2015 State Of The Industry: Major Changes In Washington Reveal Need For Reform

2015 State Of The Industry: Major Changes In Washington Reveal Need For Reform

Craig Regelbrugge

Craig Regelbrugge

The 114th Congress will be sworn in January 3, 2015, after tumultuous November mid-term elections that will mean major changes in Washington.

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Republicans now control the Senate with 54 of 100 seats. While this margin of control is one seat better than the Democrats enjoyed in the last Congress, procedural rules in the Senate usually mean 60 or more votes are needed to successfully move legislation to passage.

In the House, Republicans solidified control, gaining 12 seats for a total of 246 seats out of 435. (At the time of this writing, one House race was still undecided.) Bills pass in the House with a simple majority of 218 votes, so House Speaker John Boehner in theory has a stronger hand to move legislation on a partisan basis. Yet that presumes strong party unity — something that was often elusive in the last Congress.

America’s electorate once again demonstrated an instinctive preference for divided government. What does that mean for the year ahead? It might mean more gridlock, but it doesn’t have to. Sure, we may see a series of Republican messaging bills pass the House. With Republicans now in control of the Senate calendar and agenda, some of these bills may at least get debated there. But many could stall in the Senate, or face a Presidential veto threat if they do pass the Senate.

There are some reasons for a bit of optimism. With an eye toward the 2016 presidential contest and a 2016 Senate electoral map that is more friendly to Democrats, Republicans are going to want to demonstrate an ability to govern. Governing will require reaching across the aisle and compromising. And as for President Obama, the choice may be between a final-years legacy of ideological showdowns or a legacy of newfound cooperation and achievement.

Regardless of what does or does not happen on Capitol Hill, more and more of AmericanHort’s advocacy involves the federal agencies whose actions directly affect our members’ success. We are girding for a final two-years’ push by departments like Labor and agencies like EPA to roll out long-debated regulations affecting things like water and worker safety.

5 Mega Issues To Watch

Back on the subject of Congress, in early December I attended a Capitol Hill event at which the keynote speaker was none other than new House Majority Leader Kevin McCarthy of California. In his speech to a bipartisan audience, McCarthy outlined the five mega issues he believes Congress must deal with if we are to ensure that America’s next 100 years are bright. Here are his top five “critical for competitiveness” mega-issues:

  • Tax reform
  • Energy reform
  • Immigration reform
  • Education reform
  • Regulatory reform

At the 30,000-foot level, who could disagree? We need tax and energy policies that spur domestic investment. We need immigration reform and education policies that rejuvenate and strengthen our economy, and especially so in sectors like the technology field and the fields of agriculture.

Regulation is a necessary component of civil society, but too much of it stifles the environment for business success.

So the question facing us, and more directly the 114th Congress, is simple: what can they get done? Republicans hold majorities in both chambers of Congress, but even the omnipresent Obama White House veto threat aside, the math of getting things done in Congress suggests the inescapable need for leaders who are willing to reach across the political aisle and seek common ground. Time will tell.

Priority Issues For The Green Industry

What will be the focus of the new congress? Here are a few likely priorities.

Funding The Government. It’s been several years since we’ve seen a normal budget passed in a normal timeframe (before the October 1 start of the federal fiscal year). We’ve seen lots of continuing resolutions (CR) that simply extend current spending for a period.

This year has been no different, with a short-term CR before Congress turned to a hybrid approach that paired an omnibus spending bill to cover most government operations, but a CR for the Department of Homeland Security so the department tasked with implementing President Obama’s executive actions can be put under the Congressional microscope next year (more on that shortly). In an only-in-Washington moment, this hybrid funding approach was dubbed the CRomnibus.

If near-term efforts to fund the government proceed without too much drama, the conversation will turn to developing a federal budget for FY 2016. Renewed calls for fiscal restraint are certain. Another debt ceiling debate will punctuate a broader conversation on federal spending and reining in the government. Pressure is high for Republicans to demonstrate their ability to govern, and that starts with the budget process.

