Washington Watch

Washington Watch

September 2009

 Sen. Lincoln Named Senate Agriculture Committee Chair  

On September 29, U.S. Sen. Blanche Lincoln became the first woman and the first Arkansan to lead the Senate Agriculture, Nutrition and Forestry Committee. Lincoln succeeds U.S. Sen. Tom Harkin (D-Iowa), who had been the committee chair since 1985 and will remain a member of the committee. Sen. Harkin resigned the Senate Agriculture Committee chairmanship to accept the Health, Education, Labor and Pensions Committee (HELP) chairmanship, which became available with the recent passing of Sen. Ted Kennedy (D-Mass.).

Lincoln is now poised to be a strong influence on climate change legislation, which falls under the review of the committee. She will also be an important voice for Southern agriculture in any future farm legislation, lending a strong voice for the needs of Southern farmers.


Lincoln said her first move will be the reauthorization of child nutrition programs, which expire September 30. She said she will probably seek a short-term extension of the current program, saying that Congress may not act on a five-year reauthorization until next year. The reauthorization bill includes the school lunch program and the special program for women, infants and children known as WIC. Major battles are expected because both the Obama administration and members of Congress want to change the meal offerings to try to reduce childhood obesity and make it possible for the programs to reach more children.

Lincoln also said she believes reducing barriers to the sale of U.S. agricultural products is the number one issue in trade negotiations.

Lincoln has served on the Senate Committee on Agriculture, Nutrition and Forestry since January 1999 and has served as Chairwoman of the Subcommittee on Rural Revitalization, Conservation, Forestry and Credit during the current 111th Congress.  

Since 2005, Lincoln has served as Chairwoman of Rural Outreach, building relationships with a broad coalition of rural advocacy groups. Lincoln founded the bipartisan Senate Hunger Caucus in 2004 to help focus the Senate’s attention to the hunger that exists in this country.  As a member of the House of Representatives, she served on the House Committee on Agriculture from 1993-1995.  

Please visit Sen. Lincoln’s newsroom on her website for additional information including a statement from Sen. Lincoln and numerous statements of support and congratulations from Arkansans and other stakeholders.

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National Groups Continue To Speak Out on Card Check

 

The Labor Policy Institute (LPI), a project of the National Association of Manufacturers (NAM), on September 3rd launched a direct mail, radio and Internet advertising campaign opposing the Employee Free Choice Act (EFCA) and urging senators to vote “no” on the EFCA, in any form.

 

The campaign's initial phase, which ran through September 9, was focused on two states, Arkansas and Colorado . "This bill is one of the greatest threats to manufacturers' economic competiveness. It would undermine worker privacy and open the door to government control of wages and benefits in unionized workplaces,” says NAM Executive Vice President Jay Timmons. "We want to remind manufacturers and the public that this bill would destroy jobs. The EFCA would send our economy and our nation in the wrong direction." A recent economic analysis shows 600,000 jobs would be lost in the first year the EFCA is enacted.

 

Roll Call reported, "The NAM is ramping up its lobbying effort against pro-labor legislation as Congress heads back to work." Timmons said, "This bill is one of the greatest threats to manufacturers' economic competitiveness." Colorado "Democrat Michael Bennet and Arkansas Democrats Mark Pryor and Blanche Lincoln are seen as key votes on 'card check.'" NAM spokeswoman Maureen Davenport said NAM "is going to focus on earned media and grass-roots activities."

We need all Arkansas businesses to remain active in fighting this misguided legislation. Please contact Coalition Coordinator Sarah Beth Turner at (501) 975-8344 or e-mail her at info@yoursecretballot.com for additional information or to become a part of the Arkansas coalition against EFCA.

