The Times They are a Changin'
“Come writers and critics, who prophesize with your pen. And keep your eyes wide, the chance won’t come again. And don’t speak too soon, while the wheel’s still in spin. And there’s no tellin’ who that it’s namin’. For the loser now will be later to win. For the times they are a-changin’.”
The 2016 elections will soon be history – in more ways than one.
No matter who wins on Nov. 8, the 2016 Presidential race will break new ground. We’ll either have the first female President or the first President elected by breaking every rule in the political handbook. And depending on how things go for other candidates on the ballot, Republicans will have retained control of both Houses of Congress, lost the Senate and retained the House, or lost both.
There’s not much to be gained from attempting to predict which combination of these scenarios is about to happen, but one thing is certain: Manufacturers in general and forgers in particular will have their work cut out for them no matter the outcome. That’s because both Presidential candidates and a fair number of Congressional candidates appear to have only a cursory understanding of the problems faced by U.S. manufacturers in becoming and remaining competitive in the global economy.
A quick look at the issues that will face the next Administration and Congress will help put this in perspective.
There’s general agreement that the U.S. tax code is overly complex, inefficient and contains higher corporate tax rates than most of our trading partners. However, there is little agreement on what to do about it.
House Republicans, led by Speaker Paul Ryan (R-WI 1) and Ways and Means Chairman Kevin Brady (R-TX 8), have released the outline of a plan that calls for simplifying the code, lowering the corporate rate, allowing for immediate write-off of investments and shifting to a “territorial” system of taxing international income, among other major reforms. Many Democrats, on the other hand, continue to pursue higher tax rates in order to finance government investments in education, infrastructure and social programs.
Regulatory proposals have been coming at a furious pace in this final year of the Obama Administration, as the President attempted to finalize his legacy by putting policies in place on everything from gun control to e-cigarettes and getting them all done before about May 18. That’s because any regulation finalized after that could be blocked by Congress under the Congressional Review Act within 60 legislative days. The President can veto the Congressional action, of course, but if that 60-day period extends beyond the inauguration of the next President and the next President is of a different party, then he or she would likely not veto the Congressional action, and the regulation would die.
As faithful readers of this column know, trade policy is in the forefront of both Presidential candidates’ platforms, with Donald Trump and Hillary Clinton competing to see who can talk the toughest about cracking down on trade deals they both say are hurting American workers. Ironically, President Obama is working hard with Congress to pass the recently negotiated Trans-Pacific Partnership trade agreement before he leaves office! As we’ve noted before, the Forging Industry Association (FIA) is generally supportive of more global trade (with strong enforcement mechanisms) because U.S. forgers and their OEM customers sell internationally.
In any event – whether it’s President Clinton or President Trump and whether Congress is controlled by Republicans, split between Republicans and Democrats or controlled by Democrats – FIA will be hard at work educating policymakers about the forging industry and the policies that help or hinder the ability of U.S. forgers to compete globally.