With a little luck, we are reaching the end of the 113th Congress. By nearly every measure, this was the most unproductive sessions in U.S. history. In fact, it really is difficult to point to any major accomplishments from this Congress over the past two years. So, if you are a glass half empty type of person, Congress has a lot of major issues that need to be addressed next year. If you are a glass half full individual then the 114th Congress, with Republican majorities in both the House and Senate, will have nowhere to go but up (or at least that is what we hope).
So, in the holiday spirit and being the positive industry lobbyists that we are, let’s take a brief look at some of the issues that Congress could take up next year for the benefit of the U.S. economy and specifically the auto care industry.
Highway Trust Fund: There are not many people in Washington, or even around the Nation, that do not believe that the U.S. needs to come up with a dependable and adequate source of funding for transportation infrastructure. Currently, the highway trust fund is sustained by an 18.5 cent gas tax which has not been increased since 1983. Meanwhile, revenues from this tax have dwindled, due in part to the fact that today’s vehicles are more fuel efficient; while the list of transportation infrastructure needs has skyrocketed. When we can’t adequately move goods from one place to another efficiently, the entire economy suffers, including the auto care industry.
The current Highway Trust Fund authorization runs out in May, and coming up with a long term funding proposal has been stymied by political fear in Congress of raising taxes on motorists. So the question is: how does Congress find a politically acceptable way to come up with a long term solution that provides adequate funds for our transportation infrastructure? The answer probably lies somewhere between finding the political courage and coming up with a creative funding scheme. In any case, the time to act is now before U.S. infrastructure looks more like a third world country than one of the leading nations in the World.
Tax reform: Like the Highway Trust Fund, there is little disagreement that the current U.S. tax code is a mess. The extremely complicated and confusing code makes compliance difficult and expensive. Further, while the market distorting loopholes may be a boon to some, to most others, they are a burden; and oh yes, we have the highest 35 percent corporate top tax rate in the world. However, while reforming our arcane tax code may seem like a no brainer, the devil is in the details. What tax breaks could be canceled? Should reform be revenue neutral or increase revenue? And should reform be proposed for all taxes, or just corporate taxes.
Tax reform is definitely a difficult issue, but it appears that if there is anything that the new Republican majority and the President agree on, it is that reforming the tax code would make sense for the domestic and international economic benefit of U.S. businesses. In addition, there is some discussion that a long term funding source for highway infrastructure could be included in a reform measure, making this a win for everyone (ok, not everyone is going to like what comes out). So let’s see if the White House and Obama can come together to demonstrate that these warring factions can govern.
E-Fairness: How do you justify not charging state sales tax on Internet purchases when brick and mortar businesses must collect sales tax on every purchase? There are some conservatives that say that this is a new tax although it is still unclear to me how this is true since consumers are supposed to pay sales tax whether it is collected by the company or not. While it seems like the fair thing to do, passage of e-fairness legislation is not a slam dunk and we can expect the battle over this legislation to continue in the 114th Congress. However, with the strong support by the retail community, maybe Congress will finally do the right thing and level the playing field for collection of sales taxes.
Reform Chemical Regulation: Most businesses and environmentalists agree that the current system for approval and review of chemicals based on their impact on health and safety is antiquated and needs fixing. Modernization of the Toxic Substances Control Act (TSCA) which authorizes the Environmental Protection Agency (EPA) to oversee use of chemicals in products is a priority for both sides which makes it seem likely that a compromise bill could be worked out. So here is the rub, businesses want the changes to TSCA to preempt the many state laws that are popping up around the country to regulate the use of chemicals and environmentalists and state governments want state laws to continue to be in full effect, whether or not a federal law is passed.
Ok, so I understand the perception that many of these state laws, particularly the one in California are more stringent then what EPA might do, and I also understand that states regulators hate to cede power, but products containing chemicals are sold nationwide and not only in one state. Therefore, attempting to regulate state- by- state makes little sense either economically or from a regulatory point of view. This needs to be a national rule so that companies are able produce and distribute products containing chemicals around the Nation. While that standard needs to protect human health, it also should continue to permit companies to provide consumers with innovative and effective products. So here’s hoping that we can obtain some logic in the upcoming discussions on TSCA reform and that this issue can be worked out so that an effective national program for protecting the health and welfare of U.S. consumers can finally be enacted.
Trade Promotion Authority: There are two major trade agreements currently being negotiated: one in Europe through the Transatlantic Trade and Investment Partnership (TTIP) and one in Asia through the Trans Pacific Partnership (TPP). Both these agreements have the potential to increase export opportunities for U.S. auto care companies.
However, for these negotiations to ultimately result in agreements, Congress needs to provide trade promotion authority (TPA) such that any treaty will receive an up or down vote in the Senate rather than subject to amendment which would prevent any trade related treaty to move forward. TPA is important for our economy and for our industry and the time has come for Congress to act.
So that is some of my hopes for the New Year. While we wait for the 114th Congress to take their seats in January, I hope everyone has a great holiday season!