Washington Watch
November 2009
- Tuesday’s Biggest Loser: the Union Agenda
- Manufacturers Gain Expanded NOL Tax Relief
- Proposal Would Make It Easier for Airline, Railroad Workers to Unionize
- Obama: Healthcare Reform Bill Must Be Deficit-Neutral without Tricks
- Unemployment Crosses 10 Percent Threshold Sooner Than Anticipated
- Commerce Department Says U.S. Economy Grew in Third Quarter
- EPA Sends Final Scientific Finding on Greenhouse Gases to White House
- Climate Bill Critics Continue to Battle Supporters over Costs
- EPA Announces Regional Administrator for Region 6
- ITC to Move Forward with Full Investigation of Paper Imports Probe
- Reminder – Sign the Petition to Stop the EPA from Regulating GHGs
Tuesday's Biggest Loser: the Union Agenda
In a Wall Street Journal op-ed, Michael Barone, senior political analyst for the Washington Examiner, resident fellow at the American Enterprise Institute, and co-author of "The Almanac of American Politics 2010" (National Journal), said the biggest loser on election night might not have been one of the political candidates giving a concession speech. Instead, Barone contends Andy Stern, head of the Service Employees International Union, may have been the biggest loser of the evening because Stern “ponied up something like $60 million for Barack Obama and other Democrats in the 2008 campaign cycle. Altogether, Mr. Stern and other labor union leaders reportedly gave Democrats some $400 million last year.”
Barone noted the unions have gotten some meaningful things in return for their contributions, but have been stymied so far on their number one goal – card check. Although Democratic support for the measure was strong when George W. Bush was in the White House, and the bill had no chance of becoming law, with Obama’s inauguration many democrats began to reconsider their support of the measure. The badly misnamed “Employee Free Choice Act” appears to be in trouble even as Democrats control the Congress and the White House. And if this month’s elections results are an indication, “it looks like fewer Democrats will be elected to Congress in 2010 than in 2008.”
According to Barone, “The
unions' unprecedented political push in 2008 has not been unnoticed by the
voters. Mr. Corzine's cozy relationship with public employee union heads
proved a liability in
Manufacturers Gain Expanded NOL Tax Relief
Struggling manufacturers gained much-needed relief on November 6th when 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 important provision allows companies of all sizes to “carry back” current losses to offset taxes paid in profitable years. In turn, this will provide hard-hit manufacturers needed cash to finance ongoing operations, retain jobs and in many cases, stay in business.
The expanded NOL relief allows manufacturers to
“carry back” losses in 2008 or 2009 for a period of five years.
Previously, manufacturers could only “carry back” losses for two
years, which did not provide enough relief given the prolonged economic
downturn. More than 20 percent of small and medium-sized National Association
of Manufacturers (NAM) members reported NOLs in 2008, and the
As have many businesses, manufacturers have suffered greatly from this deep economic downturn. The expanded NOL relief will help many more companies transform a future tax benefit into cash today to stem the flow of mounting job losses and get through these hard times.
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.
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.
If your company will use this NOL relief, please contact Monica M. McGuire,
Proposal Would Make It Easier for Airline, Railroad Workers to Unionize
The AP reported, "Workers at airlines and railroads would have an easier time forming unions under a proposal to change a 75-year-old rule on organizing announced [last] Monday by the National Mediation Board." The proposed rule would "recognize a union if a majority of voting workers favored organizing." The issue "lies at the center of a dispute at Delta Air Lines." Unions "representing flight attendants and ground workers who worked for Northwest Airlines before it was bought by Delta want the new rules to cover elections at the combined carrier." Edward Wytkind, head of the AFL-CIO's transportation trades department said, "Just because a worker does not vote doesn't mean he or she does not want a union, it just means he or she didn't vote." That is "the rationale of the board, where two of its three members say current procedures are at odds with 'the basic principles of democratic elections.'"
While the Senate maintains its focus on health care and efforts to move the EFCA appear stalled, organized labor continues to push its agenda and to expand its influence.
Labor leaders see the National Labor Relations Board (NLRB) as an opportunity to change our labor law system through the nomination of Service Employees International Union (SEIU) attorney Craig Becker to server on the National Labor Relations Board. Becker has expressed views far outside of the mainstream that include objections to any employer involvement in the union organizing process. Sen. John McCain (R-AZ) has placed a procedural hold on Becker’s nomination, preventing Senate action on the nomination for the time being.
