I’d like to use this month’s column to advise readers about current happenings in Washington. If, as citizens, we don’t pay attention to what our representatives are doing, our country will be lost.
• As of this writing the Senate Finance Committee has voted to pass the healthcare legislation sponsored by Senator Baucus. This bill will mandate that all employers provide health-insurance benefits. One of the bill’s less-reported aspects mandates individuals to buy health insurance, too. If you don’t wish to buy the insurance, Uncle Sam will tax you to pay for it, and if you don’t pay the tax you will have committed a felony. In other words, you can go to jail if you don’t buy health insurance. Companies that don’t supply the required level of health insurance will be charged a surtax for each employee. Some estimates put this charge at up to 40% of the cost of the health insurance.
The Baucus bill faces several obstacles. House Speaker Nancy Pelosi has 150 Democrats who maintain that the surtax won’t last: They want an income tax on individuals making $500,000 or more.
The cost of the Baucus bill is estimated at $829 billion. The President states that this bill will not add to the deficit. Can anyone tell me when the last time a government cost estimate was accurate? As I recall, Social Security was supposed to cost no more than $40 million. The Estate Tax was supposed to be a temporary tax.
This bill does nothing to address the major cause of rising healthcare costs: the legal liabilities that manufacturers and providers must fund add billions to the cost of healthcare — an aspect of the present system that is defended by trial lawyers.
• The American Clean Energy and Security Act (“Cap and Trade”) passed in the House but its supporters say the measure won’t do much to affect global climate change. It will increase U.S. energy costs as electricity, gas and oil prices rise to pay for the additional production and delivery costs. Countries like China and India say they will not adopt similar regulations, but are supporting efforts to pass them here.
If the Cap and Trade regulations are enacted, some estimates put the number of U.S. jobs relocating offshore as high as 10 million jobs.
• The Employee Free Choice Act (Card Check) is said to be dead for now, but we need to keep an eye on it. There are rumors that labor unions will give up on the aspect that would eliminate secret-ballot elections, but remain steadfast on the rest of the bill.
Card Check would allow a union to organize a workplace if it can get a majority of workers to sign cards calling for a vote. Instead of the current 30-day campaign period for such organizing elections, employers would have just nine days to educate their employees prior to voting. Why the rush? Can’t union organizers debate their arguments openly and honestly? In a free society, people have a right to all the facts before making a decision!
A version of the bill still calls for a mandated two-year union contract if no agreement is reached after 120 days. This gives the union no reason to compromise. We expect labor backers to call for a quick vote in order to thwart opposition.
• Here is some good news: The NTMA has been working for years to draft a U.S. Manufacturing Policy. Our NTMA/PMA One Voice efforts have been working on this issue, and recently we were invited into discussions about a Manufacturing Policy. Some won’t like to hear this, but one reason China has been able to expand so significantly is that it has a national manufacturing policy. If you want to sell something in China, you must make all or part of it in China. The U.S. is the only industrialized nation without such a policy. By being at the table of these discussions, the NTMA/PMA One Voice group hopes to have a positive influence for the future of all U.S. manufacturing.
• Also, the estate tax is back on the table. Congress doesn’t want to be seen as allowing a huge tax increase to take place as the estate tax reverts back to its 2000 level. Our hope is that we can get the amount of exemption raised, or that we can get the current levels extended for another year. Section 179, for expensing equipment, is due to expire along with the net operating loss legislation and the R&D tax credit. All these bills must be extended until we can get them made permanent.
Our Congress is out of control. They seem to think they have a blank check to spend any amount they want. They’re passing legislation just to say they have — a dangerous way to make laws. Next year, we must elect officials that will stand up for manufacturing. If you haven’t joined a national trade group that is fighting to support manufacturing, do it now! We can’t wait any longer!
Contact James R. Grosmann at the National Tooling & Machining Assn., [email protected].