government affairs blog
While schools around the country are in the midst of spring break, Congress will be taking its version of spring break, leaving the nation’s capital for a two-week recess. No doubt, the press will call this a vacation and the usual accusations that Congress is taking too much time off will be moving through the air waves, newspapers and of course social media. Clearly, Congress does appear to take a lot of time off. The House takes a minimum of one week off every month to spend in their districts. Legislators also leave Washington for a week during major holidays like Presidents’ Day, Memorial Day and July 4th -- and let’s not forget the month-long break in August.
Is it a vacation? Many legislators will spend at least some of the next two weeks on vacations with their families. Others will go on “fact finding” trips that are intended to help them do their job better. Some of these trips often are to war zones like Afghanistan where they can obtain first-hand knowledge of how the war is progressing. You also will find some legislators in the district, meeting with constituents, holding town hall events or meeting with local officials on issues close to home. Many, if not all, legislators, also will focus on their re-election campaign, whether it’s planning the next campaign or raising money. Legislators, especially Congressmen, are under such incredible pressure to raise money that they are almost always in campaign mode.
There is definitely a debate in Washington and around the country as to whether legislators should be spending more or less time in the Capitol attempting to resolve some the nation’s major budget issues rather than back home. However, I think the real debate is not how much time they are spending in Washington, but really how are they spending that time. I’m not going to delve into that debate.
The reality is that legislators are home and, like it or not, this fact does present some opportunities for people employed in the aftermarket to get some “face time” with their elected official. Elected officials are often more accessible and are less hassled when they are home, out of the constant time crunch they face in the Capitol. There is no need for an agenda in these face- to-face meetings, just a chance to let them know that you either live or work in their district and that you cared enough to let them know it. If you are holding a Car Care Event as part of April’s National Car Care Month, invite them to attend. They may not come, but at least they will be aware of it.
Getting face time with your legislator can have a big pay-off should something come up in Congress and you need their vote. Also, legislators can help constituents navigate tricky federal regulatory issues that might arise and that might have a negative impact on your company. It’s not to say that they would get you out of trouble if you don’t pay your taxes, but they can provide assistance and can get the attention of federal agencies when you need it. Another great way to get involved is to attend one of their in-district fundraisers where you will definitely get spend some quality time with your Congressman.
So you can complain about all of the time Congress spends on vacation, or you can use it to your advantage. That is your choice. Oh, and before I forget, please let us know that you have been contacted with your legislator. That information can be invaluable to us if we need to contact your elected official regarding an issue impacting the industry.
Thanks and I hope everyone has a great National Car Care Month!
One of the best-kept secrets in Washington, D.C. is the dire state of funding for the nation’s transportation infrastructure. It is a secret, because it seems that so few people outside of the beltway surrounding the city, I-495, know just how bad the situation has gotten.
While many people are aware that the current funding source, the gas tax, is inadequate to handle the long-term infrastructure improvement needs of the nation, the budget sequester and the general uncertainty for funding any program at the federal level, threaten to make matters worse. And when you can’t fix roads or bridges, or get goods across border checkpoints, or into ports, you can’t do business.
The amount of money the U.S. Department of Transportation (DOT) has to do its job means a great deal to the health of the economy. The movement of goods, services and people is largely dependent upon the funding of transportation programs and infrastructure.
A slash to funding for the Federal Highway Administration (FHWA) means it becomes tougher to complete roadway projects. That in turn extends the congestion that keeps your customers from receiving products and pushes commuters out of their cars and onto alternatives. A cut to the Federal Motor Carrier Safety Administration (FMCSA) could keep the commercial vehicle drivers that transport or deliver your products off of the road.
The problem of no funding for transportation and infrastructure doesn’t stop at the doors of the DOT. It translates into real downstream effects for businesses that could result in the slowing of the automotive aftermarket supply chain.
The transportation funding problem in the United States didn’t always exist. To paraphrase a member of Congress speaking at a recent breakfast that I attended, it used to be that funding for roads and bridges was the easiest part of the federal budget. The Highway Trust Fund (HTF), the pot of money where gas tax revenue is collected, was flush for many years. But the combination of inflation, growing spending and the political inability to raise the gas tax meant that by 2008 the HTF was facing insolvency. An infusion of cash back into the account along with some creative accounting kept the HTF afloat until Congress was finally able to pass the next federal transportation bill, “Moving Ahead for Progress in the 21st Century” (MAP-21) late last year.
