Industry Market Trends
Partisan Gridlock the Order of the Day in Washington
September 17, 2013
After rising tensions in the Middle East froze the Congressional agenda for the first part of September, a temporary reprieve has put the domestic agenda back on track. But partisan and even inter-party conflict continues to stymie progress. Congress returned to Washington from the August recess to debate the United States' response to Syria's use of chemical weapons on the Syrian people. With little support in Congress and even less from the American people, President Barack Obama's request to use military action was heading for stinging defeat. Fortunately, the use force was put on the hold temporarily in favor of a diplomatic solution. Now, at least for the time being, Congress can return its attention to the pressing fiscal issues that will dominate the agenda throughout the fall. The deliberations will get ugly, but manufacturers must continue to press Congress to take action to come up real compromises that will grow the economy, create jobs, and increase the global competitiveness of their businesses. Partisan acrimony is the order of the day on Capitol Hill, but sometimes the discord comes within a party. The House Republican leadership is scrambling to shore up support from its GOP members for a FY2014 Continuing Resolution (CR) that would prevent a government shutdown when funding runs out on Sept. 30. The CR keeps the government operating at current levels -- including sequester -- through Dec. 15. A bloc of conservative Republicans objects to the resolution because it does nothing to defund Obamacare. Democrats oppose it because it keeps sequester in place. Since there is no Democratic support, the leadership will need every Republican vote. With each side entrenched in its position, a compromise agreement is proving difficult. Pushing budget decisions into December with a CR buys time for Congress to deal with another critical issue just as unpopular: raising the debt ceiling. A recent NBC News/Wall Street Journal poll found that Americans oppose raising the debt ceiling by a margin of 44 to 22 percent. That makes it harder for President Obama and Democrats who vow they will not negotiate on the debt limit and fuels Republicans who insist on deeper spending cuts in exchange for a debt limit increase. With only a few legislative days left this month, Congress is running out of time to work out a deal on the CR and the debt ceiling. Government funding runs out on Oct. 1 and the nation nears its borrowing limit in mid-October. How does tax reform figure into this equation? The short answer: it doesn't. Until our immediate fiscal challenges are addressed, Congress will find it hard to tackle an issue as weighty as tax reform. That reform is still on the table at all is a testament to the persistence of the tax-writing committees' chairs: House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Senate Finance Committee Chairman Max Baucus (D-Mont.). For months, legislative drafts have been circulated among committee members, working groups established on various topics, and countless hearings and meetings with stakeholders held. It has been and continues to be an enormous education process for many of the newer members of Congress who were unfamiliar with the magnitude and complexity our tax code. The Administration's proposal for a corporate-only tax rate reduction, including a lower 25-percent rate for manufacturers, unfortunately leaves out the majority of small manufacturers that file individual returns. There are calls from the White House and Congress to eliminate tax "loopholes" in order to pay for reform. Provisions such as bonus depreciation, Sec. 179 small business expensing and other tax breaks important to manufacturers are on the table. Fortunately, manufacturers have had a seat at the table throughout the process as a voice advocating for tax policy that creates a more level playing field for American businesses rather than hinders it. With so much at stake, it is probably best to take this one slowly rather than risk an end result that is as complicated and hard to implement as the healthcare reform law. The positive news coming out of Capitol Hill is a continued focus on the importance of manufacturing for growing the economy and creating jobs. A strong "Make It in America" theme continues to permeate Congressional hearing rooms, White House executive offices, town hall meetings, and even the box office with the late summer release of "American Made Movie." For now, it appears that lawmakers and the electorate understand the need to boost American manufacturing for increased innovation, global competitiveness and good paying jobs. It is an opportune time for U.S. manufacturers to demand an end to partisan gridlock and the beginning of decisive action to address our budget issues and develop a strategy for propelling our economy forward. Amber Thomas is vice president of advocacy for AMT -- The Association For Manufacturing Technology. Based in McLean, Va., AMT represents and promotes U.S.-based manufacturing technology and its members -- those who design, build, sell, and service the continuously evolving technology that lies at the heart of manufacturing. For more, visit AMT's website at www.amtonline.org.