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U.S. Chamber Mounts Opposition to Consumer Financial Protection Agency Act

The U.S. Chamber of Commerce recently launched a campaign to highlight the scope and proposed powers of H.R. 3126, the Consumer Financial Protection Agency (CFPA) Act. The campaign’s goal is to inform Americans how the CFPA would place new regulations, increased credit costs and taxes on dozens of industries, the vast majority of which are possibly unaware they will be affected.

“The Chamber supports strong consumer protection, but a massive new bureaucracy with sweeping powers that will deprive consumers of affordability and choice is not the answer,” said David Hirschmann, president and CEO of the U.S. Chamber’s Center for Capital Markets. “That is why we’re launching a major offensive to inform Americans the CFPA is the wrong answer to consumer protection.”

The CFPA would create a sweeping, powerful new government agency to regulate hundreds of thousands of businesses that either directly or indirectly extend credit to their consumers or allow their customers to pay over time, including layaway plans and gift cards. It even seeks to regulate anyone who provides advice to businesses that sell on credit. The proposed regulator would have the ability to determine what products are sold to whom, how they are sold and at what price.

“The unintended consequences of this bill are jaw dropping,” said Hirschmann. “Whether you’re a jeweler or a butcher, a retailer or an IT provider, this new agency would have sweeping powers to regulate over 45 industries and add yet another layer of government bureaucracy to an already disjointed and dysfunctional system.” 

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Fed Finds Tentative Recovery Beginning to Take Hold

 

The AP reported last week, "The recession is ending and the economy is finally growing again. That's the message implicit in the Federal Reserve's latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions." The AP added that "all but one of the Fed's 12 regions indicated economic activity either was 'stable,' showed 'signs of stabilization' or had 'firmed,' according to the Fed's survey. The one exception was the St. Louis region, which reported the economic decline is 'moderating.'" The New York Times  noted, however, that the Fed’s assessment warns of a "slow and still-fragile recovery." The Washington Post, under the headline "Economy Still Fragile, Fed Reports," said that "the mixed assessment is consistent with economic data of late."

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Romer Says Unemployment to Persist as Economy Grows

 

The Hill reported White House Council of Economic Advisers Chairwoman Christina Romer "voiced worry that the economic growth expected in coming years won't be enough to bring down the unemployment rate to pre-recession levels." Romer said that, "in 2010, the economy will likely grow but the jobless rate will peak at 10 percent and won't start falling at a rapid clip. The administration and independent economists expect next year 'steady but not-over-the top GDP growth' of between 2 to 3 percent, Romer told The Hill." Romer said, "That will bring unemployment down slowly but not by big movements, unemployment on the right trajectory but not coming down for what we or American people would need or like."

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Congress Urged to Boost U.S. Debt Limit Above $12.1 Trillion

 

The Hill reported, "Six of Washington's biggest business lobbies are urging lawmakers to boost the nation's debt limit above $12.1 trillion as the economy confronts historic mountains of red ink." The associations said "in a letter [last] Thursday that it is 'critical to ensuring global investors' confidence in the creditworthiness of the United States , that Congress approve the Administration's request for a higher debt limit.'" The associations "behind the letter are the Business Roundtable, The Financial Services Forum, The Financial Services Roundtable, National Association of Homebuilders, the National Association of Manufacturers and U.S. Chamber of Commerce." Treasury Secretary Timothy Geithner said "that without a boost, the U.S. government could nearly default in mid-October, when the nation's debt is expected to exceed the limit." Still, the business lobbies said "that long-term deficits and debt must be reduced."

 

The Politico reported, "The date for Senate action on the debt limit has not yet been scheduled. Senate Majority Leader Harry Reid is still working on a legislative strategy, a spokesman said." Congress essentially "has little choice but to up the limit since to fail would force the federal government to default on its debts – not a great thing for even the strongest economy. But that won't make it any more comfortable to do as polls show Americans increasingly concerned by spending deficits and already skeptical about the cost of health care reform – points Republicans are sure to emphasize during debate." Congress last "upped the debt limit in February when it passed the $787 billion stimulus package."

