News and Update
IN THIS WEEK’S EDITION:Lawyering Up Against Taxpayers: The IRS is at it Again •Roberts and Roskam Legislation: An IG for ObamaCare • House Passes Bill to Make R&D Tax Credit Permanent• Trade Promotion Authority (TPA) Debate Continues in Senate •Manipulating and Abusing Spectrum Auctions:The Small Business Pretenders • Center for Regulatory Solutions: Fixing the Regulatory System, Senator Rounds Introduces RESTORE, Senate Takes Aim at EPA Overreach, EPA and “Waters’ Rule,” NEPA and Climate Change • Energy & Entrepreneurs: Crude Oil Exports, Getting the Policies Right • Keating’s Corner – Economic Analysis & Commentary • Business Tips & Trends News
Lawyering Up Against Taxpayers: The IRS is at it Again
The IRS is contracting with a powerful and expensive law firm to conduct audit, examination and investigatory work on one business taxpayer. The $2.2 million contract raises serious issues about taxpayer rights, wasteful spending, and the legality of the agency’s outsourcing.As SBE Council President & CEO Karen Kerrigan writes in a blog post,Senate Finance Committee Chairman Orrin Hatch (R-UT) wants answers about this unusual and unprecedented private contract. He wants to know many things, including how the IRS gave itself the authority to outsource functions that appear to violate taxpayer rights. As noted by Kerrigan in her piece, “Taxpayers and Congress have low confidence in the IRS. For an agency that needs to vastly improve its competency and credibility, it boggles the mind that IRS management continues to push the limits on actions that cross the line when it comes to taxpayer rights and common sense.”
Roberts and Roskam Legislation: An IG for ObamaCare
On May 19, Senator Pat Roberts (R-KS) and Peter Roskam (R-IL) introduced S. 1368 and H.R. 2400 the“Special Inspector General for Monitoring the Affordable Care Act,” or “SIGMA.”The bill appoints a special IG to monitor and account for Obamacare spending.
“Significant taxpayer resources have been expended on botched health insurance exchanges and Healthcare.gov's poor rollout, HHS missteps and bad decision-making in general. An unbiased IG is needed to monitor how tax dollars have been spent, are being spent, and to further investigate the workings of this vast program. The SIGMA Act provides for the focused oversight and accountability that taxpayers deserve," said SBE Council president & CEO Karen Kerriganin a media released distributed by Congressman Roskam’s office.
SBE Councilhas endorsed the legislation.
House Passes Bill to Make R&D Tax Credit Permanent
The research and development (R&D) tax credit has been extended time and again over a 30-year period, and on May 20 the U.S. House voted to strengthen and make permanent this important provision for small businesses.In a letter to Reps. Kevin Brady (R-TX) and John Larson (D-CT)in support of "The American Research and Competitiveness Act of 2015," SBE Council president & CEO Karen Kerrigan wrote:
“To encourage small business growth and greater startup activity in the U.S., our policies need to help entrepreneurs compete in the global marketplace. H.R. 880 is an important part of the policy solution as it strengthens and improves the credit for small businesses and startups.”
The bill passed 274-145. Earlier this year,the House also made permanent small business expensing (Section 179) at an expanded level.
Trade Promotion Authority (TPA) Debate Proceeding in Senate
Last week (May 14), the Senate voted affirmatively on a motion to proceed to debate on TPA legislation. Thirteen Democrats voted for the motion, and the debate continues in the Senate this week, which includes votes on a variety of amendments.SBE Council chief economist Ray Keatingreviews 4 key points to keep in mindas the debate continues. On Thursday May 21, their will be a cloture vote (60 votes required) on the Hatch-Wyden TPA/TAA substitute amendment.
ICYMI:Small Business Week was the perfect time to remind Congress and the publicabout the role small businesses play in trade, and why more trade agreements are needed for America’s entrepreneurial sector.
Manipulating and Abusing Spectrum Auctions: Small business pretenders
As SBE Council Chief Economist Ray Keating explainsin a recent blog post,“Government subsidies rarely, if ever, live up to the hype. The benefits wind up falling far short of intentions, and the costs get underestimated and/or ignored all together. That includes subsidies for small businesses.”
What’s really egregious is when special interests game the system - that is, government sets up a program, and people and companies find ways of manipulating and abusing it in their favor. That’s what happened with the spectrum auction held by the FCC earlier this year. DISH Network ended up with spectrum and getting $3 billion insmall businesssubsidies to boot!
In his post, Keating reviews what happened and why future auctions need to be open and market driven.
Center for Regulatory Solutions
Fixing the Nation’s Regulatory System: Regulatory reform and relief is, of course, a top priority for our nation’s small business owners and entrepreneurs. CRS/SBE Council president & CEO Karen Kerrigan used National Small Business Week as an opportunity to advocate for regulatory reformand outlined the top regulatory reform initiativesthat need to get done in order to bring some sanity to our broken system.Kerrigan writesthat federal rulemakings should be guided and informed by three core values: Transparency, Accountability, and Scientific Integrity.
