Congress Seeks Short-Term Fix to Highway Trust Fund Dilemma

The U.S. Congress voted last week to provide $10.9 billion to the U.S. Department of Transportation to fund the Highway Trust Fund in order to reimburse states for repairs and infrastructure improvements for roads, rails and airports.

The nearly $11 billion was cobbled together from general fund revenues by any number of budgetary gimmicks not rationally tied to the fuel (gasoline and diesel) excise taxes that normally go into the trust fund (e.g., an extension of customs fees as well as so-called “pension smoothing”).

Few lawmakers in the Indiana delegation (and the entire Congress for that matter) are happy that it is not a longer-term solution; those we spoke with were frustrated by the delay and the funding mechanisms. The Indiana Chamber agrees this is no way to conduct the people’s business, but it is better than the alternative of the highway fund going broke, work stoppages and the idling of hundreds of thousands of construction workers across the country. We will work with the delegation to secure a more rational bill and reauthorization of the multi-year surface transportation bill in coming months.

Indiana Chamber Endorses Four Members of Congress for Re-Election

The Indiana Chamber of Commerce is endorsing four members of the state’s congressional delegation from Central Indiana:

U.S. Rep. Todd Rokita (R-IN, 4th District);
U.S. Rep. Susan Brooks (R-IN, 5th District);
U.S. Rep. Luke Messer (R-IN, 6th District); and
U.S. Rep. Todd Young (R-IN, 9th District).

“Good public service deserves to be recognized. These members of Congress continue to demonstrate sound fiscal policy and prudent decision-making on issues that are vital to jobs and economic growth,” says Indiana Chamber President and CEO Kevin Brinegar.

The Indiana Chamber’s nonpartisan congressional PAC determined the endorsements.

At both the state and federal levels, Indiana Chamber support is driven by vote scores on pro-jobs, pro-economy issues. For state endorsements, the Indiana Chamber relies on its Legislative Vote Analysis report. Congressional support is based on the vote tally conducted by the U.S. Chamber of Commerce.

Representatives of the U.S. Chamber, which also is supporting these candidates for re-election, joined the Indiana Chamber in downtown Indianapolis for today’s press conference.

The Indiana Chamber has been the state’s leading business organization for more than 90 years, representing over 800,000 Hoosier workers through nearly 5,000 member companies across Indiana.

Congress Can Do It, But You Can’t

An interesting blurb in a recent Kiplinger newsletter on one of the privileges of congressional service:

Congress can do what employers can’t when it comes to health coverage: use tax-advanced funds to reimburse workers who buy individual health care policies on exchanges. Employers face a tax penalty of $100 a day per worker for violations.

Yet the government gives lawmakers and Capitol Hill staffers tax free contributions to help offset insurance premiums, covering about 72% of exchange-bought insurance. The government allowed the payments because of concerns about higher premiums and the loss of the government subsidy for insurance for both lawmakers and staff.

The IRS restated its view that such subsidies aren’t permitted in the private sector after some vendors told employers that the pretax payments would allow them to meet the mandate to provide insurance. The double standards isn’t likely to change.

What to Expect From Congress in an Election Year

The answer to the query in the headline is “not much,” but that is considered a vast improvement over recent years. Here is the analysis from Bo Harmon, vice president of political affairs for BIPAC.

There are a number of legislative items that members of both parties acknowledge need to be addressed. Implementation of Obamacare. Immigration reform. Tax code and entitlement reform. A long term solution to the debt ceiling crisis. Privacy security. Patent reform. Trade.

With all of these issues, the public increasingly frustrated with gridlock in Washington, and an election coming up where Congress will want to be able to talk about their accomplishments, we should expect to see some major legislative action in 2014, right? Wrong. Well, mostly wrong. There is actually a glimmer of hope that 2014 will produce more than 2013. Though, that’s a bit like saying “we scored zero points last game and expect to do better than that this time.”

The reason that Congress hasn’t accomplished much since 2010 is the same reason we don’t expect to see much more in 2014. With the House in the hands of Republicans and the Senate and White House controlled by Democrats, and each side increasingly responsive to the most ideological polarizing parts of their base, they disagree on how to proceed. Both sides understand the things that need to be addressed, but there is zero consensus on how to do it.

