Free Enterprise Winter 2014

U.S. Chamber’s Donohue Unveils 2014 AgendaPage 5

QuarterlyWinter 2014

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Winter 2014 At A GlAnce

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Free Enterprise is published monthly by the United States Chamber of Commerce at 1615 H Street, NW, Washington, DC, 20062-2000. Copyright © 2014 by the United States Chamber of Commerce. All rights reserved. No part of this publication may be reproduced or transmitted in any form—print, electronic, or otherwise—without the expressed written permission of the publisher.

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2 www.uschamber.com

In Case You

Missed iT

U.S. Chamber Foundation Announces Corporate Citizenship Award WinnersThe U.S. Chamber of Commerce Foundation Corporate Citizenship Center recognized eight companies for their accomplishments in corporate responsibility and for their significant positive impacts in communities around the world. The 2013 winners are UPS, 3M, Transamerica, IBM, Citi, Walmart, Hilton Worldwide, and Merck.

HappenIng In and Around the U.S. Chamber

The Institute for 21st Century Energy launched the Energy Works for Us campaign. www.energyxxi.org

The Workforce Freedom Initiative released the report The Emerging Role of Worker Centers in Union Organizing: A Strategic Assessment, highlighting some of the actors, strategies, and tactics behind the growing movement of these union front groups. http://bit.ly/18PB4Dd

The U.S. Chamber Foundation’s latest edition of Business Horizon Quarterly focuses on national missions. uschamber.com/library/bhq

The Chamber’s Janet Kavinoky explains the need for infrastructure investment in a video on the Chamber’s YouTube page. http://youtu.be/E9qVBC-rTCw

eVenTs

CALeNdARFebruary 15–22 National Entrepreneurship Week

February 20 Let’s Rebuild America Transportation Infrastructure Summit

February 26 Reimagining Aid Design and Delivery Event: Data-Driven Decisions for Business and Students, hosted by the U.S. Chamber Foundation’s Education and Workforce center

March 4 International Women’s Day Forum, hosted by the U.S. Chamber of Commerce Foundation Corporate Citizenship Center

March 6–8 U.S. Chamber board meeting, Orlando, Florida

March 12 2013 Spirit of Enterprise Awards presented to members of Congress

March 18 Release of the state-by-state education report Leaders and Laggards 2014, by the U.S. Chamber Foundation’s Education and Workforce center

March 19 8th Annual Capital Markets Summit

March 26 Leading Women in Free Enterprise event, hosted by the Chamber’s Center for Women in Business

Visit uschamber.com/events for more information.

Business Leaders Chart Path for U.S.-Mexico Economic RelationsMexican and U.S. business leaders, including U.S. Chamber President and CEO Tom Donohue, concluded the U.S.-Mexico CEO Dialogue in Mexico City after identifying areas for collaboration in infrastructure, energy, regulations, customs modernization, and education and workforce development.

U.S. Chamber Commends House Passage of Asbestos Trust Transparency BillLisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), praised the House for passing the Furthering Asbestos Claim Transparency (FACT) Act of 2013. This bill would require asbestos personal injury settlement trusts, which operate with little oversight, to report their claims in order to deter waste, fraud, and abuse.

Employers Struggling Under Health Care LawResearch released by the International Franchise Association (IFA) and the U.S. Chamber shows that the Affordable Care Act (ACA) is already resulting in higher costs for health coverage and that businesses have cut full-time jobs, despite a one-year delay of the employer mandate. The research also shows that 31% of franchise and 12% of non-franchise businesses have already reduced worker hours.

U.S. Chamber Helps Build Support for Immigration ReformFormer New York City Mayor Michael Bloomberg, Michigan Gov. Rick Snyder, and former U.S. Commerce Secretary Carlos Gutierrez each issued an impassioned plea to Congress to pass comprehensive immigration reform during a National Press Club event co-hosted by the U.S. Chamber on January 24. “Without immigration reform, we don’t have a future,” Bloomberg said.

Percentage of decision makers in franchisee-owned businesses who say ACA will

have a negative impact.

Heard iN ANd ARouNd The u.s. ChAMbeR

“[We] are going to use every resource at our disposal to stem this unprecedented flow of regulations. We must lift the veil of uncertainty hanging over every

business and investor if we want to revive our economy.”

—The Chamber’s Tom Donohue in The Washington Times, December 3, 2013

Campaigns & Elections named the Chamber’s Rob Engstrom 1 of the 50 influencers to watch ahead of the 2014 election cycle. Engstrom

was recognized as an enforcer, “whose causes will shape the outcome of 2014 and beyond.”

“Our whole [voter education] strategy this cycle is we’re going to go local. We’re going to run it like a sheriff’s campaign.”

—The Chamber’s Scott Reed quoted in a Wall Street Journal story on business playing a bigger role in the 2014 elections,

December 2, 2013

www.uschamber.com 3

OpiniOn | I n Yo u r C o r n e r Winter 2014

On the Verge of RuinHow EPA Put My Family Business in Jeopardy

My family has been making clay bricks in the small town of Columbus, Mississippi, since 1890. My great-grandfather, W.N. Puckett, and his business partner, W.S. Lindamood, were helping build a women’s college when they discovered that there were not enough bricks for the project. So they started Columbus Brick Company.