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Senate Finance Chairman Baucus Introduces Healthcare Reform Bill

 Senate Finance Committee Chairman Max Baucus (D-Mont.) released a 230-page summary of his much-anticipated healthcare reform bill on Wednesday. The Washington Post reported the proposal, which would mandate insurance coverage for nearly every American, would cost $856 billion over 10 years and would be funded with $349 billion in new taxes and fees and $507 billion in cuts to government health programs.

 

As anticipated, the Baucus plan calls for the establishment of non-profit, consumer-owned healthcare cooperatives rather than the much debated public option that is favored by President Obama and many Democratic leaders, but strongly opposed by many others. The bill would also create web-based health insurance exchanges to make it easier for small groups and individuals to shop for, compare and buy insurance plans.

 

As with other proposals, the Baucus bill would bar insurance companies from discriminating against people based on their health status or from denying coverage because of pre-existing conditions. It would also bar insurance companies from imposing annual caps or lifetime limits on coverage.

 

According to the plan, families who do not purchase insurance coverage could be fined up to $3,800 annually or $950 for an individual. The bill expands Medicaid and establishes tax credits to help low and middle income families purchase coverage.

 

Despite months of negotiations with a group of six bi-partisan Senators from the Senate Finance Committee, the Baucus bill was released with no visible Republican support. CNN reported several of the issues remaining on the negotiating table include “the costs to taxpayers, affordability for individuals, preventing taxpayer money from funding abortions, screening out illegal aliens, limiting medical malpractice lawsuits and lowering the overall costs.”

As currently written, the plan does address abortion, illegal immigrants and medical malpractice and GOP sources have indicated committee members intend to continue negotiations. In addition, Republican Finance Committee members plan to offer amendments to the bill. According to CNN, “…Baucus said he was optimistic that the bill would ultimately win GOP votes. “I think when we finally vote on the bill ... there will be Republican support,” he told reporters on Capitol Hill. “They'll become a little more familiar with it” in the days ahead, he said, “and they will have several opportunities to offer amendments during the full committee's consideration of the bill.” A vote is scheduled in the Finance Committee next week.

Three House committees and the Senate Health, Education, Labor and Pensions Committee have already debated and passed various forms of healthcare reform measures. To date, all have been Democratic proposals. The Senate Finance Committee is the last committee that must approve a proposal before healthcare reform can be debated by the full House and Senate.

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White House, Some Democrats Downplay Public Option

 

As the President continued his call for action and compromise on healthcare reform over the weekend, his top spokesman, Robert Gibbs, appeared on CNN's "State of the Union" and echoed Obama's statements that the so-called public option is not a deal-breaker for the White House. The AP reported that "the White House and its Democratic allies on Sunday tried to play down the role of a government insurance option in healthcare legislation as the party in power worked to reclaim momentum." Gibbs "described the public option as just one way to achieve Obama's goal of providing coverage to about 45 million uninsured Americans." Gibbs said the public option is "a means to an end, but it is not all of healthcare," and "echoing that sentiment," Sen. Claire McCaskill said the "focus on this specific issue has become a distraction in a debate over how most people receive healthcare coverage." Other Democrats, including Senators Jeanne Shaheen, Dianne Feinstein and Kent Conrad, offered similar opinions.

 

In similar news, under the headline "Pelosi Follows Familiar Path," Roll Call reported House Speaker Nancy Pelosi "signaled a new willingness to deal on healthcare reform last week when she said she had no non-negotiable demands for the overhaul." It "appeared to mark a shift from her position, stated unequivocally for weeks, that she needed a strong public insurance option to pass a bill through the House." Roll Call added that "for longtime Pelosi watchers, the change in tone followed a familiar script: In leading a liberal-heavy Caucus, she has frequently staked out left-leaning positions in big debates only to moderate them when political reality necessitated."