The Obamacare debate is a prime example. Not a single Republican in either chamber voted for original passage though many key features of the legislation were included in previous GOP health care reform bills. Once Republicans took the House in 2010, GOP leadership took the position that repeal of the legislation in total was the only option and have refused to offer or support tweaks or fixes to problems. The Republicans believe “it’s not possible to ‘fix’ something fundamentally incompatible with our ideology.” Politically, they also believe if the legislation fails they will benefit and thus have little political incentive to improve the law. From their perspective, it is BETTER politically to have as many things go wrong with ObamaCare as possible.

This same standoff occurs on issue after issue – taxes, immigration, entitlement reform, etc. But, it is a new year and in our optimistic resolutions, we see some possibility of federal action on a handful of bills. There was a small bright spot in December when a two-year budget compromise passed that would avoid the possibility of a shutdown and eliminated some of the most irrational sequester cuts. This rare bipartisan effort was criticized by many however as small ball for not addressing bigger, long term issues. Even still, it was the best that could be achieved in the current gridlock environment.

The environment is also different than it was in 2013. At that time, Democrats were emboldened by the President’s popularity and felt little need to compromise, believing they had received a mandate from the 2012 elections to do as they wanted. With the President’s approval ratings significantly lower now, the confidence to act as boldly is similarly evaporating. Conversely, Republicans spent 2013 in fear of retribution from the Tea Party. Now, Boehner in the House and McConnell in the Senate have openly broken ranks with the Tea Party and seem almost eager to act in ways that show consensus.   The budget deal and the changed political environment provide the foundation for some compromise legislation to take place on issues that need to be addressed. Small, incremental changes to a handful of issues is possible, likely driven by the middle. We may see some movement on immigration, trade, patent reform, etc; even if more contentious things like tax reform remain unlikely.

While many would like to see more comprehensive solutions and small, incremental changes to immigration or Obamacare implementation may not be at the top of your industry agenda, we are dealing with a situation where NOTHING has been getting done and we need to make an effort to support and reward even baby steps at basic government functionality. Only then will members of Congress have the political courage to attempt larger, more comprehensive changes and take a look at issues that are at the forefront of your industry agenda. It is a shame that we have reached this point where expectations for our Congressional “leaders” is so low but they have demonstrated over the last three years that nothing else can be expected from divided government driven by ideological extremes.

 

D.C. Fly-in Helping Hoosier Business Leaders Connect with Washington

Policy decisions taking place in Congress have a tremendous impact on Hoosier businesses. That's why Chamber representatives and Indiana business leaders embarked yesterday on the 2013 D.C. Fly-in.

Participants have the opportunity to speak with their representative and senators during a panel discussion, moderated by Gerry Dick of Inside INdiana Business, and at a sit-down dinner. Day two features visits to congressional offices to continue the dialogue. The key agenda items that will be discussed are comprehensive tax and regulatory reform, as well as principled, pragmatic immigration reform.

New this year, the Indiana Chamber is partnering with several local chambers to present a unified voice. We're grateful the Chambers from Carmel, Fort Wayne, Terre Haute, Warsaw (Kosciusko County), Southern Indiana (One Southern), Indianapolis and Evansville have joined us.

"It is important to be able to review vital issues with our congressional leaders. It is also a great opportunity to build relationships with members of Congress and their staff," explains Cam Carter, Indiana Chamber vice president of economic development and federal relations.

The Chamber would like to especially thank our D.C. Fly-in sponsors: Build Indiana Council, Duke Energy, Faegre Baker Daniels and Zimmer, Inc.

Reruns That Are Definitely NOT Must-see

A concise but likely spot-on commentary from Chris Frates of National Journal about the work of Congress.

Lawmakers headed home for the July Fourth recess (Friday) after what was likely the most productive stretch of legislating we'll see this year. The Senate passed historic immigration reform, a sweeping farm bill, and water-resources legislation — all with resounding bipartisan majorities.

That cooperation will almost certainly come to a screeching halt when Senate Democrats come back in July and throw down with Republicans over President Obama's stalled nominees.

Sayonara bipartisanship.

Meanwhile in the House, Republicans leaders still can't seem to do much of significance. The Republican majority couldn't even get a farm bill passed, let alone something as historic as immigration reform. Despite months of work in the Senate, House Republicans won't even have their first meeting on immigration until after the break.

