AED Washington Insights Newsletter
April 2004
Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team
In this Issue:
Is the end of the TEA-21 reauthorization road near?
Six months after the expiration of the 1998 Transportation Equity Act for the 21st Century (TEA-21), efforts to reauthorize federal surface transportation programs continue. And AED and our allies are continuing the campaign to enact a bill that provides at least $318 billion for highways and transit over the next six years.
With House passage this week of another short-term TEA-21 extension, there were signs that the process might be nearing completion. The next few days promise to be critical.
The biggest sticking point has been how much money Congress should authorize for highway and transit programs. In November, the Senate passed legislation that would provide $318 billion through the end of fiscal year (FY) 2009. Last month, the House gave its approval to a $284 billion bill.
Unfortunately, the White House continues to oppose any number above $256 billion (a level that, when adjusted for inflation, would effectively reduce program funding over the next six years) and has threatened to veto both the House and Senate bills.
The Bush administration’s opposition to highway funding increases is apparently part of an effort to demonstrate fiscal conservatism in the face of looming budget deficits. Unfortunately, the administration is barking up the wrong tree.
Should we be concerned about mounting federal debt? Absolutely. Should funding for unnecessary and wasteful federal programs be cut? No question about it. But in targeting the highway bill, the White House has failed to recognize that the surface transportation program is both critical to the national economy and fiscally responsible, because it’s funded entirely through the gas tax and other highway user fees.
The increases proposed in the House and Senate bills would be paid for by ending losses to the Highway Trust Fund (HTF) resulting from the tax subsidy for ethanol fuels and by modifying federal law to treat the HTF the same as other federal trust funds. The Senate’s $318 billion bill would continue the precedent of a user fee-funded program and is fiscally responsible.
We remain optimistic that a good reauthorization bill can still be enacted into law this year. One beacon of hope: Senator Mike Crapo (R-ID), who this week took the lead in sending a letter to Senate Majority Leader Bill Frist (R-TN) urging continued support for the Senate’s $318 billion program level. The Crapo letter (which was signed by 19 other Republican senators) is significant because it sends a message to the White House that supporters of the Senate’s funding level have a veto-proof majority and that some of President Bush’s staunchest allies disagree with the position he’s taken on the highway bill.
As Insights went goes out, a meeting between Bush administration officials, House and Senate Republican leaders, and the relevant committee chairmen aimed at hashing out differences on the highway and transit bill is imminent. While we’re hopeful a breakthrough may be close, we’re not letting up the pressure. Neither should you.
AED members are encouraged to call or email their representatives and senators in support of a $318 billion, six-year bill. Contact information for lawmakers can be found at http://www.congress.org.
Remind your elected representatives that congestion costs the U.S. economy more than $67 billion per year and that a $318 billion highway and transit bill would put us on the path to solving the congestion crisis. Also be sure to remind them about the important impact the highway program has on your industry and that each $1 billion spent on highways creates 47,500 good paying, non-exportable jobs here in United States.
Thanks for your help.
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Kentucky distributors rally to ImPACt Northup reelection campaign, SD distributors meet to support Thune and Diedrich
With the 2004 elections just a few months away, distributors around the country are rallying to support pro-growth congressional candidates.
On April 13, members of the Kentucky Equipment Distributors (KED) joined forces as part of AED’s ImPACt 2004 program to help reelect Rep. Anne Northup (R-KY). Northup, a member of the powerful House Appropriations Committee, is known as a staunch opponent of government competition with the private sector and a strong supporter of federal infrastructure programs.
The Northup event marked the first AED ImPACt 2004 event of the year and the second of the current election cycle. Through the ImPACt program, AED’s Political Action Committee (PAC) encourages distributors around the country to join together at the local group level to support House and Senate candidates. At each ImPACt event, AED PAC matches the combined local group contributions to the candidate up to $2,500.
According to Scott Hunt (Hunt Tractor, Louisville, KY), 2004 president of KED, the event raised more than $7,000 to support Northup’s reelection effort. The event this month marked the sixth ImPACt event KED members have organized for Northup since she first ran for Congress in 1996.
Not to be outdone, AED members in South Dakota held two ImPACt meetings in April. The first was with former-Rep. John Thune (R-SD), who is challenging Senate Minority Leader Tom Daschle (D-SD) in November. The second was for Larry Diedrich (R-SD), who is running in a special election to fill the state’s single House seat, left vacant by the retirement of Rep. Bill Janklow (R-SD).