 

Regarding claims that the President will be forced to raise taxes to pay for healthcare reform, White House Press Secretary Robert Gibbs on CNN's “State Of The Union ” said, "That's not true. The President outlined a plan to Congress on [last] Wednesday that first cuts waste and inefficiency from Medicare and Medicaid dollars that are there are being spent on healthcare, but aren't making us safer or healthier. And the revenue increase that the president has proposed is actually on insurance companies that offer gold-plated healthcare plans. One of the messages that I wish would get through, not just to any group that was out in front of Capitol yesterday, but certainly throughout America, this president passed the broadest tax cut in American history at the beginning of the year by funding his make work pay tax cut that he talked about in the campaign that puts money directly back into people's pockets to get this economy moving again."

 

The Arkansas State Chamber/AIA is a member of Employers for Quality Healthcare, a collaboration of state chambers and employer organizations across the country monitoring and making comments on healthcare reform proposals. For more information, click here.

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Debate over Cap-and-Trade Legislation Continues

 

The Lafayette (LA) Daily Advertiser reported, "The August uproar over healthcare reform almost muted public discourse over global warming." But the "healthcare din hasn't quelled the fight among supporters and opponents of a House bill dealing with energy and climate change as combatants anticipate consideration of a similar proposal in the Senate." In recent weeks, "opponents of the House measure, including the oil lobby, the National Association of Manufacturers (NAM) and the National Federation of Independent Business, ignited a campaign in the Mountain West and Midwest protesting that the House legislation would be a job killer." Jay Timmons, executive vice president of NAM, said, "At a time when our country is struggling to come out of our longest and deepest economic downturn since the Great Depression, lawmakers should be focused on policies that provide incentives for businesses so they can create jobs and grow." Environmental and labor groups "have countered with a 'Made in America ' tour to highlight the green jobs they say would be created."

 

In similar news, the Chicago Tribune reported, "After months of promoting President Obama's climate plan as a vehicle for creating millions of clean-energy jobs, supporters of the legislation are increasingly pushing another strategy -- touting its benefits for national security." A coalition "backing the energy and climate bill pending before the Senate has enlisted war veterans to pressure senators in person. In television advertisements, the coalition calls dependence on foreign oil a threat to national security and fuel for terrorists." The messages "intertwine in a commercial launched last week by Clean Energy Works, a newly formed band of environmental, labor, religious, veterans and other groups that support the climate bill." Climate bill proponents say "polls show the security argument could prove powerful." A survey "by Mellman last month found that a majority of voters call global warming a serious threat to national security."

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Estate Tax Exemption Expiring Soon – Congress Set to Take Action
 
The current estate tax exemptions are set to expire in 2009. There are several possible resolutions surfacing to address this issue before the end of the 111th Congress. Due to the healthcare debate, neither the House Ways and Means Committees nor the Senate Finance Committee has focused on estate tax reform. However, congressional action is expected this fall. Earlier congressional action has produced consensus to continue the current estate tax exemption of $3.5 million per person and the current 45 percent rate, but there is debate about whether this should be a permanent extension or just a one-year fix.

As the law is currently written, for 2009, the estate tax exemption is $3.5 million and the top tax rate is 45 percent. For 2010, a one-year repeal of estate taxes will take place but a partial loss of step up in basis will negate some of the benefits. Estate taxes will return in 2011 when the exemption will be only $1 million and the top rate will be 55 percent.

The fiscal year 2010 administration budget proposed freezing the estate tax exemption and rate at 2009 levels. And the Treasury Department proposed eliminating several estate tax planning tools as a way to pay for healthcare reform.

The fiscal year 2010 congressional budget assumes the extension of the estate tax exemption and rate at 2009 levels. This means that no off-set (raising other taxes to pay for the extension) should be needed to extend current law.

