AED Washington Insights Newsletter|
Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team
In this Issue:
AED Plans Ambitious Agenda for 2012|
AED urged Congress to take immediate action on key proposals to support economic recovery in a letter to congressional leaders on the eve of the president's State of the Union address. The actions outlined in the association's message will guide AED's 2012 legislative agenda and promote economic recovery for the construction equipment industry.
AED's top priority is the reauthorization of federal infrastructure programs. Congress must immediately approve a long-term blueprint for the federal highway program and increase investment to restore certainty to the hard-hit construction industry.
Meeting our critical, national water infrastructure needs must also be among Congress' priorities in 2012. Lawmakers should fully restore funding for the Clean Water and Safe Drinking Water State Revolving Funds cut last year, and look to alternative financing mechanisms, such as bipartisan legislation lifting the state volume cap on private activity bonds (H.R. 1802/ S. 939) to leverage private capital.
The association will continue to promote tax policies encouraging growth and recovery in the equipment industry. Congress can immediately create an environment more conducive to equipment investment by extending 100 percent depreciation bonus and Sec. 179 expensing levels. These capital investment incentives, which enjoy bipartisan support, have incentivized business purchasing and job creation since their implementation, and must be extended.
Lawmakers must extend the 2001 and 2003 tax cuts and come up with a reasonable solution to resolve the estate tax uncertainty. Tax fluctuations from year to year complicate long-term planning and investing for small businesses. A two-year extension of the 2001 and 2003 tax cuts would afford lawmakers the time to consider comprehensive tax reform, a serious debate that must take place in Washington in the near future.
AED will also focus on expanding energy production. The United States must invest in developing domestic energy resources to reduce our dependence on foreign oil and create jobs. Congress should ensure that hydraulic fracturing (fracking) continues across the country. Lawmakers must also do everything in their power to ensure approval of the Keystone XL pipeline. The Keystone project will generate considerable economic activity and create as many as 20,000 new jobs (at least 13,000 of those in the construction sector).
The rollback of restrictive regulatory policies that impede economic recovery will also remain a priority for AED. Although AED understands that there is a role for government agencies like the National Labor Relations Board, Occupational Safety & Health Administration, Department of Labor, and Environmental Protection Agency, regulations should only provide oversight, not overreach.
Finally, AED plans to build upon our 2010 successes with a more active role in the 2012 election in order to build a bipartisan, pro-growth majority on Capitol Hill. The association's Political Action Committee, AED PAC, will help elect (and re-elect) leaders who share AED's legislative goals.
To weigh in with your lawmakers on these and other legislation priorities, please visit wwwAEDaction.org
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Policy Front and Center at 2012 AED Summit|
The public policy challenges facing the construction equipment industry took center stage at the 2012 AED Summit. This year's Summit, located just outside Washington, D.C., featured a variety of speakers and events highlighting the industry's Washington agenda and encouraging AED member participation in reaching the association's goals.
Political commentator Tucker Carlson discussed the importance of the 2012 elections and gave his analysis of the presidential race. Chamber of Commerce President Tom Donohue highlighted the policy issues confronting the business community in Washington, focusing on the need for expanded energy and infrastructure investments. Donohue underscored Carlson's message about the importance of AED members engaging in elections.
Donohue was also honored with the 2012 AED Democracy Award. This is the first time AED has presented this prestigious award to someone outside of the equipment distribution industry. The award was given to Donohue in recognition of his tireless dedication and long support of American business.
The Road Connection: Traveling Down a Highway Near You
In addition to the speakers, the Road Connection launched the kickoff of its nine-month cross-country tour with a press conference at the 2012 Summit.
The Road Connection is crisscrossing American highways, taking the message about the importance of highway investments to the people.
"As this truck travels around the country in the weeks ahead, it will raise the visibility of what is - or isn't - happening in Washington, D.C., and serves as a catalyst to grassroots action," said AED Vice President of Government Affairs, Christian Klein, at the Road Connection kick off press conference from the CONDEX floor.