And neither chamber is doing much of anything to prepare for this fall's looming fight over how to increase the country's credit limit.

In other words, Congress is about to begin airing summer reruns. Maybe the fall lineup will bring some fresh programming.

When the Going Gets Tough … Take a Vacation

Congressional Quarterly, in its daily update last Friday, described what is next for Congress:

The House "is done for the next 10 days," having voted to take the next week off (Democrats, to their credit, wanted to cancel the recess for more budget talks). The Senate's "President's Day recess has begun; the next session where something might get done (emphasis added) starts at 2 on Monday, Feb. 25."

Ron Fournier is a veteran political journalist, having worked at The Associated Press in two stints (among other stops) before joining the National Journal. I've always respected his writing.

A short but powerful take from Fournier on the current state of Congress:

The amount of unfinished business is stunning: A vacancy atop the Pentagon’s chain of command, billions of dollars of haphazard budget cuts due soon to take effect, immigration reform, gun control, climate change, and millions of jobless Americans. So what’s a Congress to do?

Take a vacation.

In Washington, it is politely called a 10-day “recess.” Lawmakers explain how hard they work at town halls and fundraisers back home. But their job is to legislate and to fix problems.

If you took 10 days off with critical work undone and deadlines threatening, how would your boss respond?

 .
 

Chamber and Rep. Young Release Business Tax Survey Results

As President Obama calls for a “balanced approach” and shared burden to end the current federal fiscal crisis, the Indiana business community is showing willingness to make such a sacrifice, provided there is real reduction in federal spending and substantive reform to simplify the tax code. That’s the overriding message from a recent survey conducted by the Indiana Chamber of Commerce in partnership with Congressman Todd Young (R-9th District), who is a new appointee to the U.S. House Ways and Means Committee.

The electronic survey of Indiana Chamber members and the business community at-large focused on the fiscal cliff, federal tax code, tax reductions, corporate tax system and the U.S. tax structure in general. A total of 188 respondents took part, representing both larger companies (27%) and small businesses (73%).

“Raising tax rates isn’t the right way to go to raise revenue. It may be good politics, but it is lousy economics. Reforming and simplifying the tax code, which will stimulate job creation and economic growth, is the preferred and needed path for Indiana businesses and their employees,” explains Indiana Chamber President Kevin Brinegar.

“We also need to reject Washington’s usual accounting gimmicks and cut actual spending, not just cut the rate of spending growth. We must reform federal entitlement programs – Medicare, Medicaid and Social Security – to address fiscal and demographic realities.”

Survey respondents clearly determined the fiscal crisis was more a spending problem (67%) than a revenue one (less than 1%). Additionally, 33% felt both spending and revenue were the culprits.

When asked to rate the most important principles which should guide tax reform, the top four answers respondents selected were: 1) emphasize shared sacrifice; 2) emphasize global competitiveness; 3) refrain from picking winners and losers; and 4) simplify the tax code.

Many businesses and individuals find the complexity of the tax code too much of a burden, resulting in 60% of individual taxpayers and 71% of unincorporated businesses hiring out their tax compliance. In the survey, nearly 30% said tax code simplification was even more important than rate reduction; 62% labeled simplification important, but not as important as rate reduction. To that end, some 71% of businesses surveyed indicated a willingness to give up some of their favorable tax credits and/or deductions for lower individual and corporate tax rates.

Brinegar and Young both acknowledge that, despite what needs to happen, a short-term measure – extension of credits, etc. for six months, for example – to buy more time for substantive and comprehensive reform is likely the most positive outcome that can be expected this month. 

In addition to the survey of businesses, Young’s office also electronically surveyed constituents in his district with similar questions. The results from the more than 2,700 individual respondents largely echoed the findings on the business survey.

“It’s clear to me there is a real appetite right now for comprehensive tax reform,” said Young.  “As negotiations continue on the so-called ‘fiscal cliff’, tax reform paired with spending cuts isn’t just my desired approach, it’s also the approach favored by individual Hoosiers and Indiana businesses. As a new member of the Ways and Means Committee, I look forward to representing those wishes as we move forward on this front.”

