Legislative Agenda: 2017, A Year of Possibility?
There is no question that 2017 will usher in a unique political scenario. When President-elect Donald Trump takes office in January 2017, along with GOP majorities in both houses of the 115th Congress, there will be a unified Republican government for the first time in 88 years. What this means for the printing industry remains to be seen, but what is clear is that Trump’s policy proposals suggest that there are both opportunities and challenges ahead.
We turn to the leading experts in our industry to try to make sense of the many changes that lie ahead for the graphic arts industry, and highlight the key legislative issues that face U.S. printers in 2017, such as patent troll legislation, healthcare reform, the advertising deduction, paper option advocacy, taxes, international trade and postal reform.
According to Mark Nuzzaco, NPES VP of government affairs, having a unified government can have its advantages, but usually it isn’t without intra-party disagreements, and will require the ability to forge compromises to achieve progress. Although many details of the Trump administration policy are yet to be filled in, broad outlines suggest that there are also opportunities and challenges for NPES Government Affairs priorities.
Lisbeth Lyons, VP of government affairs for Printing Industries of America (PIA), points out that Trump’s initial policy statements are pro-business on core issues like taxes, regulations and healthcare, and that is cause for optimism in the industry.
“More than anything, we see that manufacturing is back in fashion,” Lyons says. “Trump campaigned — and won — in traditional manufacturing-heavy states and has long promoted domestic industries, such as printing. That will be a big departure from the current administration, which really focused on modern industries and companies. I believe manufacturers and legacy industries like print and paper will have a greater opportunity to engage with a Trump administration — and that’s exciting.”
Below, Nuzzaco and Lyons weigh in on some specific issues that strongly impact the printing industry.
Patent Troll Legislation
Patent reform legislation in 2016 aimed at mitigating the impact of those abuses stalled in the 114th Congress, and it is unclear what Trump’s stance will be in 2017. “Trump hasn’t said much on patent trolls; in fact, I’m not sure how or if he’s even been briefed on it,” explains Lyons. “We know he’s been litigious in his own business career, so it’s incumbent upon PIA and our allies in the United for Patent Reform coalition to educate the administration on the economic impact trolls have on Main Street. President Obama was receptive to that argument and I think Trump will be, too.”
According to Lyons, “Senators John Cornyn (R-Texas), who holds the No. 2 leadership position among Senate Republicans, and Chuck Schumer (D-N.Y.), who is set to take over as Senate Democrat Leader following the retirement of Harry Reid (D-Nev.), are a bipartisan force to be reckoned with in their support for achieving a patent reform bill.” Lyons adds that California printers, tech companies and businesses in the state have also lobbied Senator Dianne Feinstein (D-Calif.) hard on the issue.
According to Nuzzaco, NPES will also continue to work with reform groups as lawmakers and industry advocates try to find a balance between measures that will lessen, if not eliminate, patent trolls’ negative effects, while preserving important and legitimate markets for intellectual property.
Trump has vowed to “repeal and replace” Obamacare (the Affordable Care Act), which could also mean fixing the parts of the law that clearly don’t work, while keeping features like requiring coverage of pre-existing conditions and covering dependent children until the age of 26.
“Retaining these provisions will be challenging to pay for without requiring objectional employer and individual mandates,” stresses Nuzzaco. “Equally, if not more important to printers and their suppliers, is the need to stem rapidly rising insurance premiums for employees covered by their employers’ health insurance plans. NPES will be working extremely hard to protect and keep this key benefit affordable.”
Lyons believes that a vote on healthcare reform will happen early and with much fanfare, but the actual policy changes will take years to accomplish. “The reality here is that most changes of the Affordable Care Act and regulations governing it will be delayed so that Congress can remake the healthcare marketplace without total disruption.”
Lyons adds that PIA will continue to focus on employer-sponsored healthcare issues, such as increased access to affordable insurance policies for small businesses, repeal of taxes associated with the Affordable Care Act and elimination of provisions regarding how workers are counted for compliance with insurance mandates (or repealing such mandates outright).
