BCA's Washington Briefing

follow us on facebook   follow us on twitter   follow us on youtubeNovember 22, 2013




With support from Business Council of Alabama members, the House voted 228-192 along party lines on Wednesday to pass H.R. 2728, the Protecting States' Rights to Promote American Energy Security Act. The bill was supported by Alabama's five Republican House members and was a key legislative goal of the National Association of Manufacturers, which is represented exclusively in Alabama by the BCA. The BCA and NAM on Tuesday asked members to contact their federal legislators to support the bill.


The Republican-controlled House also passed legislation to require the Federal Energy Regulatory Commission to approve applications for natural gas pipelines within 12 months, the Hill reported. Members passed the Natural Gas Pipeline Permitting Reform Act, H.R. 1900, in a 252-165 vote that saw 26 Democrats support the GOP bill. Both bills go to the Democrat-controlled U.S. Senate where they face an uncertain future.


The shale gas bill would prohibit the Department of Interior from enforcing federal regulations, guidance or permit requirement regarding oil, gas, and geothermal production activities, the NAM said. This includes hydraulic fracturing on or under federal lands in all 50 states regardless if a state already has a regulatory structure in place that oversees hydraulic fracturing. The process uses high-pressure, underground liquid injection to move oil, natural gas, geothermal energy, and even water, into position for easy extraction.


The BCA signed a multi-state organization letter two months ago urging EPA Administrator Gina McCarthy to allow states to conduct their own hydraulic fracturing energy development policies. BCA President and CEO William J. Canary and executives of 16 other state chambers of commerce or their equivalent signed the letter. The combination of hydraulic fracturing and horizontal drilling has created an energy revolution to make the United States the largest oil and natural gas producer in the world, the NAM said.


Republicans believe the gas pipeline bill is needed because demand for natural gas is rising across the country. The East Coast, however, is having problems getting gas, and those who are getting it may see higher prices. The bill doesn't force FERC to approve pipelines and only requires the agency to make a decision.



The Business Council of Alabama was one of 249 organizations to sign a U.S. Chamber of Commerce letter sent to congressional budget conference committee members urging mandatory spending reductions. The letter was sent to U.S. Sen. Patty Murray, D-Wash., chair of the Senate Appropriations Committee, and U.S. Rep. Paul Ryan, R-Wisc., chairman of the House Ways and Means Committee.


The letter implores Congress to quickly pass legislation that establishes fiscal year 2014 spending consistent with the Budget Control Act of 2011. "We further urge you to replace the across-the-board sequestration with mandatory spending reductions and other more appropriate spending restraint that is consistent with the nation's highest priorities," the letter sent Tuesday states. "Now, it is time for Congress to move forward and complete its work for fiscal year 2014 so that it can return to regular order budgeting in the coming year."


The letter also "encourages the committee" to develop a framework for fundamental entitlement reform and comprehensive tax reform in 2014. "However, Social Security, Medicare, and Medicaid add substantially to the current budget deficit, and more importantly, spending on these programs is projected to grow rapidly in coming years to unsustainable levels," the letter said.


The BCA's 2013 federal legislative agenda includes the passage of tax reform that would lower the corporate tax rate to enable American companies to compete for global investment in order to remain competitive.



Over the objection of Alabama's U.S. senators, Senate Democrats succeeded Thursday in passing the "nuclear option" and changed rules that will allow trampling of the minority. The Senate voted 52-48 to reverse four decades of the minority party, whether Democrat or Republican, to kill most presidential nominations by filibuster. After filibusters held up the confirmation of three people, President Obama wanted to add to the District of Columbia federal appeals court, the Senate voted 52-48 to change the rules, with three Democrats among the minority. The new rule no longer requires a supermajority to limit debate, or invoke cloture, on executive branch nominees and for seats on federal courts short of the Supreme Court.


Roll Call reports that President Barack Obama strongly backed the use of the "nuclear option" in the Senate to end filibusters of nominations and seemed to push for a broader end to the use of filibusters to stall legislation as well. "If you have a majority of folks who believe in something, then it should pass," Obama said. "We have seen an unprecedented pattern of obstruction in Congress."