In addition to personal contributions, AED’s South Dakota members, led by local group president Mike Sheehan (Sheehan Mack Sales & Equipment, Sioux Falls, SD) delivered AED PAC cheques for $1,500 to each candidate.
AED of Arizona held the first ImPACt event of the cycle when its members joined forces to support Rep. Trent Franks (R-AZ) early last year. Other ImPACt 2004 events will take place in Ohio on May 10 and in Utah on August 23.
If your local group is interested in organizing an ImPACt meeting with a congressional candidate, please contact AED’s Washington office at aeddc@aednet.org or 703.739.9513.
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As highway bill moves to conference, AED needs your help to stop rental preferences
AED’s efforts to prevent rental equipment preferences from being included in the highway and transit reauthorization bill continue. As the bill goes to conference and the endgame nears, your on-going participation in AED’s campaign is more critical than ever.
Last November, the Senate Environment & Public Works (EPW) Committee reported a six-year highway and transit bill called the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003 (SAFETEA) (S. 1072). While AED enthusiastically supported the $318 billion funding level for highway and transit programs included in the legislation, the bill also contained a provision, opposed by AED, which would have made it harder for states and contractors to buy equipment for federal highway projects.
Specifically, Sec. 1406 would have required "states and other entities" doing highway work to justify, in writing, their decision to purchase rather than rent most types of equipment. However, states and contractors choosing to rent equipment would not have been required to justify their decisions, even if renting cost more.
Pressure from AED and other construction industry groups led the leadership of the Senate EPW Committee to scale back the provision when SAFETEA was considered on the Senate floor. As passed by the Senate in February, SAFETEA Sec. 1406 would apply only to states wishing to buy equipment. While the modification was an important victory and a good first step, we’re a long way from popping the champagne corks.
After the Senate vote, AED switched its attention to the House, mounting a campaign to educate House Transportation & Infrastructure (T&I) Committee leaders about the fact that rental is often a less preferable way to acquire equipment than purchasing or leasing. In March, the House passed a $284 billion highway and transit bill that did not include rental preference language. It’s another important win for distributors, but we’re not declaring victory yet.
The next step in the process is a House-Senate conference, where a compromise between the two versions of the highway and transit bill will be worked out. Although conferees had not been named as this Insights was written, AED has been focusing lobbying attention on the senior members of the House T&I and EPW Committees.
Your help is more important than ever
Our success so far is largely attributable to the involvement of AED leaders around the country who have contacted their representatives and senators about this issue. As we enter the critical conference stage of the highway debate, your on-going participation in the campaign against rental preferences is critical.
If you’ve already sent a letter (or letters) to the Hill, call your representative and senators offices to follow up and let them know you’re still concerned.
If you haven’t yet weighed in with key lawmakers, here’s what you can do:
- Take a look at the list of members of the House T&I and Senate EPW Committees by clicking here: http://www.aednet.org/government/word/tiepwmems.doc
- Click on the name(s) of any and all committee members from your state to get contact information for them.
- Insert the contact information for all relevant members of Congress into our generic rental preference letter. You can get the letter by clicking here: http://www.aednet.org/government/word/aprilaedmemberletter.doc
- Fax (don’t mail) the letter to the Hill.
- Call the relevant representatives’ and senators’ offices. Ask to speak to the legislative director or transportation legislative assistant. Tell them that you have faxed a letter relating to the surface transportation bill conference. Explain the issue briefly. Explain how it would impact your employees and why rental is not always the best equipment acquisition option. Remember: You know a lot more about your industry than they do, and they need your help to understand the impact of the proposed rental preferences. Tell them that if their boss is on the surface transportation conference, he or she should oppose the rental preference provision (SAFETEA Sec. 1406). If he or she is not on the conference, they should get in touch with the committee chairman and voice their opposition to rental preferences.
- Fax or email a copy of the letter to AED’s Washington office at aeddc@aednet.org or 703.739.9488. Also, be sure to let us know what you hear from the people you speak with on the Hill.
Thanks for your help.
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Department of Labor updates 50 year-old overtime rules
Distributors take note: new Fair Labor Standards Act (FLSA) minimum wage and overtime pay regulations will take effect this summer. According to the Department of Labor, the new regulations will help reduce expensive and needless litigation by providing employers with clearer wage and hour guidelines. At the same time, the new rules will strengthen overtime protection for an estimated 6.7 million workers.
