Associated Equipment Distributors
AED Washington Insights Newsletter

AED Washington Insights

November 2011

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Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team

In this Issue:

Politics Front and Center at 2012 AED Summit in Washington, D.C. - Register Now!

If you're reading Washington Insights, you know that what's happening in the nation's capital can have a big impact on your company and industry. That's why politics will be front and center at the 2012 AED Summit in Washington, D.C., in January.

Summit speakers include Tom Donahue, president of the U.S. Chamber of Commerce, the nation's premiere business lobbying organization, and renowned political pundit Tucker Carlson, who will be sharing his prognostications about the critical 2012 elections. Both will provide new insights about the inner workings of government, the issues that matter to you, and what you can do to influence the process.

Donahue and Carlson are just two of the many good reasons to attend the 2012 Summit. To learn more and register now, click here.

We know that you come to the Summit to do business with your suppliers and network with your distributor colleagues, so aside from our top-flight political speakers, we haven't included any formal government affairs programming on the agenda. But don't let that stop you from getting personally engaged in policy making. If you want to take advantage of your presence in Washington, D.C., to connect (or reconnect) with your congressional offices, let us know. AED's Government Affairs team is standing by to work with you to set up and prepare for meetings on Capitol Hill. If you're interested, shoot an e-mail to AED Senior Director Government Affairs Daniel Fisher at If not, we'll see you back at the AED Fly-In in April.

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Senate Bill Revives Battle for Highway Funding

After years of inaction, there's finally some progress on the highway front. On Nov. 9, the Senate Environment & Public Works (EPW) Committee unanimously approved a bipartisan two-year surface transportation bill.

The bill, Moving Ahead for Progress in the 21st Century (MAP-21) (S. 1813), is a two-year, $109 billion dollar proposal that continues highway funding at current levels plus an inflation adjustment. The legislation would consolidate the number of federal transportation programs by about two-thirds while seeking to expedite project delivery and eliminate duplicative programs to stretch federal dollars further. It also sets specific performance goals and eliminates earmarks for transportation projects.

"The committee's approval is an important first step in a long process that is, unfortunately, years behind schedule," said AED President & CEO Toby Mack. "Time is running out on the most recent highway extension. We therefore urge the Senate Finance Committee to act swiftly to identify the additional resources necessary to pay for MAP-21 and urge the House to make parallel legislation a top priority between now and the end of the year."

While the investment levels in MAP 21 are insufficient to address America's well-documented, long-term infrastructure needs, the legislation would avoid the drastic consequences of cutting $14.1 billion from highway investments as proposed by the House earlier this year. Furthermore, the bipartisan consensus surrounding its approval is evidence of the growing awareness on Capitol Hill about the strong correlation between infrastructure investment, jobs, and the nation's long-term economic health.

Despite the unanimous approval by the committee, the bill must still overcome several significant hurdles before becoming law. To pay for the bill, senators must find an additional $12 billion in funding to make up for the gap between revenues generated by the Highway Trust Fund (HTF) and current investment levels. Senate EPW Chair Barbara Boxer (D-CA), had been hoping to secure the additional funds before introducing the legislation, but the Senate Finance Committee made no moves to find funding. For any real shot at passage, bipartisan members of the Finance and EPW committees must strike a deal that covers the HTF shortfall.

To encourage your Senators to move swiftly to approve MAP-21, be sure to visit

Senate Rejects Administration's Infrastructure Proposal
Shortly before the introduction of MAP-21, the Senate voted down competing transportation proposals, rejecting both the infrastructure portion of President Obama's jobs proposal and Republican plans for infrastructure spending on Nov. 3.

The Democratic proposal (S. 1769) would have spent $50 billion on infrastructure investments and set aside $10 billion to start a national infrastructure bank. Taken from President's Obama's jobs package, Republicans opposed the measure, as it would fund the investments through a surcharge on taxpayers earning more than $1 million.

The Republican bill (S. 1786) would have extended current highway funding for another two years. Democrats, however, objected to measures attached to the legislation that would restrict Environmental Protection Agency authority, eliminate spending on transportation enhancements such as pedestrian paths, implement the REINS Act, and prohibit any regulation with an economic impact of more than $100 million.

Neither piece of legislation was expected to win approval. Even among infrastructure supporters, these plans were viewed as overtly political. Infrastructure advocates are wary of Obama's plan, viewing it as a band-aid to a problem that begs for a long-term solution. While the Republican plan offered long-term stability, it was loaded with measures that ensured it would garner little of the bipartisan support necessary for success in the Senate.

House Wakes to Importance of Infrastructure Investment
On Nov. 17, House GOP leaders including Speaker Boehner, T&I Chair Mica, and Natural Resources Committee Chair Doc Hastings (R-WA) revealed the American Energy & Infrastructure Jobs Act (H.R. 7).