In our 125 years of business, nothing has threatened our existence quite like the recent regulations coming from the Environmental Protection Agency (EPA). I am most concerned about whether Columbus Brick can continue for our 75 employees and the fifth generation of Pucketts working here.

The threat to my family business and others is a legal tactic known as sue and settle in which advocacy groups sue an agency, the agency agrees to a settlement, and a court approves the settlement. A court-approved settlement legally binds the agency to take the action demanded by the advocacy group, upon a deadline set by the group.

We have been hit twice by this type of sue-and-settle approach on the same rule. In the early 2000s, environmental groups, including the Sierra Club, sued EPA to enforce a deadline for a new air quality

rule for brick plants across the country. As a result of the lawsuit, EPA rushed to get the rule out without fully considering the industry’s concerns. Our industry had worked with EPA since the rulemaking process began in 1998, providing it with the requested data, while being assured that the agency would write a thoughtful, fair rule.

The same environmental groups that took legal action to force the hurried rulemaking then successfully sued EPA again to have a court vacate the ruling for being technically deficient—but not until after my company had been required to install $750,000 in new control equipment. The U.S. brickmaking industry as a whole has spent more than $100 million to comply with the rule since 2003.

Now Sierra Club and EPA have entered into yet another sue and settle agreement to redevelop the standard for our industry. Because of this agreement, EPA in 2014 will propose a much more stringent and expensive rule for the industry. Our industry will be asked to rip out the controls we installed after 2003—many of which have not been fully paid for—secure new bank loans, and install more expensive equipment. EPA

estimates that the new controls could cost twice as much as the existing ones.

If EPA continues with a sue-and-settle approach to lower litigation potential, it could be devastating to Columbus Brick. Based on the EPA numbers I have seen, I expect, at a minimum, to have to permanently shut two of our three kilns. Even if someone fully paid for my control devices, it would be difficult to operate them and remain in business. That could mean permanent job losses for 45 to 50 families in our community and hurt businesses that depend on them.

EPA’s data show that the new regulation would provide no great benefit to the environment. The brick industry’s operations are already well under the air quality standards in virtually all areas. EPA has the authority under the Clean Air Act to avoid regulations that have disastrous economic impacts, while protecting human health and the environment. It should exercise that authority.

We are not asking for air quality rules to go away. We are asking EPA to consider the data, accept input from affected industries, and propose a rule that protects health and the environment, while allowing our industry to continue operating.

OpiniOn | Yo u r T u r n

Allen Puckett III

President Columbus Brick Company Columbus, Mississippi

columbusbrick.com

Rob Engstrom

Senior Vice President, Political Affairs & Federation Relations, U.S. Chamber

2014 Elections: Big OpportunityChamber Takes ‘Early, Often, and Local’ Approach

Congress’ approval ratings have made it clear that Americans are fed up with politicians who are more beholden to ideology or ambition than doing what the voters sent them to Washington to do. Americans need leaders with the courage to govern on issues that matter, not those who refuse to acknowledge the unsustainable rate of federal spending or consider pragmatism to be an antiquated concept.

The U.S. Chamber measures candidates based on their support of American free enterprise—the policies that promote growth, boost job creation, and strengthen our economy. We stand with candidates who support job creators on a broad range of issues, ranging from energy and health care to transportation and legal reform.

Our goal for 2014 is to protect and

expand a pro-business majority in the House and advance our position in the Senate. How do we accomplish that? We’re going early, often, and local.

We’re working hand in glove with our members on the ground to localize federal issues so that constituents understand the Main Street impact. We’ll be engaged in mobilizing the business community through early voting and have already been active in key states.

The Chamber went all-in to help elect pro-business conservative Bradley Byrne in the primary special election for Alabama’s 1st Congressional District last November. Shortly thereafter, we launched voter education campaigns in support of Senate Majority Leader Mitch McConnell; Shelley Moore Capito in the West Virginia Senate race; Evan Jenkins from West Virginia’s 3rd Congressional

District; and Rep. Mike Simpson from Idaho. We’re working now to shape the map and

the races that matter most. We’re meeting with candidates to gauge their support of business issues, and we’ve expanded the Chamber’s field staff, who will play an active role in the elections.

Finally, we’re embracing social media and other new techniques to communicate our messages, identify our voters, and get them to the polls. Stay tuned for the launch of VoteForJobs 2104, our voter education website.

The media, business, and advocacy communities have taken notice of our early, expanded, and upgraded activities. There is growing recognition that with our brand, broad membership, and the issues on our side, we can make a real difference on behalf of pro-business candidates in 2014.

Scott Reed

Senior Political Strategist, U.S. Chamber

4 www.uschamber.com

In 2012, the average unemployment rate for post-9/11 veterans was approximately 10%, 3 percentage

points above the national average. For veterans under the age of 25, unemployment was closer to 20%. And military spouse unemployment was at 15%.

As discouraging as these employment numbers may appear, they represent progress. The unemployment rate has dropped for every segment of the veteran population over the last three years.

Leading the charge is the U.S. Chamber of Commerce Foundation’s Hiring Our Heroes (HOH) program, and its hands-on jobs fair model is a big part of that growth.

