Congressional Outlook: More Stalling, Says Chamber Experts

May 22, 2012

The Chamber's Randy Johnson outlines some of the issues facing small businesses during a panel discussion at America's Small Business Summit 2012.

The legislative theme heading into the November election is congressional inaction, according to U.S. Chamber experts in transportation, education, and labor and immigration policies told attendees of America’s Small Business Summit 2012.

“I’d refer to the old adage - not to decide is to decide,” said Margaret Spellings, former Secretary of Education and current president of the U.S. Chamber of Commerce’s Forum for Policy Innovation. Congress and the Obama Administration must revisit No Child Left Behind, the nation’s landmark education policy, Spellings said. Instead, Washington is filling the vacuum with waivers from accountability requirements.

A similar stalling process is occurring in infrastructure investment, said Janet Kavinoky, the U.S. Chamber's executive director of Transportation and Infrastructure. “It’s a completely predictable crisis at the federal level,” said Kavinoky. “Keep expecting gridlock on the roads and in Congress.”

Executive Vice President of Government Affairs Bruce Josten Josten pointed out that 70 tax credits expired last December, and 52 more will expire this December unless Congress acts. That is one-third of the nation’s tax code.

The other economic trigger with far-reaching effects is the so-called sequestration process, which will require $1.2 trillion in budget cuts. Several leading economists “conclude that if the tax code is allowed to expire and sequestration occurs, unemployment rates will rise above 9% and GDP growth will slow by as much as three percentage points at a time when we’re only growing by 2.3%,” Josten said.

The Chamber is advocating a two-step policy on taxes and government spending, Josten said. First, a temporary extension of the current tax code for one or even two years; and second, a requirement that the next Congress tackle comprehensive tax and entitlement reform.

An area where government is active is in labor and immigration enforcement activity, says Randy Johnson, senior vice president of Labor, Immigration and Employee Benefits at the Chamber. The U.S. Immigration and Customs Enforcement (ICE) is cracking down on I-9 work authorization forms, but according to Johnson, approximately 30% of small businesses don’t know what an I-9 form is. Investigations and fines from ICE have gone up 400,000% under the Obama Administration, Johnson says. And the fines run into the hundreds of thousands of dollars for even small paperwork mistakes.

Josten urged small businesses to get involved in advocacy, says Josten. “It’s one thing for us to represent your interests, but ultimately, members of Congress ask for your stories. We’d love to have more people participate directly.”

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