Obama: Healthcare Reform Bill Must Be Deficit-Neutral without Tricks
ABC World News ran excerpts of White House correspondent Jake Tapper's interview with the President, who said, "I actually have said that it is important for us to make sure this thing is deficit-neutral without tricks. I said I wouldn't sign a bill that didn't meet that criteria. ... Congress needs to know that when I say this needs to be deficit neutral, I mean it."
The New York Times reported that "some Democrats and analysts...say the bills Congress is considering do not fulfill President Obama's promise to slow the runaway rise in healthcare spending." Though "Obama has made cost containment a centerpiece of his health reform agenda," some "health economists say it is impossible to know whether the bills, including one passed by the House on Saturday night, would meet that goal, and many are skeptical that they even come close." They criticize the pilot programs included in the Senate bill, saying they "would like to see such changes adopted more quickly." The debate is said to underscore "a fundamental tension inside the White House between cost-containment idealists and pragmatists."
According to the Washington Times, "The official $1.1 trillion price tag for the House Democrats' health care bill excludes dozens of unfunded programs that could drive up costs when future congresses look to fund them. Republicans said the health care bill includes two dozen programs whose funding is listed as 'such sums as may be necessary.' That amounts to legislative jargon, they said, for 'We'll bill you later.' The list of projects ranges from the 'No child left unimmunized against influenza' project to 10 programs in the Indian health care system."
Additionally, the Wall Street Journal reported that a provision of the House bill that limits how much extra insurers can charge older policyholders is proving controversial because it is likely to result in higher premiums for younger policyholders. The House bill limits the cost ratio for the oldest people versus the youngest at 2 to 1, but the Senate has approved a top ratio of 3 to 1. The Journal notes that the personal insurance mandate also affects younger Americans disproportionately. Rep. Joe Barton said, "'We are going to tell every young American who has decided that they don't want to pay those premiums, they want to save up to get married or to buy a home, that, by golly, they are going to have to take insurance. And they are going to pay three to four times what they would under the current system because there is only a 2-to-1 ratio."
Meanwhile, the New York Times reported Senate Majority Leader Harry Reid "said Tuesday that he expected to bring major health care legislation to the floor next week and to complete work on the bill before Christmas," but "other Democratic leaders said it was unlikely that a bill could reach President Obama's desk by year's end." In a "first procedural step toward Senate debate, Mr. Reid on Tuesday night moved to put the House bill on the Senator calendar, from which he could call it up any time after Tuesday." Aides "said there was still much uncertainty and Senate Democrats have repeatedly missed self-imposed deadlines on the health bill."
Unemployment Crosses 10 Percent Threshold Sooner Than Anticipated
ABC World News reported, "There was a discouraging jobs report [on Friday] -- not unexpected, but still alarming. The nation's unemployment rate surged to 10.2 percent last month, hitting double-digits for the first time in 26 years, as the economy lost 190,000 jobs. Pockets of the economy may be recovering from the recession, but clearly not the job market." The CBS Evening News reported, "Most economists say it's the beginning of the end of the recession, but you wouldn't know it from the latest jobs report." According to the Labor Department, "the unemployment rate rose 0.4 of a point last month to 10.2 percent, the highest rate since 1983."
The AP reported Obama called the jobs report "'a sobering number that underscores the economic challenges that lie ahead.' He signed a measure to extend unemployment benefits and to expand a tax credit for homebuyers." Economists "had not expected the 10 percent mark to come so quickly." AFP noted that analysts "said the rise above 10 percent represents a setback for the recovery and Obama's efforts to lift the economy out of recession."
McClatchy reported, "The outlook is likely to worsen for American workers well into next year. Economists expect the jobless rate to keep climbing, perhaps above 11 percent, as employers produce more with fewer workers and shy away from hiring." The New York Times reported on the front page of its Business Day section, "It suddenly seemed possible that the nation might yet confront the worst joblessness since the Great Depression." Joblessness hit 10.8 percent in 1982. The Washington Post reported, "A broader measure of joblessness that includes people working part time for lack of full-time positions and those who have given up looking for work out of frustration rose to 17.5 percent from 17 percent."
Commerce Department
Says
U.S.
