BCA's Washington Briefing

follow us on facebook follow us on twitter follow us on youtube January 16, 2015



The National Association of Manufacturers reports that Congressional delay in overhauling the nation's tax code is holding back the economic benefits of a series of pro-growth tax policies.


According to "A Missed Opportunity Tax Study" commissioned by the NAM and conducted by economists at the University of Tennessee and the University of Kansas, a five-pronged tax strategy over 10 years would increase Gross Domestic Product by more than $12 trillion relative to Congressional Budget Office projections, increase investment by more than $3.3 trillion, and add more than 6.5 million jobs to the U.S. economy.


NAM says the analysis focuses on the macroeconomic impact of five policy changes - a maximum corporate tax rate of 25 percent (down from the current 35 percent), a globally competitive international tax system, full expensing for capital equipment, enhanced and permanent research and development incentives, and, parallel changes for non-corporate pass-through businesses.


"This study confirms what manufacturers learned the hard way - uncertainty caused by political gridlock takes a toll on the economy," NAM President and CEO Jay Timmons said. "Comprehensive tax reform for manufacturers of all sizes is essential to unleashing the economic power of manufacturing and making the United States the best place in the world to manufacture. Our outdated and uncompetitive tax system is holding us back from competing with nations that have adopted pro-growth systems."


The NAM study was widely reported on a variety of media platforms.


Politico reports in "Morning Tax"  that the study shows the cost of Congressional inaction on tax reform.


The Business Journals report that NAM is trying to light a fire under Congress for comprehensive tax reform by calling "attention to the economic potential being lost by Congress' failure to act."


NAM Vice President of Tax and Domestic Economic Policy, Dorothy Coleman, said that "we can't afford" to "leave investment and jobs growth on the table as we drag out our feet and decide how we move forward on this." The Business Journals said there are "hopeful signs" that tax reform may happen, as five bipartisan working groups have been appointed by the Senate Finance Committee "to analyze current tax law and look at reform options." 


The Hill reports the study's authors note that the "estimated impacts are significant and worthy of consideration in the ongoing discussion about the future of pro-growth tax reform." 


Science Magazine says the NAM report shows that making the R&D tax credit permanent could boost GDP by 0.16 percent annually and add up to 38,300 jobs each year.



The Business Council of Alabama joined 160 other groups in signing a letter to the U.S. House of Representatives in support of H.R. 185, the Regulatory Accountability Act of 2015. After receiving letters, the House with bipartisan support on Wednesday passed the bill 250-175, which now goes to the Senate for consideration.


H.R. 185 would modernize the 69-year old Administrative Procedure Act and improve how federal agencies write the regulations that significantly affect the U.S. economy.


The BCA and associated groups seek a more accountable regulatory process and to narrowly tailor regulations that rely on strong and credible data and evidence while imposing the lowest possible burden on job creators, while still implementing congressional intent.


"When agencies produce regulations that do not reflect these ideals, better mechanisms to hold them accountable are needed," the multi-industry letter from the U.S. Chamber of Commerce said.


The Regulatory Accountability Act of 2015 would enhance the regulatory process by increasing public participation in shaping the most costly regulations before they are proposed, require agencies to choose the least costly option, unless they can demonstrate that public health, safety, or welfare requires a more costly requirement, give interested parties the opportunity to hold agencies accountable for their compliance with the Information Quality Act, provide for on-the-record administrative hearings for the most costly regulations to ensure that agency data is well tested and reviewed, restrict agencies' use of interim final regulations where no comments are taken before a regulation takes effect, provide for expedited judicial review of whether that approach is justified, and, provide for a more rigorous test in legal challenges for those regulations that would have the most impact.


"The Regulatory Accountability Act of 2015 builds on established principles of fair regulatory process and review that have been embodied in bipartisan executive orders dating to at least the Clinton Administration," the letter states. "These principles would make the regulatory process more transparent, agencies more accountable, and regulations more cost-effective. H.R. 185 would not affect the vast majority of new regulations that are not high-impact rules, regulations that are already in effect, or the enforcement of current regulations."



