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Will There Be Immigration Reform in 2014?
It’s a challenge to provide a timely update on federal immigration reform, as there are new developments on a daily basis. But one thing that is certain…there is considerable public pressure on the Administration and Congress to stop talking about it and get something done. In fact, a recent Gallup poll found that Americans now assign about equal importance to the two major aspects of immigration reform being debated in Washington. Forty-four percent say it is extremely important for the U.S. to develop a plan to deal with the large number of immigrants already living in the United States, and 43% say it's extremely important to halt the flow of illegal immigrants into the country by securing the borders. This is a shift from the past, when Americans were consistently more likely to rate border security as extremely important.
Here are some of the latest developments:
- The Senate passed its version of a comprehensive immigration reform bill last year, but the House leadership responded by saying they would deal with the issue in multiple bills rather than an omnibus reform package. They have said their approach will not be a big “1,000-page bill’, but rather it will take a sequencing approach. Both Democrats and Republicans in the House have been working on separate versions of reform bills for several months, and in late January, the House GOP unveiled its immigration reform principles.
- Some business groups have said there is much to like in the House Republican’s list, including this from Tom Donohue, president & CEO of the U.S. Chamber, “This is a very encouraging sign that House lawmakers are serious about fixing our broken immigration system.” (More on the U.S. Chamber and immigration reform below.)
- Mary Ann Miller, CEO of the Tempe, AZ Chamber wrote a guest commentary in her local newspaper “Republican Standards for Immigration Reform Would Benefit Business” praising the Republican standards.
- But national Tea Party Groups continue to oppose proposed immigration reforms calling on their Congressional members to address other, more pressing issues such as the debt ceiling, the deficit and tax reform first.
- Despite House Speaker John Boehner’s comments in February that the House Republicans didn’t trust Obama enough on border security issues to pass immigration reform, the Speaker now seems to be more committed to passing something. Following a meeting with President Obama earlier this month, he said, “We agree immigration reform is a priority. He wants to get it done. I want to get it done. But he’s going to have to help us in this process.” He declined to say what Obama could do to win the GOP’s trust on the issue.
- The sticking point for House Republicans is amnesty. Boehner told the Cincinnati Enquirer that he believes any reform package needs to include a pathway to citizenship for illegals but that doesn’t mean amnesty. Boehner added, “Some want to call it amnesty, but I reject that premise…if you come in and plead guilty and pay a fine, that’s not amnesty.”
However, Republican Senators Ted Cruz (TX) and Jeff Sessions (AL) contend that previous immigration ideas pushed by the House leadership that allow for illegals to obtain U.S. citizenship are indeed amnesty plans. Mr. Sessions distributed a “Myth vs. Fact” document to counter what he called GOP leadership spin on immigration reform. The document claims “any plan that provides special privileges to those who are in the country today but does not extend the same privileges to those coming into the country illegally tomorrow is amnesty.”
- Meanwhile, House Democrats have said they plan to launch an official petition drive to force the Republican majority to vote on the Democratic version of an immigration bill…as soon as they get finished forcing a vote on a minimum-wage increase. The maneuver known as a ‘discharge petition’ is a way for the minority party in the House on its priorities. If they are able to get signatures from the majority of the members of Congress, the House leadership has to bring up the legislation.
The Democratic immigration reform bill, which is similar to the bill passed by the Senate, has 192 Democratic sponsors, but just three Republican sponsors, making it questionable whether they will be able to reach the 218 needed to succeed in their petition drive. Republicans dismissed the discharge effort, saying House Democrats won’t be able to get enough support to force the issue. “This scheme has zero chance of success — a clear majority in the House understands that the massive Senate-passed bill is deeply flawed,” said Michael Steel, spokesman for Boehner.
- While Congress continues to bicker, President Obama tweeted that he is the ‘champion in chief for comprehensive immigration reform.’ But it would seem he comes under fire on his executive immigration policies from both sides.