While the announcement was light on details, the Speaker pledged to formally introduce the legislation in the coming weeks. The measure reiterates Boehner's earlier promise "to combine an expansion of American-made energy production with initiatives to repair and improve infrastructure and reform the way infrastructure money is spent."

While Boehner's move is a very positive development, there are still questions and political challenges surrounding it.

First, the idea of tying infrastructure spending to royalties from expanded energy production could compromise the "user-pays" model that has been the essential component of infrastructure funding since the days of President Eisenhower.

Second, it is unclear exactly how much revenue could be expected under this system, where the money would come from, and what its long-term viability might look like.

Lastly, it is essential that an infrastructure bill be truly bipartisan in nature to have a chance at becoming law. The House GOP's proposal to link infrastructure investments with expanded energy production in the Arctic National Wildlife Refuge (our support for opening ANWR notwithstanding) threatens the legislation's credibility with their Democratic counterparts in the House and Senate.

Boehner's announcement came just days after a group of 120 House Republicans, led by Reps. Reid Ribble (R-WI) and Tom Reed (R-NY), sent a letter to the GOP's top leaders in the House decrying the havoc that uncertainty in federal infrastructure programs is having on national economic growth. The letter noted Republicans' traditional support for transportation infrastructure and urged immediate action for a "reformed and streamlined multiyear surface transportation bill."

Taken together, the Boehner announcement and Senate EPW Committee action are clear signs that momentum is building to get a surface transportation bill done sooner rather than later. Help us keep up the momentum by weighing in with your elected representatives and telling them to make highways a priority. Visit to send a message urging action on a new highway bill today.

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AED Proposes Innovative Revenue Approach to "Super Committee"

Addressing our nation's surface transportation needs requires an innovative financing mechanism to ensure the long-term viability of the Highway Trust Fund (HTF), AED told members of the congressional Super Committee in a Nov. 9 letter. To address these needs, AED offered the committee a two-step user fee increase proposal that would ensure the solvency of the HTF.

The first step of the proposal would increase the gas tax by half a cent per month for 20 months starting on Jan. 31, 2012 through Aug. 31, 2013. This would yield between $15 billion and $20 billion in additional revenues for the federal surface transportation program.

The second step would mandate an additional half-cent per month increase for 12 months starting on Sept. 30, 2013, if prior to that time Congress has not enacted new HTF user fee legislation to raise the equivalent amount. This threat of an automatic increase would incentivize Congress to deal with the long-term funding issue and identify new user fees.

This innovative proposal tackles the HTF shortage head on, providing the fund with the resources to ensure its viability. If adopted by the committee, this proposal would solve the funding challenge facing MAP-21, while providing a dedicated revenue stream for years to come.

"The federal government has lived beyond its means for years," AED said in its letter to the committee. "Increasing highway user fees, as myriad business and labor organizations have encouraged Congress to do, is one way to ensure adequate resources for a critical government program, relieve pressure on other parts of the budget, and facilitate economic growth that will generate additional future tax revenues."

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AED PAC Enjoys Record-Breaking Year!

A last-minute fundraising push yielded big returns for AED's Political Action Committee (PAC), as equipment industry leaders dug deep and pushed the PAC to the highest nonelection year haul in its history.

Distributors contributed $52,550 in 2011, breaking the previous record of $51,950 in 2005. Historically, it is more difficult for campaigns and political fundraisers to raise money during nonelection years than it is during election years. AED PAC's most successful fundraising year was 2008, a presidential election year, with $59,100.

Since its inception, AED PAC has attracted increasingly greater industry support and has grown in its influence and reach with each passing election cycle. With your continued support, AED PAC will continue this growth in the 2012 election cycle. In order to do so, AED PAC must keep its members politically informed; if you have not yet done so, please make sure your solicitation consent is up to date.

Just because the 2011 AED PAC fundraising campaign is over doesn't mean PAC activity is complete. As election season approaches, AED PAC will be providing insight about how key races could impact our industry. Stay tuned for important insider campaign information on these pages, beginning in 2012. Your knowledge about the election and your political activity increases the visibility of AED and our issues.

Federal law prohibits AED from asking you for money or giving you detailed information about the PAC unless you give us written permission in writing to do so. Click here to give AED PAC solicitation consent today!

If you have any questions about AED PAC, please contact Josh Pudnos at 703-739-9513.

