This year brings questions and hope to Capitol Hill.
By Brandon VerVelde
The new year brings with it a tidal wave of change to Washington, D.C. On Jan. 3, 2017, all members of the House and Senate will be sworn into the 115th Congress and there will be several new faces. But all of their eyes will be focused on a date 17 days later: Jan. 20. On that day, Donald J. Trump will be inaugurated as the 45th president of the United States.
For the first time since the 2006 election, the Republican Party will control both houses of Congress and the White House. But for many reasons, accomplishing their goals will be much more difficult and complex than meets the eye. Politics and antiquated traditions will intervene – and often – to stymy progress the leaders want to make. Nonetheless, there’s hope that AAHOA’s priorities will see significant progress.
Speaker Paul D. Ryan (R-Wisconsin) leads the House, though his majority is slimmed down from the 114th Congress. The Senate is led by Sen. Mitch McConnell (R-Kentucky) who is the Majority Leader. McConnell was able to hold 52 Republican seats for the majority (down from 54 last year).
For the three men, the overarching question will be party unity. Throughout the campaign, the congressional leaders sparred with Trump. Ryan publicly disagreed with Trump on politics and policy, and Trump shot back that Ryan was disloyal.
The tone after Trump’s victory was markedly different.
“I don’t worry about intraparty issues,” Ryan said. “I feel very good about where we are. I’m very excited about our ability to work together.”
Trump echoed Ryan’s assessment.
“I think we’re going to do some absolutely spectacular things for the American people,” Trump said. “We look forward to starting, in fact, truthfully, we can’t get started fast enough.”
Winning and an opportunity to accomplish something – anything – can heal even deep divisions. Trump wrote “The Art of the Deal,” and it describes him more than anything. Will a President Trump make deals to defer to congressional leaders on policy details as long as the big picture ideas are his?
When it comes to Congress, institutional roadblocks remain – for now. The Senate’s rulebook requires 60 votes to pass most bills, meaning McConnell will need at least eight Democratic votes to pass something. Sen. Chuck Schumer, the Democratic leader from New York, will likely seek his pound of flesh – legislatively speaking – in exchange for his caucus’ votes. But for every concession that McConnell gives Schumer, McConnell risks losing votes within his own caucus.
The Senate rulebook could be changed by a simple majority vote on Jan. 3 to speed up the legislative process in the Senate and free McConnell from having to make deals with Democrats. Some Republicans have been calling for the elimination of the 60-vote rule, such as Wisconsin Gov. Scott Walker.
“They cannot use inside-the-ballpark Washington procedural reason to justify why things don’t happen,” Walker said. “They’ve got to get things done and… the best time to do them is early.”
But, if tradition holds, the rule will be sustained because each party is wary that they’ll one day be in the minority and want the rule back, so they’re hesitant to do away with it while they’re in power.
Ryan’s chief challenge stems from the Senate’s 60-vote rule. There hasn’t been much unanimity among the House Republicans in previous years, so when Ryan is sent a compromise bill from McConnell, he might be hard-pressed to get every Republican to vote for it, especially the hardline conservatives. If he has to rely on Democratic votes, he faces the same dilemma as McConnell where he risks losing votes from his own side.
Hope for AAHOA’s Priorities
Despite the obstacles facing the new Republican government, the policies AAHOA is advocating for generally have a positive outlook due to the fact that the government has one party controlling it. It’s not necessarily that it’s a Republican government, but rather the leaders will spend less time fighting partisan battles and more time passing bills. But even the slightest hiccup in politics can derail everything. Even in a positive environment, there are always challenges to getting a policy across the finish line.
The issue of reversing the expanded definition of a joint employer – where the government considers a franchisee and a franchisor as one legal entity – could move in 2017 if Congress can be persuaded to make it a priority. The bill to undo the damage of the expanded definition would be the path of least resistance and will be a top priority for AAHOA along with industry partners (let’s not forget, the franchisors also strongly oppose joint employer; they want as little to do with it as we do).
The bill has a fan in Ryan, who said joint employer is “putting a chilling effect on growth.”
There’s also another longer path to addressing this issue. The members of the five-person National Labor Relations Board, which issued the expanded definition, are appointed by the president for five-year terms. As the current terms expire, Trump will appoint new members. But that means it will take a few years for Trump’s appointments to take control.
The new overtime rule is next in line for action by Congress or Trump, who in August advocated for rolling it back.
“We would love to see a delay or a carve-out of sorts for our small business owners,” Trump said.
Fortunately, Trump and critics of the rule got their delay. A federal judge in November blocked the rule from going into effect on Dec. 1 as planned. The Department of Labor, which issued the new rule in response to an executive order from President Barack Obama, has appealed the judge’s ruling and asked for an expedited review this month. If they’re successful, the rule could go into effect before Obama leaves office.