Launched in March 2011, HOH is a nationwide initiative to help veterans and military spouses find meaningful employment. Through its Hiring 500,000 Heroes campaign, a joint effort by the National Chamber Foundation and Capital One, approximately 1,400 businesses of all sizes had hired nearly 250,000 veterans and military spouses by the end of 2013, with a commitment to hire an additional 110,000 veterans. The program is well on its way to reaching its goal of having 500,000 veteran hiring commitments by the end of 2014.

Building on the success of the program’s founder, Lt. Col. Kevin Schmiegel, HOH brought on Navy Reserve Judge Advocate Commander Eric Eversole as executive director of the program and a U.S. Chamber vice president in August 2013.

Prior to joining the Chamber, Eversole spent six years as attorney adviser at the Federal Energy Regulatory Commission, providing legal advice to the chairman and commissioners on issues involving the sale of electric power. In 2010, he founded the Military Voter Protection Project, a nonprofit dedicated to

promoting and protecting the voting rights of American service members.

The success of HOH is due in large part to its efforts in local communities throughout the United States. Working with the U.S. Chamber’s vast network of state and local chambers and other strategic partners from the public, private, and nonprofit sectors, the program has hosted more than 670 hiring fairs in all 50 states, Puerto Rico, and the District of Columbia. As a result, 21,600 veterans and military spouses have found meaningful jobs and careers.

Businesses find that they benefit from the skills that veterans and military spouses bring to the table, including discipline, leadership, and performance under stress. “We’re very veteran focused,” says Grant Johnston, vice president of New Jersey-based Airstreams Renewables. “There’s a benefit to hiring veterans—you know what you’re getting.”

Johnston attended an HOH jobs fair in Holmdel, New Jersey, seeking employees to work atop cell phone towers and wind turbines. “Veterans have discipline instilled in them,” Johnston told local news outlet NJ.com. “They are going to show up and get the job done. They attend to detail, important when you are working 700 feet up.”

Says Eversole, “The business community has truly stepped up in unprecedented ways to seize this

opportunity and hire military talent. They understand that hiring veterans is not just the right thing to do, but it is the smart thing to do for their businesses.”

HOH AdvocatesBut Eversole is quick to point out that HOH has not

done it alone. Through relationships forged with strategic partners such as the U.S. Department of Veterans Affairs, the Department of Defense, the Department of Labor Veterans’ Employment and Training Service, the Employer Support of the Guard and Reserve, The American Legion, Blue Star Families, and many others, HOH has hosted hundreds of hiring fairs at no cost to employers or job-seeking veterans and military spouses.

“These partnerships have enabled us to begin moving the needle on veteran and military spouse unemployment,” Eversole says.

Realizing that military spouse unemployment also creates significant burdens on military families, HOH established a program for military spouses in 2012 and hosts 20 job fairs on military installations each year exclusively for them.

The program includes the first-of-its-kind Military Spouse Employment Advisory Council made up of nearly a dozen companies; LinkedIn networks to help military spouses network and identify employment opportunities; an eMentor program that connects protégé spouses with spouse-friendly employers; and networking receptions in conjunction with fairs for military spouses to interact with business leaders and other spouses in their communities.

Former Arizona Rep. Gabrielle Giffords serves as honorary chairwoman of the Hiring Our Heroes Military Spouse Employment Advisory Council. Giffords, a

military spouse, helps raise awareness of the particular challenges military spouses face when searching for meaningful employment.

“While members of the military put on the uniform—they are not the only ones who serve,” says Giffords. “I’m proud to join hands with military spouses to help them put their unique skills to work in their communities.”

HIrIng Our HerOesMObIlIzes busIness

Winter 2014 Chamber @ Work

E n g a g E w i t h

Hiring Our Heroes HiringOurHeroes.org

facebook.com/HiringOurHeroes

@HiringOurHeroes

youtube.com/HiringOurHeroes

member beNeFIT

As a U.S. Chamber member, when you join or renew at Sam’s Club® as a Business Plus Member, you’ll receive a $25 gift card (non-Plus new or renewing Members receive a $10 gift card). Visit www.uschamber.com/samsclub, print your certificate, and present it to the Member Services Desk at your local Club. Benefits include no minimums, no contracts, Business Members-only hours, online ordering, 100% satisfaction guarantee on merchandise and membership, and more!

member benefits From Sam’s Club

Transitioning service members register at a Hiring Our Heroes jobs fair. April 25, 2013, marked the launch of the Hiring Our Heroes partnership with the University of Phoenix with a fair on its campus in Tempe.

Photo: Ian Wagreich/U.S. Chamber of Commerce

The Arizona Republic

Tempe job fair aims to help

veterans, spouses find work

Tempe, Arizona, April 24, 2013

The economy is getting stronger and should grow faster in 2014 than it did in 2013. But alongside the positive signs are big question marks surrounding trade policy, government spending, health care, and regulations, U.S. Chamber President and CEO Tom Donohue said at his annual State of American Business address on January 8 before nearly 200 audience members and more than 100 members of the media.

“Overall growth for last year will probably come in at a lackluster 1.8%. We’ll do considerably better this year—with growth accelerating to near 3%,” he predicted.

