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Washington Update

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Last Week

While the House and Senate were back home for the week, a controversial agency’s leadership emerged as a boiling point. The Consumer Financial Protection Bureau (CFPB), created in the wake of the 2008 financial crisis in the Dodd-Frank law, was intended to intervene between lenders and consumers specifically dealing with lending products, such as mortgages, student loans, and payday lenders. With his Friday departure, outgoing director, Richard Cordray named his Chief of Staff as Deputy Director (both holdovers from the Obama Administration), thereby elevating her to Acting Director. The president sought a different approach to the agency’s leadership and named Office of Management and Budget Director Mick Mulvaney as the interim director. This morning, there appear to be a pair of acting directors, causing confusion, and now in the courts for them to decide, as Cordray-appointed director Leandra English filed suit last evening to seek a ruling in her favor and blocking Mulvaney from serving.
Item Of Interest
With tax reform meandering through the Senate, concerns remain over the treatment of Pass-Through businesses. The small business community, including ASA will be sending letter up at the end of the day highlighting some of our concerns. “Specifically, the bill’s 17.4 percent deduction is a welcome effort to lower rates on all pass-through businesses, but the provision is both temporary and too small. The deduction’s 50-percent payroll limitation would leave behind pass-through businesses who do not add direct payroll at a one-to-one ratio as they grow, while the portion of pass-through businesses that do get the full deduction would be subject to a 32 percent effective marginal rate. This rate falls well short of the 25 percent rate forecast in the Framework and it is significantly higher than the bill’s 20 percent rate applying to C corporations. The disallowance of the State and Local income tax deduction would increase this gap further, raising effective tax rates on pass-through businesses operating in States with income taxes. Meanwhile, the proposed limitation on a businesses’ ability to deduct active pass-through losses would discourage entrepreneurial activity, business formation and investment, as would the exclusion of pass-through businesses from the new, territorial regime on international income.

As a result of these provisions and others, we are concerned that the Senate bill would increase the tax burden on many pass-through businesses relative to current law, while the bill’s rate disparity with C corporations creates a significant competitive disadvantage for many more.

Washington Update

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Congress returns for a three-week sprint to its August recess, with declining support and momentum for the Senate’s healthcare overhaul. Conservative Senators Ted Cruz (TX) and Mike Lee (UT) are pushing hard to move the bill further right, a plan that has many moderates balking. And some senators are already predicting the repeal plan is doomed and Republicans will have to work with Democrats to get anything done. A vote is not expected this week as GOP leaders await an updated estimate from the Congressional Budget Office after making tweaks before the recess, hoping the changes improve the prediction that 22 million fewer people will have insurance under the GOP plan. With a slim 52-seat majority, Republicans can only afford to lose two senators. No Democrats are expected to support the repeal bill. At least 10 Republican senators are opposed to the Senate’s legislation, and GOP senators signaled over the recess that they don’t think they are near an agreement.

In the House, the annual defense authorization is expected to get a vote this week and is likely to attract fights over undocumented immigrants serving in the military, the war on terror, Russia, Turkey, and a host of other hot-button issues. This week’s vote will come as Republicans try to reach an agreement on a budget resolution for the next fiscal year, which will establish the groundwork for keeping the government funded after September and open the procedural avenue they’re using for tax reform. Hundreds of amendments have been filed to the legislation that range from imposing punishment on Turkey for its security officials’ role in a brawl outside the Turkish embassy in Washington earlier this year to slapping sanctions on Russia for violating a landmark arms treaty.

Washington Weekly Update

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Items of Interest.

Once again, members of Congress are home for the next two weeks in observance of Easter and Passover. It’s likely you’ll find them in heated townhall debates, hearing from supporters and opponents on their failure to do something about healthcare laws. While most will schedule public forums, they also seek private or limited sessions with small businesses like yours. This is an opportunity to invite them into your conference room, with your fellow small business owners in your community or your management team. And this is not your only opportunity to have the ear of your elected officials.

This week, we’ll be opening registration for ASA’s Legislative Fly-in, a unique opportunity to visit with members of Congress in Washington about issues important to our industry and your business. Be on the lookout for registration information arriving shortly!

Sacramento Fly-In Update

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IMMEDIATE RELEASE EDITORIAL CONTACT:
Benjamin Stephens
Director of Marketing & Communications
American Supply Association
(630) 467-0000 x 203, bstephens@asa.net

ASA Leads Members on First-Ever Sacramento Fly-In

Itasca, IL – June 21, 2016 – Last week, manufacturer and distributor members of the American Supply Association embarked on their first foray into state policy-making. On the day that it was announced that California leapfrogged both Brazil and France as number six in economic might, small business owners in California were gearing up to take their message to members of the Senate and General Assembly in the Golden State.

But while California’s economy flourished in the headlines, as ASA’s members successfully advocated, not all is well for the small business climate in the state. “The costs and burdens of operating a small business have made it imperative that we get involved in Sacramento; we are looking for solutions and leaders that will be a voice of reason,” said Columbia Specialty Company’s Mike Taylor.

Attendees met with leaders in the General Assembly and Senate imparting their experiences, challenges and good-news stories from operating small businesses. Attendees discussed the need to reform the legal process, protect small businesses from meritless and frivolous lawsuits, water infrastructure and the continuing impacts that the Reduction of Lead in Drinking Water has had. Manufacturers got into the game as well, with Bradford White Corporation’s Eric Truskoski educating policy-makers on the challenges brought on by the California Energy Commission revisions to Title 24’s strict new energy efficiency requirements for water heaters.

ASA’s involvement in government affairs actually traces its roots to Sacramento. It was the onerous and consequential Reduction of Lead in Drinking Water Act that made the association realize that enough was enough. “We have said all along that water agencies were the winners and the distributors were the losers when that law passed. That was when we said, “Never again!,” said Executive Vice President, Mike Adelizzi.

“We came to Sacramento to build relationships and claim a seat at the table before the next bad or questionable idea is generated; with that we are successful. It is our responsibility as industry leaders to stop the bad ideas and help improve the good ones. Without the relationships that we have started to build, that is just not possible,” said ASA Education Foundation Chairman John Mills (WHCI Plumbing Supply).

The American Supply Association is the national association for full-service wholesaler-distributors and manufacturers of plumbing-heating-cooling-piping and industrial pipe-valve-fitting products. Learn more about ASA at www.asa.net.

ADVOCACY ALERT – EPA Posts Revised FAQ’s on Reduction of Lead in Drinking Water Act

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The EPA has posted a revised list of frequently-asked-questions (FAQs) to assist manufacturers, distributors, regulators and the general public in complying with and understanding the requirements of the Reduction of Lead in Drinking Water Act.  The FAQs address the definition of lead free, the effective date, calculating lead content, 3rd party certification, product labeling, repair and replacement parts, and exemptions.

The FAQs can be found here and at: