behind closed doors to craft a compromise that can win the requisite 60 votes. Republicans are hoping to talk the legislation to death. The result is a desultory collection of rote talking points, dubious factual assertions and cheap demagoguery -- and there are 23 debating days left before Christmas."

The Hill reported new language "on the public option will be unveiled next week, which Senate Democratic leaders hope will break the logjam on healthcare reform." Sen. Tom Carper (D-Del.), "who has been tapped by Majority Leader Harry Reid (D-NV) to come up with a Plan B approach to the public option controversy that has divided Democrats, has been working closely with liberal and conservative Democrats, as well as Sen. Olympia Snowe (R-Maine)." Carper "indicated that significant progress has been made and it is a question of when, not if, the new healthcare plan will be unveiled."

Meanwhile, in an editorial, the Wall Street Journal criticized the reception of the Congressional Budget Office report on the impact of health insurance premiums under the Senate bill. The Journal said the report shows that premiums will increase for individuals and families, but Democrats and some media outlets touted the data to support the Democratic bill. However, the Journal says the report should be read to indicate the Democratic bill is a failure, because its authors hoped it would cut premiums.

 

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Reports Show Women on Track to Become Majority of Union Workers

The AP reported, "Women are on track to become a majority of unionized workers in the next 10 years, signaling their growing clout in the labor movement." The shift, "outlined in a report from the Center for Economic and Policy Research, could see organized labor focus more intensely on issues important to women as unions look to broaden their ranks and wield greater political strength in the next election cycle." The study "tracks the growing diversity of the labor movement over the past quarter century, including a surge in Latino union members and the steep decline of unionized workers from the manufacturing sector." Women now "make up about 45 percent of union members, up from just 35 percent in 1983." Latinos are the "fastest-growing ethnic group in organized labor, more than doubling their representation from 5.8 percent to 12.2 percent over the past 25 years."

The New York Times reported, "A study has found that just one in 10 union members is in manufacturing, while women account for more than 45 percent of the unionized work force." According to the study, "just 11 percent of union members work in manufacturing, down from nearly 30 percent in the 1980s." The study found "that white men represent just 38 percent of all union members and women will come to represent more than half of all union members during the next decade." Approximately "48.9 percent of union members are in the public sector, up from 34 percent in 1983. About 61 percent of unionized women are in the public sector, compared to 38 percent for men." Elizabeth Shuler, the AFL-CIO's new secretary treasurer, said "she found the study encouraging because of the increased female membership in unions."

 

With this recently published information, we ask that you continue to oppose the Employee Free Choice Act (EFCA) and encourage your friends and co-workers to do the same.  Visit yoursecretballot.com for printable fact sheets and further information.

 

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Governor’s Quality Award Program Slates Training for Potential Applicants

 

Have you ever had an interest in the Governor’s Quality Award Program but were not sure of where to start? If so, don’t miss out on a great opportunity to gain a better understanding of the Malcolm Baldrige Criteria and practical ways in which you can use it to improve your overall business processes.  You will: learn how to: write an application for the Governor’s Quality Award Program, gain a better understanding of what the Malcolm Baldrige Criteria is asking and what examiners look for in an application, assess your business more thoroughly in every category of the Criteria, benchmark for results and much more! 

 

The Governor’s Quality Award will be providing Applicant Training on January 20 and March 18, 2010.  Major David Harrison, Senior Instructor for the Organizational Readiness Training Center of the Army National Guard, will be the instructor.   Harrison is an expert in the Malcolm Baldrige Criteria.  He will show you how to utilize the Criteria for a complete assessment of your organization from leadership to results. 

 

To register, go to www.arkansas-quality.org and click on Applicant Training Seminar for either January 20 or March 18. Complete the application with the award level your organization is considering.  Return the application with a $150 registration fee to the Governor’s Quality Award office.  Registration for the January 20 seminar is due January 13. Up to five representatives from your organization may attend the seminar.  If you do apply for an award, the $150 will be applied to your application fee.  For questions or additional information, call Governor’s Quality Award Executive Director Sue Weatter at 501-372-2222.  

 

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New Economic Reports Indicate "Slow but Steady" Recovery

The AP reported that the U.S. economic "recovery seems on track for slow but steady gains after new reports Tuesday showed growth in manufacturing activity, construction spending and contracts to buy homes." In "one hopeful sign," the Institute for Supply Management said its manufacturing index "showed growth in November for a fourth straight month. The reading of 53.6 was slightly lower than October's 55.7. But any reading above 50 indicates growth." A second report by the Commerce Department shows construction spending rose by 0.04 percent, a sign that the "construction sector is stabilizing." And a third "positive" report "showed that the number of homebuyers who signed contracts to buy previously occupied homes rose for the ninth straight month in October."

