The abrupt resignation of House Speaker John Boehner (R-OH) sent shockwaves through the Nation’s Capital. The embattled Speaker has been at odds with a very conservative faction of his party for most of his 5-year tenure, and there was growing pressure on him to step down as Speaker. The news that he would be vacating his seat on October 30 set tongues wagging on possible successors to the Speakership. The front runner is House Majority Leader Kevin McCarthy (R-CA), a vocal opponent of Ex-Im Bank. The Tea Party caucus is expected to back its own candidate for Speaker. A special election will be held to fill Rep. Boehner’s congressional seat through the end of his term in 2016, and the field for who will next represent Ohio’s 8th District is wide open.
Government shutdown narrowly averted
With just days to spare before a government shutdown, Congress approved a bill to fund the government through mid-December. The legislation, known as a continuing resolution (CR), almost didn’t make it through Congress due to an attempt to add an extraneous amendment to defund Planned Parenthood. Fortunately, Republican and Democrats came together to reject that approach, and Congress was able to pass a clean, non-controversial bill that essentially kicks the can down the road for 10 weeks.
While some saw the CR as a vehicle to make a statement on Planned Parenthood, others saw it as an opportunity to reauthorize the Ex-Im Bank before funds completely ran out on September 30. Unfortunately, despite strong support from U.S. manufacturers small and large, there was no action to forestall the Bank’s closure. Ex-Im was forced to stop new business three months ago when Congress allowed its charter to lapse, but had sufficient funds to service existing business through the end of last month. This negative impact on U.S. manufacturers is already being felt. Three major satellite deals have been lost, and the pain is growing. General Electric and Boeing announced they are taking steps to do business without the U.S. export credit agency and this will assuredly have deleterious effect on its entire supply chain.
Although the short-term CR was not considered a serious option for the Bank’s reauthorization, another must-pass bill could be a better vehicle. The highway trust fund will be forced to shut down on October 17 unless Congress reauthorizes it before then. Congress passed a short-term extension last July that now must be acted on with either another short-term bill or a longer term multi-year extension that a majority in both Chambers supports. One scenario might include both options – a short-term bill to keep the trust fund operating through December and a multi-year bill late in the year. A good starting point would be the six-year highway bill the Senate passed before the short-term extension. That bill includes an Ex-Im reauthorization, but has seen no action yet in the House due to opposition to the Ex-Im provision.
That sets up a very busy December when Congress must not only take up a longer-term CR and possibly, a longer-term highway bill, but also must consider what to do about the 50-plus tax provisions that expired at the end of last year. Of particular concern to manufacturers is the future of increased Sec. 179 expensing, bonus depreciation and the R&D tax credit. In 2015, Sec. 179 limits dramatically dropped from 2014 levels and bonus depreciation and the R&D tax credit expired completely. House efforts to make these provisions permanent are gaining no ground in the Senate, and it appears that manufacturers holding investment decisions until these issues are resolved will again be facing an end of year deadline as this issue will not be resolved until just before Congress adjourns for the year.
It’s incumbent upon manufacturers to make your voices heard on Ex-Im Bank reauthorization, extension of the investment tax provisions and other issues important to manufacturers in your local newspapers, town hall meetings and in letters and visits with your members of Congress. Visit AMT’s Legislative Action Center by clicking on the American flag on amtonline’s homepage for help contacting your Senators and Representatives.