AED Washington Insights Newsletter
October 2005
Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team
In this Issue:
Will Alito nomination put things back on track for the GOP?
As Halloween 2005 rolls around, things are looking kind of scary for Republicans.
Senate Majority Leader Bill Frist (R-TN) is under investigation by the Securities and Exchange Commission (SEC) for insider trading. House Majority Leader Tom DeLay (R-TX) has been indicted for alleged campaign finance violations. And congressional Republicans are tearing themselves apart about how to pay for the Katrina cleanup and close a projected $1.6 billion, five-year budget deficit.
Things aren''t much better at the other end of Pennsylvania Avenue. Malaise over the progress of the war in Iraq and concerns about the Katrina response have brought the president''s poll numbers to their lowest point ever. And Friday saw the indictment of the vice president''s chief of staff for obstruction of justice and other charges relating to leaks about the identity of an undercover CIA agent.
With all that in mind, this morning''s nomination of conservative judge Samuel Alito to succeed Sandra Day O''Connor on the Supreme Court may seem like a risky decision. Some have suggested that it might have been easier for Bush to nominate a moderate who would gain quick confirmation. While the Alito nomination looks like a gamble, it''s also exactly what the Republican Party needs to regain its political footing.
The Party base sent a clear message to the White House after the Harriet Miers nomination: Give us a qualified candidate with a proven conservative track record. This morning, the White House did just that. Now it''s up to Republicans to take the nomination and run with it. If they win, GOP loyalists will have their faith in their Party and president renewed, and they''ll be re-energized heading into next year''s elections.
For the Republican Party faithful, who at the moment feel like their team is on the receiving end of a slew of political dirty tricks, that would be a real treat.
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Efforts to cut gas tax, reopen SAFETEA-LU fade, but across the board cuts still likely
How low can they go?
That''s the question on Capitol Hill at the moment. With a $1.6 trillion, five-year budget deficit looming and the cleanup costs of Hurricanes Katrina, Rita, and now Wilma still to be reckoned, Congress is bogged down with a case of budget fever.
Earlier this year, the House and Senate approved a budget resolution that requires $34.7 billion in federal program cuts over the next five years. The next critical step in the process is crafting legislation to reconcile the budget goals with federal law. The Senate is beginning consideration of its budget reconciliation bill today. It would cut a net $39.1 billion from mandatory spending over five years. A final vote is expected Nov. 3. The reconciliation bill is privileged, which means it can''t be filibustered, but that doesn''t mean things won''t get hairy. Democrats are planning to offer amendments to restore funding for social programs, while GOP conservatives will likely pursue further cuts.
On other side of Capitol Hill, the House is still working out the details of its reconciliation plan. Republican leaders are pushing to increase the five-year savings number from the $34.7 billion to $50 billion. Across the board budget cuts are likely.
ANWR drilling on the agenda
The raw numbers are an abstraction, but important policy issues will come up during the budget debate. For example, the current version of the Senate''s reconciliation bill contemplates opening the Arctic National Wildlife Refuge (ANWR) in Alaska to oil drilling. Doing so has been a priority for pro-growth legislators and organizations (including AED) for some time.
Given the recent surge in gas prices, supporters believe the stars may have aligned to resolve the ANWR drilling issue. But why bring it up during the budget debate? In addition to helping make America more energy independent, opening ANWR would bring in an additional $2.4 billion per year for federal coffers.
Are highway cuts looming?
Since Katrina and Rita, the road program has come under attack on multiple fronts. First there was the push to suspend the gas tax. Then, conservatives launched an initiative to reopen SAFETEA-LU, eliminate the earmarked projects, and use the money to pay for Katrina relief.
Both were bad ideas and AED has been letting lawmakers know we think so.
What happens when the proposed gas tax suspension expires in a few months and gas prices go up more than 18 cents overnight? Public support for the user fee and highway program will likely be undermined. Would consumers ever see the price savings from the gas tax suspension or will oil companies and gas stations reap most of the benefits? And, finally, given current budget pressures, is it realistic to think that Congress will be able to come up with the billions of dollars it will take to reimburse the Highway Trust Fund (HTF) (as advocates of the gas tax suspension bill have promised to do).
As for reopening SAFETEA-LU, detractors may call the earmarked projects "pork", but in most cases they serve critical local and national transportation needs identified by state officials. And even if you don''t like earmarks, there''s an important principle at stake in this debate: Using highway project money for non-transportation Katrina relief would undo the precedent we worked so hard to set with TEA-21, that all money collected from gas taxes be used exclusively for transportation improvements.
The good news is that it looks increasingly less likely that Congress will either suspend the gas tax or reopen SAFETEA-LU. The bad news is that funding for next year''s road program is still up in the air. House and Senate negotiators are working out the details of the FY 2006 transportation appropriations bill (see related story, in this issue of Insights). Although the size of the highway program is technically guaranteed, general budget pressures are likely to be a factor in the appropriations discussions. Additionally, if Congress does decide to impose across-the-board cuts, it''s likely that road funding will be on the chopping block along with everything else.