However, for the economy to reach its full potential, misguided government policies that have slowed growth and created tremendous uncertainty for job creators must not be repeated, Donohue warned. He noted the business community’s concerns about the negative impacts of the Affordable Care Act as well as other uncertainties. How will an avalanche of new regulations covering energy, the environment, capital markets, and workplaces affect business operations just as things are starting to hum? Will Washington, the states, and localities continue to ignore the pension and entitlement crisis—driving up the nation’s debt, reducing lending capital, squeezing out essential government services, and forcing higher taxes?

Jobs, Growth, and Opportunity AgendaIn 2014, the Chamber will focus its tools, talent,

and resources to advance its Jobs, Growth, and Opportunity Agenda. “Our plan includes ideas to expand trade, produce more domestic energy, and improve our infrastructure,” Donohue said.

The Chamber will also push to speed up

permitting without lowering standards and “modernize a regulatory process that hasn’t been updated since Harry Truman was president,” Donohue quipped.

Other priorities include the need to make “thoughtful but essential changes in entitlements, fix the serious flaws in Obamacare, curb lawsuit abuse, advance American innovation by protecting intellectual property, and revitalize our capital markets by striking the right balance between legitimate investor protections and the freedom to innovate and take responsible risks,” Donohue told the audience.

These proposals, Donohue said, “will solidify our recovery and help generate strong and faster economic growth. The Chamber’s agenda is built on the belief that our nation’s best days are not over; they are yet to come.” He added that “no other country, no other people, and no other society start from such a position of strength and advantage as we do. If we stop ignoring the challenges that confront us and start seizing the extraordinary opportunities ahead of us, we can usher in a new era of economic prosperity and extend its benefits to all Americans.”

Election-Year ActivitiesWith an increasingly difficult political and

legislative environment in Washington, the Chamber will use its voter education efforts for the midterm elections as a motivator for change. “It’s based on a simple theory—if you can’t make them [members of Congress] see the light, then at least make them feel some heat,” said Donohue.

He vowed that the Chamber will support candidates in the primaries and in the general elections who want

to work constructively within the legislative process to solve the nation’s problems—and who understand that business is not one of those problems but rather the solution (see article on top of page 3).

Beyond WashingtonThe Chamber will work on other important activities

beyond Washington, Donohue said. It will leverage strong relationships with governors, mayors, and other officials to reform the education and legal systems, counterbalance the influence of labor unions, and find good jobs for veterans and military spouses.

The Chamber’s public policy law firm, the National Chamber Litigation Center, will be even more active in the courts, weighing in on precedent-setting business cases and challenging regulatory overreach. “In 2013, we added superior legal expertise to the team, expanded our caseload, and filed more of our own lawsuits,” said Donohue. “We’re expanding our program into more state and local courts while remaining a key player in the U.S. Supreme Court.”

At the same time, the Chamber’s International Division, its Global Intellectual Property Center (GIPC), and its national security and cybersecurity experts are working with the nation’s defense, intelligence, and diplomatic communities and before governments around the world.

“It all comes down to leadership—leadership in our government, leadership in business, and leadership in every sector of American life. Leadership that puts our country and the future first,” Donohue concluded.

For more details on the Chamber’s Jobs, Growth, and Opportunity Agenda, see pages 6–10 in this issue.

Jobs, Growth, and Opportunity: An American Agenda Winter 2014

THE STATE OF AMERICAN BUSINESS | ENERgy & ENvIRONM

ENT | FISCAL RESPONSIBILITy | IMM

IgRATION & EDUCATION REFORM | REgULATION & LITIgATION | TRADE & INTELLECTUAL PROPERTy

U.S. Chamber President Lays OutJOBS, GrOwth, and OppOrtunity aGenda

www.uschamber.com 5

EnErgy & EnVIrOnMEnT

To view video of Tom Donohue at the State of American Business address, scan this code with your smartphone.

WORKING FOR YOUThe Institute for 21st Century Energy

Environment, Technology & Regulatory Affairs Division

www.energyxxi.org

Led by Karen Harbert, a former U.S. Department of Energy official, the Institute builds support for meaningful energy action nationally and internationally through policy development, education, and advocacy.

www.uschamber.com/environment-technology-regulatory-affairs

Among the many projects of this Chamber division, led by William L. Kovacs, is Project No Project, which assesses the broad range of energy projects that are being stalled, stopped, or outright killed nationwide due to Not In My Back Yard (NIMBY) activism, a broken permitting process, and limitless challenges by opponents of development.

America’s energy abundance gives us an unrivaled opportunity, but we need leaders and policies that embrace the

enormous potential our nation has been blessed with.

—Thomas J. DonohuePresident and CEO, U.S. Chamber of Commerce

ISSUE AT A GLANCEAmerica is on the verge of an energy revolution. But is the nation ready to capitalize?

The United States has always been rich in energy resources. But owing to the application of new technologies on private land, over the past five years our nation has entered a new, yet still fragile, era of energy abundance. These changing circumstances have come about largely in spite of federal policy, rather than because of it.

Policy needs to adjust to the new energy realities. The federal government keeps 86% of federal lands off limits to energy development. Our affordable and abundant coal resources are under constant regulatory threat by federal agencies. The administration is proposing new regulations on shale energy development, even though it

is already stringently regulated at the state level. And some in the government still want to pick winners and losers among energy industries.