The New York Times reported the National Association of Realtors said Tuesday that its pending home sales index jumped 3.7 percent in October, as buyers "took advantage of a government-financed credit for first-time home buyers." The Times added that the "relatively sunny" reports "brought optimism to investors and suggested that the economy in three crucial sectors - housing, manufacturing and construction - was on track to a steady, albeit slow, recovery." But economists "warned that those sectors could suffer further setbacks as governments gradually reduced stimulus efforts."

 

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Fed Predicts Tough Economy Through 2012

The Washington Post reported "a forecast released [last] Tuesday by the Federal Reserve that addresses for the first time economic conditions at the time of the next presidential election," and "it paints a grim picture. Top Fed officials expect the unemployment rate to remain in the 6.8 to 7.5 percent range at the end of 2012 and said it could take 'about five or six years' from now for economic activity to return to normal." Stuart Hoffman, chief economist at PNC Financial Services Group, refers to current conditions as a "slow-motion recovery." The Hill ran a similar story under the headline "Fed: Jobless Rate Will Stay High Through 2012."

Meanwhile, the CBS Evening News reported that "the Federal Reserve says it expects unemployment to remain high next year, as high as the current 10.2 percent. And if you add in the underemployed, which refers to those who have settled for part-time work or have given up looking entirely, that rate is actually 17.5 percent."

USA Today reported, "The Fed expects the economy to grow a bit more robustly the rest of this year and in 2010 than it previously anticipated, according to the minutes of its Nov. 3-4 meeting. It said the economy should contract 0.1 percent to 0.4 percent in 2009, better than its June forecast of 1 percent to 1.5 percent. And it now expects growth of 2.5 percent to 3.5 percent next year, up from 2.1 percent to 3.3 percent."

The AP said that Fed officials also "acknowledged its efforts to keep the rebound going could feed a new speculative bubble," and "although Fed officials saw the current likelihood of that as 'relatively low,' they pledged to 'remain alert to these risks.'" Bloomberg News also noted the Fed's fear that "record-low interest rates might fuel 'excessive' speculation in financial markets and possibly dislodge expectations for low inflation."

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Obama to Pledge 17 Percent Cut in 2005 U.S. Emission Levels by 2020

AFP reported President Obama "heads to Copenhagen needing to perform a delicate balancing act between huge expectations and the reality of a reluctant Congress." Obama will "travel to the Danish capital on December 9" to "offer to curb U.S. emissions by 17 percent from 2005 levels by 2020 -- less than calls by the European Union, Japan and U.N. scientists -- but the first concrete numbers put on the table by the world's largest economy and second biggest polluter." But "analysts warn this is a risky gamble for Obama because the goals -- with longer-term pledges of a 30 percent reduction in emissions by 2025, 42 percent by 2030 and 83 percent by 2050 -- are conditional on action in Congress."

Bloomberg News reported the U.S. "will propose cutting its emissions 'in the range of 17 percent' from 2005 levels by 2020, Carol Browner, Obama's top adviser on energy and the environment, told reporters." Though climate change legislation has "stalled in the Senate," Administration officials "said they aren't going to Denmark empty-handed and Obama's attendance will send a strong signal." However, Senate Majority Leader Harry Reid said "that his chamber won't take up legislation until 'sometime in the spring.'"

The AP reported experts say "Americans' day-to-day lives won't change noticeably if President Barack Obama achieves his newly announced goal of slashing carbon dioxide pollution by one-sixth in the next decade." Experts say "it will mean higher energy bills, fewer deaths from air pollution, and maybe even a dividend check at the end of the year. But mostly, they say, it'll be small, slowly evolving changes that the public won't even notice."

The Wall Street Journal reported that the United States and China for the first time offered specific targets for controlling their emissions, ahead of a United Nations climate summit. China announced it would aim to cut its "carbon intensity" by 40 percent to 45 percent below 2005 levels by 2020. The announcement came a day after President Barack Obama announced he would travel to the U.N. climate summit to deliver a pledge that the U.S. will cut greenhouse-gas emissions 17 percent from 2005 levels by 2020 and 83 percent by 2050.