Getting MAP-21 passed was a bloody battle of partisan politics and special interest groups who all knew they were fighting to keep the same sized wedge of what was going to be a much smaller pie. Traditionally, transportation bills cover five to seven fiscal years at a time. MAP-21 covers two – FYs 2013 and 2014. Many programs were eliminated, nearly everything was consolidated and great reforms were put into place to force more efficient use of the little funding that was available. While much of that is good progress, cuts to an already strained program only compounded the problem.
With the sequester going into effect on March 1, the DOT was forced to identify another $1.9 billion in reductions. The majority of the funding reductions will come from emergency Hurricane Sandy aid to the northeastern United States, but every DOT agency is expected to take a shave off of the top.
Even more uncertain is the future of transportation funding in the federal budgets for next fiscal year. The Senate has a proposal to fund MAP-21 at its full authorized amount, but with no reserve funds to help if it runs dry. The House of Representatives’ current proposal is very grim, with no funding outside of annual revenues. That could translate to an all-out stop of transportation and infrastructure construction and improvement programs, which could put the brakes on the domestic economy. The budget process has a ways to go until anything is decided, but the final result will be critical to the future of domestic growth.
The absence of a solution to the transportation funding deficit is something that should concern us all in every aspect of life and business. The automotive aftermarket could feel the ramifications of drastic funding cuts throughout the entire supply chain.
I think that if every business weighed the impact of a weak transportation and infrastructure program, it would be clear that the nation’s ability to move goods, services and people depends on the health of our roads, bridges, ports and borders. The need to develop a sound long term funding scheme for the nation’s infrastructure should no longer be an “inside the beltway” issue, but a priority for everyone in our industry.
If you have paid any attention to government affairs over the years you probably got tired of reading about Association Health Plan legislation long ago. These bills would have permitted trade groups to provide health insurance to their members across state lines with the aim of reducing premium costs for small businesses. While great ideas, these bills passed easily out of the House only to become stalled in the Senate.
Fast forward to 2010, and as the small business community was shut out of the negotiations, we watched dejectedly as Congress passed the Patient Protection and Affordable Care Act (ACA), which quickly became known as Obamacare. We had your attention briefly when AAIA and associations from multiple industries spread the word about the onerous 1099 Reporting provision contained in the Act, and with an enormous grassroots response, had it stripped out of the law.
Our concern now is that with the constant press coverage of Obamacare and the implementation dates seemingly far in the future, healthcare fatigue has set in and anecdotal observations lead many of us in the association world to believe that business owners just aren’t paying attention to what’s coming in 2014.
At this point, it’s worth remembering that the Supreme Court essentially validated the ACA and John Boehner, Speaker of the House, famously stated that, “it’s the law of the land”. That does not mean that AAIA is not part of the efforts to repeal sections of the law—quite the contrary in fact—but businesses should not count on the repeal of ACA as the solution to the upcoming implementation of the law.
A minimal understanding of the ACA, and the subsequent regulations, quickly point to employers who have over 50 employees, but less than 200, as particularly vulnerable to a lack of preparedness come January of 2014. Simply put, if you have less than 50 employees you are excluded from almost all of the ACA, and if a company employs over 200 people they are likely to be self-insured and have a dedicated HR department, which means they are going to be watching this issue pretty carefully. Those in the middle will in fact be caught at the center of ACA.
Why should companies be concerned? In the last few months, the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) have finally started to issue the regulations that will implement the ACA, including the proposed rule on Shared Responsibility for Employers Regarding Health Coverage (the employer mandate) and the Essential Health Benefits package (the minimum necessary benefits for a plan to qualify).
These rules were expected to be complicated, and the agencies did not disappoint. For example, the following paragraph is from the IRS’s own Q&A page on the Employers Shared Responsibility, in answer to the question, “How does an employer know whether it employs enough employees to be subject to the provisions?”
