With the large gains by Congressional Republicans, Republican control of the House, and a more balanced Senate, industry owners/operators can expect some relief from the many burdensome initiatives pending in the 111th. Republican gains in the Senate will tilt Committee ratios closer to parity between the parties with greater representation by Republican Members and staff on Committees across the board. A shift toward parity, and the Republican majority in the House, will be very positive for industry owners/operators.
KEY ISSUES FROM THE 111th CONGRESS
Climate Change Cap-and-Trade
Any life left in greenhouse gas (GHG) cap-and-trade legislation has been squelched by the election outcome.
Creating American Jobs and End Offshoring Act (S 3816)
This bill would have punished manufacturers for increasing production outside of the US or closing US facilities, by eliminating their business expense deduction and increasing their taxes. The underlying reasons for expanding overseas and closing domestic facilities – such as, for example, unsustainable energy or environmental costs here in the US – would not have been taken into consideration. Although the closely-watched bill did not move in the 111th, Senate Majority Leader Reid in his Teleconference mapping out the Democrats' post-election agenda, made clear that Democrats will "keep fighting to stop" corporations from shipping jobs overseas, "because there's nothing that impacted the middle class more than job shipping overseas." Industry should expect to revisit this issue in the 112th.
Foreign Manufacturers Legal Accountability Act (HR 4678)
HR 4678 would require foreign manufacturers doing business in the U.S. to identify a registered agent in the U.S., effectively to acknowledge liability for lawsuits in the US against the company. Although the bill explicitly exempts certain manufacturers with a US presence or ownership, the bill would violate trade laws and could have created supply difficulties for US companies. The bill was reported favorably by the House Energy and Commerce Committee in the 111th, which is less likely to happen in the 112th, but there could continue to be interest in this issue.
KEY INDUSTRIAL OWNER/OPERATOR PRIORITIES
- environmental standards that are achievable and protect the environment
- energy policies that do not substantially increase costs and decrease competitiveness
- overall regulatory certainty
- greater access to credit
- tax and trade policies that encourage manufacturing investment and assist US manufacturing
- aid for developing a skilled workforce
ON THE HORIZON FOR THE 112th CONGRESS
Republican "Pledge to America"
The Pledge outlined plans for encouraging business and supporting manufacturers. According to the pledge, "a plan to create jobs, end economic uncertainty, and make America more competitive must be the first and most urgent domestic priority of our government." Republicans in the House will introduce legislation to implement this pledge. To have any chance of success, the legislation will need to garner enough Democratic support to be passed by the Senate and signed by the President. For this reason, industry should not expect Congress to enact major changes in law or policy.
House Energy and Commerce Committee Oversight of EPA
All three potential Republican Chairmen of the House E&C Committee (Reps. Barton, Shimkus, Upton) have made clear that they will conduct oversight of EPA regulatory actions. In October 2010, Ranking Member Barton wrote to EPA signaling his interest in the impact on US companies and jobs of 50 pending EPA Clean Air Act regulations. In the 111th Congress, concern for EPA's pending regulations has been strongly bipartisan, evidenced by, for example, Democrats and Republicans on letters to EPA expressing concern that the upcoming ozone standard not be unduly stringent. Close, bipartisan scrutiny of these and other EPA actions such as climate change, Clean Water Act, Superfund and other environmental statutes, should be expected in the 112th.
Beyond no support in the 112th Congress for a GHG cap-and-trade legislation, there will likely be bipartisan support for protecting the US economy from GHG regulation. House and Senate Committees are likely to consider ways to prevent EPA from going forward with its GHG regulations. Among the possible actions would be a Rockefeller-like attempt to delay EPA regulations, or to delay State implementation of the rules.
Senate Environment and Public Works Committee Makeup
Two of the most dogged and knowledgeable opponents of overreaching by EPA – Senators Bond and Voinovich – are retiring. It is unclear who will replace them on the Committee, but their deep knowledge of the Clean Air Act and other EPA statutes will leave a gap to be filled. New Committee Members and staff will take some time to be educated in the issues and new advocates on the Committee for key environmental issues will need to be identified.
From the perspective of industrial energy consumers, who must absorb the downstream cost impact of the regulation of utilities, the 112th energy policy = environmental regulation + energy legislation. Presumptive House Speaker Rep. John Boehner has described his idea of comprehensive energy policy to include boosting domestic energy supplies and creating American jobs. This is consistent with how industrial sources see domestic energy policy, and the 112th could provide the bipartisan opportunity to bring environmental goals into line with the energy policy they are driving.