For several months now legislators in Washington, D.C., have been toying with the idea of moving ahead with tax reform by year-end. This has become less likely as each day passes and no new tax language is brought up in either chamber. While it was the ultimate hope of former Sen. Max Baucus (D-MT) of the Senate Finance Committee and Chairman Dave Camp (R-MI) of the Ways and Means Committee to have a solidified tax reform package complete and ready to debate sometime during the second session of the 113th Congress, this has become the least likely of scenarios.
While Camp only has the gavel of the Ways and Means Committee until year-end, he has yet to give up hope about delivering a tax plan to the incoming chairman before his term is up. Sen. Ron Wyden (D-OR), who took over the Senate Finance Committee from Baucus, has a great interest in comprehensive tax reform but still does not anticipate anything happening in the short term.
Tax extenders, or temporary fixes to tax deductions, are the obvious choice for those on the Hill to move ahead with necessary tax fixes, as brief as they may be. Some 60 tax provisions that have expired or will expire this year were up for grabs beginning in 2014. As of late May, the Senate advanced a bill that would renew $85 billion in individual and business tax credits for a period of two years. This package, which includes more than 50 of the proposed tax extenders, now waits in the Senate for final passage. Meanwhile, those in the House are pressing lawmakers in the Senate for a clean passage of the tax extender plan. They believe that the plan will pass quickly through the House and be a tremendous accomplishment for both parties.
At press time, legislators remained trapped in a stalemate over necessary amendments; an even more looming deadline is the start of the lame duck session that begins November 5. This gives Congress less than nine collective session weeks to finalize and pass a plan.
Congressional To-Do List
With four months left until the 2014 midterm elections, Congress has quite the extensive to-do list before the lame duck period begins. Of the many agenda items, some that stand out include government funding, tax extenders, minimum wage, voting rights and bipartisan patent reform.
1. Government Funding
It is hard to believe that is has been nine months since the 16-day federal government shutdown. With this event still fresh on many legislators’ minds, government funding for fiscal year 2015 has become a top priority. In late spring the House launched many of its appropriations efforts, including those that would provide funding for the military, Congress and the Department of Veterans Affairs, among others. The groundwork laid in December 2013 by a special bipartisan committee on budgets should help ease the passage process. Congress has until October 1 to pass a comprehensive budget.
2. Minimum Wage
While the argument for increasing the federal minimum wage has come up through other channels of legislation—including a recent housing and urban development bill—a minimum wage hike is unlikely to gain the support it needs for passage this year.
3. The President’s Budget
President Obama has released his proposed FY 2015 budget. Among its 244 pages are specific tax inclusions that could raise the ire of some legislators, including a proposed a tax deduction cap of 28 percent. Currently, tax deductions can be made at the same percentage rate as an individual’s income tax bracket; for example, if they are in the 35-percent tax bracket, then 35 percent is deductable. If it passes, this restriction would place a solid 28-percent cap on all deductions.
The president’s tax plan also includes the Buffet Rule, which would create a minimum tax rate of 30 percent for anyone with a gross adjusted income of $1 million or more. It puts an end to long-term capital gains for individuals reporting this level of income.
4. Patent Reform
One item on the agenda that both sides can agree on is the passage of a patent reform bill that would decrease the number of lawsuits claiming patent infringement. Chairman Patrick Leahy (D-VT) of the Senate Judiciary Committee has announced that he will submit language for patent reform to the committee sometime this week. A similar bill passed the House last year with firm bipartisan support.
5. DATA Reporting
With the crackdown on federal government spending still in full swing, Congress has passed the Data Accountability and Transparency Act, or DATA. It requires federal government agencies to report all spending to the government and then list spending on a public facing website. It remains somewhat unclear when the website will be available for public review, but it is anticipated to be early next year.
What This Act Means To The Industry
Chairman Darrell Issa (R-CA) of the House Oversight Committee has been at the forefront of this fight since it began. Issa’s goal with the DATA Act was to create more accountability for government agencies and eliminate wasteful and abusive spending. Promotional products industry members have an obligation to educate Congress about the industry and how it should not be unnecessarily targeted as wasteful and abusive. It is inevitable that the products from this industry will end up somewhere on the DATA Act’s site since every government agency uses promotional products for a variety of messages. The industry must continue to show those in the government as well as the general public that our products are cost effective and useful.
To help educate Congress about this industry and to eliminate the possibility of promotional products being identified as wasteful spending, PPAI encourages members to take action. Find a link at Protect The Promotional Products Industry to send a message to your member of Congress. The DATA Act is an important step in the elimination of government waste. However, we must ensure that its effects do not unintentionally misguide the government and general public alike about the importance of promotional products and the industry.
Midterm Elections Are Not For The Young
For one reason or another, this year’s midterm elections will see the lowest number of young voters since before the 2008 elections. It is estimated that only 23 percent of youths ages 18 to 29 will turn out to vote in November. During the 2012 elections more than 40 percent of this demographic came out to vote. This begs the question, why does participating in this election seem to be less important to the younger generation?
Midterm elections understandably do not have the same pomp and circumstance as the presidential election. Efforts to increase voter turnout during a midterm election are also typically lower than during a presidential election. This low number is reflected across all voter demographics, but it is worth noting that the upcoming midterm election can anticipate a lower turnout caused by the voters’ overall disapproval of Congress, which hovers around 78 percent.
Tweet The Hill
In April, 17 members of Congress were honored for their use of social media by the Congressional Management Foundation. PPAI LAW now has a user-friendly way for industry leaders to tweet their elected officials about the promotional products industry. Find an industry-centric, auto-populated tweet at this site: www.ppai.law.org and click on Legislative Action Watch.
Seth Barnett is PPAI’s government relations manager. Reach him at SethB@ppai.org or 972-258-3068. This information was previously published in PPAI’s Government Relations Today e-newsletter.