but referred to committee. Though unlikely to be reintroduced this year, there’s always a chance that it will come up again, West says.
In addition, some of the discussion has moved to eliminating LIFO through regulation from the Securities and Exchange Commission, a move that also concerns West: “We really need to be able to keep an eye on what’s going on with this.”
Employee Free Choice Act
First introduced in 2005 and reintroduced every year since, the Employee Free Choice Act was designed to make it easier for employees to form unions or collective bargaining units by allowing organization through petition rather than election. Employees could sign a card or petition showing their support for the appointment of an individual as a bargaining representative.
“I predict that this bill will be the top issue for labor groups when the new Congress comes into session in January,”West says. The bill passed the House last year but stalled in the Senate. Proponents of the bill say it allows for employees who want to organize to do so without having to put in a lot of money or fear retaliation for exploring organization.
Opponents say the bill allows unions to eliminate the secret ballot and opens the door to harassment of workers who disagree. They also say the legislation puts unreasonable time limits on the bargaining units, allowing only 120 days to reach a labor agreement before being forced into binding arbitration.
“Until the energy issue hit, this was the biggest issue we dealt with for this year because it had to be,”West says. “It’s a major rewrite of the current labor laws.”
This issue also has West watching the November elections closely. With the Presidency, the entire House of Representatives and one-third of Senate seats at stake, it’s hard to predict how favorable the climate will be in the national government come January, she says.This article looks at five key issues distributors and manufacturers should watch closely in the next year.
The U.S. House of Representatives plans to adjourn for the year on Sept. 26. And, with the August recess not over until Sept. 8, Jade West, senior vice president for Government Relations for the National Association of Wholesaler-Distributors, doesn’t expect much more to get done before a new Congress takes its place in January.
However, distributors and manufacturers may want to keep their eye on a few critical issues going into the next session.
The prices of finished energy goods -including home heating oil, gasoline and lubricating oils among others -increased 28 percent from July 2007 to July 2008, according to the Bureau of Labor Statistics. The impact of those steep increases has been felt across all segments -business and consumer -and has drawn much attention to what the National Association of Manufacturers calls the increasing demands on our country’s dwindling energy supply.”
“If anything is going to be passed in those last three weeks, an energy bill is a definite possibility,”West says. “It will at least be talked about.”But while everyone has the desire to do something to offset the economic hardship caused by skyrocketing prices, no one can seem to agree on how best to address the issue. Before the August recess, a bipartisan group of 10 senators presented a compromise bill with the hopes of moving forward. As yet, it appears that neither side is happy with the provisions.
The proposal targets three areas: transitioning vehicles to non-petroleum-based fuels, conservation and energy efficiency; and targeted, responsible domestic production of energy resources. Funding would be made available to auto manufacturers for the research and development of alternative fuel vehicles, and tax credits to consumers who utilize alternative energy options. In addition, it would open limited offshore drilling options for oil exploration.
Alternative Minimum Tax Patch
When the AMT code was written in 1969, it failed to account for future inflation, West says. As such, a code meant to target fewer than 200 people now affects millions. The annual patch is meant to alleviate some of the inflationary expansion by extending increased exemptions for another year. If the patch fails to pass, which West does not expect to happen, the AMT would expand to millions more in the middle class.
“Extenders Package”Tax Bill
The Jobs, Energy, Families, and Disaster Relief Act of 2008, commonly referred to as the “Extenders Package,”extends a variety of provisions slated for reconsideration by Congress, including some that overlap the Alternative Minimum Tax patch. “This bill is of critical importance to businesses in general, but manufacturers in particular, because it renews the tax credit for certain research and development activities,”West says. “If it doesn’t pass, companies will need to start restating their earnings very quickly.”
The likelihood of passage is fairly high, but far from assured in the current Congress. In particular, the Extenders Package has faced heavier opposition than normal because of the energy bill debate and the inclusion of credits for using alternative renewable energy sources.
Repeal of LIFO
A few years ago, Congress began discussing repeal of the Last In First Out (LIFO) tax accounting method used by many distributors in warehouse accounting. The method was viewed by some legislators as a tax loophole that provided undue benefits to businesses.
“This is one of those issues that we watch like a hawk because it is so problematic to our members,”West says. “If LIFO is repealed, it would amount to a significant tax increase for thousands of distributors who warehouse goods.”The issue was introduced during this Congress