U.S. Sens. Jeff Sessions and Richard Shelby opposed the rule change that was pushed by Senate Majority Leader Harry Reid, D-Nev. "He does not get to dictate how this Senate is operated," Sessions said. "He does not have the right to come in and change the rules."


Shelby said the "drastic move sets a dangerous precedent that could later be expanded to speed passage of expansive and controversial legislation."

"If Democrats think that they deserve more power, they should earn it from voters at the polls in 2014, not swipe it with a drastic rule change in the Senate today," Shelby said in a statement. "Unfortunately, this radical move will allow President Obama to stack the executive and judicial branches with radical individuals who will do anything to preserve the terrible legislation that bears his name."



The Senate Banking Committee voted 14-8 on Thursday to forward Janet Yellen's nomination to chair the United States Federal Reserve to the full Senate. U.S. Sen. Richard Shelby, R-Ala., was one of the eight "no" votes. Yellen is the Federal Reserve Bank's vice chairman and would succeed Chairman Ben Bernanke when his second term expires in January. She would become the first woman to head the Federal Reserve, the nation's central bank.


Shelby did not immediately release a statement on his vote, but in an interview with Reuters in October, he questioned the "huge (bond) portfolio that the Fed is accumulating," her "proclivity to print money," and her record as a bank regulator.


Eleven of the committee's 12 Democrats as well as three Republicans voted for her. Shelby, six Republicans, and Sen. Joe Manchin, D-W.Va., voted against her nomination. Roll Call reports that the bipartisan vote indicates that she should receive full confirmation by the Senate. Debate over the central bank has grown more partisan since Bernanke's first confirmation, as several high-profile Republicans, like Sen. Rand Paul, R-Ky., have assailed the central bank's policies especially how it attempts an economic stimulus, Roll Call reported.



A federal appeals court told the Energy Department it cannot continue to charge utilities and electricity ratepayers a fee to pay for a theoretical nuclear waste disposal site, the U.S. Chamber of Commerce reported. The U.S. Court of Appeals in Washington told the Energy Department to suspend collection of the nuclear-waste fee from utilities because there's no government alternative to a canceled project at Yucca Mountain in Nevada that is supported by the fees, the chamber said.


The three-judge panel said the Energy Department does not have an adequate evaluation for the waste fee. It brings in about $750 million a year. The fund has grown to more than $28 billion since it began in 1983. Circuit Judge Laurence Silberman in a seven-page decision said the agency's assessment of disposal costs was "so large as to be absolutely useless to be used as an analytic technique."


"The court's ruling reinforces the fundamental principle that the federal government's obligation is to carry out the law, whether or not the responsible agency or even the president agrees with the underlying policy," Nuclear Energy Institute General Counsel Ellen Ginsberg said. "There's been a national nuclear waste policy on the books for over three decades, and federal agencies can't ignore it."


The U.S. Chamber reported that the ruling is the latest legal setback for the Obama administration that opposes the Yucca Mountain disposal site. In 2010, the Nuclear Regulatory Commission - then chaired by a former aide U.S. Sen. Harry Reid, D-Nev. - stopped a review of the site. A federal court scolded the agency in August, declaring it was "flouting the law," and ordered the review restarted.



The House Judiciary Committee on Wednesday approved a bill amended by U.S. Rep. Spencer Bachus, R-Vestavia Hills, that is designed to protect entrepreneurs and small businesses from abusive patent litigation, Bachus said. The committee passed the amended Innovation Act on a bipartisan vote of 33-5. Bachus said so-called "patent trolls" cost inventors, entrepreneurs, and businesses tens of billions of dollars in extra legal costs annually. The "patent trolls" chill innovation important to economic growth.


The amendment, co-offered by U.S. Reps. Jason Chaffetz, R-Utah, and Ted Deutsch, D-Fla., is designed to curb the use of threatening and evasive "demand letters" sent to small businesses during the early stages of a potential lawsuit. "Abusive litigation practices are a severe drain on innovation and that is what we are seeing from patent trolls," Bachus said. "It takes away capital that could be productively used to develop a business, hire workers, and grow our economy."


The bipartisan amendment, a "sense of Congress" policy statement, was approved by voice vote. Bachus, chairman of the Judiciary Subcommittee on Regulatory Reform, Commercial, and Antitrust Law, is an original cosponsor of the Innovation Act.