U.S. Chamber of Commerce President and CEO Thomas J. Donohue this week gave his annual State of American Business address that outlined the business community's top policy priorities for the year.


There was good news but also realistic challenges.


"The state of American business is improving," Donahue said. "Six long years after the recession technically ended, investing, hiring, and consumer spending are all firming up. The housing sector continues to recover in fits and starts."


Looking beyond the near term, Donahue said, "the outlook is less certain."


"Businesses are concerned about the health of their major customers overseas. China is slowing, Europe is floundering, and Japan may be sinking back into a recession," he said. "Closer to home, employers are being saddled with another new health care mandate, and they're worried about what's coming next. At the current rate, some 4,000 new regulations will pour out of the regulatory pipeline this year."


He asked the nation's leaders to approve pro-growth policies and reform the regulatory environment.


"So as the Chamber pursues a full policy agenda focused on economic growth and government reform, rest assured that we are reserving a good measure of our fight, our spirit, and our passion for that which must not change - the unique American rights and freedoms that made this country great and that will carry it forward into a bright future," Donahue concluded.


The address was carried on C-SPAN.


The Business Council of Alabama is the exclusive representative of the U.S. Chamber of Commerce in Alabama.


House Votes to Ease Dodd-Frank Law

Associated Press (Gordon, Daly 1/14) "Propelled by its enlarged Republican majority, the House has moved to ease a landmark law reining in banks and Wall Street, more than six years after a financial crisis brought on the Great Recession.


"The vote was 271-154 on legislation that advanced a key priority of the Republicans. Approval of the bill came swiftly in the second week of the new Congress despite a veto threat from the Obama White House. The measure now goes to the Senate, where it will face strong opposition from liberal Democrats such as Massachusetts Sen. Elizabeth Warren.


"It probably won't move through the Senate as quickly. While the Republicans now control the Senate as a result of November's elections, GOP senators would be more likely to work on compromises with their Democratic colleagues and to put the legislation through a process of hearings and debate.


"In the House, 29 of 188 Democrats joined the near-unanimous 242 Republicans to vote for the measure. The bill alters sections of the 2010 Dodd-Frank financial overhaul. That law had tightened government oversight of banks and financial markets with an eye toward preventing another crisis and another taxpayer bailout of banks.


"Most notably, the measure passed Wednesday would give U.S. banks two extra years - until 2019 - to ensure that their holdings of certain complex and risky securities don't put them out of compliance with a new banking rule.


"The business lobby was heartened by the House action and already looking toward additional changes in the Dodd-Frank law. In a speech, U.S. Chamber of Commerce President Thomas Donohue cited the Financial Stability Oversight Council and the Consumer Financial Protection Bureau - two federal bodies created by the 2010 law - as needing changes and curbs to their authority."


Chamber Likes Infrastructure Legislation

U.S. Chamber of Commerce (Kovacs 1/14) "U.S. Chamber Senior Vice President of Environment, Technology, & Regulatory Affairs William L. Kovacs issued the following statement regarding the introduction of bipartisan H.R. 348, the "Responsibly And Professionally Invigorating Development (RAPID) Act of 2015":


"Every year, infrastructure and major facilities projects are stalled, cancelled, or lose funding because of a dysfunctional permitting process that allows for endless delays. As a result, millions of U.S. jobs go uncreated. The Chamber applauds the bipartisan efforts of Representatives Marino and Peterson on their introduction of important legislation aimed at addressing this problem. The 'RAPID Act' would provide a streamlined process for projects to obtain environmental permits and approvals for their projects in a timely manner, which will allow for job creation and economic growth.


"The 'RAPID Act'-a practical, industry-wide approach that builds on successful provisions for environmental review management found in previous transportation legislation-is a critical component to improving and reforming this country's regulatory process. By cutting the 'red tape' that has stymied development and maintaining meaningful environmental reviews, H.R. 348 will allow projects to move forward and enable millions of Americans to get back to work."


US Chamber of Commerce   National Association of Manufacturers
Sixth District
 U. S. Rep. Gary Palmer