"Roads and Bridges are at the very heart of our country," stated Jeff Elliot, president of Johnson Crushers International (KPI-JCI), the leading sponsor of the Road Connection. "But they are falling apart; the Road Connection is about telling Congress that inadequate funding is unacceptable."
The Road Connection is sponsored KPI-JCI, Astec Mobile Screens, Navman Wireless, Bedrug, and Truxedo. AED is proud to serve as an important sponsor to this campaign along with long-time allies, Association of Equipment Manufacturers, the American Road and Transportation Builders Association, and the National Stone, Sand, and Gravel Association among others.
To view the press conference and to learn more about the Road Connection, visit their You Tube page at http://www.youtube.com/RoadConnectionVideos.
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Two, Five, Six - What Will a Multiyear Highway Bill Look Like?|
Momentum for a multiyear surface transportation bill continues to build in Washington, with the House, Senate, and White House all putting proposals forward. Though all the key players are involved and committed to making a long-term bill a reality, there remain deep divisions over how to get there.
The challenge for transportation advocates over the coming months will be working among the various players to forge a bipartisan compromise.
House Leaders Call for At Least a Five-Year Bill
With a compromise announced by congressional leaders on a final FAA reauthorization bill, the House is poised to move forward on multiyear highway legislation in February.
Word on the Hill is that House Republicans will unveil a surface transportation bill on Jan. 31. After introducing the legislation, the House Transportation & Infrastructure (T&I) Committee will promptly move forward with consideration of the bill, marking it up on Feb. 2 and then sending it to the House floor for final approval. House Republican leadership has indicated their desire to complete the legislative process on a highway bill by Feb. 20.
Details of the House bill are fuzzy, but the legislation will likely be five years in duration and provide $52 billion annually ($260 billion over the program's lifetime). However, T&I Chairman John Mica (R-FL) has said that he would like the legislation to be extended to six or seven years if the financing is available. The proposal will be financed in part by expanded offshore drilling royalties. As AED has previously noted, this will complicate agreement on a final bill.
In addition to the T&I Committee in the House, the Energy & Commerce and Natural Resources committees will have to act on the energy components of the legislation. Additionally, the Ways & Means Committee must approve the financing portion of the bill.
Senators Pushing Two-Year Bill
In the Senate, the leaders of the Environment & Public Works Committee are still pushing a two-year, bipartisan, $109 billion deal (S. 1813) that would keep highway investments on par with current commitments.
However, to meet this goal, senators must come up with at least $12 billion in additional funding to cover the shortfall between current revenue and spending levels, a substantial challenge in the budget environment. Senate Finance Committee members are looking for ways to find the necessary revenue. Recent rumblings have indicated that the committee may have identified sources to secure up to $17 billion for transportation, but nothing has been officially unveiled. In addition to the Finance Committee, the Banking, Housing & Urban Affairs Committee must still consider the transit title of the legislation before the bill can be brought to the Senate floor.
White House Wants Six-Year Program
In his 2012 State of the Union address, President Obama again called on Congress to approve investments to fix America's crumbling roads and bridges, and to put the hard-hit construction industry back to work. The administration has called for a six-year, $556 billion surface transportation package.
Obama has been urging to Congress to act on transportation investments since 2010, though the administration's proposals have not matched with political reality and have been rejected by lawmakers at the opposite end of Pennsylvania Ave. In the State of the Union, the president suggested paying for infrastructure using money saved from troop drawdowns in Iraq and Afghanistan. Like Obama's past funding proposals, this measure will face significant opposition on Capitol Hill.
AED Stresses Importance of Multiyear Highway Bill
AED remains in the midst of the political wrangling over the highway bill, stressing the employment, economic, and environmental benefits that a new long-term surface transportation bill will bring.
The association joined a massive grassroots push led by the Chamber of Commerce's Americans for Transportation Mobility coalition, of which AED is a steering committee member, urging Congress to make transportation a top priority in 2012. Signed by more than 1,000 associations and businesses, the Jan. 25 letter reminded lawmakers that the United States must invest in order to grow, and that few federal efforts rival the job-creating potential of critical transportation investments.
