Guest post by Seth Barnett, PPAI Government Relations Manager.
Government Relations Today is a monthly publication released by the PPAI Public Affairs team and covers political news, industry related updates and product safety insight. To subscribe to GR Today and become a more informed industry advocate, click here.
Budget Deal Reached
A bipartisan budget group led by Senate Budget Committee Chair Patty Murray (D-WA) and House Budget committee Chairman Paul Ryan (R-WI) broke a four-year streak this month when they reached an agreement on a budget to fund federal agencies.
Not since April 2009 has the government been able to pass a new budget. Until now, legislators have been churning out resolutions to continue funding government business. This accomplishment brings hope that Congress can continue its bipartisan efforts heading into midterm elections next November.
The next major step will be for an agreement to be reached on an appropriations bill before January 15. While a seemingly less daunting task, the bill must be completed, passed and signed by President Obama by the deadline to avoid another government shutdown. The House returns to work Friday and the Senate will be back on Monday.
Tax Reform Proposals
With a budget on the books, the next item of business for the 113th Congress may likely be tax reform. While the budget passage opens up the possibility for something to be introduced during the first quarter of 2014, those involved in tax policy continue to argue that a plan may not happen transpire until after the midterm elections.
Nonetheless, Chairman Max Baucus (D-MT) of the Senate Finance Committee and Chairman Dave Camp (R-MI) of the House Ways and Means Committee have each released proposals for a tax overhaul. In the past six months, Camp, Baucus and Obama have released plans for items they wish to include in tax reform.
Baucus’ discussion drafts on tax reform contain at least one item of note for promotional products—advertising expenditures. Baucus would like to amend tax law governing the deductibility of advertising expenditures by businesses, ultimately putting an unwarranted constraint on businesses that spend money on advertising. The impact to the industry would be as widespread in that businesses would have to make considerations when choosing to allocate advertising dollars. To learn more about this draft item and to take action to protect the industry, click here.
The chairman’s drafts also include a plan for international tax reform that would require U.S. companies doing business abroad to change their cash accounting procedures. This change would require accountability to happen as the income is earned.
Camp and Baucus also both agree on cost recovery specifically targeting small businesses. They also both agree that a lower corporate tax rate is needed; Baucus seeks 25 percent and Camp is asking for a rate somewhere below 30 percent.
New Independent Contractor Debates
Legislation that will have strong repercussions for promotional products business continues to keep PPAI’s attention. Bills that would re-classify independent contractors doing business in the industry include SB 1687, which amends the Fair Labor Standards Act to require employers with independent contractors to classify new hires under more specific guidelines and to re-classify existing contractors if any classification discrepancies are evident.
While the bill, introduced by Sen. Robert Casey (D-PA) doesn’t directly target promotional products businesses, confusion and frustration may be a direct result if it passes. A more strategic piece of legislation that is definitely considered detrimental to industry contractors is SB 1706, the Fair Playing Field Act from Sen. Sherrod Brown (D-OH).
Brown is carrying forward legislation that previously was developed and introduced by former Sen. John Kerry. The bill seeks to eliminate Section 530 of the Internal Revenue Code; language in the section governs how and whether promotional products businesses are able to classify employees as independent contractors.
Currently the bill has nine co-sponsors but no bipartisan support in the Senate Finance Committee. PPAI has drafted a letter informing Members of Congress about this bill and its negative consequences for the industry. To add your voice to ours, click here to send a letter or email to your elected officials.
GR at The Expo
PPAI government relations’ staff as well as members of PPAI’s Government Relations Advisory Council will be present during the 2014 PPAI Expo to answer questions about PPAI’s government relations activities. You can find us in the PPAI HQ booth, number 1049. We will have informational documentation, a presentation about product safety and government relations and PPAI Public Affair’s staff available during show hours to answer questions. If you are interested in becoming more involved in PPAI government relations activities, email PPAI’s Government Relations Manager Seth Barnett at firstname.lastname@example.org to set up a time to meet during Expo.