Washington Watch

August 2008

Recess Perfect Time to Talk About Dangers of Card Check

Congress is in recess until Monday, September 8. (The Senate will convene in pro forma sessions every Tuesday and Friday through the recess to prevent Presidential recess appointments.)  During the recess, delegates will be traveling throughout their districts, attending speaking engagements and visiting with constituents.  Please take this opportunity to visit with Senators Lincoln and Pryor and your Representative about the dangers of the Employee Free Choice Act/Card Check Legislation. 

The concept behind Card Check is simple: unions would be certified as the bargaining agents for workers once they get a majority of eligible employees to sign authorization cards. This new system would replace secret ballot elections, which have been the primary means for granting unions recognition since the National Labor Relations Act was amended in 1947. The unions would have a full year to collect the required number of signatures. There would seem to be endless ways to get workers to sign cards for reasons other than wanting a union to represent them – opportunities for intimidation and coercion from having close personal friends solicit workers to more heavy-handed tactics.

Secret ballots, on the other hand, have served this country well since its founding as a way to make important decisions. They allow the people affected to decide between competing options on the merits rather than in response to outside pressure. They also have the benefit of finality: when the issue is settled, it is done.

This issue affects businesses of all sizes, but especially smaller companies. In 2005, the National Labor Relations Board conducted 2,649 union representation elections. More than 20 percent of those elections involved bargaining units of fewer than 10 employees and a full 70 percent of them involved bargaining units of fewer than 50 employees. Should Card Check become law, union organizing would be cheaper and easier than ever before, allowing unions to target even smaller companies.

Many believe that because Arkansas is a “right to work” state, we are somehow protected from card check.  Please help us stop the spread of this myth.  The “right-to-work” status only prevents a union contract from requiring employees to pay union dues; it does not prevent the establishment of unions in a workplace.

Our Congressional Delegation is hearing about this issue from organized labor.  It is vitally important that they hear the business perspective too.  For additional information about card check legislation or for talking points, please contact us. 

Even George McGovern, a former senator from South Dakota and the 1972 Democratic presidential candidate, gets it. In an opinion piece published in the August 8 issue of the Wall Street Journal entitled My Party Should Respect Secret Union Ballots, McGovern said:

As a congressman, senator and one-time Democratic nominee for the presidency, I’ve participated in my share of vigorous public debates over issues of great consequence. And the public has been free to accept or reject the decisions I made when they walked into a ballot booth, drew the curtain and cast their vote. I didn’t always win, but I always respected the process.

Voting is an immense privilege.

That is why I am concerned about a new development that could deny this freedom to many Americans. As a longtime friend of labor unions, I must raise my voice against pending legislation I see as a disturbing and undemocratic overreach not in the interest of either management or labor.

The legislation is called the Employee Free Choice Act, and I am sad to say it runs counter to ideals that were once at the core of the labor movement. Instead of providing a voice for the unheard, EFCA risks silencing those who would speak.

The key provision of EFCA is a change in the mechanism by which unions are formed and recognized. Instead of a private election with a secret ballot overseen by an impartial federal board, union organizers would simply need to gather signatures from more than 50 percent of the employees in a workplace or bargaining unit, a system known as “card-check.” There are many documented cases where workers have been pressured, harassed, tricked and intimidated into signing cards that have led to mandatory payment of dues.

Under EFCA, workers could lose the freedom to express their will in private, the right to make a decision without anyone peering over their shoulder, free from fear of reprisal.

There’s no question that unions have done much good for this country. Their tenacious efforts have benefited millions of workers and helped build a strong middle class. They gave workers a new voice and pushed for laws that protect individuals from unfair treatment. They have been a friend to the Democratic Party, and so I oppose this legislation respectfully and with care.

To my friends supporting EFCA I say this: We cannot be a party that strips working Americans of the right to a secret-ballot election. We are the party that has always defended the rights of the working class. To fail to ensure the right to vote free of intimidation and coercion from all sides would be a betrayal of what we have always championed.

Some of the most respected Democratic members of Congress – including Reps. Marcy Kaptur of Ohio, George Miller and Pete Stark of California, and Barney Frank of Massachusetts – have advised that workers in developing countries such as Mexico insist on a secret ballot when voting as to whether or not their workplaces should have a union. We should have no less for employees in our country.