To be subject to the Employer Shared Responsibility provisions, an employer must employ at least 50 full-time employees or a combination of full-time and part-time employees that equals at least 50 (for example, 40 full-time employees employed 30 or more hours per week on average plus 20 half-time employees employed 15 hours per week on average are equivalent to 50 full-time employees). Employers will determine each year, based on their current number of employees, whether they will be considered a large employer for the next year. For example, if an employer has at least 50 full-time employees, (including full-time equivalents) for 2013, it will be considered a large employer for 2014.
This doesn’t even delve into the convoluted formulas required to determine if your employee is full-time/part-time, whether your employees’ contribution to premiums triggers a penalty based on the Federal Poverty Rate or the amount of the penalties you could be facing.
The bottom line is that companies, especially those with 50-200 employees, are strongly encouraged to sit down with their accountant and healthcare provider in order to develop a real understanding of the ramifications and compliance requirements associated with the ACA. While AAIA over the next few months will attempt to make resources available for members that will help explain many aspects of the ACA and provide easily accessible links to the regulations, these resources will be no substitute for the Obamacare conversation you need to have with your trusted advisors; hopefully, as soon as possible.
I welcome your call with any questions or comments or e-mail me at email@example.com.
Every year, the aftermarket talks about the need for states to adopt safety inspection programs in order to ensure that all of those maintenance items -- such as brakes, tires, wipers and lights -- are in good working order. Yes, it is good for business, but as many repair shops know, a lot of people are driving around with critical safety-related components that are not in full working order, endangering their lives and those that share the highway with them. However, the value of safety inspection programs is not necessarily shared by the public and, in many states, the industry is fighting to just keep their programs from being eliminated.
Taking a look back on this history of safety inspection might help provide some perspective. In 1966, Congress passed the Highway Safety Act, which included a provision that made vehicle safety inspection a required element of each state’s highway safety program. By 1968, 31 states and the District of Columbia had programs that required car owners to have their vehicle safety systems inspected on a yearly basis.
In 1973, the National Highway Traffic Safety Administration (NHTSA) established vehicle-in-use standards and states risked losing highway funds for not establishing a complying safety inspection program. However, the NHTSA standards were pretty weak and so were many of the state programs. Perceiving that the inspections were both inconvenient and ineffective, the public called on their local elected officials to eliminate them.
In 1976, Congress bowed to public dissatisfaction, eliminating the ability of NHTSA to take away highway money from states that failed to implement a safety inspection program. With the federal pressure off, many states shed their safety inspection programs. Now, according to the American Association of Motor Vehicle Administrators, only 16 states have programs, and four of those states have gone to inspections every two years.
Until recently, safety inspection programs have been pretty difficult to defend. There just was not enough data to demonstrate that they had a measurable safety benefit. However, in 2011, the Department of Transportation for the state of Pennsylvania completed a report that showed very clearly the importance of safety inspection to saving lives on the nation’s highways. The report, which was undertaken by Cambridge Systematics, Inc., concluded that Pennsylvania’s, as well as other vehicle safety inspection programs, are effective ways to reduce fatal crashes and save lives. Specifically the report stated that:
- Nationally, vehicle safety inspection programs appear to be a significant factor in lowering fatal crashes;
- Based on the model results, Pennsylvania can be expected to have between 115 and 169 fewer fatal crashes each year, corresponding to between 127 and 187 fewer fatalities each year than it would have if it did not have a vehicle safety inspection program; and,
- The largest difference in reported vehicle failures at the scene of fatal crashes between states with programs and states without programs is for vehicles of three years of age or more.
Of course, more data is going to be necessary to turn the corner on safety inspection. In the meantime, states like Hawaii, Missouri, Mississippi and North Carolina have had bills introduced that seek to end or reduce the number of vehicles that are inspected. Whether these bills receive any attention or not, it is critical that aftermarket companies in these states contact their legislators in support of keeping their safety inspection programs in place. We simply cannot afford to lose any more programs.
In addition, the industry can take matters into their own hands by producing more voluntary car care events. During these events, car owners can obtain free inspections of some of their safety items, but without the government mandate. These events have proved very popular since it appears that the motoring public may not want to be required to have their car inspected, but they don’t seem to be as opposed to having their vehicle voluntarily inspected for free. Interesting, but certainly not surprising.
More information on hosting a car care event can be found here or by contacting the Car Care Council atwww.carcare.org or 240-333-1088.