U.S. Sen. Richard Shelby of Alabama continues to block financing of mega-export deals by the U.S. Export-Import Bank. The bank is limited to approving deals of only up to $10 million. Because the five-member board is short one member it cannot approve deals involving big-ticket items such as airplanes, power generators, heavy equipment, and nuclear reactors.
More than 30 transactions worth more than $20 billion are awaiting assistance in the hope that Senator Shelby will allow the agency to fully function, the New York Times reported. The hiatus is forcing companies such as General Electric and Boeing to shift more production overseas. And other nations’ export-credit agencies are “rolling out the red carpet” to finance those deals, said G.E. Vice Chairman John G. Rice.
“It’s very troubling to me, and I think a lot of others, that one person can hijack a process and keep the export credit agency from functioning in the United States when two-thirds of Congress support it,” Mr. Rice said.
The Business Council of Alabama was a member of a coalition supporting renewal of the bank’s operating charter and the options the bank present to American exporters and importers.
A year ago the Ex-Im Bank stopped backing new business after a faction of conservative Republicans blocked renewal of its charter. The bank reopened for business in December but Senator Shelby who is chairman of the Senate Banking Committee has blocked Senate confirmation of President Obama’s nomination of J. Mark McWatters, formerly an aide to the Republican chairman of the House banking committee, to the bank’s board.
The Times reported that Shelby issued a statement declaring that his action is in the best interest of the American taxpayer. In May, a Boeing official at its facility in Alabama publicly criticized Mr. Shelby, saying he was putting local jobs and suppliers at risk.
SUPREME COURT DECLINES TO REHEAR UNION FEES DISPUTE THAT WENT AGAINST BUSINESS
The U.S. Supreme Court this week rejected a request by non-union public school teachers in California to rehear a major challenge to fees that unions collect. The non-union teachers, represented by the Washington-based Center for Individual Rights, launched an effort to get the court to reconsider its March decision that was a victory for unions that force non-members to pay fees.
The 4-4 split left intact lower court rulings in favor of a teachers’ union in California, Reuters reported. The issue was so-called agency fees equivalent to union dues that are currently mandatory for non-union workers in about half the states including California.
The March 4-4 decision upheld a 1977 legal precedent that allowed such fees, which conservatives have long abhorred. Conservatives have tried to curb the influence of public sector unions like those that represent police, firefighters, teachers and other government employees while unions typically back the liberal Democratic Party.
IN CASE YOU MISSED IT
Federal Appeals Court Temporarily Halts Controversial Union Rule, ‘Persuader’ Court Action a Win for Manufacturers
National Association of Manufacturers (Micetich 6/27) “National Association of Manufacturers Senior Vice President and General Counsel Linda Kelly issued the following statement on the decision by the U.S. District Court for the Northern District of Texas to halt the Department of Labor’s ‘persuader’ rule, which dictates how employers can talk to their employees by instituting new reporting requirements. The Manufacturers’ Center for Legal Action (MCLA) filed suit on the rule in March in the U.S. District Court for the Eastern District of Arkansas.
“‘Once again, the courts have had to step in and restrain the federal government from asserting powers it does not have. Manufacturers have long held that this rule is a violation of our First Amendment rights and the Fifth Amendment’s due process clause, and today’s ruling supports our view. This complicated, vague rule fails to give manufacturers fair notice of what actions are considered forbidden and what forms of communication and outreach are considered reportable. The MCLA will continue to fight against a regulatory agenda that threatens to fundamentally change the manufacturing workplace’.
“‘The MCLA serves as the leading voice of manufacturers in the courts, representing the more than 12 million men and women who make things in the United States. The MCLA strategically engages in litigation as a direct party, intervenes in litigation important to our manufacturers and weighs in as amicus curiae on important cases’.”
Republican Plan Caps Small Business Tax Rate at 25 Percent
Business Journals (Hoover 6/24) “Business groups welcomed House Republicans’ plan to overhaul the tax code, but they want to take a closer look at its details. The plan calls for simplifying individual income taxes by reducing the number of tax brackets to three, with a top rate of 33 percent vs. the current 39.6 percent. Most small businesses pay taxes on their profits at the individual level, and their tax rate would be capped at 25 percent. Plus, businesses could immediately write off investments in new facilities, equipment and technology, instead of depreciating the cost over time.
“For larger businesses, the plan calls for cutting the top corporate tax rate from 35 percent to 20 percent, and shifting to a system where profits are taxed in the country they’re earned, a territorial system used by most developed nations. Taxes on individual investors would be reduced as well – taxes on dividends, capital gains and interest received from stocks and mutual funds would be cut in half. Plus, the estate tax and the alternative minimum tax would be eliminated.
“Simplifying the tax code and reducing rates, however, means that many tax breaks used by businesses and individuals would be eliminated. Businesses would no longer be able to deduct interest expenses, for example.”