Bills Introduced to Repeal "3 Percent" Language from Tax Code

Last week, two bills were introduced that would address the harmful contracting withholding provision. The first bill (S. 89) introduced by Sen. David Vitter (R-La.), would provide a simple repeal of Section 511 from the tax code and is identical to legislation from previous years. The second bill (S 164), introduced by Sens. Scott Brown (R-Mass), Olympia Snowe (R-Maine) and Amy Klobuchar (D-Minn.), would repeal the withholding provision but also includes spending rescission language to "offset" the cost of repeal. On Friday, the Government Withholding Relief Coalition (GWRC) sent a letter to Rep. Darrell Issa (R-Calif.), Chairman of the House Oversight and Government Reform Committee, encouraging him to support repeal of the provision as part of his ambitious agenda this year. The letter pointed out the damaging impacts of Section 511, stating "the provision is already proving costly and will increase exponentially as the implementation deadline moves closer. If this tax is not repealed, it will cost companies and governments at all levels substantial amounts of money. These exorbitant expenditures will be at the expense of hiring new employees, expanding businesses, and providing government services at a time that neither the public nor private sector can absorb such unnecessary costs." NUCA looks forward to working with the GWRC to fully repeal the withholding provision before its scheduled implementation at the beginning of 2012.

Infrastructure Bank Bill Introduced in House

Legislation that would create a national infrastructure was introduced last week in the House by Rep. Rosa DeLauro (D-Conn.), and Senate legislation bank is expected to be dropped in the Senate over the next several weeks. The National Infrastructure Development Bank Act of 2011 (HR 402), which was introduced by Rep. DeLauro introduced in the 111th Congress, would establish a bank responsible for leveraging private sector funds to invest in transportation, water and wastewater, energy, and telecommunications infrastructure projects. The bank would have the authority to issue federal bonds and provide funding for projects from the proceeds, namely by making loans and offering loan guarantees. The bank would be capitalized with authorized appropriations of $5 billion a year over the next five years. The Treasury Department would be authorized to call up an additional $225 billion if needed to meet bank obligations. The bank could potentially issue up to $625 billion in bonds.

"With today's budget constraints," DeLauro said in a statement, "innovative financing solutions are needed to invest in critical infrastructure projects, a key component to a national growth strategy that creates good middle class jobs at a time of unacceptably high unemployment and spurs economic growth to allow us to compete with other economic power centers around the globe." NUCA applauds Rep. DeLauro for introducing the legislation. As we have indicated over the past several months, the lack of federal dollars from general revenues calls for innovative financing methods and bond initiatives to fund critical infrastructure projects.

E-Verify: The only thing Dems and Republicans agree on in Immigration Debate

The immigration reform debate is sure to return this year in some way, shape or form, although the "reform" agenda vastly differs for lawmakers on the two sides of the aisle. While Democrats on the far left are still pushing for a bill that would provide a way to give legal status to undocumented (illegal) immigrants, many Republicans are looking for strict legislation that would facilitate the deportation of illegal immigrants. The only thing agreed on by most lawmakers is the need to crack down on employers who knowingly hire undocumented individuals. The most popular method of verification is the E-Verify system. E-Verify became a requirement for all federal contractors in September of 2009 - but any business can use it. Well over 200,000 of the country's 7 million employers are enrolled in the program, according to the Department of Homeland Security, and approximately 1,500 new employers are registering each week. NUCA and several business organizations will continue to work collectively to ensure that any new legislation to expand E-Verify requirements includes "safe harbor" provisions to protect employers who use the system in good faith. E-Verify continues to be imperfect, and employers need safe harbor protection for system failures.

Executive Order Requires Review of all Federal Regulations

President Obama recently ordered every federal agency to review existing regulations in order to expel bureaucratic red tape reflecting what seems to be a White House eager to reach out to energized Republicans and repair its troubled relations with the business community. Through executive order and two presidential memorandums, the president laid out a new strategy that aims to protect public health and safety and free business to pursue profits at the same time. The executive order puts all federal agencies on notice, requiring them to avoid "unreasonable burdens on business." According to the president, "this order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books in order to remove outdated regulations that stifle job creation and make our economy less competitive." This action has been called for by the business community since President Obama took office, and NUCA is happy he's answering the call.

Similar to the Noise Rule which was quickly rescinded after this executive order came out, we expect more good things to come out of this federal agency review, but we'll keep an eye on it! During his State of the Union speech last week, the president reiterated his efforts toward regulatory reform. In a report released in conjunction with the speech, the White House indicated it is "working to reform government so that it is leaner and smarter for the 21st century, removing barriers and creating new incentives for growth. The President has ordered a review of regulations to remove needless burdens, while ensuring common sense standards to protect the American people. He also asked for efforts to merge, consolidate and reorganize federal agencies to make America more competitive."

Legislation to Repeal "1099 Requirement" Introduced

Last week lawmakers introduced new legislation that would correct a greatly harmful IRS filing requirement included in last year's healthcare reform law. The measure would eliminate the "1099 requirement" that would require businesses to report any annual purchases of $600 from vendors. All Republicans and most Democrats, including the president, support repealing the provision, but lawmakers have clashed over how to offset the $19 billion in lost revenue. The first bill, the "Small Business Paperwork Elimination Act of 2011," was introduced by Sen. Mike Johanns (R-Neb.) last Tuesday. The bill fully repeals the new paperwork mandate and would pay for the bill through unobligated stimulus funds. The legislation already has 52 cosponsors including 40 Republicans and 12 Democrats. "It's a bad policy; it hurts businesses and it should be repealed, enough said," Johanns said in a conference call with reporters.  

The second bill was introduced by Sen. Max Baucus (D-Mont.) and Sen. Majority Leader Harry Reid (D-Nev.). There are 12 cosponsors on the legislation. Republicans are posing repeal of 1099 as part of their promise to chip away at the reform law, while Democrats are touting it as a sign of their willingness to improve the current law.