A plurality of individuals said the fiscal crisis was more of a spending problem (46%) than a revenue problem (11%), while 40% said both are to blame. 

Additionally, 54% (compared to 26% opposed) of individuals support a model of tax reform similar to the House Republican proposal of eliminating deductions in order to simplify the tax code. But regardless of what approach is taken, 85.5% of individuals said they support extending most or all of the current tax rates while Congress works through the issue.

Congressman Young is using the information gathered in the survey and via constituent research to help inform his approach to these fiscal issues. Likewise, the Indiana Chamber’s lobbying efforts on federal tax reform are relying heavily on the survey findings.

Charts detailing the results of the tax surveys of business owners and Congressman Young’s individual constituents can be found online at www.indianachamber.com/federal.

P2 Brings a Little Less Conversation, a Lot More Action

I get it – we’re less than two months away from an election. Stop yelling at me.

Because it seems no matter where I turn, people are yelling at me: on television, on the radio, through Facebook posts, in person, with newspaper articles, through inflammatory e-mails. They’re telling me why I should vote one way or another in November. And they’re telling me that their candidate is better because the other one is the devil and voting for him or her will literally kill me someday.

Enough. No more misinformation; no more spin; no more lies or half-truths or deceptions.

I am a decently informed voter. I don’t claim to know all the answers, or even have fully-formed opinions on all of the issues (because there are so many). But I know what matters to me at the end of the day. I’m sure you know what issues concern you as well. 

The question then becomes: How do we get everybody else on board this well-informed voting wagon? Call me naïve, but we need to get rid of the external nonsense and take a serious look at all of the candidates up for office – from local offices and state legislature all the way to Congress and the president.

I want to see voting records (because, the proof is in the pudding, folks). I want to know where politicians stand on substantial issues. And I’d like to know these things without partisan rhetoric. Meaning I can’t listen to the politicians themselves – or even the media at times – because it doesn’t seem like they want to give me true information.

Who do I turn to then? My family; a few friends. What about my employer? Maybe the boss doesn’t come right to mind as a source of political information. But, don’t you want to know if a legislator in your district previously passed a law that would have affected your paychecks? Bet you that your employer knows exactly who those legislators are already.

Even if we are just hearing from employers that it is our civic duty to be informed citizens and voters; that is the way we can right this ship.

With the Indiana Prosperity Project (Indiana P2), employers have access to great resources and tools to spread the message – and the information is presented in a non-partisan way. Voting records, legislator profiles, contact information, links to government information (how to register to vote online, how a bill becomes a law, the Indiana election process and much more) are available for free. The Prosperity Project staff will even build employers a customized web site to go along with their brand.

A newly-redesigned and user-friendly Prosperity Project web site is available for employers to explore and share with employees at www.indianaprosperity.org.

Employers – check it out and start using it. Employees – take heed and trust your employer.

And for goodness’ sake – everybody else stop yelling at me.
 

Good Journalism; Broken Congress

I  love reading The New York Times headline stories. I continue to be shocked by the fact that Congress is so dysfunctional. The two came together late last week.

Here’s the first sentence of a Times story from early in the week. "Members of Congress feel mighty proud of themselves this week, mainly because they appear to be avoiding a government shutdown — an outcome taken as an actual accomplishment in this turbulent and acrimonious legislature." (Which is exactly what happened early Saturday with a stopgap budget measure to fund day-to-day government through late March 2013).

Other gems from this Times article:

  • The 112th Congress is set to enter the Congressional record books as the least productive body in a generation, passing a mere 173 public laws as of last month. That was well below the 906 enacted from January 1947 through December 1948 by the body President Harry S. Truman referred to as the “do-nothing” Congress, and far fewer than even a single session of many prior Congresses.
  • Appropriations bills, once the central function of the legislative branch, have been ditched in favor of short-term spending measures that do little more than keep the lights on.
  • After the election, when the makeup of the White House and the next Congress are known, there will be a lame-duck session during which myriad tax issues will be tackled, or, somehow punted into the next year.

Saxby Chambliss, a Republican senator from Georgia, sums up the situation. "There has been way too much politics injected into the work that is going on in the Senate. We’ve been spinning our wheels all year."

And that, while true, is simply unbelievable.