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Illinois distributors meet GOP House candidate
The 2006 congressional elections may be a year away, but AED members are already focusing on what''s at stake. On Oct. 12, the Illinois Equipment Distributors (IED) met with Illinois State Senator Peter Roskam (R), the all-but-certain GOP nominee for the House seat being vacated by Rep. Henry Hyde (R-IL).
Roskam told the Illinois distributors that he was committed to strong infrastructure programs and pro-growth regulatory and tax policies. As part of the meeting, AED President Toby Mack presented Roskam with a $1,000 AED PAC contribution to Roskam''s campaign.
The centerpiece of AED''s election year activities is our ImPACt local group fundraiser program, through which AED encourages its members to support pro-growth House and Senate candidates and matches individual contributions to candidates with an AED PAC cheque. Several ImPACt 2006 events are already in various stages of the planning process. If your group is interested in holding an event for a candidate next year, please contact AED Washington Counsel Christian Klein at caklein@aednet.org or 703.739.9513.
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Show your support for AED''s work in Washington by supporting the AED WEF
November is upon us, which means fundraising for AED''s Washington Education Fund (WEF) is set to begin.
Last year, WEF experienced unprecedented participation by equipment industry leaders, leading to a record $37,000 in contributions. But with issues like the IRS'' dual use equipment depreciation coordinated issue paper (DUED CIP), the parts inventory accounting petition to the IRS, permanent death tax repeal, a growing water funding gap, and product liability reform looming large, your WEF contribution is more important than ever.
The WEF is a special AED account, funded by contributions from AED member companies, that helps offset the costs associated with AED''s legislative, regulatory, and grassroots development activities. Over the past year, WEF money contributed by member companies has helped AED:
- Work for robust infrastructure funding and to defeat a provision in the highway reauthorization bill that would have created rental preferences in the federal highway program;
- Respond to the IRS'' dual use equipment coordinated issue paper, which would effectively prevent distributors from depreciating equipment in their rental fleets;
- Support AED''s parts inventory accounting petition to the IRS;
- Work for death tax repeal and other pro-growth policies;
- Keep you informed about critical developments in Washington through our legislative fax alert system;
- Educate congressional staff about our industry through an AED member facility tour; and
- Send AED Washington staff to local group meetings with congressional candidates to help increase support for the issues important to your industry.
If you think AED''s work on Capitol Hill on issues like rental preferences, death tax repeal, the depreciation bonus, Section 179 small business expensing, reducing health care costs, and highway and water infrastructure funding is important, we hope that you''ll join your industry colleagues in contributing to the WEF for 2006.
Companies that support the WEF will receive a plaque thanking them for being a part of AED''s work in the nation''s capital. WEF supporters also will be recognized at AED''s Annual Meeting and in AED publications. Supporters will be recognized at four levels: Champion ($2,500 contribution); Patron ($1,250); Donor ($750); and Friend ($350).
In 2005, the WEF had its most successful fundraising campaign ever. Help make 2006 another record breaking year. Simply click on the link to download the AED WEF contribution form: http://www.aednet.org/government/pdf/ContribForm2006.pdf. Then complete it and fax or mail it to AED''s Washington Office.
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Senate passes transportation appropriations bill
The Senate has approved its version of the fiscal year (FY) 2006 Transportation Appropriations bill. The $141.6 billion legislation, passed on October 20 by a 93 to one margin, includes $40.2 billion for federal highway spending. Its passage came nearly a month after FY 2005 ended and Congress passed temporary legislation, called a Continuing Resolution, to fund government operations and agencies in FY 2006 until appropriations legislation is finalized.
Senate seeks to increase highway spending
The Senate''s FY 2006 surface transportation spending level is $5.2 billion above the White House request and $3.2 billion above the level the House included in the transportation appropriations bill it passed on June 30. According to the White House, the Senate''s Transportation Appropriations measure includes funding for Federal-aid Highways spending that exceeds by $4.2 billion FY 2006 funding levels in the recently enacted highway reauthorization legislation, SAFETEA-LU. In response to this proposed increase in funding, on October 19, the White House issued a veto threat if the final appropriations bill included the Senate''s surface transportation funding level.
The Federal-aid Highways program provides matching grants to states for planning, building, and repairing highways and bridges. State highway departments can initiate Federal-aid projects once they receive approval of plans, specifications, and cost estimates from the Federal Highway Administration. The Highway Trust Fund provides the financing for the program. The funds are allocated to the states through a formula developed in SAFETEA-LU.
