Washington Watch
February 2009
Senate Approval of Stimulus Sets Stage For Negotiations
The Senate yesterday approved its version of the stimulus plan with three Republican votes. The AP reported that "within hours of the 61-37 Senate vote, White House Chief of Staff Rahm Emanuel, Budget Director Peter Orszag and other top aides to President Barack Obama met in the Capitol with Democratic leaders as well as moderate senators from both parties whose support looms as crucial for any eventual agreement." The GOP supporters -- "Olympia Snowe and Susan Collins of Maine and Arlen Specter of Pennsylvania -- are demanding that the final bill resemble the Senate measure" including "a $70 billion Senate plan to 'patch' the alternative minimum tax, or AMT, for one year."
The Financial Times noted that Collins "warned that she would withdraw support if spending limits agreed by the Senate were overturned." The Christian Science Monitor reported Specter said, "My support for the conference report on the stimulus package will require that the Senate compromise bill come back virtually intact." USA Today added Democratic Sen. Ben Nelson also "said senators should hold firm on any changes." Roll Call reported, "Snowe warned against any scheme to take out the $70 billion AMT fix and fill the gap with more spending." And the Washington Post reported "Senate Finance Chairman Max Baucus (D-Mont.), who will help negotiate the final bill, predicted that it will be closer to the Senate version than the House's."
The New York Times reported "officials said the talks were on a fast track to finish the legislation perhaps by the end of this week."
But The Hill reported, "House Democratic leaders spent Tuesday pushing back against pressure from both sides of the aisle in the Senate." And the Wall Street Journal said, "The White House is seeking to restore funding cut by the Senate for schools, health insurance and computerizing health records."
The New York Times noted that to "many on K Street, the stimulus bill was the clearest guide to the new administration's closest friends in the business world. What oil was to President Bush, some say, clean energy and technology are to the Obama White House." The Wall Street Journal added, "Manufacturers, home builders and firms in other sectors that were unprofitable in 2008 and 2009 would gain the ability under the Senate bill to turn their losses into tax refunds. The bill allows them to use those losses to offset tax liability as far back as 2003." Dorothy Coleman, vice president of tax and domestic economic policy at NAM, said, "Manufacturing in general is a cyclical industry, so net carryback loss is very important. Typically any industry that is cyclical would benefit from this." The Fond du Lac Reporter reported Majority Leader Harry Reid, D-Nev., cited "support for the package from the AFL-CIO, U.S. Chamber of Commerce and NAM as unlikely allies on legislation."
High-Stakes Battle Over Employee Free Choice Act Heats Up
The AP reported, "Labor groups [last week] stepped up the pressure on Congress to take up legislation that could give a major boost to union membership, organized labor's top priority." Union leaders "brought hundreds of their rank-and-file members and petitions that they said held 1.5 million signatures to Capitol Hill for a rally in support of the Employee Free Choice Act, hoping to escalate an already intense fight over the controversial bill." At the same time, "more than 50 members of NAM met with lawmakers to express their concerns that the bill would 'hinder manufacturers' economic competitiveness and our ability to create jobs, said NAM president John Engler." Business groups "have already spent millions attacking a key provision that would allow workers to organize a union by signing a card instead of holding secret-ballot elections."
The Hill reported, "Asked on Wednesday when he plans to introduce his Employee Free Choice Act, House Education and Labor Committee Chairman George Miller (D-Calif.) said, 'Soon.' Miller added the so-called card check bill would be unveiled in a matter of days or weeks." The legislation is "expected to sail through the House in 2009, but proponents want to trigger as much political momentum as possible before an anticipated cliffhanger vote in the Senate." Business associations and corporations have "mounted a substantial lobbying campaign against the bill, using print and radio ads to deride it." So far, "NAM has flown in about 50 senior corporate executives to lobby against the legislation."
The Wall Street Journal reported, "The high-stakes battle over the bill is becoming a war of words, with advocates and opponents spending millions to shape perceptions of the proposal among the public and undecided lawmakers." The American Rights at Work coalition "has spent $3 million on an ad campaign titled 'Hope and Change,' in which workers who declare that they aren't CEOs say they hope to 'save a little for a change' and 'have some health care for a change.'" But NAM President Engler commented, "I've had members say they'll sell their businesses if this becomes law."
We are asking all members of Arkansas’s business community to send a letter immediately to both of Arkansas' senators and to the U.S. House member who represents your district. Instructions and tips for letter writing are available online at www.yoursecretballot.com or by phone at 501-975-8344. It is important that you provide us with copies of letters you send so that we can evaluate our activities and grassroots lobbying efforts. Please fax your letters to 501-975-6045.
In Wake of Strike, Aviation Industry Leaders Deliver "Tough" Messages to Boeing
The Seattle Times reported, "Two aviation-industry billionaires had tough messages for Boeing workers at a reception before an airplane delivery at Boeing Field in Seattle Friday morning." Steven Udvar-Hazy, CEO of International Lease Finance Corp. (ILFC), "predicted that both Boeing and Airbus will sharply reduce their output in the coming months" and Richard Branson, chairman of Virgin Blue, "said that if there's a risk of further strikes in the future, he may not buy Boeing again." Udvar-Hazy called production cuts of 30 to 35% in the next 18 months "not...surprising." Branson "said Udvar-Hazy had been making the same point at dinner last night" about potentially not dealing with Boeing in the future and "Branson said he would have to examine whether Boeing has 'an unreliable management/work-force situation.'"
