What’s Passed, What’s Pending
Whether you think that Congress should spend more time at home listening to their constituents or you were appalled that they left Washington Aug. 1 for five weeks with important work still to be done, the annual August Recess is now history. Here’s a brief recap of what’s been passed and what’s pending that impacts the forging industry.
Workforce Innovation and Opportunity Act
Let us start with the good news. Congress was able to pass, with broad bipartisan support, an FIA-endorsed bill that will aid in addressing the manufacturing skills gap. The bipartisan bill, known as the Workforce Innovation and Opportunity Act (HR 803), updates the Workforce Investment Act of 1998 and covers dozens of job training programs. President Obama signed the bill into law on July 22. The bill eliminates outdated programs; provides accountability and data-reporting requirements; requires implementation of industry or sector partnerships and career pathway strategies; increases industry participation on state boards; and increases the ability to use on-the-job training and incumbent worker training.
Export-Import Bank Reauthorization
The Export-Import Bank’s authority to issue new financing expires Sept. 30, although it could still service existing agreements without reauthorization. Proponents of the Bank say that its loans support U.S. manufacturing jobs and help keep U.S. manufacturers globally competitive. In addition, the Bank’s financing is often for large-scale projects that the private sector would not finance and, in some cases, supports small U.S. businesses that could not get private-sector financing. Supporters of the Bank include major purchasers of forgings from FIA members. FIA has stated its support of the Bank’s reauthorization by signing on to support letters with the National Association of Manufacturers.
Opponents say that the Bank only benefits large companies and financing should be handled in the private sector. Opposing the Bank’s reauthorization has become a Tea Party talking point, but moderate GOP members believe it should be reauthorized and perhaps reformed. Most Democrats support reauthorization.
The government’s fiscal year ends Sept. 30, and the government cannot function without new money from Congress. This year, the House has passed seven FY2015 appropriations bills funding various agencies and programs, and the Senate has passed none. That’s because Senate Majority Leader Harry Reid (D-NV) is very reluctant to make his vulnerable Senators up for re-election in November take any “uncomfortable” votes on amendments that would certainly be offered to appropriations bills. For example, Republicans would fight hard to include language in the Environmental Protection Agency (EPA) funding bill that would prohibit funds from being used to implement the EPA’s greenhouse-gas emissions rules for new and existing power plants. They would also likely insist on language forcing a quick decision on the Keystone Pipeline.
A Continuing Resolution will likely pass before Sept. 30, funding the government at least through early December (when a lame-duck Congress would extend it again) or through early 2015 to give a new Congress time to finish an Omnibus Appropriations bill.
Speaking of the EPA…
FIA strongly opposes proposed rules by the EPA to limit greenhouse-gas emissions from new and existing power plants because they will lead to increased energy costs for all consumers, especially manufacturers in energy-intensive sectors such as forging. The proposed rules allow states to regulate forging operations and other heavy manufacturers as a means to achieve the state’s target reductions. The EPA has held listening sessions on the proposals in a number of cities, including Pittsburgh, Atlanta, Denver and Washington, D.C. Several members of Congress testified against the regulations.
Expired Tax Provisions
Tax provisions helpful to manufacturers – such as the R&D tax credit, the domestic manufacturing tax credit, the Section 179 deduction and Bonus Depreciation – all expired on Dec. 31, 2013. The House has passed stand-alone bills permanently extending all of these except the domestic manufacturing tax credit. The Senate Finance Committee has marked up a package that would extend all of these provisions for two more years, but it has not yet seen Senate floor action.
We expect that some version of an extension of these key manufacturing deductions will be passed in the lame-duck session of Congress held after Nov. 4. The provisions would be retroactive to Jan. 1, 2014. However, the fate of comprehensive tax reform will depend largely on who controls the Senate in 2015 and whether the President chooses to exert any leadership over the process.
Laurin M. Baker, Founder & President • The Laurin Baker Group, LLC. Washington, D.C. • FIA Washington Representatives
202-393-8525 • email@example.com