With the current highway authorization set to expire on March 31, it is important that Congress act now. Be sure to stay tuned to AED's Washington Insights and AEDNews for the latest developments. In the meantime, weigh in with your lawmakers to urge their support for highway reauthorization legislation by visiting AEDaction.org.
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Administration Disappoints, Rejects Keystone Pipeline|
Despite a push from a host of leading business organizations and an AED-led coalition of national construction associations and unions, President Obama denied approval for the Keystone XL pipeline on Jan. 18.
Caught between appeasing his labor and environmental supporters, the president's move is the latest of many disappointing bouts of political posturing over the pipeline, including his November announcement to delay a decision until after the 2012 presidential election. Most notable among the collateral damage is the opportunity to approve an important infrastructure project that could have created up to 13,000 construction jobs and brought 830,000 barrels of oil per day to U.S. refineries.
"AED is deeply disappointed with the president's refusal to give the economy a much needed shot in the arm," said AED President and CEO Toby Mack. "We are saddened that the president chose to play politics and placate his environmental supporters' allegations of ecological harm rather than create jobs and secure America's energy future."
Congressional supporters of the Keystone Pipeline XL are exploring options for forcing the matter by attaching it to either the payroll tax holiday bill or the surface transportation legislation. Proposals to compel the Federal Energy Regulatory Commission to make a decision on the pipeline or simply giving Congress the authority to approve the project are being considered on the Hill. The risk inherent in attaching Keystone language to either the payroll tax or surface transportation bills, however, is that the pipeline provision might jeopardize bipartisan support for the overriding measure.
While lawmakers search for ways to get the pipeline built, they are asking for examples of businesses outside the oil industry that have been negatively impacted by the delay. To tell your story of lost opportunity, please send an e-mail to AED Senior Director of Government Affairs Daniel Fisher.
AED will continue pressing for the permission of the Keystone XL pipeline in order to create jobs and pursue greater energy security.
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Budget Ax Falls on FY 2012 Highway and Water Investment|
In the closing days of the first session, Congress slashed investment levels for both highway and water infrastructure projects. These cuts will further impede a drastically underfunded and outdated infrastructure system.
The "Minibus" appropriations bill (H.R. 2112), signed into law in November 2011, designated $39.144 billion to federal highway programs through the Highway Trust Fund. AED estimates the 5 percent drop in funding from the $41.107 billion allotted to similar projects in 2011 equates to more than $125 million in lost equipment market opportunity for fiscal year 2012.
Water infrastructure programs similarly fell victim to this Congress' aversion to spending. The Clean Water and Drinking Water State Revolving Funds both took hits in the Omnibus Appropriations Bill (H.R. 2055) passed shortly before the 112th Congress ended its first session.
The bill directed several reductions at the Environmental Protection Agency (EPA), cutting $101 million from the State Revolving Fund (SRF) budgets. With roughly 12 percent of water utility bids attributable to the purchase, rental, and leasing of construction equipment, and to the cost of dealer-performed equipment repairs, the reduction in investment could cost the equipment industry $12 million in lost market opportunity.
The Clean Water SRF, used by states for water quality protection and wastewater infrastructure projects, was allotted $1.469 billion in 2012, a cut of more than $50 million. The Drinking Water SRF, which provides states with the resources for potable water infrastructure projects, will receive $919 million in 2012 - $44 million less than in 2011.
However, the budget for the Army Corps of Engineers was the one bright spot among infrastructure investments, receiving a slight uptick in 2012 funding levels. The Disaster Relief Appropriations Act of 2012 (H.R. 3672) and the "Omnibus" 2012 Appropriations bill (H.R. 2055 & H.R. 3671) provided $5 billion to the Corps, which oversees large civil and water projects - a $145 million increase from 2011 investments.
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Where Did Your Lawmaker Stand in 2011?|
With the start of election season, it is vital that AED members know how lawmakers voted on the association's legislative priorities.
