They say elections have consequences, and this year’s has especially big consequences for the greenhouse and nursery industry. Of course, President Obama won both the Electoral College and popular vote, capturing pretty much all the states that were considered up for grabs. In the U.S. Senate, Democrats had to defend twice as many seats as Republicans, and many of them were in the conservative Midwest and Plains states. But Republicans’ high hopes of gaining control of the upper chamber were dashed. Democrats are expected to have a net gain of two seats, presuming that independent candidate Angus King of Maine caucuses with the majority. Republicans held the House. They lost about seven seats but maintain a comfortable margin of control.
Despite a record $6 billion spent on political advertising, little has changed. Americans seem inclined by instinct toward divided government, and that’s the reality for at least the next few years. Successful legislative proposals will have to be bipartisan to clear Congress and be signed by the President. This is especially true in the Senate, where it still takes 60 votes to overcome procedural hurdles. Accordingly, the outlook is mixed on key issues for the greenhouse and nursery industry.
Over The Fiscal Cliff Or Not?
First up for Congress is the fiscal cliff, the combination of automatic tax increases and spending cuts that will hit with the new year. Negotiations are ongoing. There are three possible outcomes: a full agreement that avoids the cliff and brings meaningful deficit reduction; a short-term deal that may or may not bring deficit reduction; or, going over the fiscal cliff and facing the recession it is forecast to trigger.
Swirling around in the fiscal cliff debate is the prospect of tax reform. Whether in the context of corporate or individual taxes, many are calling for a reduction in rates and an elimination or reduction in exemptions and deductions. Such proposals need close monitoring. In the business context, many deductions, credits and exemptions were designed to benefit small business. So a reduction in top corporate tax rates paired with elimination of credits or exemptions could disproportionately impact small businesses. One close-to-home example: the “cash accounting” rules frequently followed by growing operations could be targeted for elimination.
Obamacare Looms Large
For employers hoping for repeal of Obamacare, the realization is sinking in that the law is likely here to stay. Health and Human Services and other federal agencies are making steady progress on rules and guidance to implement the law. Prudent employers want to plan, but planning is tough until we know how insurance products will be priced.
The prevalence of seasonal employment in our industry is another challenging variable. Many experienced and vital horticultural workers are foreign-born and falsely documented. Presumably they will count toward an employer’s determination of total employees relating to the employer mandate to provide coverage or pay a penalty. But they will not be able to obtain insurance in the exchanges, and the mandated coverage could create a paper trail back to their employer without the privacy protections that exist with respect to Social Security information, for instance. In our industry, immigration reform is a necessary precursor for workable health care reform.
The Impact Of Immigration Issues
Immigration reform is one issue where expectations of progress are rising in the election aftermath. Why? This past election cycle was the first in which Latinos as a voting bloc may have made the difference in several statewide races, as well as the presidential contest in states like Florida, Colorado and Nevada. Mitt Romney performed terribly among Latino voters, receiving less than 30 percent of their votes. Most of this poor performance has been attributed to his hard-right turn on immigration policy during the primary, something from which he never recovered.
Most Republicans now recognize the need to evolve their messaging on immigration reform and to put the issue in the rear view mirror. Many feel that the party can appeal to Latinos on other issues. Ronald Reagan once referred to Hispanics as, “Republicans who just don’t know it yet.” To paraphrase Senator Marco Rubio, however, it’s hard to appeal to someone on jobs or education when they think you are going to deport their grandmother. Thought leaders in the Republican Party are beginning to reframe immigration policy in economic terms, something we have long supported.
For Democrats, pressure is high to deliver on promises made. With some elements of the Democratic base now defining immigration reform as “citizenship for 11 million,” it may not be easy for party leaders to come to a reasonable middle ground.
American Nursery & Landscape Association (ANLA) and the coalition we co-chair, known as the Agriculture Coalition for Immigration Reform, are partners in an ongoing effort to reunify the agricultural community behind a reasonable solution for farm, nursery and greenhouse workers. Such a solution could move as part of a broader bill or as an early building block toward a modernized immigration policy. Time is of the essence, as work on the issue in Congress could begin shortly after the inauguration.
Flexibility will be the watchword. While an immigration effort next year looks likely, the path will be difficult. The so-called perfect solution from an employer perspective will not clear Congress nor be signed into law by the president. Negotiation will be tricky and take finesse, and a difficult compromise will be inevitable.
A Stronger, More Unified Industry
The nursery, greenhouse, landscape and garden retail industry has long been very fragmented. Fragmentation has hindered effective federal advocacy and strong grassroots involvement in political affairs. That’s a problem, since the business of government affects every business. The expected consolidation of OFA and ANLA and the launch of a new, premier horticultural industry association should mean positive things for the associations’ efforts to monitor and influence federal legislation and regulation. It will advance our industry’s ability to think and act together, when needed, and to speak with one voice. With challenges like health care and opportunities like immigration reform on the horizon, that’s a good thing.