Major changes in the overtime rules include:
- Minimum salary level: An employee earning under $455 per week must be paid overtime regardless of whether their duties would otherwise exempt them from the overtime pay guarantee. This is $300 increase from the former $155 per week minimum.
- "Highly Compensated Worker" Exception: An employee paid $100,000 or more annually, at least $23,660 of which is paid on a salary basis, is exempt from the overtime rules. The former cap was $65,000. But note that under the new rule, occupations such as carpenters, electricians, mechanics, plumbers, ironworkers, craftsmen, operating engineers, longshoremen, construction workers and laborers are not exempt from the FLSA, no matter how highly compensated.
- Exempt Employees: Changes to the executive, administrative, professional, outside sales, and computer employee exceptions to the FLSA overtime pay requirements clarify the duties each category of employee must perform to qualify for exempt status.
- Safe Harbor: If certain requirements are met, employers can maintain employees’ exempt status even when the overtime rule is unintentionally violated. Currently an employer who violates the overtime regulations loses the right to exempt a category of employees from the overtime pay rules.
The changes to the FLSA regulations become effective on August 23, 2004. Make sure that your company is prepared for these changes by discussing them with your Human Resources department or an employment attorney.
For more information about the new overtime regulations, including a copy of the regulations and interactive tutorials, visit the Department of Labor’s FairPay Overtime Initiative website at: http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm.
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Asbestos victims compensation fund bill stalls in Senate
Tort reform opponents in the Senate’s Democratic caucus have again thwarted efforts to restore sanity to the nation’s tort law system.
On April 22, a group of Senate Democrats prevented a floor vote on a bill that would have streamlined the process by which asbestos victims obtain compensation for their injuries. The Fairness in Asbestos Injury Resolution Act, or the FAIR Act (S. 2290), would establish a trust fund to compensate asbestos victims, reducing the need for costly and lengthy litigation. Currently, there are more than 300,000 asbestos plaintiffs with lawsuits working their way through the nation’s court system.
Protecting victims and companies
Senate Majority Leader Bill Frist (R-TN) introduced the FAIR Act on April 7 to address the thousands of asbestos litigation claims that threaten to bankrupt some businesses and leave asbestos victims without proper compensation from these insolvent companies.
While they may prevail after years of costly appeals, asbestos plaintiffs may be unable to collect, since the defendant-company expended all its resources on litigation, other damage awards, or settlements. A plaintiff, legitimately entitled to compensation, could therefore end up with nothing.
Of particular concern to AED is the fact that as companies that produced products with asbestos are becoming insolvent, plaintiffs are increasingly filing claims against product distributors. This potentially impacts the equipment industry because of the past use of asbestos in equipment braking systems.
The FAIR Act would protect both plaintiffs and defendants by creating a no-fault Asbestos Victims Compensation Fund of up to $124 billion. Rather than filing a suit, asbestos victims would file a claim with the Department of Labor, which would handle the processing of claims.
Obstacles to Tort Reform
The inability of the Senate to pass the FAIR Act highlights political difficulties associated with reforming the nation’s dysfunctional tort litigation system. Other tort reform measures pending on the Hill include a medical malpractice reform bill; legislation to shield the food industry from lawsuits filed by customers claiming the food they ate made them obese; and the House-passed bill making it easier for defendant’s to remove class action suits into federal courts. Of course, for AED, the top tort reform priority remains the Small Business Liability Reform Act (H.R. 2813 and S. 1546), which includes a provision limiting the liability of product sellers and renters in product liability suits.
House Judiciary Committee Chairman Jim Sensenbrenner, Jr. (R-WI) told distributors at AED’s Government Affairs Conference this spring that if and when the Senate passes an asbestos bill it will be "fast tracked" to the House floor for a vote. But don’t look for the House to act until it’s shown that there are enough votes to pass the bill in the Senate.
Compromise on the horizon?
Supporters haven’t lost hope that some variation of the FAIR Act may yet make it to the Senate floor this Congress. Despite this month’s developments, leaders of both parties have agreed to resume negotiations with business, insurance and labor interests, with Edward Becker, the former chief judge of the U.S. Court of Appeals for the 3rd Circuit, acting as a mediator.
For more information about the FAIR Act or any of the other bills mentioned in this article, go to http://thomas.loc.gov and search by bill number or keyword.
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