Growing Optimism for the Horticulture Industry in 2017

The CapitolSome of the best news about the 2016 election is that it’s over! The near-universal predictions that Hillary Clinton would be the nation’s next president and that Democrats would regain control of the Senate both failed to materialize. Claims of a sweeping mandate would be overstated. But a “red wave” propelled by voters anxious about the economy and culture and demographics — voters wanting change as they also fear it — washed across the Rust Belt and deprived Clinton of crucial Electoral College votes.

Republicans in Congress are busy preparing for a frenetic start to its 115th term. For many in the horticulture industry who have grown weary of what they see as excessive and intrusive government regulation of the Obama years, there is growing optimism that there will be a breather, and maybe some relief.

Energetic Upcoming Session In The House

The sense of possibility has been helped along by the recent unanimous nomination of Paul Ryan (R-WI) to continue serving as Speaker of the House. Ryan, while an ideologically grounded conservative, is policy-oriented and has a pragmatic streak. Presuming his formal election in January, House Republicans will have a steady leadership hand and will sidestep a divisive Speaker battle that could otherwise jeopardize early legislative opportunity.

With one-party rule, the checks and balances voters usually prefer will diminish. Still, Senate rules give the minority considerable power. Key procedural motions to consider a bill or to end debate and move to a final vote typically require 60 “yeas.” With a somewhat diminished majority (52 seats expected), Republicans will face challenges moving most any legislation that lacks bipartisan support. In another bit of good news, Sen. Chuck Schumer (D-NY) replaces Nevada’s Harry Reid as the Democrats’ Minority Leader. Reid’s relationship with his Republican counterparts was nothing short of toxic. Schumer, by contrast, is a wily adversary but a deal-maker at heart.

What’s Up First?

Regulatory relief, major infrastructure spending, tax cuts and reform, and health care are top-of-mind as early priorities for the 115th Congress.

The drumbeat for repealing the Affordable Care Act (ACA), or Obamacare, is loud and constant. A tool called “budget reconciliation” could allow Republicans a path to change the ACA without the need for 60 votes. Yet the reality is starting to set in: If you repeal, what after? With ACA implementation now well-advanced, there are perhaps nearly 20 million people with insurance who could lose it as a result of repeal. And, the law has other popular provisions. All this makes repair more plausible than repeal, as an end-game.

On infrastructure, Republicans have been cool to Democrats’ proposals since President Obama took office. However, with a President of their own party, an infrastructure package that includes new funding, as well as ideas to stimulate private investment, could garner bipartisan support and pave the way for early progress here.

Tax reform is another popular priority around which lawmakers are expressing optimism. Everyone complains that our tax code is too complicated, and that top rates — especially corporate — are too high. For our industry, details matter. The tax reform conversation often goes, “We’ll simplify and reduce top rates, while eliminating exemptions, deductions, and loopholes.” Yet, such provisions were often created to benefit small business, and so reform could benefit big businesses while hurting small business.

And, there is the question of cash accounting. The option to use the cash method is exceptionally important for nursery growers producing crops that can take several years or more to develop and reach market size. AmericanHort worked with the House Ways and Means Committee to achieve favorable treatment on this issue in the 113th Congress, but leadership has changed and much work lies ahead.

Finally comes the question of regulatory relief. Regardless of how you feel about the Obama administration and its priorities, it’s hard to dispute that key departments and agencies were active (some would say hyperactive) on labor, environmental, and financial regulation. Much of the focus early on will target high-profile regulations in the energy, financial, and environmental arenas. Some may directly affect our industry.

A good example is the Labor Department’s rule doubling the minimum salary threshold for the executive, administrative, and professional overtime exemption. While growers in most states engaged solely in agricultural activities would continue to be able to claim the agricultural exemption from overtime, the prevalence of diversified businesses in our industry often leads to compliance problems. Moreover, the rule would affect retail and landscape operations, plus others in the supply chain.
Fortunately, a federal judge issued an injunction blocking the rule from taking effect on Dec. 1. This buys time for Congress to potentially use the Congressional Review Act (CRA) as a mechanism for overturning the rule completely. The CRA allows Congress an up-or-down vote on new regulations, and requires only a simple majority vote in the Senate.

Labor Pains

The issue of greatest uncertainty and anxiety in the coming year will be labor. President-elect Trump’s own views on the issue may trend pragmatic. Yet, he has surrounded himself with advisors and selected an attorney general nominee, all of whom have a long history of opposition to immigration, both legal and illegal, and temporary worker programs. A pledge to strengthen border security could quickly veer off to include interior enforcement measures such as mandatory use of the E-Verify program. Making E-Verify mandatory would probably require Congress to act. But there are many tools within the administration’s discretion, such as prioritization of activities and resources. We could see a move toward more worksite audits and even raids.

It also remains to be seen how sympathetic a Trump administration will be toward existing visa programs such as H-2A and H-2B. Trump pledged, in a recent video message on early priorities, to direct the Labor Department to investigate alleged visa program abuses, a move that Bloomberg Government reported as “more likely to be a burden on law-abiding employers than a strategy to catch bad actors.”

So at AmericanHort, we are hoping for the best, and preparing for something less than that. We have deeply committed elected leaders and a dedicated professional staff that place a high premium on our reputation, our integrity, and the importance of taking the long view. Fortunately, the industry has such a positive story to tell. Our products and services improve quality of life and the environment, and add value to our homes and communities. With a new administration and a new Congress, telling our story once again takes center stage. Just remember, “many hands make light work!”

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