Transcript DeBoer/Dennis/Ziebart legislative panel

The National Association of Business Political Action Committees
2012 NABPAC POST-ELECTION CONFERENCE
Lame Duck and Beyond
PRESENTED BY:
Michael Erlandson, Moderator
Jeff DeBoer
James Dennis
Discussion
o Election Results
o Deficits and the Fiscal Cliff
o Key Policy Issues in the Lame Duck & Beyond
o Taxes
o Real Estate
o Energy and Environment
o What It All Means in the Real World
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Impact of Elections
o Republican/Democratic ratios not dramatically changed
o But some attitudes may have changed
o Sets up opportunity for compromise in Lame Duck
o Aisle crossing will still be necessary to get legislation to the
President’s desk
o Next Congress not likely to see sweeping reforms – more
maneuvering around the edges
o Compromise critical to moving legislation in new Congress
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Deficit Overview
o Projected $1.1 trillion deficit for FY 2012
– 4th yr over $1 trillion
o 1986 – 5% deficit as a percentage of
GDP
o 2012 – 7.3% deficit as a percentage
of GDP (down from 8.6% in 2011)
o National debt is $15.98 trillion +/- $1bn
o Interest on debt likely to rise from
$197bn in 2010 to $778 bn in 2020
o As percentage of GDP - net interest
outlays expected to more than double
during that period from 1.4% to 3.4%
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Fiscal Cliff & Sequester
o Failure of Deficit Commission left us with the Sequester
o $110bn automatic cut in defense & discretionary spending
o Congress can:
o Do nothing – let Sequester take effect
o Delay effective date of Sequester
o Agree to a comprehensive compromise
o Agree to a smaller compromise
o Failure to act likely pushes economy back into recession
o Business is bracing for the worst
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Other Issues in Lame Duck Session
o Bush Tax Cuts
o Cuts passed in 2001 and 2003 slated to expire at end of year
o AMT Patch
o Payroll Tax Relief Extension
o Extenders
o Various individual and corporate tax provisions have either
expired or will expire at the end of the year
o Farm Bill
o Current 5 year bill has expired
o Debt Limit Increase
o Debt limit reached in January or February
o Without action government will shut down
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Tax Reform in New Congress
o Growing consensus that reduction in corporate rate necessary to remain
competitive
o Several bipartisan deficit reduction plans envision tax reform
o Ryan budget and Camp proposal envision reducing top individual and corporate
rates to 25%
o May be comprehensive or piecemeal
o What may be on the table:
o Corporate and individual tax rates
o Carbon tax
o Increases in dividend, capital gains and state tax rates
o Repeal/modification of tax credits and deductions, including:
o Home mortgage interest deduction
o Charitable deduction
o Energy tax credits
o Accelerated depreciation
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Real Estate Industry
o Credit and Capital Concerns
o Mounting commercial real estate mortgage maturities
o Dodd Frank and Basel III raise concerns about real estate
lending
o GSE reform of Fannie and Freddie
o Terrorism Risk Insurance Program expires at end of 2014
o Tax Issues
o Capital gains and Carried interest
o Partnership taxation
o Interest deductibility
o Depreciation
o Environmental Matters
o Building Energy Retrofit incentives and mandates
o EPA LEAD and stormwater runoff regulations
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Energy & Environment
o EPA
o Many regulatory initiatives problematic for industry,
particularly coal – continued plant retirements
o Stand off among EPA, industry, states, environmental groups,
members of Congress
o Continued litigation and legislation to stop/modify EPA
initiatives
o Some companies may look for compromise
o Other Issues:
o Keystone Pipeline approval
o Domestic oil and gas production and regulation
o Export of natural gas
o Challenges around continued renewable energy development
o Push for increased energy efficiency
o Infrastructure development
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Industry Reaction
QUESTIONS
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