Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.
Congress Embraces Economic Growth in Year-End Legislation
As Congress wraps up business for 2015, it's recording major, pro-growth successes in the omnibus spending bill and the tax extenders legislation. From the lifting the ban on oil exports to a variety of renewed and even permanent tax provisions, members of Congress have stepped up on behalf of U.S. employers and employees, adopting many of the policies that Business Roundtable has made priorities.(See our economic growth agenda, Achieving America’s Full Potential.)
True, Congress did not accomplish all these goals through regular order, instead relying of the often-used strategy of catch-all legislation at the end of the year. But the approach does not diminish significant achievements in the two bills.
Take for example the omnibus spending bill’s end of the prohibition on exports of U.S. crude oil, a relic from the days of the 1970s oil crisis. Thanks to new technology and billions of dollars of investment, the United States has emerged as the top oil producing country in the world. Ending the export ban will allow U.S. producers to seek out new markets.
The tax legislation makes permanent the research and development tax credit, a powerful tool companies use to invest in innovation. First created in 1981, the R&D credit has expired and been renewed multiple times, the antithesis of the certainty that business requires.
As Mark Weinberger, CEO of EY and Chair of Business Roundtable’s Tax and Fiscal Policy Committee observed in a BRT statement, “Congress and the Administration demonstrated bipartisan leadership in reaching agreement on a deal that will create the kind of long-term certainty that encourages investment, innovation, economic growth and jobs.”
Another provision established in 2001 that support business investment established, 50 percent bonus depreciation for asset acquisitions, was extended. (The legislation would gradually phase it out by 2020.)
The tax bill also suspends the medical device tax for two years until 2017, removing an anti-competitive burden to an industry that’s one of this country’s great success stories. Delayed, as well, is the Affordable Health Care Act’s tax on high-value health care plans, which would limited benefit options for employers and employees. The delays give Congress and the Administration time to examine and avoid the flawed implementation of the health care law while preserving important benefits for employees.
Business Roundtable has long pressed for modernizing the corporate tax system, and some critics of tax extenders bill claim its passage will make those kind of major reforms much more difficult. We think it actually gets us closer to the goal line. A statement from the tax-writing House Ways and Means Committee chaired by Rep. Kevin Brady (R-TX) puts it this way:
This bill lays the groundwork for historic reforms that will fix our broken tax code. Instead of spending months each year debating temporary tax extensions, Congress will be able to focus on the comprehensive tax reform we all agree our country needs. Americans deserve a simpler, fairer and flatter tax code that’s built for growth, and this bill will help make that possible.
As for the omnibus spending bill, the big news is that Congress has avoided the kind of budgetary brinksmanship that does so much harm to consumer confidence, market stability and the United States’ global reputation. It appears that members of both political parties recognized that the public will not accept government shutdowns and acted accordingly to compromise.
The omnibus bill also included cyber-security information sharing language, enabling companies to cooperate in fighting off cyberattacks, while giving the federal government the tools to strengthen national security. Privacy is also protected in the bill.
These bipartisan agreements build on solid work Congress already accomplished in passing a multiyear transportation infrastructure bill and the long-awaited reauthorization of the Elementary and Secondary Education Act. Both were also Business Roundtable priorities.
Congress is doing the work that voters elected them to do, and the benefits will accrue to the entire nation in the form of economic growth and the hiring it produces.
The outcome is not perfect, but it’s vastly preferable to inaction and gridlock. A journey to restore economic strength means taking positive steps.