Anticipating Legislative Activity

Karen Wanamaker, V.P. Industry & Govt. Affairs NWPCA

Since Jan 2009

• Chrysler, GM• Citigroup • AIG• Jan 2009: $10,628,881,485,510.23 • Dec 2009: $12,144,893,016,570.46

Carbon Tax (& Trade)

• ACES (American Clean Energy and Security Act)– Passed in House– Passed Senate Committee– Target: Cut “Greenhouse Gases” 20% by 2020

• EPA Endangerment Ruling– Target: Companies that emit 250 tons of CO2 a year

Union Strength

• Congress – Employee Free Choice Act “Card Check” – Eliminate secret ballot voting, replacing it with union cards

signed by a majority of employees – Binding arbitration

• U.S. Department of Labor– Eliminating union reporting requirements– Hiring 250 new investigators to audit employer records for

wage/overtime; injury/illness– New industrial dust standards– Plans to hire 100 new OSHA inspectors– Increase in “egregious” violations – the highest penalties

ICE Increasing Workplace Audits

April 2009 Entire FY 2008

Businesses debarred 45 0

Individuals debarred 47 1

Notices of Intent to Fine (NIF) 142 32

Dollar amounts of NIFs $15,865,181 $2,355,330

Final Orders 45 8

Dollar amounts of Final Orders $798,179 196,523

Cases initiated 1,897 605

Form I-9 Inspections 1,069 503

Health Care Bill – Employer Impact

• Increased Premiums– $70 billion over 10 years on insurance companies, – $2 billion-a-year tax on medical devices

• Employer Mandates – $750 penalty per worker on employers of 50 or more who do not offer

“federally qualified coverage” – $3,000 for each worker that qualifies for a federal insurance subsidy

• Excise Tax: 40 percent on plans exceeding $8,500 (individual) and $23,000 (family)

• State Taxes: Expand Medicaid • Medicare Payroll Surtax: income in excess of $200,000

(individual) and $250,000 (couple) • New limitations on flexible spending accounts (FSAs)

SBA Small Business Loans

• Loan volume down 36%, 25,000 businesses• Total dollar volume dropped 27%: • Stimulus Bill: $730 million • SBA waived fees. increased guarantees;

encouraged 1,200 lenders to resume lending• Wells Fargo, increased lending • Rest of top-10 cut loan volume by 30% or more.• CIT Group last year’s largest lender, edge of

bankruptcy. • Last year’s 10th biggest lender was shut down

by regulators in July.• Half nation's workforce on payroll of a small

business• President wants “windfall profits tax” on top 20-

30 banks – $120 billion revenue

Economic Forecast

• Consumer Spending– Flat through 3rd Q 2010 – 2% increase 4th Q

• Business Investment Restrained– 1.5% to 2% – through 2nd Q– 4th Quarter 5% annual rate – 1st time in 3 ½ years

• International Trade – Stable Dollar– U.S. Exports Rebound and grow by 7.2%

• Labor Market Remains Weak – Job Losses Continue– 1 million jobs forecast lost by mid-2010– Manufacturing hit hardest – 29 percent of total jobs lost– Unemployment to peak at 10.8% in 3rd Q (Individual monthly rate of 11% likely)– Initial increases will be mild– Nonfarm employment will not reach pre-recession level of 138 million until 3rd Q of

2012 (7.2%)

Other Employer Issues

• Paycheck Fairness Act – Passed House• R&D Tax Credit Expired (Dec)• Policy Uncertainties Impact Business

Outlook