Government Matters: 2010 Update
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1 Government Matters: 2010 Update BRAD D. STEELE VP of Gov t Relations & General Counsel National Club Association th Street NW, Suite 450 Washington, DC steele@nationalclub.org
2 National Club Association The advocate for clubs your lobbyist On Capitol Hill In the agencies In the statehouses In the courthouses NCA makes sure the private club industry s voice is heard And, NCA provides answers for club leaders Through conferences, seminars, personal consultations and with numerous publications
3 Today s Roadmap The Political Landscape Congressional Action Regulatory Action
4 The Political Landscape: Capitol Hill
5 House of Representatives Make-up: 257 Democrats 178 Republicans, Rep. Parker Griffith (Ala.) switched to Republican Party in December Only need 218 to pass anything Expanded 39 vote Democratic majority means Speaker Nancy Pelosi (D-Calif.) can do as she pleases She can lose some Blue Dogs (49); She can lose some New Democrats (56); and She has less need to engage the minority party
6 Make-up: 58 (57) Democrats 40 Republicans 2 Independents Senate The majority lost its filibuster-proof Senate with the election of Scott Brown (R) in Mass. Lost the state that has only 5/40 Republican St. Sens. and 16/160 Republican St. Reps. The seat held by John & Ted Kennedy The retirement of Chris Dodd (D-Conn.), Byron Dorgan (D-N.D.), Roland Burris (D-Ill.) and Ted Kaufman (D-Del.) could mean more losses
7 Congressional Action in 2010
8 Tax Increases The President s plan Increases the top 2 marginal income tax rates from 33% to 36% and from 35% to 39.6% Increases the capital gains and dividends tax rate from 15% to 20% Limits personal exemption and itemized deductions (mortgage interest) for the wealthy Family making $500,000/yr. will pay more than $11,000 in new taxes With 20 such families at your club, you could lose more than $200,000/yr.
9 The Patient Protection and Affordable Care Act The 2,457 page, $1.0T Senate bill has some good points: Insurers must accept everyone regardless of a pre-existing condition Insurers must renew coverage on individuals even if they suffer health problems during the year Insurers may not place a limit on lifetime benefits and they must place a limit on annual out of pocket expenses Insurers may not look at gender or past claims to determine yearly rates (unless employees)
10 The Patient Protection and Affordable Care Act And, the bill has some bad points, too: Ins. companies with policies costing more than $8,900 or $24,000 will be subject to a 40% tax on the amount above those thresholds Unions raised thresholds and removed union workers from the tax until 2018 $60B small business health ins. tax Ins. companies will pay a new gov t fee, but CBO says fee will be passed to you and your members Rx manufacturers and medical device makers will pay new gov t fee All must carry ins. or be fined $750, but 8% rule
11 The Patient Protection and Affordable Care Act Then there are some very bad points: Clubs with 50 + full-time employees will be fined up to $750/employee if they don t offer ins. Full-time employee = 30 hours/service week Seasonal workers are included if your club has 50 + employees or if you have <50 but they work days Clubs that do offer ins. can be fined, too If the ins. cost is more than 9.8% of an employee s income and he goes to gov t exchange, then $3K/employee up to $750 times total no. of employees Clubs with a waiting period of more than 60 days - $600 fine
12 The Patient Protection and Affordable Care Act Finally, the bill will have a significant impact on your members, too: Medicare payroll tax is increased by.9% for those making $200K/$250K and tax could be applied to investment & dividend income, too This investment & dividend tax is to pay for the lost revenue caused by the union Cadillac plan deal With only 50 families, this payroll tax hike could cost your club over $100,000 Your members could be forced to choose between their kids education, their retirement, or their discretionary spending at the club
13 Health Care Reform Outlook The House passed its bill One Dem. has resigned and one Rep. voted for it, but probably won t do so again The Senate passed its bill Now, there are 59 votes for it now and Sen. Brown will be seated before any more is done The Mass. result has taken a its toll The House will not pass the Senate s bill The Senate doesn t want to spend the time to pass anything new A scaled-back bill may not get the votes
14 Employee Free Choice Act The Card Check bill introduced by the late Sen. Kennedy (D-Mass.) 40 co-sponsors House version introduced by Rep. George Miller (D-Calif.) 228 co-sponsors Passed the House in 07, but failed in the Senate by 9 votes Dems. have 8 of those votes in 2010 The Card Check bill strips the secret ballot election from workers deciding to join a union If a majority sign a card, then your club is union