Economy Grew in Third Quarter
A U.S. Commerce Department report released on October 29 found that U.S. GDP, after declining the past four quarters, increased at an annual rate of 3.5 percent during the third quarter. While this was the fastest pace in two years, temporary factors were largely behind the improvement in economic conditions. Due in large part to the “Cash for Clunkers” program, motor vehicle output increased at an annual rate of 158 percent during the third quarter. Outside of motor vehicles, the economy edged up a modest 1.9 percent during the third quarter.
The New York Times reported, "Ending the longest contraction since World War II, the
The Washington Post reported "the US economy roared to life this summer, as an array of government actions led to the strongest quarter of growth in two years," but "there were few signs in the new data that the private sector will be able to sustain that growth once the government pulls back, or that the rise will soon translate into an improving job market. ... Economists are wary about what happens as those programs recede."
The AP noted that Romer, "Obama's chief economist, has acknowledged that the government's stimulus spending has already delivered its biggest economic jolt." Romer told the AP, "Even if we've turned the corner, we know it's a long way before we're completely recovered."
USA Today asked whether the GDP growth last quarter "will...be followed by a steady climb or frequent stumbles," and added that "many economists believe that while the recession that began in December 2007 is history, the third-quarter spurt was largely fueled by government incentives and industry trends that will fade, leaving a wobbly economy."
EPA Sends Final Scientific Finding on Greenhouse Gases to White House
In the Washington Post "Capitol Briefing" blog, Juliet Eilperin, wrote, "The Environmental Protection Agency has sent its final scientific finding on greenhouse gases to the White House, agency officials said Monday, a step that could trigger regulation of carbon dioxide and other greenhouse gases as pollutants under the Clean Air Act."
Environmentalists
"embraced the move as a sign that the Obama administration is moving
ahead on global warming policy less than a month before U.N.-sponsored
climate talks begin in
Climate Bill Critics
Continue to
Battle
Supporters over Costs
The Hill reported, "Democratic supporters of climate legislation on Tuesday battled critics who argue cutting carbon emissions will hurt the economy and cost jobs." The setting "was a Senate Finance Committee hearing on climate change and job creation that served as another reminder of how the debate over carbon has as much to do with the economy as with the environment, especially as unemployment levels rise." Much of the "focus on Tuesday centered on a study paid for by the American Council for Capital Formation (ACCF) and the National Association of Manufacturers (NAM), critics of climate bills in Congress." Margo Thorning, an economist at ACCF, said "climate legislation could cost between 1.7 million and 2.4 million jobs by 2030 as companies shift overseas to cut their energy costs." Thorning defended the study and said "others make overly optimistic assumptions about the availability of technologies, like carbon capture and sequestration at coal plants that will reduce emissions."
Bloomberg News reported, "A 'cap-and-trade' program being debated in Congress to reduce
greenhouse gases must 'minimize any job losses' that could result from
restricting industry's right to emit carbon dioxide, said Senate Finance
Committee Chairman Max Baucus, a Montana Democrat." With the
EPA Announces Regional
U.S.
Environmental Protection Agency
"I look forward to working closely with Al Armendariz on the range of
urgent environmental issues we face, in Region 6 and across the nation,"
said EPA
Regional
Dr. Alfredo “Al” Armendariz is an Associate Professor at Southern
Methodist University in
ITC to Move Forward with Full Investigation of Paper Imports Probe
The Milwaukee Business Journal reported, "The U.S. International Trade Commission said Friday there is
enough evidence to support charges that unfair trade practices in regards to
coated paper imported from
Reminder – Sign the Petition to Stop the EPA from Regulating GHGs
There are less than 50 days left in the comment period on the Environmental Protection Agency’s proposed “tailoring rule” outlining regulations for greenhouse gas (GHG) emissions from large industrial facilities. Please help stop the EPA from moving forward by signing a letter at www.nam.org/epa.
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.
This “tailoring rule” is the first step toward regulating carbon emissions from large stationary sources that emit more than 25,000 tons of GHGs while establishing the process to begin regulating smaller plants.
For a manufacturer, it could mean doing something as simple as adding a “plant shift” to the schedule that would trigger EPA regulation.
Please help us stop the EPA from undermining manufacturers’ ability to remain competitive globally, retain and create jobs, and our ability to help our nation recover from this economic downturn. Sign the petition at www.nam.org/epa.