In January, the Chamber’s Institute for 21st Century Energy launched a new Energy Works for Us platform that outlines more than 50 policy recommendations to help the United States embrace the new era of energy abundance and unleash the benefits across our economy.

CHAMBER PRIORITIES• Urge the administration to expeditiously issue a

presidential permit to construct the Keystone XL pipeline.

• Ensure that EPA evaluates the economic impact and job loss in its regulations, as required by all major environmental laws.

• Oppose efforts to regulate greenhouse gas emissions through existing environmental statutes, including the Clean Air Act, the Clean Water Act, the Endangered Species Act, and the National Environmental Policy Act.

• Urge the administration to stop “slow walking” the permitting process for onshore and offshore oil and gas exploration and development and for coal mining.

• Increase domestic oil and natural gas exploration, maintain coal’s role as a critical part of our energy portfolio, expand the use of nuclear energy, make renewable energy more competitive, modernize the permitting process for energy infrastructure and protect it from cyber attacks, reform the regulatory process, and ensure a competitive workforce.

The Numbers

Amount that unconventional oil and gas added to GDP in 2012.

billion$284

million2.1

million1

million1.9

Number of jobs supported by unconventional gas in 2012.

Number of construction jobs that could be created if permitting delays and other

obstacles were removed from 351 proposed energy projects.

Number of additional jobs that could be created by 2018 by expanding the

development of oil and gas, as well as by building the Keystone XL pipeline.

6 www.uschamber.com

Winter 2014 Jobs, Growth, and Opportunity: An American Agenda




Fiscal responsibility

www.uschamber.com 7

CHAMBER PRIORITIES• Advocate for tax reform that lowers rates for businesses

operating under both the corporate and individual sides of the code, increases global competitiveness, contains proper cost recovery rules, reduces complexity, minimizes uncertainty, and, as a result, drives job creation and economic growth.

• Address demographic realties and put entitlement programs on a sustainable path by making reasonable changes to the programs and gradually phasing them in to slow the rate of increased spending.

• Fend off tax increases, secure a long-term budget deal that includes entitlement reform, keep discretionary spending in check, and avoid a government shutdown.

The Numbers

Without reform, all the major [entitlement] programs will be financially insolvent in 20 years. This is the most predictable crisis in American history, and

yet year after year, our political leaders, and yes, a good share of the American public, refuse to believe it or pretend they don’t see it.


Amount by which mandatory government

spending—which consists mostly of

funding for Medicare, Medicaid, and Social

Security—will grow over the next 10 years.

trillion$1.6

The annual total price for Social Security,

Medicare, and Medicaid within a decade.trillion

$3

Amount the federal government is projected to spend per American in 2015, although it will receive only $9,700 per person in taxes.

$12,400

The price tag for keeping the programs

exactly as they are over the next 75 years.trillion

$40


WORKING FOR YOU

ISSUE AT A GLANCEThe nation must face up to the single biggest threat to its economic future—soaring national debt driven by massive recent deficit spending that will worsen in future years due to unsustainable entitlement spending.

If federal policymakers fail to address this threat, automatic spending will soon consume every dollar the federal government collects, leaving nothing for education, national defense, or other essential programs.

The federal government must reform its major entitlement programs that are driving the nation into the fiscal abyss. These programs, especially Medicare, Medicaid, and Social Security, combine to produce the government’s largest expenditure by a wide margin. All three programs are already running substantial deficits. Both the Medicare and Social Security Trust Funds are projected to be exhausted in just a few years. This means that real reform is coming with utter certainty—either sooner as part of a national debate or later in a manner that could prove devastating to seniors and the economy.

A stronger economy would help provide long-term solutions for entitlement programs, and comprehensive tax reform is essential to creating a more robust economy. The country’s byzantine tax code, which has not been

fundamentally restructured in 28 years, is out of date, is overly complex, and distorts sound business decisions.

The tax code should not pick winners and losers. Comprehensive tax reform should lower tax rates for everyone—corporations and individuals alike—reflect economically sound rules for determining what is to be taxed with due regard for simplification, reduce compliance burdens, and put in place realistic transition rules. Together these reforms would foster economic growth through job creation, investment, and international competitiveness. They would also reduce poverty, taking fiscal pressure off Medicaid, and improve the finances of seniors and the government.

Entitlement Reform Initiative

www.uschamber.com/tentruths

Led by Executive Vice President for Government Affairs Bruce Josten, the Chamber is spearheading a major public education campaign to raise awareness of the need for commonsense entitlement reform. Its 10 Truths About Entitlement Programs generated significant media attention and added a jolt to the national conversation about reforms needed to strengthen and improve the nation’s core social insurance programs.

Economic Policy Division

www.uschamber.com/economic-policy

Led by Chamber chief economist Dr. Martin Regalia, this division focuses on advancing policies that create jobs and foster economic growth. The team produces papers on taxes, the federal budget, and economic forecasts, among other topics.





ImmIgratIon & EducatIon rEform

Immigration reform will not take jobs away from Americans; it will add jobs, talent, innovation, investment, and dynamism to our economy.

Superior education and training for every child and worker are critical too.