15 The Card Check Bill If the initial CBA cannot be reached within 120 days, then a federal arbitrator imposes a 2 yr. contract No employee vote and no changes to reflect the needs of the club The bill makes it more difficult for the club to talk with employees about risks of union representation Adds fines of up to $20,000 for new unfair labor practices
16 The Card Check Bill The Quickie Election compromise Union calls for election after quietly campaigning Election held within 5-10 days from call Sen. Tom Harkin (D-Iowa) Chair of HELP likes the quickie election language AFL-CIO annual convention in Pittsburgh Pres. spoke and unions want 1,000 organizers ready once EFCA passes Though Sen. Elect Brown opposes EFCA, some form could be included in the upcoming jobs bill
17 American Clean Energy and Security Act The Cap and Trade bill introduced by Rep. Henry Waxman (D-Calif.) Caps carbon dioxide emissions by requiring power plants to use cleaner fuel to create electricity Forces the reduction in the use of coal and oil and a retrofitting of plants to burn new fuels Allows those plants to trade credits if they are under their emission targets Hopes for a 17% reduction in emissions by 2020 Higher energy production costs will be passed on to consumers
18 The Cap and Trade Bill The minority offered an alternative: Set new emission standards for all new power plants, but exempt existing ones Existing plants would be given tax incentives to limit emissions Speaker Pelosi forced the bill through the House All parties acknowledge that there will be higher costs for the rate payer, but it still passed the House
19 Clean Energy Jobs and American Power Act The Senate s version of Cap and Trade introduced by Sen. Barbara Boxer (D-Calif.) and Sen. John Kerry (D-Mass.) Their bill increases the carbon emissions reduction from 17% to 20% The EPA has started regulatory moves to reduce emissions if the bill dies Designating emissions a danger to the public Sen. Lisa Murkowski (R-Alaska) moving to stop the EPA with Democrat support
20 CIR ASAP The House immigration bill, entitled Comprehensive Immigration Reform for America s Security and Prosperity The bill proposes: Stronger border security measures, Stronger employment verification mechanisms, Creating a pathway to citizenship for undocumented aliens, Establishing a Commission on Immigration and Labor Markets, and Broad visa reforms including H-2B visas
21 CIR ASAP The bill creates the Commission on Immigration and Labor Markets A new federal agency that would recommend to Congress and the President the number of foreign workers to be admitted into the country Number would change each year based on the Commission s decision Composed of 7 political appointees who make this decision rather than the business community that needs and uses the workers
22 CIR ASAP The bill also reforms the H-2B visa program Requires clubs to: Notify the state and local unions of the job opening, Pay a new $800 application fee and all transportation costs, visa fees and subsistence costs of the workers (currently required by DOL), Pay H-2B workers the CBA wage or prevailing wage or median of BLS wage or at least 150% of minimum wage, and Provide workers compensation Clubs cannot hire an H-2B worker unless: The real prevailing wage for the job increased by 3% over the last year or you offer to pay 3% more
23 CIR ASAP Penalties for failing to comply include Fines of up to $10,000 Debarment from the program for 1-5 yrs. H-2B workers will also have the right to sue Any person whose wages or working conditions have been directly and adversely affected by an employer in violation of these laws Lawsuit is filed in federal court They may recover back wages, court costs and attorney s fees
24 2010 Outlook Higher income and capital gains taxes for your members with less deductions available New taxes, employee costs and gov t fees for you and your members with health care reform A greater chance for unions to be in your club Higher energy costs for your club and your members businesses Immigration reform that creates a new federal agency to determine whether foreign workers may come to America and higher gov t fees with higher mandated wages for H-2B and non-h-2b workers And then, Scott Brown won.
25 Regulatory Action in 2010
26 COBRA Payments Employers who have terminated, or will terminate, an employee between and must offer a subsidy for the COBRA premium The original end date was The subsidy is effective starting and lasts up to 15 months Extended the subsidy an extra 6 months Employer pays 65% of the cost but the employer may reduce the 65% premium from FICA and withholding taxes
27 SSA No-Match Rules President Obama rescinded the Bush rules with no new guidelines, BUT DHS is now targeting employers rather than the illegal aliens and No-Match letters are red flags E-Verify is a way to protect your club Though the Bush rules are gone, clubs should still follow them: Notify your employee and assist him as he resolves the issue with SSA Document what you do and what he does Don t fire him unless he has shown he s not doing what a reasonable person would do
28 The National Club Association YOUR VOICE IN WASHINGTON, DC JOIN TODAY!
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