Finalizing spending measures
Senate and House negotiators must now meet in a conference committee to reconcile differences between the two appropriations bills. The House bill provides a total of $139.1 billion in spending for all federal transportation programs, compared to the Senate''s $141.6 billion measure. The House bill would appropriate $37 billion for highways next year. Congress must work quickly on these negotiations if it hopes to meet the November 18 deadline laid out in the Continuing Resolution.
To learn more about the Senate version of the appropriations legislation, visit http://appropriations.senate.gov/hearmarkups/09-20-05TTHUDPRSenate.htm.
To learn more about the House version of the appropriations legislation, visit http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=505&Month=6&Year=2005.
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Notice of proposed rulemaking issued on surge brakes
On October 7, the Federal Motor Carrier Safety Administration (FMCSA) released the long awaited notice of proposed rulemaking regarding surge brake prohibitions, in response to the Surge Brake Coalition''s petition for rulemaking.
AED has been working with members of the Surge Brake Coalition, which includes the Association of Equipment Manufacturers (AEM), the American Rental Association (ARA) and other groups to urge the FMCSA to clarify rules allowing surge brakes on interstate commerce trailers with gross vehicle weight ratings (GVWR) of 20,000 pounds or less. Confusion about the rules has led to inconsistent enforcement from state to state.
As written, the general brake operating rule would not apply to any trailer, equipped with surge brakes, with a GVWR of 12,000 lbs or less and which does not exceed 1.75 times the GVWR of the towing vehicle. Trailers with a GVWR greater than 12,000 lbs, but less than 20,001 lbs, would also be exempt when the GVWR does not exceed 1.25 times the GVWR of the towing vehicle. Vehicles meeting these weight qualifications would also be exempt from the control valve rule, requiring one valve to control the entire braking systems when applied.
In an effort to clarify any remaining confusion, the proposed rule would also define the term "surge brake." Under the definition, for the purposes of the regulations a surge brake would be "self-contained, permanently closed hydraulic brake system for trailers that relies on inertial forces, developed in response to the braking action of the towing vehicle, applied to a hydraulic device mounted on or connected to the tongue of the trailer, to slow down or stop the towed vehicle."
AED is working with the Coalition to submit comments; the deadline for comment submission is December 6, 2005. For additional information, contact AED''s Washington Office at aeddc@aednet.org.
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A record year for AED PAC
For the second year in a row, AED''s Political Action Committee (AED PAC) has broken fundraising records. In 2005, we''ve shattered records, collecting $45,650 from 48 equipment industry leaders, raising the most money for the PAC in a non-election year. This follows a year in which AED PAC took in over $53,000, making it the highest one-year fundraising effort ever.
The PAC is a special account supported entirely by personal contributions from AED members. It helps elect federal candidates who share AED''s commitment to strong infrastructure, limited government, and reduced tax and regulatory burdens for family businesses.
Record contributions from AED members this year have enabled AED PAC to contribute to 18 pro-growth federal candidate committees. The following is a list of candidates who have received contributions so far this election cycle:
- Sen. George Allen (R-VA); Member, Senate Commerce, Science and Transportation Committee: $1,000.
- Sen. Max Baucus (D-MT); Ranking Member, Senate Finance Committee; Member, Senate Environment and Public Works Committee: $1000.
- Rep. Ed Bryant; Candidate for U.S. Senate in Tennessee; Former U.S. Representative from Tennessee 7th District: $1,000.
- Sen. Saxby Chambliss (R-GA); Chairman, Senate Agriculture, Nutrition and Forestry Committee; Member, Senate Armed Services, Select Intelligence and Rules and Administration Committees: $2,500.
- Rep. Mike Conaway (R-TX); Member, House Budget, Armed Services and Agriculture Committees: $1,000.
- Rep. Jo Ann Davis (R-VA); Member, House Armed Services and Select Intelligence Committee: $250.
- Rep. Lincoln Davis (D-TN); Member, House Transportation & Infrastructure (T&I) Committee: $1000.
- Rep. James Duncan (R-TN); Chairman, House Water Resources and Environment Subcommittee: $1,000.
- Rep. Peter Hoekstra (R-MI); Chairman, House Select Intelligence Committee; Member, T&I Committee: $500.
- Sen. Jim Inhofe (R-OK); Chairman, Senate Environment & Public Works Committee: $1,000.
- Rep. Tom Latham (R-IA); Member, House Appropriations Committee: $1,250.
- Sen. Ben Nelson (D-NE); Member, Senate Commerce, Science and Transportation Committee: $2,500.
- Rep. Anne Northup (R-KY); Member, House Appropriations Committee: $1,000.
- Rep. James Oberstar (D-MN); Ranking Member, House T&I Committee: $1,000.
- Rep. Thomas Petri (R-WI); Chairman, House Highways, Transit, and Pipelines Subcommittee; Member House T&I Committee: $1,000.
- Rep. Mike Rogers (R-MI); Member, House Commerce Committee: $1,000.