Meanwhile, the New York Times reported, "The nation's corporations have long been bracing for the day when they would be required to carry out sharp cuts in the emissions that cause global warming. That day seemed to move a bit closer [last] Wednesday, when President Obama outlined a national target for such reductions." Major corporations, including General Electric, the Ford Motor Company and PepsiCo, "have teamed up with environmental groups to set up the United States Climate Action Partnership, a wide-ranging coalition trying to find ways to cut emissions throughout the economy." In the energy sector, some corporations "have also been vocal in demanding clarity on emissions."

 

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Time Running Out to Voice Your Concerns with the EPA Rule

 

The comment period on the Environmental Protection Agency’s (EPA) proposed “tailoring rule” outlining regulations for greenhouse gas (GHG) emissions from large industrial facilities ends on December 28. 

 

The proposed tailoring rule is the EPA's first step toward regulating carbon emissions from large stationary sources that emit more than 25,000 tons of CO2. It also allows the EPA to immediately begin considering lowering the threshold of emissions at their discretion, further expanding the organization's scope to regulate hospitals, libraries and even American homes. For a manufacturer, it could mean doing something as simple as adding a “plant shift” to the schedule would trigger EPA regulation.

 

Congress, not the EPA, is the appropriate authority to deal with such a complex regulatory issue that needs and deserves transparency and rigorous public debate.

 

Sign the petition at www.nam.org/epa. For more information, please contact Bryan Brendle, the NAM ’s Director for Energy and Resources Policy at bbrendle@nam.org.

 

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Senate Panel Bypasses Hearing, Approves OSHA Nominee

The Senate Health, Education, Labor and Pensions (HELP) Committee on November 18 approved the nomination of David Michaels to head the Occupational Safety and Health Administration (OSHA). The National Association of Manufacturers sent a letter to the HELP Committee last month urging a formal hearing in light of Michaels' criticism of efforts to ensure that workplace regulations are based on the best available science and data. Michaels' nomination now proceeds to the full Senate.

 

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South Carolina Congressman Trying to Make E-Verify Permanent

The Greenville (SC) News reported Rep. Bob Inglis (R-SC) "is trying to build support in the House for possible legislation to make E-Verify permanent." Inglis "sent a letter to his colleagues, urging them to support a future bill to make the employment-verification program permanent." South Carolina and 11 other states "require most employers to use the online system to check whether new employees are legally entitled to work in the U.S. " Supporters say E-Verify "is a good tool to curb illegal immigration," but critics, including the U.S. Chamber of Commerce and the National Association of Manufacturers, say "the federal databases E-Verify uses are so error-prone that many legal immigrants and citizens are mistakenly disqualified." Inglis "wants to gauge the extent of support in the House before drafting an E-Verify bill. If he does write legislation, it faces tough odds."

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Reminder - New NOL Carryback Law Information

 

On November 6, President Obama signed into law (Public Law 111-92) the Worker, Homeownership, Business Assistance Act (HR 3548), which included Net Operating Loss (NOL) tax relief. This temporary relief will allow struggling companies to get quick cash refunds from the IRS by using either their 2008 or 2009 losses to offset taxes paid in the past five years. This temporary tax relief is available to all size companies. There is a temporary limit in year five of the carryback: any refunds for taxes in the prior fifth year would be reduced by 50 percent. There is no limit in the refunds for taxes paid in the fourth, third, second or first year of carryback.

 

The National Association of Manufacturers (NAM) and many of its member companies participated in a vigorous campaign to secure passage of this important tax provision.  NAM also chaired the NOL Coalition to bring broad-based industry support to their efforts.

 

For more details about the New NOL tax law, including its impact on multinational companies, financial statements, consolidated returns, etc., see pages 3 and 4 of the Deloitte explanation of the new law. 

 

If your company will use this NOL relief, please contact Monica M. McGuire, NAM ’s Senior Policy Director, Taxation and Chairman, NOL Coalition. She can be reached at (202) 637-3076 or mmcguire@nam.org. This information will be very helpful when NAM is asked how many companies benefited from this relief.   

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China Rejects Currency Manipulation Claims

The AP reported, " China rejected the charge that it was keeping the yuan artificially low against the dollar, but rather blamed another 'major economy' for keeping its own currency weak." China 's trade minister Chen Deming "didn't mention a specific country by name, but was widely understood to be referring to the United States ." Chen said "criticism of China was unfair at a time when the stability of the yuan was contributing to global economic recovery, and noted that the currency has risen 20 percent in value since Beijing decided to loosen somewhat its peg to the dollar four years ago." Chen also "noted that China 's trade surplus was falling significantly after reaching $290 billion last year." The AP noted that "the yuan's low value against the dollar also distorts other foreign exchange rates, by causing the dollar to weaken against free-floating currencies like the euro and pound."

 

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