Tax Reform. This is another issue that could see attention in 2015. Incoming House Ways and Means Committee Chairman Paul Ryan (R-WI) has already expressed a desire to focus on the business side of the tax equation. Lowering top corporate tax rates and eliminating some loopholes are seen as crucial to American competitiveness.

Close to home for horticulture, we’ll face the renewed challenge of educating lawmakers on the importance of and underlying reasons for the cash method of accounting in the horticulture industry. While tax reform is likely to stall unless it can attract bipartisan support, Ryan and his Senate Finance Committee colleagues, Orrin Hatch (R-Utah) and Ron Wyden (D-Ore.), have a long history of successful efforts working across the political aisle.

Other Business Priorities. With the return of the Senate to Republican control for the first time since 2007, there is tremendous pent-up demand in various parts of the business community to see legislative progress on items ranging from so-called tax extenders, to patent reform, to changes to the Affordable Care Act. With Republicans controlling the agenda, such measures will have a chance of being debated in the Senate. But again, a measure of bipartisan support will be a key ingredient to bills passing.

Immigration. President Obama’s decision to act unilaterally and issue a series of executive actions on immigration has kicked up clouds of dust, and it will take some time for the atmosphere to clear. While the executive actions include varied provisions on matters such as border and interior enforcement, the most relevant and controversial aspect is the new deferred action for parents component. Under that program, an individual who entered or remained in the country without legal authority prior to January 1, 2010, who has resided continuously in the country since that date and who is the parent of a U.S. citizen or legal permanent resident is eligible to apply for deferred deportation.

It is really important for employers to understand what the deferred action for parents program is, and what it isn’t. At the outset, this is not an employment-based or employment-dependent program. To qualify for deferred action, an individual needs to demonstrate five or more years of continuous presence, and the familial requirement of a citizen or legal permanent resident child. Presumably, this can be done with a variety of documents that have nothing to do with employment. Unlike the special agricultural worker (SAW) program of 1986, the employer has no formal role to play. And in fact, there are legal exposure perils and pitfalls for employers if they learn or had reason to know that an employee is unauthorized to work in the U.S.

The relief the program offers is temporary and uncertain. In essence, a person is presenting himself or herself to the government for deportation, which is then being deferred for a period of three years. A carrot for doing this is temporary relief from the risk of being deported, with the significant added benefit of receiving authorization to work in the U.S. The risk is putting oneself into the deportation database with huge uncertainties about whether the program will be successfully challenged legally or defunded in the short term, and whether it will be extended or replaced by a better opportunity after three years.

On a more positive note, many immigration reform proponents point out that rarely if ever in the history of American immigration policy, when people have received relief from deportation, does our nation ultimately act to deport them. They argue that this temporary reprieve is likely a stepping-stone to something more certain and permanent. Again, time will tell.

Meanwhile, the dust will settle. Once it does, Congressional Republicans may realize that they have three options: do nothing, try to kill Obama’s program and suffer the political consequences or pass legislation that takes the place of the executive actions. The third option won’t be the easiest, but it would be the best for the nation, and probably for the Republican party.

Let’s All Work Together

I don’t know about you, but we’re feeling pretty optimistic here at AmericanHort. The darkest economic days many of us have ever seen are behind us. The industry is at the threshold of new opportunities, new markets and uses for our plants and services. But as we often say, with respect to politics and the impact of government on our members and their businesses, “we’re either at the table, or we’re on the menu.” If you are not yet part of your national organization, please join us. Working together, the future will be even brighter.

More 2015 State Of The Industry articles:
American Floral Endowment: Laser-Focused On The Floriculture Industry’s Needs
Current Green Industry Trends
Growers And Suppliers Are Optimistic For A Strong Year In 2015
2015 State Of The Industry: Numbers At A Glance
2015 Brings More Debate On Pollinator Health, Pesticides And The Plants We Sell