Government Affairs

2004 CONGRESSIONAL RECAP

In 2004, despite a divided Senate and election-year politicking, the business community was able to garner enough support to pass some key pieces of legislation. While we had our share of setbacks, 2004 was a successful year for the business community. The recent elections produced larger pro-business majorities in both houses in of Congress, which will make it easier to pass important legislation in 2005. Before the new Congress assumes office, here is a look back at successes, failures, and unresolved issues of the past year.

Asbestos Litigation - Though Senate Majority Leader Bill Frist was committed to reaching a compromise on asbestos reform legislation, the issue was not resolved. After more than a year of wrangling, Senator Frist and Senate Minority Leader Tom Daschle agreed on a framework that would create a $140 billion privately financed fund to pay asbestos claimants. However, the Senators could not agree on how many existing asbestos cases could stay in court once the fund was established.

Class Action - After four years and many attempts at enacting fair and meaningful class action reform legislation, the issue was once again blocked in the Senate. The "Class Action Fairness Act of 2004," would have shifted more class action cases to federal courts, making it difficult for trail attorneys to continue their practice of "venue shopping" and victimizing consumers, plaintiffs and small businesses.

Energy - Little happened on the energy front in 2004. After House and Senate conferees failed to reach a compromise on comprehensive energy legislation in 2003, the issue was not taken up in 2004. We will continue to support and work towards an energy bill that increases domestic energy production, provides incentives for conservation, and leads to the development of alternative energy sources.

FCC Fax Rule - In July 2003, the federal Communications Commission (FCC) announced a new rule that would require businesses, organizations, and trade associations to receive written consent from recipients before sending a fax, even if a business relationship already exists. The FCC initially gave business until January 1, 2005 to comply with the new rule. However after business groups such as the Chamber raised some serious objections about the ramifications of this new rule, the FCC extended the compliance deadline June 30, 2005, so congress would have time to create exceptions to the new rule. The House passed the Junk Fax Prevention Act of 2004 (H.R. 4600) in July, reinstating the Established Business Relationship (EBR) exemption that allows Businesses, associations, and charities to send faxes to their existing customers and members without first receiving permission. In September, the Senate Commerce, Science, and Transportation Committee passed their own version of the bill the full Senate will likely consider the bill in early 2005.

Health Care - After Congress added prescription drug coverage to the Medicare program in 2003, the Bush Administration and Congress spent 2004 implementing provisions of the mammoth bill. Also, in 2003, the House overwhelmingly passed legislation that would have allowed small businesses to pool their resources to achieve discounts on health insurance through Association Health Plans (AHPs). The bill stalled once it reached the senate, and was not seriously considered in 2004.

Internet Tax - The Chamber pushed for a permanent ban on internet taxation, but Congress Could only muster another temporary extension, which will last Until October 1, 2007. In late 2003, the last temporary ban expired and Congress failed to pass either an extension or a permanent ban. Congress finally passed an extension of the moratorium in the lame-duck session.

Labor - The Department of Labor's new overtime rules, updated for the first time in more than 50 years, went into effect in August. Opponents in the House and Senate promised to deny funding for the new rules in this year's appropriations process. They fought until the very end, but the final version of the omnibus appropriations bill was passed without restrictions on the new rules. The new rules, designed to fit the modern workplace, should be much access and affordability crisis.

Medical Liability Reform - For a second straight year, the Senate lacked the necessary votes to pass meaningful medical liability reform. The House passed a medical liability reform bill on a party-line vote in May. The House bill, supported by the business community, would place a reasonable cap on non-economic and punitive damages in malpractice cases, reducing the incentive to bring forth frivolous lawsuits. This will bring a degree of predictability and fairness to the civil justice system that is critical to solving the growing medical access and affordability crisis.

Pension Reform - In April, Congress passed a law that amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to temporarily replace the 30-year Treasury rate with a rate based on long-term corporate bonds for certain pension funding requirements. Congress must revisit the issue next year, as the temporary corporate bond rate index expires on December 31, 2005.

Taxes - With the World Trade Organization declaring that U.S. export subsidies were in violation of international trade law, the business community has prodded Congress for two years to pass legislation eliminating the subsidies. Finally, in October, President Bush signed a bill into law that eliminated the export subsidies and enacted targeted tax cuts for U.S. Manufacturers and exporters. This year, the President also signed legislation to extend middle-class tax cuts that would have expired in 2005. The bill extended the $1,000 Child tax credit, the 10% tax bracket, and marriage penalty relief until 2010.

Trade - Congress signed off on free trade agreements negotiated with Australia and Morocco.
Both trade agreements will expand markets for U.S. exporters, create jobs, and lower prices for consumers. The Chamber will continue to build broad support for a free trade agreement with Central American countries.

Transportation - Since the original TEA-21 program expired on September 30, 2003, Congress has passed numerous extensions to keep highway and transit money flowing to the states. President Bush and Congress continue to disagree over the precise funding level in a TEA-21 reauthorization bill. The Chamber supports a bill that will provide $318 billion in funding for highway and transit programs over the next six years.

The 2004 Elections - The U.S. Chamber led it's most extensive and aggressive political campaign to date. With a greater focus on Get-Out-The-Vote (GOTV) activities in targeted House and Senate races, the Chamber was successful in helping to elect 249of the 269 Chamber endorsed candidates- a winning percentage of 93%. Through a variety of mediums, including a web-based GOTV program, mail, phone calls, and field work, the Chamber was able to express the importance of electing pro-business candidates. The Chamber put 215 people on the ground in 31 states, sent 3.7 million pieces of mail, made 5.6 million phone calls, and sent 30 million e-mails. While we maintained our policy of not issuing endorsements in presidential elections, we ran a voter education program in key presidential battleground states, stressing legal reform issues. That program consisted of 906,000 direct mail pieces, 3.3 million emails, 1.7 million phone calls, 23 million web advertisements, and print ads that reached an audience of 2.7 million.

The Greater Marysville Tulalip Chamber of Commerce will continue to push for pro-business legislation with our partner the U.S. Chamber in the next Congress. None of these issues is completely off the table. It is possible that with some new faces in the House and Senate, we can now win some of the new issues that have led to difficult battles or deadlock in the past. Once the new members of congress are sworn in and an agenda for the 109th Congress is formed, we will update you on our priorities for the year.