- Activists point to the administration’s record-setting level of deportations. The President has been under fire for years over the Homeland Security Department’s informal quota of trying to deport about 400,000 immigrants every year. Republican opponents accuse him of inflating the numbers, while immigration rights advocates say the number is too high.
- On the other side of the coin, a recent audit conducted by the Homeland Security Department’s inspector general, found that U.S. Immigration and Customs Enforcement regularly cuts a break for businesses that violate immigration hiring 40 percent from what they should be and that the government should be doing more to go after unscrupulous employers.
- Finally, the U.S. Chamber has said it will use all of its influence to persuade Congress to pass immigration reform in 2014. “Rewriting the immigration law won’t be any easier in 2016 or 2018, so the GOP should take the plunge now. There will never be a perfect time for reform….The fact remains it is in our national interest to get it done,” said Donohue in his annual speech on the state of American business. Click here to see a transcript of his comments.
Federal Transportation Budget Proposes Reforms, Revenue and Innovation
The Obama administration has released the details of its four-year, $302 billion transportation plan as part of its 2015 Budget Request to Congress. The President’s plan is important because it goes beyond setting spending levels for fiscal year 2015, which is the predicted date of the Highway Trust Fund’s insolvency. Simply extending the current MAP-21 Plan would require requires an infusion of $19 billion next year or $100 billion over 6 years. In his proposal, which is an $87 billion increase over current spending levels, funding for transportation projects would come from $150 billion in transition revenue generated from business tax reforms and current revenues from the federal gas tax.
From the Department of Transportation press release:
In addition to closing the $63 billion hole in the Highway Trust Fund and reversing our infrastructure deficit, the President’s proposal will also:
- Improve transportation efficiency with a new Interagency Permitting Improvement Center to help us continue streamlining permitting processes so we can deliver projects faster and work towards the President’s goal of cutting timelines in half;
- Boost the safe transportation of energy products with a comprehensive approach --from increased inspections and investigations to new research and cross-agency projects--so the United States can continue on track toward becoming the world’s top oil producer by next year;
- Increase freight capacity to allow us to move 14 billion additional tons of freight in this country by 2050;
- Build ladders of opportunity through infrastructure investment that is not just about pouring cement and lifting steel, but about helping people get home faster and connecting them with jobs, schools, and a better quality of life.
As for what’s likely to happen next, because the bipartisan budget passed by Congress in December also set top-line budget amounts for the year (FY15) to come, it’s uncertain if the House or Senate will introduce or pass their own budget resolutions this year. Still, whether the ultimate legislative vehicle is the reauthorization of MAP-21 or appropriations bills later this year, it’s essential that Congress and the President come to agreement on a way to continue supporting communities’ efforts to maintain their transportation infrastructure and prepare for the future.
Here are couple of links to read more about the Federal Transportation Plan:
- Transportation For America’s Analysis of the President’s Proposed Budget
- The Department of Transportation’s detailed version of the 2015 FY Transportation Budget
Business Outlook Reports Offer Some Optimism, but Employers Still Fearful of Uncertainty
The recent release of several economic outlook reports offers a mixed bag of attitudes from employers. While many are optimistic the economy will pick-up in 2014, most are still expressing concerns about the ‘unknowns’ including the implementation of the Affordable Care Act, the regulatory environment, immigration reform and the new call for an increase in the minimum wage. Here’s a round-up of some of the results.
- McDonald Hopkins, a business advisory and advocacy law firm, recently released its 2014 Business Outlook Survey. The headline is that ‘2014 is the great unknown.’ There is considerable caution and uncertainty as respondents expressed numerous concerns about the rising cost and complexity of healthcare and fear of additional burdensome regulations. Some highlights include:
- 67% believe the Affordable Care Act will have a negative impact on their company’s bottom line; and 46% said increasing health care costs are the greatest challenge facing their company
- They have no confidence in Congress to help improve business conditions, with just 33% saying they are cautiously optimistic
- 41% say they are likely to ‘slightly’ increase their number of employees and the same percentage – 41% say their number of employees will stay about the same
- 51% expect to make a ‘moderate’ investment in capital; 55% will dedicate more resources to domestic growth
- The National Federation of Independent Business’ latest survey indicates that only 12% of small business owners plan to add jobs in the next three months. However, NFIB’s Chief Economist Bill Dunkelburg calls the number ‘solid’ and says it is the highest job creation since September 2007. “Small businesses are telling us they would hire more workers if they could find qualified applicants,” added Dunkelburg. “Nearly half of NFIB members surveyed said they tried to hire workers, but reported few or no qualified applicants for open positions.”
