President Addresses Joint Session, Reaffirms Top Issues for 2017
The President's first State of the Union-like address to Congress reaffirmed his commitment to tackling a number of key issues that are relevant to the electroindustry: tax reform, regulatory reform, repeal of the Patient Protection and Affordable Care Act (ACA), and infrastructure investment. He mentioned his Administration's effort in clearing the way for the continued construction of the Keystone XL and Dakota Access pipelines but provided no additional details on energy and environmental priorities.
As he addressed the Republican-led Congress, the President reiterated as a top priority comprehensive tax reform to lower rates for businesses and provide "massive relief" for the middle class. The administration had previously announced that a plan would be released in the coming weeks. The President specifically noted that "when we ship products out of America, many other countries make us pay very high tariffs and taxes but when foreign companies ship their products into America, we charge them nothing or almost nothing. Treasury Secretary Steven Mnuchin, who will play an important role in crafting the tax plan, commented following the address that "President Trump's plan to grow our economy will work because it focuses on a middle-income tax cut for working families and an end to regulations that are stifling job creation."
NEMA supports tax reform that encourages work, investment, research & development, and job creation.
The President underscored his desire to "reduce job-crushing regulations" and "impose a new rule which mandates that for every one new regulation, two old regulations must be eliminated." He highlighted what he described as "a historic effort" and pledged that his administration was "going to stop the regulations that threaten the future and livelihood of our great coal miners." He pointed out that dollars spent on compliance with cumbersome or duplicative regulations are dollars not spent on capital investment or hiring new employees in America.
NEMA and its Members recognize the importance of and need for certain government regulations. Some markets require regulation in order to function; other regulations are needed for health and safety purposes. However, the current regulatory environment can be characterized by several trends that threaten the ability of U.S. businesses to remain competitive in the global marketplace. NEMA policy addresses these issues.
ACA Repeal and Replacement
The President urged Congress to press ahead with the repeal and replacement of the Affordable Care Act (ACA) because "Obamacare is collapsing, and we must act decisively to protect all Americans." He asked lawmakers to move quickly and "save Americans from this imploding Obamacare disaster."
The President laid out five "principles" for health reform:
- New tax credits to help individuals purchase coverage
- Expanded use of health savings accounts
- Greater state flexibility for Medicaid
- Allowing insurers to sell health plans across state lines
- Keeping the popular ACA provision that prohibits insurers from discriminating against individuals with expensive medical conditions
He said, "The way to make health insurance available to everyone is to lower the cost of health insurance, and that is what we are going to do."
Immediately upon convening in January, the 115th Congress moved to repeal the ACA through budget reconciliation, a process by which certain budget and tax measures can be expedited. Since reconciliation bills are not subject to filibuster in the Senate, repeal of the ACA can pass with a simple majority vote in both chambers. A replacement for the ACA is in development for congressional approval later in the year.
Concurrent with ACA repeal is pending legislation to repeal the medical device excise tax of 2.3 percent, which was enacted as part of the ACA in 2010. NEMA supports full repeal of the medical device tax.
Regarding infrastructure investment, the president renewed his call for "a new program of national rebuilding" and stated that he intends to ask Congress for legislation "that produces a $1 trillion investment in the infrastructure of the United States—financed through both public and private capital—creating millions of new jobs. However the details of what an infrastructure package might include or how it would be funded were not revealed.
The President's campaign website listed the use of tax credits to spur private investments in infrastructure as an option. Using revenues from tax reform (e.g., a tax on repatriated foreign earnings of U.S. companies) to fund infrastructure investment has been floated as a potential option since at least 2014. However, any use of tax revenue for purposes other than lowering the overall tax rate will face opposition.
Democratic Senators recently proposed their own $1 trillion infrastructure plan, but Republican congressional leaders expect the Administration to spell out the shape, scope, and funding sources for infrastructure investment. The American Society of Civil Engineers estimated in 2016 that $3.3 trillion in infrastructure investment is needed through 2025, including $2 trillion in surface transportation, over $900 billion for electricity generation, transmission, and distribution, $157 billion for airports, $150 billion for water and wastewater, and $37 billion for inland waterways and ports.
Visit www.nema.org/policy to learn more about NEMA's priorities.