I worry that there has been too little discussion about EFCA’s true ramifications, and I think much of the congressional support is based on a desire to give our friends among union leaders what they want. But part of being a good steward of democracy means telling our friends “no” when they press for a course that in the long run may weaken labor and disrupt a tried and trusted method for conducting honest elections.

While it is never pleasant to stand against one’s party or one’s friends, there are times when such actions are necessary – as with my early and lonely opposition to the Vietnam War. I hope some of my friends in Congress will re-evaluate their support for this legislation. Because as Americans, we should strive to ensure that all of us enjoy the freedom of expression and freedom from fear that is our ideal and our right.    

Senators Plan To Introduce Energy Bill after Break

The Arkansas Farm Bureau has reported that a bipartisan group of Senators led by Senator Kent Conrad (D-ND) announced principles to reduce gas prices and lessen the nation’s dependence on foreign oil.  These principles will be turned into legislation entitled “New Energy Reform Act,” to be introduced when Congress returns in September.  Senators Lincoln and Pryor have both signed on as co-sponsors of this bill.

The bill is expected to contain three main components: (1) an intensive effort to transition vehicles to non-petroleum based bio-fuels; (2) a robust federal commitment to conservation and energy efficiency; and (3) targeted, responsible domestic production of energy resources.   While details have not been worked out, the legislation would fund a $20 billion effort to support the goal of transitioning 85 percent of America’s motor vehicles to non-petroleum-based fuels within 20 years.  
 
To accelerate this transition, the legislation would include:
•        $7.5 billion for research and development focused on the major technological barriers to alternative fuel vehicles;
•        $7.5 billion to help U.S. automakers and parts makers re-tool and re-equip to become the world leader in making alternative fuel vehicles; and
•        Consumer tax credits of up to $7,500 per vehicle to provide incentives to Americans to purchase advanced alternative fuel vehicles (those that run on non-petroleum fuels) and up to $2,500 to retrofit existing vehicles with advanced alternative fuel engines.
 
The outline of the proposal also includes $2.5 billion in research and development funding for the next generation of bio-fuels and infrastructure.  It also funds tax incentives for the installation of alternative fueling stations, pipelines and other infrastructure as part of the conservation and energy efficiency programs.
 
Consumer Product Safety Bill Passes

Congress overwhelmingly adopted the conference report to H.R. 4040, the Consumer Product Safety Modernization Act, responding to a steady, heavy stream of news about product recalls, dangerous toys and chemicals.  The conference report received only one dissenting vote in the House and three in the Senate.  Many business and industry groups say it’s clear the legislation will increase manufacturing costs and encourage litigation.  Several groups sent letters expressing concern and opposition, but with such strong support in both chambers it has been clear for some time the conference report was going to pass. 

Provisions of particular concern include:

• State attorneys general will have the authority to file for injunctive relief in federal court against products that violate a standard, are sold in violation of a recall, or violate new certification provisions in the act.  An AG must provide the CPSC a 30-day notice before court action, but there is loophole: Any time an attorney general alleges there is a substantial product hazard, he can file the suit immediately without any notice.
• Whistleblower provisions: Employers are prohibited from firing or punishing any employee who reports violations of consumer product safety laws.  The self-identified "whistleblower' can file a complaint with the Secretary of Labor about such retribution and then can go on to U.S. District Court for satisfaction.
• Public complaint database: The bill gives detailed instructions for the creation of a database to disseminate consumer complaints, including anonymous complaints, naming manufacturers and products.  Manufacturers get a chance to respond and unfounded or inaccurate complaints are to be corrected or explained. 

Despite these concerns, the conference report does contain provisions that are viewed as an improvement over the Senate version of the CPSC legislation.  Most notably, the Senate version included a possibility of civil fines adding up to as high as $100 million.  The conference report figure reached was $15 million (up from $1.8 million now).  In addition, the legislation has received praise for additional resources for the CPSC.

Fed Holds Rate Steady, Citing Concerns about Inflation

 

The Wall Street Journal last week reported that the "Federal Reserve left interest rates unchanged as it remains stuck between worries about rising prices and renewed concerns about slower growth." Only Federal Reserve Bank of Dallas President Richard Fisher dissented, "preferring a rate increase." A statement by the Fed "called the inflation outlook 'highly uncertain,' the easing of energy prices supports the Fed's expectation, stated in June and again Tuesday, that inflation would moderate this year and next year." Still, "the key quandary facing the Fed" is if inflation will "moderate quickly enough to give policy makers breathing room to raise rates more slowly."