- The recent Federal Reserve report indicates banks are easing lending restrictions making it easier for businesses to access new capital. According to the survey, ‘Banks eased their lending policies for commercial and industrial loans to firms of all sizes and experienced stronger demand for such loans over the past three months.” The banks cited increased competition, a more favorable economic outlook and a greater tolerance for risk for the new standards.
- Finally, economists polled in USA TODAY’s quarterly survey predict that the U.S. economy is headed for stronger growth in 2014. They also believe we will see steady improvement in the unemployment rate. Many of the 40 economists surveyed Feb 5-6 cut their first-quarter forecasts due to the January weather and an expected pull-back in business stockpiling after firms aggressively replenished shelves in the second half of 2013.
- “While growth late last year was driven largely by the stockpiling, this year's expansion will be fueled by higher consumer and business spending,” says Dean Maki, chief U.S. economist of Barclays Capital.
- "I think we will regain momentum and not fall on our face," says Diane Swonk, chief economist of Mesirow Financial, drawing a contrast with previous ups and downs in the five-year-old recovery.
What does the State of the Union Address Mean for Business?
President Obama laid out his agenda in his State of the Union address declaring 2014 would be a ‘year of action.’ Despite his promise to do whatever he needs to do to move the country forward whether Congress is willing to or not, it is unclear exactly what the administration can, or will, implement without Congressional approval. So what should businesses anticipate from the White House in the coming year?
- He assigned Joe Biden the task of a top-to-bottom review of the government’s job-training programs.
- He asked businesses to take the lead in hiring the long-term unemployed and creating more job apprenticeship programs.
- He introduced a plan to start manufacturing innovation institutes and pledged to assist manufacturers with finding skilled employees.
- He is planning a summit on family-friendly workplaces.
- He flexed his muscles on minimum wage by indicating he will issue an executive order requiring federal contractors to pay at least $10.10 per hour and strongly encouraged the Congress and/or state and local governments to raise the minimum wage across the board.
- He offered two proposals to address what experts have called a “retirement-savings crisis” - automatic IRA’s where workers opt-out rather than opt-in; and directing the Treasury to create a new government-backed retirement plan for small-dollar savers to be offered through employers.
- He promised to ‘streamline the permitting process’ for key infrastructure projects.
- Congress – with some help from the Supreme Court – has already given the President the authority he needs to roll out aggressive regulations on coal-fired power plants. He has directed the EPA to present draft rules by June 1.
- He once again asked Congress to pass tax reform, however his proposal falls short of details and fails to address what most businesses are looking for. He says his proposal would simplify the corporate tax code and use revenue generated from the transition to a new tax system to finance infrastructure projects. He also says he would use money generated by tax reform to pay for deficit reduction. But with a lack of specificity on what ‘reform’ actually means it’s hard to understand how the new revenue would be generated.
- He once again called on Congress to pass immigration reform, although he spent very little time talking about the issue, presumably to give the House the room it needs to maneuver. However, House Speaker John Boehner has indicated the Republicans in the House are hesitant to pass any type of reforms because they ‘do not trust the administration’ to enforce border security and law enforcement.
The Push for Tax Reform Continues in Statehouses in 2014
When it comes to the scope and sheer number of tax reforms proposed and enacted in the states, 2013 was a year like none before. However, as states continue to tinker with their tax systems, most have tended to overlook the need for more fundamental tax reform to reflect structural economic changes. Tax reform, according to University of Tennessee professor William Fox, "would seem to achieve more goals than just revenue chasing. Other goals might include better revenue elasticity, improved fairness, reduced efficiency costs, and easier administration and compliance."