The US Lost 598,000 Jobs in January
USA Today reported, "The unemployment rate rose to a 16-year high 7.6% in January as employers slashed a seasonally adjusted 598,000 jobs, the most since 1974, the government said Friday in a report that showed the job market deteriorating at a rapid clip." Over "11.6 million people were out of work last month, up 54% from a year ago and the most since December 1982, when the economy was emerging from one of the deepest and longest recessions in U.S. history."
Productivity Improves as Companies Cut Jobs
The Wall Street Journal reported, "Companies continue to slash jobs and output, but are producing more goods with fewer workers, a sign that the labor market could stay sluggish for some time." The Labor Department stated last Thursday that "output per hour jumped in the fourth quarter" of the last year, "rising at a 3.2% seasonally adjusted annual rate...compared with 1.5% in the prior period." Even though "an increase in productivity is usually a good sign for U.S. economic growth" with "more output per worker helps drive growth," the Journal notes that "the news isn't as cheery as it appears. Productivity increased because total U.S. nonfarm output fell at a 5.5% rate in the fourth quarter while total hours worked by employees fell at a 8.4% rate, the steepest decline since 1975." The numbers indicate that "companies cut hours aggressively last quarter as the economy slumped."
Further, according to Bloomberg News , "manufacturers didn't fare as well as other parts of the economy. The productivity of factory workers dropped at a 3 percent pace in the fourth quarter, sending labor costs up at a 13.3 percent rate."
Obama Reverses Bush Labor Policies
President Obama issued three executive orders on Jan. 31 that reverse Bush Administration orders related to federal contractors' employee relations. Numbers for the orders were unavailable at press time. The first order instructs contractors to post signs informing workers of their rights under federal law to collective bargaining. The second order would require service contractors at federal buildings to give “qualified current employees” the right of first refusal of employment when contracts change. Hence, rank-and-file workers could continue working on the same federal project even if the administrative contract expired. The third order prohibits federal contractors from being reimbursed for expenses aimed at influencing workers' decisions to form unions or engage in collective bargaining.
New York Times columnist David Stout wrote about these policy changes and other steps the Obama Administration has said they will take to “strengthen organized labor” in his January 31 article Obama Moves to Reverse Bush’s Labor Policies .
President Signs Lilly Ledbetter Fair Pay Act
The House on January 27 approved S. 181, the Lilly Ledbetter Fair Pay Act, by a vote of 250-177. President Obama signed the bill two days later. Congress approved the legislation, despite numerous concerns raised by business and industry groups. S. 181 would overhaul key portions of four major civil rights laws, severely weakening, and effectively eliminating, the statute of limitations for filing discrimination claims against employers.
Gregg Agrees to Become Commerce Secretary
The Federal Times reported, "In an unusual arrangement, Republican Sen. Judd Gregg agreed [last] Tuesday to join the Obama administration as Commerce secretary after the Democratic governor of New Hampshire agreed to appoint another Republican to replace him in the Senate." In the past month, Gregg "voted against two Obama-backed bills, an expansion of the Children's Health Insurance Program and a law making it easier to sue for pay discrimination. In 1995, Gregg voted to abolish the very Commerce Department he now plans to lead." Gregg "cited the economic crisis and bipartisanship in his remarks."
BusinessWeek added, "Among all of President Barack Obama's picks for cabinet posts, Republican Senator Judd Gregg as Commerce Secretary certainly is one of the more baffling." Appointing Gregg "could bring some tactical benefits, however, as Obama seeks to convince the business community and moderates that his administration will be about more than big government and massive spending. A look at Gregg's 16-year voting record in the Senate, during which he rose to chairman of the Budget Committee, shows that he is strong on bread-and-butter issues dear to corporations." Several business lobbying groups "swiftly gave Gregg ringing endorsements."
Auto Suppliers Say They Need Immediate Government Assistance
The Detroit News reported, "Auto suppliers face a 50 percent drop in payments from automakers in the first three months of the year and need immediate government assistance to avoid the collapse of the entire industry." The Original Equipment Suppliers Association said in a "report that was submitted to the U.S. Treasury" that "suppliers may see just $2.4 billion in revenue in March, down from $8.4 billion a month in the fourth quarter of 2008." Talks between Treasury and suppliers are "continuing on a daily basis, with Treasury officials in the TARP office seeking more information about the projected 2009 auto market in trying to assess how much aid to grant."
Bloomberg News added, "Delphi Corp., the biggest supplier to General Motors Corp., said its value has fallen so much that the company may not be able to cover debts accrued since filing for bankruptcy in 2005, including a $4.35 billion loan." GM "has agreed to make an accelerated payment of $50 million to help the parts supplier survive while it seeks exit financing...GM also agreed to advance an additional $50 million by Feb. 27 or increase a later payment to $350 million from $300 million." U.S. auto-parts suppliers "may seek as much as $25.5 billion in government aid to prevent an industry collapse. The Motor & Equipment Manufacturers Association trade group said [last] week the Treasury Department should widen its commitment to prop up the auto industry."
The AP reported, "Ford's top executive for auto parts purchasing said Friday he expects more failures among parts suppliers as the industry grapples with an unprecedented downturn in automobile sales." Tony Brown, Ford's group vice president for global purchasing, said, "Ford, whose U.S. sales fell 42 percent in January, will continue to slash the number of suppliers it does business with as it adapts to the weak auto market. He said Ford had about 1,600 auto parts suppliers eligible for new business at the end of 2008, and is aiming to bring that number down to about 750." Brown also said he "backs the effort among parts makers to obtain federal help to weather the industry downturn."
