September 18, 2017 - Weekly Legislative Update

Trump-Ryan-McConnell Tax Reform Plan Due Soon 
We can expect a detailed tax reform plan the week of September 25, with the bill introduced around mid-October.
President Trump's courting of Democratic leaders has dealt a blow to the thirty or so arch-conservatives in the Freedom Caucus who've been aiming to give themselves a voice in tax reform by holding up passage of a joint budget resolution for next fiscal year. 
In the recent continuing resolution to fund the government and suspend the debt ceiling, Freedom Caucus thought they could force the Speaker (and majority of House GOP) to agree to their demands for spending cuts and other riders, but this strategy backfired.
They were dismayed as the President made a deal with Democratic Minority Leader Schumer and Minority Leader Pelosi to pass the funding and debt ceiling suspension bill with more than enough Democratic votes to offset the loss of Freedom Caucus votes.
What happens now will impact the odds for tax reform by Christmas, which is the oft-cited goal of GOP leaders in Congress and the Administration.
Recovering from their shock, Freedom Caucus members aren't willing to accept they've been marginalized.  They see these options:
  • Await the Trump-Ryan-McConnell tax reform plan on September 25 and frame new demands.  Stick to leverage of blocking passage of a budget resolution, preventing use of reconciliation for fast-track passage of tax reform if the product isn't to their liking.
  • Exploit divergence between the parties.  Senate Democrats long ago stated their principal demands for tax reform: no tax cuts for the wealthy, no addition to the deficit, no budget reconciliation.  Both parties could go into December struggling for a deal, and if they fail and GOP goes it alone, Freedom Caucus will again be in a position to block action until their demands are met.
That's the dynamics we'll be dealing with as we lobby for permanent WOTC in the coming tax reform bill.
Here are our advantages as we enter the fray:
  • Democrats having a voice in tax reform is much to our advantage.  Senator Schumer and Leader Pelosi are friends of WOTC, and lately, are on good terms with the President. 
  • Congressman Tom Reed, principal sponsor of H.R. 3652 to make WOTC permanent, is highly regarded on Ways and Means and is an early supporter and friend of the President.
  • Our supporters in Congress are making a strong case for permanent WOTC as the bill is written: groups like military spouses and foster youth in transition are clamoring for eligibility, new challenges like disaster relief and rural poverty are claiming attention of policymakers.  
  • Cost of WOTC is included in the budget baseline-it will be counted as no cost to the government and no revenue offset required.
  • Our lobbying campaign jumped off to a good start after Labor Day, building on the importance of WOTC for disaster relief.

Our main challenges:

  • Authors of the GOP plan say they want a revenue-neutral bill, which limits funds needed to sustain tax credits that achieve important policy goals, like WOTC, unless some of the cost is allocated to a new revenue source or the deficit.  To achieve goals for lower tax rates, tax extenders like WOTC may be scrutinized for expiration at  the end of 2019.
  • House Ways and Means Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch have enormous power to decide which tax credits will be included for permanent extension and which allowed to expire.  If not included in the "Chairman's mark," that is, the final text of tax reform that each committee will vote separately to approve, amend, or disapprove, it'll be an uphill fight to get WOTC into the House and Senate bills. 
  • If Republican Leaders Ryan and McConnell persist in their plan to pass a budget resolution allowing reconciliation, they'll likely lose Democratic support.  However, Senate  Democrats alone won't be able to keep a GOP bill from passing.  This forces us to make every effort to win support of GOP leaders and members of Ways and Means and Finance so permanent WOTC will be included in their final product.
  • Tax reform (after winning permanent WOTC) can pass by attaching it to the bill to fund the government in December, but the attempt is unlikely to succeed if Democrats aren't on board.  This tactic depends importantly on Senator Schumer and the President continuing to work together.
TIA Announces Richard Smallwood as Keynote Speaker for the 2017 Tire Industry Honors
The Tire Industry Association, a leader in tire safety, announces Richard Smallwood, president & CEO, Sumitomo Rubber North America, Inc. as the 2017 Tire Industry Honors keynote speaker.

The Tire Industry Honors, sponsored by Michelin, will be held in Las Vegas at the Paris Las Vegas Hotel on Monday, October 30th from 6:00pm - 8:00pm. Richard Smallwood's speech will focus on the advent of driverless cars - the greatest change in highway travel in over a century. He will address how this impact will increase vehicle miles traveled and how tire and auto part sizes are expected to be more uniform in size, that will significantly reduce inventory. By 2025, industry leaders are predicting 24 million driverless vehicles on the highway.

Richard has been in the tire and rubber industry for 30 years. Throughout his career Richard has held the roles of Vice President of Sales & Marketing, and Chief Operating Officer, with Falken Tire Corporation. He also currently serves as an Executive Officer of Sumitomo Rubber Industries, Ltd. (SRI), and previously served as a member of the Board of Directors for SRI Tire Trading, Ltd. (SRIT). Richard received a Bachelors of Arts degree in Organizational Communication at California State University Stanislaus and a MBA in Business at Pepperdine University.

"We are excited to have Richard speak at our 2017 Tire Industry Honors awards ceremony," said Roy Littlefield, executive vice president, Tire Industry Association. "Richard has proven himself as a selfless leader and key player within the tire industry and we are looking forward to having him join us, our honorees, members, and guests for an incredible evening."

Every year the Tire Industry Honors recognizes individuals who have significantly impacted the tire, rubber, and transportation industries.
To register for the 2017 Global Tire Expo: For more information on the Tire Industry Honors please contact: LeAnn Harley