ISSUE AT A GLANCEAmerica has grown and thrived because it has attracted and welcomed the world’s most talented and hardest working citizens.

Given the nation’s changing demographics, there will be an even greater need for more workers to sustain the economy and support the retiring population. Even with relatively high unemployment, there are millions of job openings that go unfilled across the country in both high- and lesser-skilled sectors. If immigrants are not allowed to fill those jobs, companies will take them somewhere else, or the services will disappear altogether.

Besides attracting foreign talent, the United States must do more to ensure that its students are academically prepared for both college and careers. Additional emphasis must be placed on STEM (science, technology, engineering, and mathematics) education. The U.S. Department of Commerce estimates that STEM jobs will grow by 17% between 2008 and 2018, compared with just 9.8% growth in non-STEM jobs.

We must also encourage the implementation of strengthened and streamlined academic standards known as the Common Core State Standards, a state-led and voluntary set of rigorous standards adopted by 45 states and the District of Columbia. Other steps that must be taken to reform the education system include implementing better processes for hiring, preparing, and deploying teachers and making a college education more affordable and transparent.

CHAMBER PRIORITIES• Support legislation that takes meaningful steps toward

addressing all four critical immigration priorities: a pathway to legal status for undocumented workers, expansion of temporary worker programs, implementation of the E-Verify program to ensure that employers hire documented workers, and tougher border security.

• Collect and use more robust, comprehensive data to guide the professional development of K–12 teachers, make smarter personnel decisions, and target areas in need of the greatest improvements.

• Support Common Core State Standards in coordination with state and local chambers.

• Increase transparency and urge accountability throughout postsecondary education as well as promote access, affordability, completion, and success for all students.

• Close the skills gap.


The Numbers

Amount of additional tax revenue that the United States stands to gain from comprehensive immigration reform.

billion$66

230,000

Amount of revenue generated by immigrant-owned businesses in 2011.

Percentage of jobs in the fastest-growing occupations that require some level of postsecondary education and training.

Number of unfilled positions requiring an advanced STEM degree by 2018.

90%

billion$775


WORKING FOR YOU

Education and Workforce Center

Led by Vice President Cheryl A. Oldham, the U.S. Chamber of Commerce Foundation’s Education and Workforce center promotes rigorous educational standards and effective job training systems. Its portfolio includes Leaders & Laggards: A State-by-State Report Card and the video series Profiles of Change, highlighting individuals making a difference in K–12 education.

www.uschamber.com/education

Labor, Immigration, and Employee Benefits Division

This division, led by Senior Vice President Randy Johnson, interacts with congressional staff, federal agencies, and national coalitions (many of which are chaired by the Chamber) to help define and shape policy in health care, immigration, and other issue areas.

www.uschamber.com/immigration




8 www.uschamber.com

Regulation &litigation

ISSUE AT A GLANCEA transparent and effective regulatory process, coupled with open and fair courts, is necessary to ensure that there are clear rules for operating in a complex society.

But the nation’s regulatory and legal systems have run amok. Excessively costly regulations—from Obamacare to restrictions on capital markets—and a legal system that has been hijacked by special interest groups are harming the economy and inhibiting job creation.

What’s more concerning is that federal and state regulatory agencies increasingly allow private groups to use litigation to drive new regulation. The use of sue and settle—where special interest groups use lawsuits against federal agencies and subsequent settlements as a technique to shape agencies’ regulatory agendas—has led to a slew of economically damaging rules. This includes one that will needlessly cost an Arizona power plant $700 million for negligible benefits, and another that will add $10 billion in costs for coal-fired power plants and cost thousands of jobs.

www.uschamber.com 9


CHAMBER PRIORITIES• Promote commonsense changes to the Administrative

Procedure Act (APA) and other relevant laws to ensure accountability, transparency, and efficiency in the federal regulatory process and to close loopholes in existing law.

• Support efforts in Congress to pass legislation to curb the unprecedented onslaught of regulations.

• Protect the competitiveness of the U.S. capital markets by fighting abusive and meritless litigation and directly challenging anti-business regulations, including some imposed under the Dodd-Frank Act.

• Through the courts, defend U.S. energy production, distribution, and consumption against ill-conceived initiatives by environmental regulators and activists. Key litigation initiatives include challenging hydraulic fracturing bans at the federal, state, and local levels; disputing EPA’s unlawful expansion of air and water regulatory authority, such as EPA’s new greenhouse gas regulations; and curtailing EPA’s abuse of “guidance” to circumvent the rulemaking process.

• Continue to assist the Chamber’s ongoing efforts to rein in overzealous regulators as a direct party challenging federal and state regulations and as an amicus in federal lawsuits seeking to force regulators to adhere to federal administrative laws.

• Enact commonsense legal reforms that curb lawsuit abuse, limit overzealous enforcement of federal statutes, and reduce high legal costs for businesses.

The Numbers

Regulatory reform is not a Democrat or Republican issue. It’s about good government. It’s about encouraging growth, innovation, and

responsible risk while adequately protecting the public.


Cost of America’s civil justice system in 2010.

billion$264.6

The tort cost per person in 2010, a sevenfold increase from 1950 when adjusted for inflation.

$857

The average regulatory cost for each employee of a small business.