AEDAction.org's Vote Scorecard allows members to see how their representatives in Washington voted in the first session of the 112th Congress. Entering a zip code directs users to a district-specific page displaying how your lawmakers voted on AED's key issues.
AED members can also use AEDAction.org's Key Bills in Congress page to track the progress of legislation important to the equipment distribution industry. You can see AED‘s position, legislative sponsors, status updates, and read about the legislation.
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AED PAC Kicks Off 2012 Fundraising With Momentum|
AED's Political Action Committee (AED PAC) is launching a new campaign for the 2012 election cycle. Coming off the most successful nonelection year in the history of AED PAC, Washington's government affairs team has great expectations for its political program in 2012.
Federal election laws require that AED members must provide solicitation consent in order to learn more about the PAC and its activities.
Companies That Have Provided Solicitation Consent for 2012
|Alliance Heavy Equipment ||Groff Tractor & Equipment|
|Anderson Machinery Company||Hoffman Equipment Co.|
|Arnold Machinery Co.||Holt of California|
|Arrow Equipment, LLC||Hunt Tractor, Inc.|
|Asphalt Care Equipment||Intermountain Bobcat|
|Baschmann Services||J. A. Riggs Tractor Co.|
|B-C Equipment Sales||J.W. Burress, Inc.|
|Bee Equipment Sales, Ltd.||James River Equipment|
|Berry Companies, Inc.||JCB of Georgia|
|Bobcat Enterprises, Inc.||Kirby-Smith Machinery, Inc.|
|Bobcat of Omaha||Leppo Rents/Bobcat of Akron|
|Brandeis Machinery & Supply Co.||Louisiana Machinery Company, Inc.|
|Butler Machinery Co.||MacAllister Machinery Co., Inc.|
|C. N. Wood Co., Inc.||Martin Implement Sales|
|Carolina CAT||McCann Industries, Inc.|
|Cate Equipment Company||Metrolift, Inc.|
|Central Power Systems & Services, Inc.||Miller, Bradford & Risberg, Inc.|
|Clark Machinery Company||Mississippi Valley Equipment Co.|
|Cleveland Brothers Equipment Co., Inc.||New Jersey Bobcat|
|CLM Equipment Co.||Ohio CAT|
|Closner Equipment Co, Inc.||Power Equipment Co.|
|Clyde/West Inc.||Rental Solutions, LLC|
|CMW Equipment||Road Machinery & Supplies Co.|
|Cowin Equipment Company Inc.||Rockland Manufacturing Co.|
|Cummins Rocky Mountain LLC||ROMCO Equipment Co.|
|Ditch Witch Midwest||Sheehan Mack Sales and Equipment Inc.|
|Ditch Witch of Louisiana||Sievers Equipment Co.|
|Ditch Witch of Maryland, Inc.||Southern Machinery Co.|
|Ditch Witch of New Mexico Inc.||State Equipment Inc.|
|Ditch Witch of Ohio, W. PA & W. NY||Stephenson Equipment, Inc.|
|Ditch Witch of Oklahoma||Stowers Machinery Corporation|
|Ditch Witch of South Dakota, Inc.||The W.I. Clark Co.|
|Edward R. Bacon Co.||Tracey Road Equipment|
|Emery Equipment Sales & Rental, Inc.||Vermeer Midsouth, Inc.|
|EPG Insurance, Inc.||Wagner Equipment Co.|
|Equipment Corporation of America||Walsh Equipment|
|Erb Equipment Company, Inc.||West Side Tractor|
|Fabick CAT||West Virginia Tractor|
|Faris Machinery Co.||Whayne Supply Company|
|General Equipment & Supplies, Inc.||Wheeler Machinery|
|Gregory Poole Equipment Company||Yancey Bros. Co.|
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Obama's Recess Appointments Ensure NLRB Labor Tilt|
President Obama ushered in the New Year by circumventing the Senate approval process and unilaterally making three recess appointments to National Labor Relations Board (NLRB).