Once Trump is sworn in, however, his appointees will take over the department. The new administration will then be able to decide if the government should continue to appeal the ruling – or drop the rule altogether. Complicated procedures muddy up the waters on Trump simply issuing a new executive order repealing the rule, but the option is on the table.
The easiest and cleanest avenue of permanently rolling back the rule – completely bypassing a judge’s whims –would be action by Congress. Through an obscure law, Congress can pass a bill by a simple majority (not subject to the Senate’s 60-vote rule) and repeal the overtime rule completely. If Congress goes this route, it could take its time to formulate and pass a more reasonable update to the overtime standard, slightly increasing the salary threshold, for example.
Reforming the complex tax code has been a wish of Ryan for years and will likely be on his agenda this year. Before taking the position of Speaker, he led the Ways and Means Committee, which is responsible for writing the tax code.
On this issue, AAHOA will be playing defense. Hoteliers’ principle goal is to preserve like-kind exchanges under section 1031 of the tax code. Like-kind exchanges allow for property owners to defer payment of capital gains taxes when they sell a property, if they invest the gains in a new property that is of like-kind to the one sold. In other words, it allows hoteliers to invest the funds that would be used to pay capital gains taxes into a bigger, newer, more expensive property.
“Like-kind exchanges are a big source of growth in our industry,” said Chip Rogers, president and CEO of AAHOA. “Allowing owners to invest more money into expanding their companies leads to more jobs being created. Plus, it’s an added incentive for current owners to sell to newcomers, giving the next generation a door into the business.”
Trump didn’t release his tax returns during the campaign, but as someone with many investments in real estate, it would be surprising if he hadn’t used the provision a few times himself. Having the president on our side while defending it can only help AAHOA when defending this key provision.
The most important priority that AAHOA has moving into 2017 is reforming the Americans with Disabilities Act (ADA). The future is very bright for the bill, the ADA Education and Reform Act, because it is bipartisan, the story hoteliers tell on the issue is so compelling, the issue primarily affects small business owners and there is a broad coalition of support for the bill.
It’s a rosy picture, for sure, but it’s not all smooth sailing ahead. There are challenges, and first among them is educating lawmakers. Those affected by ADA-related drive-by lawsuits know firsthand what’s going on and why it so badly needs to be addressed. But if you’re among those not affected, like the lawmakers, then you have no idea this is an issue, let alone that there’s a bill to address it.
The need for education and awareness among lawmakers is why AAHOA hosts two annual legislative conferences each year, sending hundreds of AAHOA members to Capitol Hill offices to urge lawmakers to move the bill to the top of the agenda.
Even with that, the reality of reforming a law as important as the ADA is harsh. Lawmakers are very cautious to amend a complex law without knowing for sure that the new bill is an improvement. They don’t want to reform something and later find out the reforms have unintended consequences that need to be addressed again.
The new year brings renewed hope for positive solutions to the problems AAHOA members face as hoteliers and small business owners. Significant challenges and roadblocks are still in view, though. So now is the time to make your New Year’s resolution to redouble efforts to make AAHOA’s policy goals a reality. ■
Brandon VerVelde is the Director of State and Local Government Affairs for AAHOA and can be reached at [email protected]
“Yuuuge” challenges await in 2017
Come the inauguration of President-elect Donald J. Trump on Jan. 20, the government will be unified under the Republican Party banner. But with hold of the reins comes a host of major public policy issues that he, House Speaker Paul D. Ryan and Senate Majority Leader Mitch McConnell will need to address in 2017 and beyond.
Reforming health care reform
President Barack Obama’s health care law not only faces staunch opposition from all three leaders, but the law is also failing. Health insurance premiums are skyrocketing, and insurers are leaving the government-run marketplaces due to massive financial losses. But reforming the health care reform law will be complex. The original bill ran nearly 2,000 pages and took nearly 14 months from Obama’s inauguration to becoming law.
For their part, Republicans have put forth replacement plans several times over the years. Putting them into one proposal that can be supported by both chambers and the president is a monumental challenge.
The debt and deficit
The 2015 deal cut by Congress and Obama to suspend the debt ceiling, or the overall amount of debt the government can have, expires this spring. The estimated $20 trillion debt is due to the government running $500 billion annual budget deficits (having to borrow the amount to keep the government operational).
Republicans, fearing dire economic consequences for having too big of deficits and too much debt, have in the past fought for spending cuts as part of the deal in an effort to force the government to borrow less moving forward. But every program or spending line-item chosen to cut faces opposition from whomever created it and those who benefit from it. The challenge for Trump, Ryan and McConnell is how much is enough for hardline conservatives in their party to sign off on the deal.
Domestic issues aside, the country faces sobering threats to national security. Peter Bergen, an Arizona State University professor and national security expert, writes on CNN.com that Trump will have to deal with everything from “the resurgence of the Taliban in Afghanistan, to the grinding Syrian civil war, to the flexing of Russian muscles under President Vladimir Putin, to how to deal with ISIS as the terrorist army retreats in Iraq.”