$10,000

Annual cost of the nation’s broken federal regulatory system.

trillion$1.75


WORKING FOR YOUInstitute for Legal Reform

The U.S. Chamber Institute for Legal Reform, headed by Lisa A. Rickard, exposes lawsuit abuse and advances commonsense reforms that will reduce the costly drag on the American economy.

www.instituteforlegalreform.com

The litigation arm of the U.S. Chamber advocates for the fair treatment of business in the courts and before regulatory agencies. Lily Fu Claffee is executive vice president of NCLC.

National Chamber Litigation Center

www.chamberlitigation.com

Led by Senior Vice President William L. Kovacs, this initiative supports efforts to make the regulatory process more effective and accountable to the people.

Project on Regulatory Reform

www.uschamber.com/regulatory-reform




ISSUE AT A GLANCESmall and large businesses can’t create more jobs without more customers, and 95% of the world’s customers live outside the United States. Selling them more American goods and services is one of the best ways to substantially boost job growth.

2014 will present several opportunities for our country to expand trade opportunities for U.S. firms. In January, Congress began considering Trade Promotion Authority (TPA) legislation. TPA, which every president since Franklin D. Roosevelt has received, allows the executive branch to negotiate new international agreements but guarantees Congress a meaningful voice on trade policy.

With TPA in hand, the administration should push to conclude a high-quality Trans-Pacific Partnership (TPP) agreement with 12 participating countries that opens markets for manufacturers, farmers, and service providers; protects intellectual property (IP); and fosters the digital economy.

Similarly, the Chamber continues to lead the business community’s efforts in support of a comprehensive and ambitious Transatlantic Trade and Investment Partnership (TTIP) that strengthens ties between the United States and the European Union.

CHAMBER PRIORITIES• Level the global playing field for American businesses and

workers by lowering barriers to trade and investment.

• Renew TPA to ensure effective executive-legislative collaboration in negotiating new trade agreements.

• Reach trade and investment agreements to ignite U.S. economic growth, including the TPP, the TTIP, and new agreements on trade in tech goods and services.

• Secure strong bilateral investment treaties with China and other countries.

• Reauthorize the Export-Import Bank of the United States.

• Conclude and build on the administration’s initiative to modernize export controls to enhance U.S. national security and competitiveness.

• Align trade, regulatory, and competition policy to ensure open and competitive markets.

• Raise awareness and increase support for strong IP rights in the United States, in key capitals around the world, and in multilateral organizations.

• Promote strong IP protection and enforcement regimes abroad.


The Numbers

million38

97%

Number of manufacturing jobs that depends on exports.

Amount that IP companies contribute to the U.S. trade balance.

Percentage of U.S. exporters that are small and medium-size companies.

1 in 3

$775 billion

Number of American jobs supported by trade.

10 www.uschamber.com

TRADE & INTELLECTUAL PROPERTY

High on our list [of priorities] are our efforts to spur jobs and growth by expanding international trade and investment. The administration is now more focused on trade.

We have an excellent opportunity to make major additional progress this year.



WORKING FOR YOUInternational Affairs Team

Global Intellectual Property Center

The GIPC is leading a worldwide effort to champion intellectual property rights as vital to creating jobs, saving lives, advancing economic growth, and generating breakthrough solutions to global challenges. David Hirschmann is president and CEO of the GIPC.

www.theglobalipcenter.com

This team of 70 international trade and investment experts, many with long experience in key regions and countries, drives the global business strategy of the organization. The group is led by Senior Vice President Myron Brilliant (left). Vice President John Murphy represents the business community before the administration, Congress, and foreign officials.

www.uschamber.com/international




www.uschamber.com 11

Dr. Martin Regalia

Senior Vice President and Chief Economist, Economic Policy

U.S. Chamber of Commerce

DO

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It is hard to pick up a newspaper or watch a news program on TV without reading or viewing a debate on the prospects for tax reform. One minute it seems that we are on the verge of passage, and the next minute tax reform is pronounced dead forever. If we are to make sense of this debate and accurately assess the prospects for tax reform, we must recognize that there are at least a dozen major hurdles or impediments that must be addressed before tax reform has a chance.

Theoretical ConsiderationsThe first, and possibly most important,

obstacle is the complete lack of a common focus. What is the goal of tax reform? Is it more growth in output, investment, income, wages, and jobs? Is it to improve the global competitiveness of U.S. firms and encourage more economic and job growth here at home? Or is it to change the progressivity in the tax code, redistribute income and wealth, and reengineer society and the economy by incentivizing certain behavior and penalizing others? Without a firm goal, it is virtually impossible to sort through the myriad plans and make an informed choice.

Nowhere is this lack of focus more clear than in the debate over revenue. Should tax reform be revenue neutral as most Republicans contend, or should tax reform raise substantially more revenue both in absolute terms and as a percentage of GDP, as Senate Majority Leader Harry Reid and other Democrats have demanded? If there is no area of overlap, no area of common ground, there can be no tax reform.

Not only is there a major disconnect over revenue, the parties to the debate cannot even agree over how to measure the potential revenue from tax reform. While experts from both sides agree that properly designed tax reform can boost economic growth, they cannot agree on whether such growth and the additional tax revenue forthcoming from that growth should be “counted” as additional revenue. Scoring or counting tax reform’s dynamic benefits would address at least some of the revenue questions alluded to above. Assuming that our government would undertake tax reform to benefit the economy but refuse to “count” that benefit doesn’t seem to make sense.