- Rep. Lynn Westmoreland (R-GA); Member, House T&I Committee: $500.
- Rep. Don Young (R-AK); Chairman, House T&I Committee Chairman: $1,000.
Part of the success of this year''s PAC fundraising effort is likely attributable to the creation of new PAC contribution categories for AED members. The following is a list of the AED leaders who''ve contributed to AED PAC this year. The number in parentheses after the person''s name indicates the number of years of President''s Circle, Chairman''s Caucus, Capitol Club or Washington Team participation:
President''s Circle ($5,000 Contribution)
Stephenson, James E., Yancey Bros. Co. (2) (8 yrs Capitol Club)
Chairman''s Caucus ($2,500+ Contribution)
Leppo, Dale A., Leppo Rents/Bobcat of Akron (1) (8 yrs Capitol Club)
Vrablik, Joseph, Cummins Rocky Mountain, Inc. (1) (5 yrs Capitol Club)
Capitol Club ($1,000+ Contribution)
Bebchick, Les L., Equipment and Systems for Industry, Inc. (4)
Berry, Walter T., Berry Companies, Inc. (5)
Butler, Matthew Dan, Butler Machinery Co. (3)
Campbell, Paul W., Wheeler Machinery Co. (8)
Campbell, Robert B., Wheeler Machinery Co. (9)
Clarkson, Charles F., ROMCO Equipment Co. (6)
Cleveland, C.E. Thomas, H.O. Penn Machinery Co., Inc. (5)
Dudley, Richard S., J.W. Burress Inc. (2)
Furcron, Cliff, Clark Machinery (2)
Gaylor, Roy C., Power Equipment Co. (7)
Glynn, Lawrence F., Cummings, McGowan & West, Inc. (1)
Graves, Richard D., J.W. Burress Inc. (2)
Groff, Kenneth, Groff Tractor and Equipment, Inc. (3)
Hawthorne, J.T., Hawthorne Machinery Co. (3)
Henderson, Robert K., Highway Equipment Company (1)
Hunt, Roy H., Hunt Tractor, Inc. (9)
Kern, Roy, Equipment Corporation of America (2)
Kirby, H.E. Jr., Kirby-Smith Machinery, Inc. (2)
Kruepke, Dennis E., McCann Industries, Inc. (4)
MacAllister, Christopher, MacAllister Machinery Co., Inc. (9)
Matz, Mike G., Western Plains Machinery Co. (4)
Mullins, Robert G., ROMCO Equipment Co., L.P. (8)
Mullins, Robert O., ROMCO Equipment Co., L.P. (8)
Paradis, Joseph A. III, Bramco, LLC (9)
Riggs, John A., J.A. Riggs Tractor Co. (1)
Romanson, Dennis G., Briggs Construction Equipment, Inc. (1)
Stowers, Harry W., Stowers Machinery Corporation (2)
Taylor, Kenneth E., Ohio CAT (8)
Vander Molen, Dennis R., Vermeer MidSouth, Inc. (4)
Vaughn, R. Dale, OCT Equipment, LLC (4)
Walsh, Michael E., Walsh Equipment Inc. (5)
Wilson, Thomas P., United Equipment, Inc. (9)
Washington Team ($500+ Contribution)
Berry, Fred F., Berry Companies, Inc. (4)
Coffman, Alan, Bobcat of the Rockies, a Div. of Berry Companies, Inc. (1)
McNutt, Robert C., Wolverine Tractor & Equipment, Inc. (6)
Price, James, Valley Supply & Equipment Co., Inc. (2)
Sill, Michael M. II, Road Machinery & Supplies Co. (2)
Shilling, Donald, General Equipment & Supplies, Inc. (1)
Weisiger, Edward I. Jr., Carolina CAT (2)
Other 2005 PAC Supporters
Bock, Eugene A., B. & W. Equipment Co. ($100)
Farmer, John F., Atlantic Detroit Diesel Allison, LLC ($250)
Heller, Dennis, Stephenson Equipment, Inc. ($200)
Pederson, Jon R., Ruffridge-Johnson Equipment Co. Inc. ($100)
Poulson, Todd C., Faris Machinery Company ($250)
Woods, Robert, Garden State Bobcat, Inc. ($250)
AED Member Companies with multiple PAC contributors
J.W. Burress Inc. (2)
ROMCO Equipment Co. (2)
Berry Companies (3)
Wheeler Machinery Co. (2)
AED PAC accepts contributions only from owners and executives of AED distributor member companies who have given AED PAC solicitation consent in accordance with the Federal Election Campaign Act (FECA). To obtain an AED PAC solicitation consent form, click here: http://www.aednet.org/government/pdf/aed-pac-solicit-form.pdf. For more information about AED PAC, please contact AED''s Washington office at aeddc@aednet.org.
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