The Senate-passed budget contained a Lincoln (D-Ark.)/Kyl (R-Ariz.) amendment that put the Senate on record in support of an inflation-adjusted $5 million per person exemption and a 35 percent top rate. Senators Lincoln and Kyl pledged to work to secure a $5 million exemption in future estate tax reform legislation. Any increase over a $3.5 million exemption would need to be offset. Senator Lincoln has also publicly reinforced her commitment for a higher exemption level.

The House passed pay-go legislation extending the current estate exemption and rate from House pay-go requirements.

Several members of the House tax writing committee, the Ways and Means Committee, have introduced bills that will set the stage for estate tax reform debate:

  • H.R. 2023: Rep. McDermott (D-Wash.) has introduced legislation that would lower the estate exemption to $2 million and increase the top rate to 55 percent.
  • H.R. 436: Rep. Pomeroy (D-N.D.) has introduced legislation that would extend the current estate tax exemption and rate but would disallow discounting the value of non-business assets.
  • H.R. 3463: Rep. Brady (R- Texas) has introduced legislation to permanently repeal estate taxes.
  • H.R. 3524: Rep. Thompson (D-Calif.) and Salazar (D-Col.) have introduced legislation to defer estate taxes on land as long as the property is owned by a qualified family member who uses the land for agricultural purposes. Estate taxes are recaptured when the property is sold to a non-family member or ceases to be used for agricultural purposes. To qualify, the land must be owned for eight years prior to death with material participation requirements for five of those the eight years. In addition, the bill would exempt land covered by a conservation easement from estate taxes and section 2032A special use valuation rules so that a timber sale or the sale of a conservation easement will no longer trigger a tax recapture.
  • H.R. 3050: Rep. Blumenauer (D-Ore.) has introduced legislation to increase the exclusion for land protected by a permanent conservation easement from $500,000 to $5 million.

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EPA to Limit Carbon Dioxide Emissions Regulation to Largest Polluters

 

The Washington Times reported that environmental groups have claimed that the Environmental Protection Agency, in a draft rule sent to the White House on August 31, "is proposing to limit its regulation of carbon-dioxide emissions to the nation's major polluting sources," such as "refineries, utilities and manufacturers." If the proposed rule were to become law, "the practical effect of the rule is that many smaller carbon-dioxide emitters, including hospitals, schools and office buildings, would not be subject to EPA's regulation. The change could also slow the drive on Capitol Hill to pass major climate-change legislation." When the EPA announced in April "that it was prepared to use its authority to regulate carbon-dioxide emissions," it was "widely thought" that the declaration "would push Congress to pass climate change legislation that would exempt small polluters from regulation."

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Obama Taps Bloom for Manufacturing Policy Post

 

The Detroit News reported last week that President Obama announced that "he's tapping his chief auto adviser to try to revitalize the struggling U.S. manufacturing sector." Ron Bloom "will assume the title of senior counselor for manufacturing policy in addition to his role as senior adviser on the President's task force on the automotive industry." Obama "said in a statement late [last] Sunday that the manufacturing sector expanded in August for the first time in 18 months and had the highest monthly output in two years."

 

The Cincinnati Enquirer noted that Bloom traveled "with the president to [last] Monday afternoon's annual AFL-CIO Labor Day picnic at Coney," in Ohio . Bloom "will remain head of the auto task force as he takes on the expanded task of working across federal agencies to integrate existing programs and develop new initiatives affecting the manufacturing sector."

 

The Hill reported, "The administration chose Labor Day to announce that Ron Bloom, the head of the auto recovery taskforce, would serve as its first manufacturing czar." Bloom already "has a few wins under his belt, which should further serve to increase his influence." He was "a fierce advocate of the 'cash for clunkers' program...And he gets kudos for quickly steering General Motors and Chrysler through bankruptcy as the auto task force chief." Working with "the National Economic Council, Bloom's reach will stretch beyond Commerce to the Energy, Labor and Treasury departments." But Bloom also "faces a big challenge in revitalizing a sector devastated by the recession."

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