July 9, 2020

Washington Wire: Senators Seeking to Reach Fifty Votes on Tax Bill


Senators Seeking to Reach Fifty Votes on Tax Bill  

Negotiations continue around the clock as Republicans seek to secure fifty of their own Senators to vote in favor of the still changing tax bill currently up for debate on the Senate floor. The upper chamber hopes to pass their measure sometime late this evening or Friday, allowing Congress virtually all of December to negotiate a compromise prior to the president’s Christmas deadline. The House could come under increasing pressure to simply adopt whatever bill emerges from the Senate, however, most expect the two to reconcile their different bills in a formal conference. As of this writing, Senators continued to look for ways to appease certain concerns, particularly among the pass-through business community. Roughly two-thirds of One Voice members are structured as such, being S-Corporations, LLCs, or ESOPs, who pay at the higher individual income tax rate. Under both the House passed and pending Senate bills, C-Corporations pay a 20% rate while pass-throughs can achieve a 25% level in the House and may claim a possible 20% deduction off any individual income rate bracket in the Senate. In addition to achieving more parity for pass-through companies, the two chambers must come to an agreement on whether to eliminate or limit the ability to deduct state and local taxes, to keep an Estate Tax, and even to include a potential termination trigger for the tax cuts if the economy does not achieve a certain level of growth requested by debt weary Senators. One Voice is working with Senators to help shape their bill while continuing to communicate with key House leaders in anticipation of a contentious conference throughout December.



OSHA Form 300A Online Reporting Period Extended until December 15
Over the Thanksgiving week, OSHA announced a two-week delay of the “Electronic Recordkeeping” rule, moving its deadline to December 15th. Under the Obama-era regulation, OSHA is requiring all businesses with 250 employees or more and certain employers, including manufacturers, with 20-249 workers to file electronically their 2016 Form 300A. The government will then publish this data online, without clarification, and beginning in 2018 will require employers with over 250 workers to also submit online their Forms 300 and 301, in addition to Form 300A for all manufacturers with 20 or more workers. The current administration is in the final stages of reviewing a new rule that sources indicate could limit the types of employers covered and the data they will publish online. In addition to the December 15, deadline for Form 300A, the regulation now in effect mandates employers file their 2017 forms by July 1, 2018 and submit annually by March 2 moving forward. One Voice opposes the rule because it does not improve workplace safety but will create a false impression of manufacturing as dangerous if the government publishes raw data of incidents online without context or explanation. For more information, please visit: https://www.osha.gov/injuryreporting/



EPA Starts Process on Repealing Clean Power Plan
The EPA announced it is delaying the close of its public comment period by another month, to January 16, 2018 for its proposal to repeal the Obama administration’s Clean Power Plan (CPP). One Voice strongly opposed the regulation, which, by the EPA’s own admission would increase the price of electricity by 6-20% annually (industry experts predict 30% and higher increases). The U.S. Supreme Court blocked the rule from taking effect in 2016, while parties argue over the EPA’s authority to issue the regulation. Rather than imposing restrictions and mandates on existing power plants that are largely out of their control, the EPA proposes to focus instead on modifications to existing facilities. The EPA estimates saving up to $33 billion in compliance costs by 2030 by repealing the CPP. One Voice will formally weigh in with the EPA in support of repealing the CPP.



EPA Labels 85% of U.S. in Compliance of Ground Level Ozone Rule
On November 6, the EPA released its Ground Level Ozone National Ambient Air Quality Standards (NAAQs) findings, listing 85% of the U.S. in attainment (or unclassifiable) while stating it was not yet prepared to identify the remaining portions. The EPA listed 2,646 counties as in attainment/unclassifiable, meaning these areas meet the new prerequisite of 70 parts per billion (ppb) of ozone in ambient air. The previous administration lowered the requirement in 2015 from 75 ppb. When the EPA designates a county as nonattainment, the state government must present a State Implementation Plan (SIP) describing steps it will take to reach attainment status. If states do not submit a plan, the EPA can start taking action on its own. These actions can include restricting the building of new power plants, mandating additional renewable energy use, restricting facility expansions, and even impacting transportation improvement projects. The EPA faced lawsuits from environmental groups for missing the October 1 deadline to label all of the more than 3,100 counties in the U.S. and is already facing pressure to identify the status of the hundreds left off the list. Strategically, the EPA is hoping to avoid having to label the remaining counties as nonattainment prior to its efforts to repeal the rule or receive a favorable court ruling. However, this leaves a number of counties with hundreds of One Voice members still in limbo including Cuyahoga in Ohio, Cook in Illinois, several in Pennsylvania and virtually all of California where only six of fifty-eight counties achieved attainment status. One Voice strongly resisted the rule when proposed under the Obama administration, submitting formal comments stating that existing regulations work.



NAFTA 2.0 Negotiations Not Moving Ahead as Planned
NAFTA negotiators officially delayed their initially ambitious December deadline to conclude talks and now hope to reach an agreement on NAFTA 2.0 by March 2018. Canada and Mexico continue to push back against U.S. positions they claim as untenable, including increasing the content requirements for autos. Under current law, vehicles with at least 62.5% NAFTA country components may cross borders duty free. Known as the Rules of Origin, the U.S. wants to increase the threshold to 85% and mandate that at least half of a vehicle originate in the U.S. This position is not only opposed by Canada and Mexico, but also the U.S. auto industry and supply base who fear foreign manufacturers will simply choose to pay a 2.5% tariff on the finished vehicle rather than restructure their current supply chain to comply with the new 85% level. Negotiators are starting to make progress on another major sticking point pushed by the U.S. automatic termination of NAFTA after five years unless renewed by all parties. Mexico offered a counterproposal calling for periodic reviews, but not a trigger to terminate the agreement. The president continues to reiterate his preference to formally withdraw from NAFTA and then restart negotiations from a stronger position, a stance strongly opposed by the business community. Any new NAFTA agreement will not only require the president’s signature, but Congress must also vote on it, roughly six months after its completion.



Administration Moving Ahead on WOTUS Changes
EPA and the Army Corps of Engineers sent a proposed rule delaying the effective date of the Waters of the U.S. Rule (WOTUS) to the White House for review. With this move, not only has the EPA signaled it needs more time to craft its new regulation, it is also waiting for the Supreme Court to rule on whether challenges to WOTUS should be filed in district court or the appellate level. The Court’s decision likely will come in the first half of 2018. Even so, EPA’s new proposed rule is separate from any regulation aimed at replacing WOTUS. In addition to EPA, the House Committee on Science, Space, and Technology held a hearing this week on ways to fix WOTUS. The agency did not state the new effective date, or if it would make any other modifications to the regulation, but sources indicate EPA will reach a final determination by April 2018.