2011 AED PAC Contributors

Chairman's Circle ($2,500)
Dale A. Leppo, Leppo Rents/Bobcat of Akron
Doug Fabick, Fabick CAT
Ed Kirby, Kirby-Smith Machinery, Inc.
Mark Romer, James River Equipment
Michael Savastio, Groff Tractor & Equipment
Wes Stowers, Stowers Machinery Corporation
James E. Stephenson, Yancey Bros. Co.
Donna Y. Stephenson, Yancey Bros. Co.

Capitol Club ($1,000)
Alvin Richer, Arnold Machinery Co.
Robert Henderson, Associated Equipment Distributors
Walter Berry, Berry Companies, Inc.
Charles Leis, Brandeis Machinery & Supply Co.
Michael Brennan, Brandeis Machinery & Supply Co.
Joseph A. Paradis, III, Brandeis Machinery & Supply Co.
Dan Butler, Butler Machinery Co.
Lawrence F. Glynn, CMW Equipment
Roy Kern, Jr., Equipment Corporation of America
Don Shilling, General Equipment & Supplies, Inc.
Chris MacAllister, MacAllister Machinery Co., Inc.
P.E. MacAllister, MacAllister Machinery Co., Inc. ($2000)
Dennis Kruepke, McCann Industries, Inc.
Rick Dahl, Metrolift, Inc.
Ken Taylor, Ohio CAT
R. Christopher Gaylor, Power Equipment Co.
Craig Burkert, ROMCO Equipment Co.
Charlie Clarkson, ROMCO Equipment Co.
Robert G. Mullins, ROMCO Equipment Co.
Robert O. Mullins, ROMCO Equipment Co.
Dennis Heller, Stephenson Equipment, Inc.
Dennis Vander Molen, Vermeer Midsouth, Inc.
Michael Quirk, Wagner Equipment Co.
Michael E. Walsh, Walsh Equipment
Paul Campbell, Wheeler Machinery
Rob Campbell, Wheeler Machinery

Washington Team ($500)
Kayden W. Bell, Arnold Machinery Co.
Ed I. Weisiger, Jr. Carolina CAT
Pat McConnell, Clyde/West Inc. ($700)
William Reardon, JCB of Georgia
Glenn Leppo, Leppo Rents/ Bobcat of Akron
Robert Woods Jr., New Jersey Bobcat
John Eyde, Pioneer Equipment & Supply Co.
Michael M. Sill, II, Road Machinery & Supplies Co.
Roy H. Hunt, Roy Hunt Equipment, LLC

Fred Berry, Berry Companies, Inc.
Gayle Humphries, JCB of Georgia
Rick Piper, JCB of Georgia

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AED Scores Major Victory as Congress Approves Contractor Withholding Tax Repeal

AED scored another major legislative victory as both houses of Congress unanimously passed a bill (H.R. 674) to repeal the 3 percent government contractor withholding tax. President Obama signed the legislation into law on Nov. 21.

Repealing the 3 percent withholding tax law has been a top AED priority for years. Created by Sec. 511 of the 2006 Tax Increase Prevention Reconciliation Act, this onerous tax would have required federal, state and local government entities whose annual expenditures exceed $100 million to withhold 3 percent of all payments made to any individual or company that provides goods or services to the government. The law would have effectively forced contractors to make interest-free loans to the federal government. In some cases, the amount would have exceeded a business' profit margin. The tax was set to go into effect at the end of 2013.

As an active member of the Government Withholding Relief Coalition, AED has been working with more than 100 other organizations to encourage the law's repeal. A massive grassroots push over the summer built tremendous support for repeal in both chambers, with more than half of the House and a third of the Senate co-sponsoring repeal legislation.

Thanks to all AED members who helped show lawmakers the folly of this ill-conceived law using and by discussing the matter with lawmakers at AED's Washington Fly-In and local facility visits.

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Two Depreciation Bonus Bills Introduced in Senate

On Nov. 15, two bills were introduced in the Senate to extend the depreciation bonus, which expires at the end of the year.

Sen. Richard Lugar's (R-IN) bill (S. 1873) would extend 100 percent bonus depreciation and increased Sec. 179 expensing levels for one year. Sens. Chris Coons (D-DE) and Marco Rubio's (R-FL) AGREE Act would also extend the capital investment incentives and includes other job creation proposals.

The introduction of these bills shows that AED's efforts are clearly having an impact. Both Sen. Lugar's press release and the summary of the AGREE Act cite the recent coalition letter spearheaded by AED as evidence of the broad support for depreciation bonus/Sec. 179.

In other news, Reps. Sam Johnson (R-TX) and Richard Neal (D-MA) recently introduced a bipartisan, technical correction bill (H.R. 3366) to resolve the percentage of completion issue that has limited the efficacy of the depreciation bonus in certain industries. Additionally, Rep. Pat Tiberi (R-OH) last month introduced H.R. 3123, a bipartisan proposal to allow companies to use more corporate AMT credits for activities that would otherwise qualify for bonus depreciation.