Another major obstacle involves the measurement of the impact of tax reform. Economists have long recognized that there can be a difference between those remitting or paying a tax and the incidence or who bears the burden of a tax. Much improvement has taken place over the last few years on how to measure the incidence of tax changes,

but there is still considerable debate over the desired distribution of a tax on various income classes. Our current tax code is progressive. The well-off pay higher taxes and a higher percentage of their income than the less well-off. This is fact. But the question still rages as to whether the “rich” pay enough or even a “fair” amount. Without answering the questions posed earlier on the goals, measurement, incidence, and distribution of tax reform, it is impossible to answer such questions of fairness.

Most of the discussion thus far has been confined to reform of our current income tax system. But more and more discussion seems to be focusing on more fundamental questions such as the appropriate tax base. Should tax reform be looking at an alternative base such as consumption or carbon and not just tweaks to the current income tax system? The minute consumption taxes are mentioned, some people start thinking about value-added taxes (VATs), flat taxes, or sales taxes and contend that broadening the current debate in this way is an unnecessary complication. But those detractors fail to recognize that because we allow for tax deferred saving and expensing of some investment, our tax system is really a hybrid of an income tax and a consumption tax. As the current system is already partly a consumption tax, changes to the tax base may move us closer or further from a consumption tax. Whether this is good or bad will depend, again, on the goal of tax reform.

Practical ConsiderationsWhile the discussion to this point has

centered on theoretical impediments to tax reform, there are a host of controversial issues of a more practical nature. Tax reform, especially revenue neutral tax reform, ultimately devolves into picking winners and losers. This issue is nowhere more acute than in the taxation of businesses. When a tax base is broadened by removing some deductions, preferences, or tax expenditures to achieve a lower marginal rate, the current users of the deductions or preferences lose and all others generally gain. Such an approach can pit corporate businesses against pass-through businesses, capital-intensive businesses against labor-intensive businesses, old capital against new capital, and global companies against primarily domestic producers and sellers. My point here is that this process is not generally conducive to consensus building, and tax reform will ultimately require a consensus.

The overall political environment may also prove to be a hurdle for tax reform, if not an outright roadblock. Overarching issues like tax reform, immigration reform,

entitlement reform and, yes, even health care reform generally need a champion. Normally on an issue of such importance, the president would take the lead to help maintain momentum, smooth over rough spots, and help broker compromise. This administration has been largely silent on tax reform, allowing the lead to fall to the leaders on the tax-writing committees.

While the chairmen of the House Ways and Means Committee and the Senate Finance Committee are certainly capable and well-respected members of Congress, it is unclear if they alone provide sufficient impetus to push this issue forward. Rep. Dave Camp (R-MI) is entering his final year as chairman, and Sen. Max Baucus (D-MT) is retiring. Neither seems to have the unbridled support of their respective leadership or political party.

Party rivalry and the stage in the election cycle are not enhancing the prospects for tax reform in this Congress. The parties are in open warfare over issues such as immigration and health care, and each side is trying to gain a campaign advantage for the critical midterm elections now less than a year away. Moreover, many in Congress will face intraparty challenges, which tend to widen the divide and harden positions—neither of which are conducive to finding common ground.

As if these issues are not daunting enough, I have not mentioned what I think may be the biggest impediment to tax reform—the American people. The average American, while disgruntled over the tax system, does not, however, have a good grasp of how the tax system really works, who actually pays taxes, who bears the burden of taxes that are paid, or the impact of the tax system on economic growth, investment, wages, and jobs. As a result, the average American is highly susceptible to misinformation and ill-equipped to make an informed judgment about the myriad tax changes on the table.

Further ConsiderationsFacing the kind of obstacles outlined

here, one may easily conclude that tax reform is not only highly unlikely but probably not worth the effort. Yet nothing would be further from the truth. Comprehensive pro-growth tax reform is the major key to jump-starting the economy, promoting job creation, and ensuring long-run improvement in productivity, wage growth, and our standard of living. It can help us maintain our competitive edge in the global economy and address some of the problems in income and wealth distribution. Moreover, it is an absolutely necessary component to getting our fiscal house in order.

ECONOMY & TAXES Winter 2014

Impediments to Tax Reform

Member Discounts and ServicesChamber of Commerce of the United States® discounts and services are offered to members ONLY.

Members also have access to a variety of Chamber programs, information, and services by visiting www.uschamber.com/member.

Save on FedEx Shipping

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Sam’s Club®—Discover exceptional savings on merchandise and services for your business and home. As a U.S. Chamber member, when you join or renew at Sam’s Club as a Plus member, you’ll receive a $25 gift card (new or renewing Savings and Business members receive a $10 gift card).

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FedEx Office—Double your savings at FedEx Office! As a U.S. Chamber member, you can save up to 20% on the materials you need most with FedEx Office® copy and print services. It’s the perfect time to save big on color copies, posters, signs, banners, direct mail services, and much more. Go to www.uschamber.com/fedex to learn more.

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Free Enterprise Winter 2014