Employer-based medical insurance is expected to go by the wayside for millions of employees over the next decade, according to business surveys and estimates by the Congressional Budget Office. If businesses stop offering or subsidizing employee medical insurance, the benefit would join the trend to stop offering company retirement and retiree medical insurance.


The Hill reported that by 2016, the CBO projects that 6 million fewer people will get employer-based health insurance compared with this year. The estimate includes those who could get coverage from work but choose not to. Experts say the health care law is not the cause of the general shift by employers away from providing health care insurance, but acknowledge supporters of the law will have to defend it.


"We had rising costs before the [Affordable Care Act], and we had employers dropping coverage before the ACA. ... But in politics, these things are fair game," said Dan Mendelson, president of the consulting firm Avalere Health. The shift started in the late 1980s as companies sought to reduce costs by cutting health benefits.


The U.S. Chamber of Commerce and the International Franchise Association surveyed 400 mid-size firms and found that 28 percent planned to drop their health care coverage because of ObamaCare. Neil Trautwein, vice president and employee benefits policy counsel at the National Retail Federation, said some companies would choose to pay the penalty for dropping the offer of insurance, some employers are cutting hours for employees, and some employers will cut generous benefit packages to avoid the so-called "Cadillac" tax on those plans.


State insurance commissioners give Obama an earful 

The Hill (Sink 11/21) "President Obama met with state insurance commissioners at the White House on Wednesday in an attempt to quell concerns over his plan to allow insurers to continue offering policies that do not meet ObamaCare's requirements. The insurance commissioners set minimum insurance standards in their states but they complain about the president's executive order, arguing it injects chaos into their insurance markets.


"National Association of Insurance Commissioners president Jim Donelon said that in the meeting Obama 'acknowledged the complexity of the issues that we're dealing with and the change he suggested last week with the issuance of his executive order'. The commissioners, meanwhile, warned Obama that different rules for different policies could result in higher premiums for consumers.


"But Donelon seemed more encouraged after the 50-minute meeting in the Oval Office than last week, when he warned that the president's action 'threatens the solvency of the system' and 'threatens to spike the cost to policyholders across the board.' He said that the meeting, which also included Health and Human Services Secretary Kathleen Sebelius, was 'very productive' and that during a 'robust' discussion, Obama acknowledged that there was a 'unique statutory situation' in each state.


"The president's proposal would allow insurance companies to continue offering existing plans to current customers, and was offered after mounting criticism over the president's promise that individuals could keep their health plans if they liked them. But in many states, commissioners have already set minimum guidelines and premiums for this year assuming that all new plans would comply with the Affordable Care Act. They argue changing those regulations at the last minute would be messy for states and confusing for consumers."

U.S firms bear half of the $1.2 trillion worldwide cost of regulations  

The Hill (Goad 11-21) "Worldwide costs of complying with government regulations have soared to nearly $1.2 trillion annually, with roughly half the pain falling to U.S. businesses, a new study has concluded. Published Thursday by the international law firm Berwin Leighton Paisner, the 'Speed of Business' report is based on a survey of 250 international businesses covering a wide swath of industries, including finance, healthcare and energy.


"It is apparent from our study that some businesses are becoming entangled in a bureaucratic web preventing them from doing what they do best - creating, innovating and growing," said Neville Eisenberg, managing partner at Berwin Leighton Paisner. The online survey, conducted in August and September, found that about 6.2 percent of costs incurred by transnational companies stem from regulatory compliance. The U.S. companies spend the most on compliance - roughly $557 billion - while firms in Europe spend $309 billion and Asian outfits shell out around $311 billion, according to the report.


"However, the three regions rank in reverse order in terms of perceptions that regulation serves as a barrier to innovation, the report found. More than 58 percent of the European firms surveyed hold that view, while 43.2 percent of Asian companies said rules hinder innovation, and 40.2 percent of U.S. companies agreed. The study concluded that regulations impact firms differently, with those able to remain on top of regulatory responsibilities able to reap rewards in the forms of customer confidence, forestalled litigation and clear operating standards."


US Chamber of Commerce   National Association of Manufacturers
1st Congressional District