REGULATORY SOLUTION Alert: On May 20, Senator Mike Rounds (R-SD) introduced the RESTORE Resolution, which would bring accountability and order back to the federal regulatory system. TheRegulation Sensibility Through Oversight Restoration(RESTORE) Resolution would,according to a media release from Senator Round’s office, “establish a Joint Select Committee to conduct a comprehensive review of rules enacted by federal agencies and analyze the feasibility and options for creating a rules review process in congress. The committee would also hold hearings on the effects of these rules and recommend ways to reduce the regulatory burden on the American people.”
Senate Takes Aim at EPA Overreach: Two Senate Committees held hearings this week zeroing in on regulation proposed by the U.S. Environmental Protection Agency (EPA). The first, held onTuesday, May 19,by the Senate Small Business and Entrepreneurship Committee, examined the impact that new and existing rules, including the controversial Waters of the United States (WOTUS) regulation, will have on America’s small businesses.On May 20, the Senate Oversight Subcommittee will examine the scientific advisory process that EPA utilizes to create its environmental rules and standards.Here are the key things to know about these hearings.The May 20 hearingalso reviewed S. 543, the Science Advisory Reform Act. This legislation, supported by SBE Council and CRS,passed the House on March 17.
EPA’s Abuse of the Clean Water Act Must End: The House of Representatives passed H.R. 1732, “The Regulatory Integrity Protection Act of 2015,” by a vote of 261-155. H.R. 1732 requires the Environmental Protection Agency (EPA) and the Army Corps of Engineers (ACOE) to rescind the intrusive “Waters of the US” (WOTUS) rule, which could extend federal bureaucratic control over every puddle and pond in America.
We’ve weighed in numerous times over the past year on WOTUS, as it presents a massive regulatory burden for small businesses seeking federal permits to expand or build new facilities. It is one of the most egregious examples of Obama Administration overreach. If you have any doubts about how extensive and far-reaching this rule would be,read Karen Kerrigan’s blog post on EPA regulatory abuseand why it must end.
NEPA and Climate Change - An Exercise in Presidential Overreach: On December 18, 2014, the White House Council on Environmental Quality (CEQ) issued“revised draft guidance”covering how federal agencies should incorporate climate change impacts into the federal environmental review process. The guidance, which hasn’t been finalized, presents yet another major bureaucratic obstacle to infrastructure development and small business expansion, and provides a gift to hyper-litigious activist groups who only exist to stop energy development.Karen Kerrigancovers the issue here.
FCC Moving Forward on Internet Regulation Order: The FCC’s “Open Internet” order kicks in on June 12. During Small Business Week,SBE Council reminded members of Congressabout why this intrusive and unjustified move by the FCC will be particularly harmful for America’s small businesses and entrepreneurs.
Energy & Entrepreneurs
Time to Get Policy Moving in Right Direction on Energy:In the latest Energy & Entrepreneurs analysis, chief economist Ray Keating looks at four recent developments on the energy front, and what these tell us about where U.S. energy policy – for example, with crude oil exports – needs to go.
ACCF Capitol Hill Forum: Ray also joined a panel forum hosted by ACCF on May 20, “Crude Exports and U.S. Trade Policy: A Closer Look at the Policy and Economic Outlook.” Senator John Hoeven (R-ND) provided the keynote address.Ray and fellow panelists reviewed the substantial economic benefits of lifting the ban on crude oil exports. With small businesses dominating the energy sector and being at the center of America’s energy renaissance, entrepreneurs and their workforce stand to significantly benefit from policies that encourage and support U.S. energy exports.
Keating’s Corner: Analysis and Commentary on the Latest Economic Data and Trends
Troubling Downward Trend in Industrial Production:The latest SBE Council Fact of the Week opens: “One month does not a trend make. Five months? Yes. The Federal Reserve recently reported that industrial production declined in April, and that was the fifth straight monthly decline.” Chief economist Ray Keating examines this troubling trend and what it might be signaling for the overall economy.
A Healthy Job Market? Not Even Close:In the latest Cybercolumn, chief economist Ray Keating reviews the jobs numbers from the Bureau of Labor Statistics earlier in the month. He notes, “Unfortunately, the unemployment rate always has been a poor gauge of the labor market. After all, it does not really tell you anything about how many jobs were created, nor what share of the working-age population have jobs or are in the labor force at all. Let’s be clear, today’s 5.4 percent unemployment rate is not the same as 5.4 percent unemployment rates in the past.” Keating goes on to explain the differences.
Worst Productivity Data Over Two Decades:Keating looks at the latest data onproductivity, and ties in this data with broader economic worries. How bad are the productivity numbers? Chief economist Ray Keating reports, “The declines in nonfarm productivity of 2.1 percent in the fourth quarter of 2014 and 1.9 percent in the first quarter of this year rank as the worst back-to-back quarterly performance in 22 years.”
Business Tips & Trends News Highlights
If you missed the past week’s “How To” articles, educational resources, and business news and success stories curated by SBE Council President & CEO Karen Kerrigan,you can find them here.