The move ensures that the NLRB maintains the number of members necessary for continued operation. Without the appointments, the Board would have been reduced to two members, denying it a quorum and rendering it inoperable.
Unfortunately, two of the president's nominees are labor attorneys with a pro-union background, including Department of Labor Deputy Assistant for Congressional Affairs Sharon Block, and International Union of Operating Engineers General Counsel Richard Griffin. While the nomination of Block and Griffin will keep the Board tilted in favor of unions, Obama also nominated Terrence Flynn, chief counsel to current Republican board member Brian Hayes.
It is clear that the administration wishes to make the Board an even more union-friendly body. Given the NLRB's recent activities, including its role in the Boeing case and the proposed "ambush election" rules, the addition of two more union advocates will only make the Board more anti-employer.
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FMCSA Releases Final Hours of Service Rule|
On Dec. 22, the Federal Motor Carrier Safety Administration (FMCSA) unveiled its final hours of service rule (HOS) which establishes new regulations limiting the amount of time commercial drivers can spend behind the wheel.
FMCSA's final rule reduces the amount of time a trucker can spend on the road by 12 hours a week, limiting drivers to a 70-hour workweek and requiring at least a 30-minute break after working eight hours. The rule kept the 11-hour daily driving limit in place.
The regulation requires drivers who maximize their weekly work hours to take at least two nights' rest when their 24-hour body clock demands sleep the most - from 1 to 5 a.m. This rest requirement is part of the rule's "34-hour restart" provision that allows drivers to restart the clock on their workweek by taking at least 34 consecutive hours off duty. The final rule allows drivers to use the restart provision only once during a seven-day period. This is a challenge for drivers in the highway construction industry where much of the work is done at night.
According to FMCSA, the new rule "does not change existing regulatory exemptions or exceptions." Thus, for example, special HOS reset rules for the construction industry are unaffected. 49 CFR 395.1(m) states that, "In the instance of a driver of a commercial motor vehicle who is used primarily in the transportation of construction materials and equipment, any period of 7 or 8 consecutive days may end with the beginning of any off-duty period of 24 or more successive hours." However, the new rule made adjustments to regulations relating to short-haul trucking operations (49 CFR 395.1(e)) to harmonize them with the new maximum driving times.
Commercial trucking companies and drivers must comply with the rule by July 1, 2013.
A summary of the proposed rule change is available from the FMCSA's website.
Senate Committee Approves Bill Requiring HOS Monitoring
The Senate Commerce Science & Transportation Committee approved the Commercial Motor Vehicle Safety Enhancement Act (S. 1950) on Dec. 14 by party line vote, 13-11, with Democrats prevailing over Republican objections.
The bill would mandate electronic surveillance equipment in commercial trucks to monitor the time drivers spend on the road for compliance with federal HOS rules. Additionally, the legislation includes other regulatory burdens including establishing minimum entry-level training requirements for commercial drivers, setting uniform standards for commercial driver's licenses, and creating a national database for records relating to drug and alcohol violations of commercial motor vehicle operators.
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Equipment Industry Urges Canada's Admission to Pacific Trade Talks|
In joint comments submitted Jan. 10, AED and the Association of Equipment Manufacturers urged the U.S. Trade Representative to immediately start negotiations with Canada concerning that nation's entrance into Trans-Pacific Partnership (TPP) trade talks.
Comprised of Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam, TPP is a strategic partnership seeking to establish a free-trade zone and further liberalize economies in the Asia-Pacific region.
The letter stresses that, "U.S. and Canadian economies are highly integrated," and "allowing Canada to join . . . in the TPP negotiations will help better achieve a high-quality, next generation free trade agreement that will level traditional tariff and "behind-the-border" barriers on goods, liberalize services and investment, ensure greater regulatory coherence, and strengthen intellectual property protections."
Canada recently began pursuing support from TPP members to join the partnership. Discussion of Canada's status as a potential TPP member is expected at the group's March meeting.
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