The Financial Times noted that the Fed "pushed back the horizon for possible rate increases by acknowledging continuing risks to growth, but emphasized that inflation risks were 'also of significant concern.'" Still, the Fed's statement's "overall tone was more hawkish than some in the market had expected." It "made clear that it believed it had already dealt with the risks to growth with pre-emptive rate cuts this year, and 'ongoing' liquidity support operations." The Fed statements' "net effect is to underscore that while growth risks may prevent the Fed from raising rates in the near term, the central bank has an implicit inflation bias."

U.S. Lost 51,000 Jobs in July

 

The Washington Post reported that the Labor Department announced the "unemployment rate jumped yet again as employers slashed jobs for the seventh consecutive month." Notably, "the job losses weren't just in the long-troubled construction and manufacturing sectors. Trucking companies, telecommunications firms and car dealers all eliminated thousands of jobs, too, as the troubles in the nation's economy showed new breadth that undermines any hopes of even a tentative recovery in the second half of the year."

The Washington Times added, "Jobs dropped by another 51,000 in manufacturing, construction, retailing and temporary employment, adding to a string of losses that totaled 463,000 since January." The unemployment rate was 5.7 percent, according to the Labor Department. "One area where job gains previously held up – information technology – succumbed to the trend last month with the loss of 13,000 positions. Only healthcare, mining, education and government continued to see healthy job growth."

The Wall Street Journal noted that a "rise in employment plans in the [ISM] manufacturing report suggests companies are hoping for the best. Tig Gilliam, chief executive of staffing firm Adecco North America, says job prospects right now differ vastly depending on the industry, a change from 2001 when companies 'just stopped hiring.'" According to Gilliam, "'There's still a very good market for professional skills,' such as those needed in engineering, accounting, computer systems and design, and science and healthcare."

Washington Post Columnist Explores Drilling Debate

In his August 1 column titled "Do-Not-Drill-Democrats are Damaging the Environment," Washington Post Opinion Columnist Charles Krauthammer debated the merits of domestic oil production from a new environmental angle. 

In the piece, Krauthammer argues ”[t]he net environmental effect of [House Speaker Nancy] Pelosi's no-drilling willfulness is negative. Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world -- thereby increasing net planetary damage.”

To illustrate his point, Krauthammer points to places like Nigeria where corruption and neglect have led to pipeline explosions, oil spills and illegal siphoning.  Krauthammer then contrasts that image with U.S. oil rigs that withstood Hurricanes Katrina and Rita and the United States, which has “one of the most extensive and least corrupt regulatory systems on the planet.” 

Krauthammer’s entire piece can be read online here.

Proposed Tax Increases

 

Under current law, tax cuts enacted in 2001 and 2003 are set to expire at the end of 2010. Individual income tax rates would rise to 39.6 percent – from the current rate of 35 percent. For businesses that file as S-corporations, partnerships and other pass-thru entities, this will have a direct impact on their bottom line. Unless Congress acts, small and medium-sized manufacturers are going to see substantial tax increases beginning in 2011.

The National Association of Manufacturers (NAM) is compiling information about NAM members who fall into this category and will be impacted by these tax increases. If you are a NAM member who files and pays taxes at the individual rate, please click here and your response/reply will be automatically calculated.

Nam Requests Help from Members to Get R&D Credit Renewed

 

National Association of Manufacturers (NAM) members are urged to ask their research and development (R&D) employees to add their names to a letter to Congress asking that the federal R&D tax credit (expired in 2007) be restored. Deadline: August 15. The NAM, as part of the leadership of the R&D Credit Coalition, is collecting names of company R&D employees to be added to a letter to be sent to Congress in early September. This letter is intended to put a face on the R&D Credit and highlight the impact of the credit on the jobs of R&D employees. Only R&D performed in the United States may qualify for the federal R&D tax credit. More than 70 percent of R&D Credit dollars are used for wages of R&D employees. The following information will be included on this R&D employee letter to Congress: 1) R&D employee name, 2) name of your company, and 3) location (city & state) of company facility of R&D employee.

To join the letter, click here for a copy of the letter AND to complete the sign-up form. For more information about this letter OR to get a draft company message that can be sent to employees, contact NAM’s Monica McGuire at mmcguire@nam.org