2014 is shaping up to be another busy year. At least four governors will push to revamp their states’ tax systems in 2014, and several more are proposing significant changes or cuts. The Institute on Taxation and Economic Policy has created a “Quick Guide to Key Trends and States to Watch in 2014 State Tax Policy Debates.”
Few issues are as important to the business community as taxes, and as a result, staying informed about tax policy changes and their implications is a critical job for Chambers of Commerce. To help you keep up, ACCE has updated its Chamberpedia page on Taxes with several new links and resources. Click here to check it out.
ACCE will continue to closely monitor state tax policy proposals as they develop and keep you up-to-date with the latest information.
If you have any questions about Tax Reform, policy positions on Tax Reform or additional resources to add to the Chamberpedia page, please contact Carmen Hickerson at CHickerson@acce.org.
Minimum Wage Debate Taking Center Stage
President Obama and Congress are talking about it. More than 12 states are considering it and several more have already done it. And workers around the country are rallying about it. What is ‘it’? Raising the minimum wage.
The White House got the ball rolling on the current discussion by including it in the State of the Union speech, with President Obama declaring that “no one who works full time should have to live in poverty.” On Black Friday, protests were held at several Walmart stores to draw attention to the issue, and in December, fast-food workers in hundreds of U.S. cities staged a day of rallies to demand higher wages.
The current rate of $7.25 per hour was last increased in 2009. While Washington remains gridlocked on the issue, several states, as well as some localities, saw increases approved last year go into effect on January 1. Some were modest increases, but New Jersey voters approved a minimum wage increase of $1.00 to $8.25 and California lawmakers raised that state’s to the highest in the nation at $10. Click here for an overview of the minimum wage changes taking place in 2014. This year, 12 states and the District of Columbia will be considering minimum wage hikes through legislation or ballot initiatives.
Proponents of the increase argue that hiking the minimum wage is not only necessary to improve the lives of millions of workers and their families, but that it also improves the economy by increasing purchasing power and creating more stability for the middle class. However, opponents believe that an increase disproportionately affects small businesses and that such a move would be counterproductive by decreasing opportunity for those young and lower-skilled looking to enter the workforce. Economists cannot agree on the effects of a minimum wage increase. Some studies report that higher minimum wages lead to higher unemployment because employers cut labor costs by offering fewer hours and fewer new jobs. However, other reports indicate little to no negative effects.
One thing for certain is that the debate is not going away any time soon. As Chambers of Commerce it’s an issue we can’t afford to ignore as it affects nearly every business sector in some way. At ACCE, we’d love to know what you think? Have you started talking about the issue internally or with your board and policy committees? Do you have an existing policy position on minimum/living wage? Email us with your chamber’s take on the issue at Chickerson@acce.org.
Pew Releases New Report on the Fiscal Health of States
“More than four years after the Great Recession officially ended in June 2009, states’ financial conditions are improving, but most have yet to get back to where they were on some key measures of fiscal health.” That’s the headline from a report just completed by the Pew Charitable Trust. Fiscal 50: State Trends and Analysis examined data from all 50 states and its analysis determined that state governments still face additional difficulties that could set them back even as the economy picks up.
The fiscal health of state governments is important to the interests of chambers of commerce for many reasons. As states continue to struggle to fund critical services such as health care for the needy, basic education, transportation and public safety, they are not able to invest in more long-term strategies, and there is additional pressure to find new sources of revenue.
Further, state finances matter because of their impact on the U.S. economy. State spending accounts for 4 percent of the nation’s economic output, and states provide about one-third of local governments’ budgets.
While the report finds that some measures are moving in the right direction, unavoidable pressures loom and could slow further recovery. One hurdle is the burden of unfunded pension and retiree health care costs for public workers. Another challenge is the prospect of more federal budget cuts—coming after a period in which federal dollars made up a bigger share of overall state revenue than at any time in at least 50 years.