“In general, expect to see more market-centric approaches to the delivery of healthcare, such as allowing insurance to be purchased across state lines and expansion of consumer-driven healthcare products like Health Savings Accounts.”
PIA and its allies in the advertising sector scored a large win when House Ways and Means Chairman Kevin Brady’s tax plan was released in 2016 without touching the current deduction. According to Lyons, tax reform will happen in 2017 barring any extraordinary circumstances, and PIA’s goal will be to make sure that it maintains Brady’s approach as a comprehensive bill is drafted and signed into law.
“PIA has great champions on this issue on the House side and Senator Schumer has told us that the deduction will be lost ‘over [my] dead body,’ which is a pretty solid statement of support,” she says.
“And let’s not forget that our new president is a master at advertising and marketing; I don’t think he would be a hard sell on the need for businesses to keep treating the advertising deduction as an ordinary business expense.”
Paper Option Advocacy
According to Lyons, the key for paper advocacy issues is to drive home with the Trump administration the economic importance of print and paper. “Trump talked a lot about steel and textile industries, and paper can fall right into that same category,” she notes. “Whether that leads to trade and tariff issues remains to be seen, but at a minimum, focusing on manufacturing jobs is key. Pairing that argument, along with the value of consumer choice in communications methods and the need to protect less Web-enabled constituencies from losing options to paper-based government information and services, will be our message to Congress and the White House.”
Nuzzaco adds that NPES will continue to support the work of Consumers for Paper Options as one means of ensuring that paper remains available as a viable, proven and effective means of communication in commerce and culture in the electronic digital age.
Tax Reform and Free Trade
According to Nuzzaco, the general parameters of Trump’s tax reform plans appear to comport with NPES’s goal of making 100% first-year expensing of capital investment a permanent feature of the U.S. Tax Code, as well as its preference for reducing tax rates for both large corporations and small businesses, regardless of how they are organized under the tax law.
“The ability to immediately write off capital investment, combined with lower tax rates on businesses, are two sides of the same tax reform coin that is designed to drive economic growth and create tens of millions of new jobs,” he notes. “If enacted, this kind of pro-growth tax reform will be a huge boon to U.S. manufacturing, and a magnet for domestic, as well as foreign direct investment, greatly improving the United’s States’ competitiveness in global markets.” NPES has organized the Capital Cost Recovery Coalition (CCRC) to fully engage capital goods suppliers and their customers in this effort.
Nuzzaco reports that NPES also strongly supports repeal of the Estate Tax, which is another component of the Trump tax reform plan. Eliminating the “Death Tax” would greatly reduce the cost of succession planning for smaller, family-owned businesses, many of which are found in the printing industry.
However, he adds a strong caution that the current law step-up basis for inherited assets must not be lost in the process of repealing the Estate Tax. Losing the step-up basis would result in huge capital gains taxes on inherited assets, an outcome that would severely undercut the value of repealing the Death Tax. Currently, neither the House Blueprint nor the Trump tax reform plans are clear on this important point.
In regard to trade, Nuzzaco says NPES will continue to forcefully advocate for free trade agreements (FTAs) like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, recognizing that 95% of the world’s consumers live outside of the United States and that U.S. manufacturers must have access to these markets on equal or better terms than their foreign competitors.
“President-elect Trump’s strong opposition to the Trans-Pacific Partnership free trade agreement — and his skepticism about trade in general — is a major concern given NPES’s longstanding support for free, fair international trade and FTAs that greatly facilitate it. This is a political reality that will demand even more assertive pro-trade advocacy by NPES going forward,” relays Nuzzaco.
“Hopefully, tax reforms that make U.S. businesses more internationally competitive will be effective in helping President-elect Trump keep his promise to bring good paying manufacturing jobs back to the United States without resorting to harmful tariffs and anti-import policies.”
Nuzzaco highlights the complex interaction of tax reform, ACA repeal and/or replace, and trade policies with the budget process and federal government revenues. “These are not discrete issues that have no impact on each other. To the contrary, they are inextricably connected and much will depend on the order in which they are taken up and under what set of legislative rules. Some may have bipartisan support, but others will likely need to be achieved through the budget reconciliation process with its own limitations.”