CED

January 2015

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>> LEGISLATIVE OUTLOOK CHRISTIAN A. KLEIN W ith the 2014 mid-term elections in the rear-view mirror, it is time to turn our focus to 2015 and the 114th Congress. Congress accomplished so little over the past two years that the important issues for the equipment industry remain the same for the year ahead. What's not the same – with the new Republican majority in the Senate and expanded GOP control of the House – is the political landscape. e fact that Republicans now control both houses of Congress should help end the legislative log-jam on Capitol Hill. Party leaders are eager to make progress on key policy issues and demonstrate they are capable of governing. But there are also political wildcards: Will a Republican Congress and Democratic president work together? Will Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) be able to bridge the divide between the conservative and moderate wings of their caucuses? How will the looming specter of presidential elections (and the related political ambitions of GOP senators) affect the process? Only time will tell, but whatever the answer, we won't stop working to create a better policy climate for equipment distributors. Action on Keystone may come sooner rather than later. Now that the House and Senate are firmly in GOP hands, we're expecting fast action on legislation to force the president's hand on the Keystone XL pipeline. e project, which has been in limbo for years due the Obama administration's intransigence, has significant economic and national security consequences. Beyond reducing energy costs and lessening our dependence on natural resources from politically unstable or hostile countries, the project also will generate considerable economic activ- ity and create jobs along its route and in the manufacturing sector. AED has made Keystone a priority because of the implications for equip- ment distributors and the broader construction industry in both the U.S. and Canada. e association is leading a coalition of business and labor interests determined to make the pipeline a reality. Legislation to approve Keystone has passed the House many times in recent years; the Senate has been the stum- bling block. But even with Democrats still in control, a Keystone bill failed by just one vote in November. Federal highway funding must be a priority. Of all federal spending programs, none has a bigger impact on equipment distributors than the high- way program. In 2014, it created an esti- mated $2.6 billion in equipment market activity for our industry. Past AED studies have shown that each $600,000 in dealer revenue supports roughly one dealership job, meaning that the federal highway program supports more than 4,300 jobs in our industry. Unfortunately, the Highway Trust Fund (HTF) is facing unprecedented funding challenges. e program is merely limping along aer Congress averted near disaster this summer by extending funding to the end of May 2015. e funding extension is just a stopgap; without a long-term solution, the HTF is driving down the road on nothing but spare tires and an empty gas tank. In our industry, uncertainty causes chaos. States are unable to plan beyond the first half of this year and contractors are le sitting on their hands. Whether the Republican Senate take- over is a good thing or bad thing for the road program remains to be seen. While there are certainly many Republicans who understand the broader economic impact of road and bridge investment, the party's inherent aversion to tax increases will make it difficult to find the new user fees needed to put the HTF back on solid fiscal footing. Even more problematic, 55 House Republicans cosponsored legislation in the last Congress to get rid of the federal highway program, and 28 Republican senators voted for an amendment this summer to end the program. e economic consequences of doing so would be devastating, and some of the members of Congress supporting the legislation say they're doing so just to send a message that the program has to be fixed. But there's an old saying: "You can't shake the devil's hand and say you're only kidding." We've told them that rather than political grandstanding, we're expecting them to step up and offer real solutions to an important policy challenge. If we're going to achieve our goal of a well funded, multiyear highway bill, it's important that AED members reinforce that message in their conver- sations with lawmakers back home. Tax reform remains a priority. e turnover in Congress means that new leadership will be in place come Janu- ary. Rep. Paul Ryan (R-Wis.) and Sen. Orrin Hatch (R-Utah) are the incoming chairmen of the House Ways & Means and Senate Finance Committees, respectively. e committees will take Everything Old is New Again Looking ahead at AED's priorities for the 114th Congress – several, ahem, 2,000-pound "elephants" in the corner, demand swift Congressional action. 56 | www.cedmag.com | Construction Equipment Distribution | January 2015

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