As a reminder, there's plenty of information to help distributors understand the capital investment incentive laws available at

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Obama Punts on Keystone XL

The U.S. Department of State announced last week that it will delay, by more than a year, a final decision on the Keystone XL Pipeline.

A decision on the pipeline, set to bring oil from the oil sands of Alberta, Canada, to the Gulf of Mexico off Texas, was expected by the end of 2011. The department's announcement postpones a decision until at least first quarter 2013.

The project has proved a political challenge for the Obama administration, with two of its key constituencies, labor unions and environmental groups, taking opposing sides. Labor unions and the construction industry, including AED, have been advocating for the 100,000 jobs and 1.2 million barrels of oil per day the project is expected to create. Environmental groups have raised concern over potential negative environmental consequences, despite the State Department's final environmental impact statement showing no detrimental effects.

Recent criticism of the project's proposed path through Nebraska has highlighted concerns about potential negative impacts on wetlands in the state's Sand Hills area. Echoing these concerns, Nebraska's GOP Gov. Dave Heineman, called a special session of the Nebraska legislature to address the matter and asked Obama to deny the pipeline permit. In delaying a final determination, the State Department announced that these concerns have made it necessary to re-evaluate alternative routes for the pipeline.

AED is disappointed by the State Department's decision. There's a strong economic and national security case for the project. The pipeline will ensure a stable supply of oil from our closest ally and trading partner. In addition to reducing energy costs and lessening our dependence on natural resources from politically unstable or hostile countries, the project will also generate considerable economic activity and create jobs along its route and in the manufacturing sector.

The association will continue to monitor the project as it advances and advocate for its approval.

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AED Goes West, Presents Wheelers' Paul Campbell with 2011 Democracy Award

Over the last few weeks, AED's Government Affairs team hit the road, travelling west to brief equipment distributors in Utah and Oklahoma about developments in Washington, D.C.

On October 25, AED's Vice President of Government Affairs Christian Klein met with AED members in Salt Lake City. Klein discussed the status of AED's top priorities on Capitol Hill, including highway reauthorization and tax issues. Following the meeting, Utah equipment distributors Democracy Awardssigned a letter to Sens. Orrin Hatch (R-UT) and Mike Lee (R-UT) urging Congress to extend 100 percent depreciation bonus and higher Sec. 179 expensing levels through 2012.

As part of the event, Klein presented AED's 2011 Democracy Award to Paul Campbell, executive vice president of Wheeler Machinery. Campbell is a former AED Chairman and Board member and long-time member of the association's Government Affairs Committee. Wheeler is also a founding member of AED's Highway Infrastructure Taskforce. Campbell is the second member of his family to receive the award, which was created more than a decade ago to honor his father Lyle for his years of service as Chairman of AED's Government Affairs Committee.

Braving earthquakes and tornados on Nov. 8, AED's Senior Director of Government Affairs Daniel Fisher travelled to the Sooner State to address the Oklahoma local group. Two days later, Fisher ventured to Perry, home of The Charles Machine Works, Inc.-Ditch Witch, to present to the Orange Edge leadership program. Fisher reminded future Ditch Witch dealer leaders and owners about the importance of staying politically active and participating in AED's government affairs activities.

Please contact us if you would like us to address your local group. We look forward to visiting a town near you!

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FMCSA Hours of Service Deadline Delayed

The release date of a new hours of service rule, limiting the time commercial drivers can spend behind the wheel, has again been delayed. Scheduled for release on Oct. 28, the Federal Motor Carrier Safety Administration (FMSCA) did not send its proposed Hours of Service (HOS) to the Office of Management and Budget (OMB) until Nov. 2, likely delaying a final release until next year.

The change would possibly reduce the maximum time behind a wheel from 11 to 10 hours and proposes a maximum "on duty" time of 13 hours in a 14-hour cycle. The rule follows the "34-hour restart," which allows motor carriers and drivers to continue to restart calculations of the weekly on-duty limits after at least 34 consecutive hours off duty, but it would require that two periods be between midnight and 6 a.m. This is a particular challenge for drivers in the highway construction industry where much of the work is done at night.

The proposed rule change is prompted by a court settlement between the FMCSA and the Teamsters and Public Citizen, a consumer advocacy group founded by Ralph Nader. In return for halting the lawsuit brought by the Teamsters and Public Citizen, the FMCSA promised to propose the new rule addressing HOS. AED, like many in the business and trucking communities, believe the alteration would impose significant regulatory burdens on employers and drivers and do little to address safety concerns.

A summary of the proposed rule change and more information from the FMCSA may be found here.

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