Pew’s Fiscal 50 identifies five core areas that contribute to states’ fiscal health: Revenue, Spending, Economy and People, Long-term Costs, and Fiscal Policy. Within this framework, Pew highlights trends, makes 50-state comparisons, and provides unique insights into significant fiscal, economic, and demographic indicators that influence state finances.
For most indicators, Fiscal 50 allows users to compare their state to others and to a national benchmark, providing insights and perhaps raising questions in state capitals about why states lead or lag behind their peers. This resource will be updated when new data are available, and additional indicators and further analysis will be added.
Click here to access the full interactive report. For questions or more information, contact Sarah Leiseca, email@example.com, 202.540.6369.
Chamber Forced To Drop Statewide Health Insurance Offering
Last week, Insurance Journal reported that the Greater Oklahoma City Chamber “will no longer provide a health insurance offering that 1,400 companies in the state have been using.”
According to the news item, the chamber said that “its group plan does not meet the requirements of the federal health overhaul law.”\
In an article in The Oklahoman, chamber President Roy Williams said that having to end the program is “very, very unsettling.”
“It was a good program, otherwise 1,400 companies wouldn’t be on it,” Williams remarked.
Read more here.
Erksine Bowles and Fix the Debt
A huge thank you to the State Chamber Policy Center for allowing ACCE's Government Relations Division to participate on Tuesday's call with Erskine Bowles. If you were unable to join the conversation, please review the links below for more information.
From the State Policy Center:
The Policy Center would like to thank Erskine Bowles and the Fix the Debt campaign for speaking to our members on Tuesday regarding the long-term federal debt and how to get our fiscal outlook under control. In April, Erskine Bowles and Alan Simpson released “A Bipartisan Path Forward to Securing America's Future” (download the summary or full report). They describe their report as “not our ideal plan, it is not the perfect plan, and it is certainly not the only plan. It is an effort to show both sides that a deal is possible; a deal where neither side compromises their principles but instead relies on principled compromise. Such a deal would invigorate our economy and demonstrate to the public that Washington can solve problems, and leave a better future for our grandchildren.” For more information see the two-page summary (pdf) of what Fix the Debt is calling for from the upcoming budget conference committee and an op-ed published in the Washington Post.
The Fix the Debt campaign now has chapters in all 50 states.
CICE REPORT: Local Chambers as Change Agents
Chambers for Innovation and Clean Energy has released a first-of-its-kind report, revealing that local chambers of commerce have emerged as unexpected catalysts of clean energy innovation and growth throughout the country.
Local Chambers as Change Agents: Creating Economic Vitality through Clean Energy and Innovation provides the first comprehensive look into local chambers’ roles in attracting investment, improving business competitiveness, and diversifying their local economies around clean energy and energy efficiency.
CICE surveyed hundreds of local chambers nationwide, developing case studies of chambers in Ohio, North Carolina, South Carolina, Illinois, Texas, Utah, Tennessee, Michigan, Massachusetts, and California. Highlights include the Asheville (NC) and Salt Lake (UT) chambers, which collectively saved their manufacturers and shippers more than 10 million gallons of fuel, and the Cleveland Chamber, which saved businesses more than $13.4 million in 2012 through energy efficiency.
The foreword of the report notes:
Today, it’s only natural that these local chambers of commerce are using all of their formidable assets to help businesses and communities meet shared challenges in our energy landscape: a slowly recovering economy, volatile energy prices, global competition in manufacturing and technology development, and aging electric grids. Time and again, clean energy has proven to be a practical and profitable solution for these chambers and their member companies.
As you will see in this pioneering report, local chambers throughout America are becoming unprecedented clean energy and innovation leaders. Some chambers have tackled enormous hurdles, such as leading the charge to modernize Chicago’s outdated electricity grid. Some have focused on increasing energy efficiency on a company-by-company basis, providing consulting to small businesses in places like Cleveland, Ohio, and Bartlett, Tennessee. Still others have sought to attract investment in renewable energy infrastructure and in the manufacture of new clean energy technologies