Contracting Business: What were you initial thoughts on the election results?
Charlie McCrudden: I think the results of the election are going to be good for the contracting industry. Republicans tend to favor small business issues and they are more reflective of concerns of small businesses. With control of both the House and Senate, pushing a pro-small business agenda through congress will be easier.
CB: Will there be immediate change?
CM: We’re still going to see the same gridlock we saw before the election, but instead of it being between House and Senate, it’ll now be between Congress and The White House. We may not see more things get done. All we’re really doing is delaying when the gridlock occurs.
The house is going to have an easier time passing bills than they did last Congress. That’s because their majority is bigger. There are more moderate Republicans in Congress now that will likely be more supportive of Speaker [of the House John] Boehner. He had some difficulty with the Tea Party portion of the Republican caucus last Congress. The new moderates there now will counter some of those Tea Party folks that he had difficulty with.
CB: How will this election impact the contractor industry? Are the people you have spoken with happy?
CM: Yeah, I think people are positive about the changes in the House and Senate in the hopes that the gridlock will come to an end. However, as I mentioned, this is really only going to delay the gridlock. But going into a lame duck term for [President Barack Obama], there is some hope that perhaps one of the issues that White House and Congress can work through is tax reform.
There’s a lot of opportunity to reform the tax code. That can help small businesses, as lot of small businesses are organized as pass-through entities. Partnerships, LLCs, etc. pay a higher tax rate than their seed corporation brethren. It’s one of the flaws of the tax code. Fixing that could help a lot of small businesses that are organized as pass-through pay less taxes going forward.
CB: What else are contractors looking forward to?
CM: I think there’s going to be more oversight too of the administration. Mow that both The House and Senate are in Republican hands, I think we’ll see more hearings on agencies and some of their actions. You’ll likely see hearings on the immigration executive order that came out and likely hearings and debate on healthcare. I don’t think Republicans will be successful in overturning the Affordable Care Act, but hey will be able to reform and fix parts of it that aren’t operating well.
CB: Which parts may see change?
CM: I think one of the first ones will be the medical device tax, which was imposed on the ACA and there’s uniform support for getting rid of that. The White House agrees that it may be one place they can work together on. It will likely be a tradeoff for something else. Congress rarely focuses on one issue at a time. Everything is a tradeoff; give a little here, take a little there. We’ll probably see a fair bit of that trading going forward.
There’s also a Supreme Court case this session that is looking at the state exchanges and some of the rebates under the state exchanges. That could potentially upend parts of the ACA. We’ll have to wait for that decision, probably sometime in the spring or summer.
CB: People have been critical of regulatory bodies, such as the EPA, with new rules being passed into law. What do you see happening here?
CM: I think we’re going to see a lot more oversight of regulatory agencies. I also think the last two years of the Obama Administration, regulatory agencies will really ramp up rule making and regulations they’re putting out. That’s one where the entire business community is going to have to watch and see what happens and react. You can rely on congress to push back or legal challenges to overrule, or just get involved in the regulatory process.
We typically see that at the end of an Administration. Knowing there’s a potential change of party, am administration likes to put their stamp on the federal register. You often times see a lot of regulations, especially controversial regulations, get released. This happens during the last two years of a president’s term, especially the last quarter.
CB: Is anything flying under the radar that could be passed as a new regulation?
CM: There’s the power plant rule, which is looking to set emissions standards for power plants. This will likely come out next year or possibly in 2016. I expect to see a number of regulations from the Department of Energy on appliance standards. And I learned the other day that there’s a rule pending at [the Occupational Safety and Health Administration] on confined space and construction that could affect HVAC contractors who go into crawl spaces or attics.
The National Labor Relations Board could have a number of controversial rules Teed up as well. Some have bene delayed by legal challenges, some have been slow to release, but I think we’ll see some from there as well. There’s no shortage of rules that are waiting to come out.
CB: Any advice for businesses who want to get more active in the legal and political process?
CM: It always makes sense to get to know your representatives and your lawmakers. At the ACCA, we’ll certainly be informing people of the issues that are coming up with regulations in Congress. We have our grass roots action center, which allows you to easily send a letter to your Congress member in support or opposition of a bill. But I would stay tuned to our website and our alerts and our newsletters for the big topical issues as they come out.
As aside, I’m not sure what the tone or tenor of this next Congress will be. … When [Obama] pulled trigger on the immigration executive order, I think it rankled a lot of Republicans. I think the 114th Congress is going to start off on a bad footing because the White House and Congressional Republicans are already sort of battling over an issue. I don’t think we’re going to see the concessionary president some thought they were going to have this past election. That’s going to set the tone going forward.