10.14.2011 For 9 months it has seemed that Congress and the President were only interested in one issue – the federal budget. And contentious, partisan battles had become 'the norm'. Battles between Democrats and Republicans, between the House and the White House, were a constant, and not much got done other than the budget and setting spending limits. While those are important, and the deficit remains the elephant in DC, other functions of the government require attention: transportation, infrastructure, trade, tax, etc. Yet it seemed that all the oxygen was being consumed by the budget and spending battles. All of a sudden that has changed, or, at least we have seen a glimpse of what can be accomplished when the Congress and White House feel they must find a solution. This past week Congress passed three major trade agreements, opening new markets for US manufacturers, service industry and agriculture, defeated a misguided threat to trade with China, restored an important trade facilitation mechanism, and passed a limited worker training program. These had been languishing for months, in some cases years. These trade agreements with Korea, Panama and Colombia were vigorously opposed by organized labor and their supporters on Capitol Hill and in the White House, which had refused to send the Agreements to Congress for nearly three years. Finally, as Korea and Colombia were entering into Free Trade Agreements with the European Union, with Canada, with Mexico, leaving US without competitive access to their markets, the White House was pressured into releasing the Agreements to Congress, and majorities were cobbled together in the House and Senate to pass them. What is remarkable is that we have decided we need to remain competitive in the global economy, and we have finally demonstrated the will and capacity to pass the laws which will allow US business to compete. Keep in mind that the big news is still deficit reduction. The "Super Committee", comprised of 6 Senators and 6 Congressmen (half Democrat and half Republican) continues to meet, striving to find a way to reduce the deficit between $1.2 and $1.5 trillion over the next decade. They must reach an agreement, and present to the Senate and House, by November 23. Then Congress must vote to accept that agreement. Failure to do so would trigger automatic cuts totaling $1.2 trillion, divided equally between defense/homeland security (including Coast Guard) and civilian government programs. And then Congress will be back to battling over raising taxes or not, cutting entitlement (Medicare, Social Security, etc) or not, cutting or eliminating specific programs or even agencies. The Super Committee is comprised of 12 Congress people with diverse viewpoints, some who have vowed they will not accept any tax increases, and others who have vowed not to accept any cuts in entitlement programs. Frankly, without one or the other, or better yet a combination of both, it will not be possible to reach real deficit reduction. So an agreement will require compromise. It's a tall order. Optimists only give it a 50-50 chance. And until this work is completed, Congress cannot move forward with a meaningful jobs bill, or a transportation infrastructure (highway and transit) bill, or assign budgets to all the federal agencies, including Customs and Border Protection, the Corps of Engineers, the Defense Department, etc. Thus all Federal programs and their funding are "on the chopping block" through the end of the year. In the meantime, there will be skirmishes on Capitol Hill as the business community and Republicans, emboldened by success in passing the trade agreements, will seek to derail new regulations being issued by the Administration. For instance, cement dust regulations by EPA, or trucking hours of service Regs by the Federal Highway Safety Administration, both of which are seen as "anti-business". Regulations will be a flashpoint between the House and the White House for the remainder of the year. It is all very unsettled, and with the economy still in jeopardy, the stakes are high. But passing the trade agreements gives us some reason for hope that when push comes to shove, decisions, the right decisions, are possible. Regards, FBB Federal Relations
Peter Friedmann's View From Washington, DC
Peter
Peter Friedmann
Of Counsel, Lindsay, Hart, Neil & Weigler, LLP
1120 G Street NW, Suite 1020 Washington, DC 20005
tel: 202-783-3333 fax: 202-783-4422
ourmanindc@federalrelations.com