Federal Legislative Update
Posted Friday February 02, 2018
The CEO Council for Growth (CEO Council) leads our region forward by envisioning a stronger, more competitive community, convening decision-makers, taking action, and advocating for policies and practices that strengthen our regional economy. The CEO Council is committed to enhancing economic growth and prosperity in our region through regional and national policy. This update summarizes recent congressional activity as it relates to the identified priorities of the CEO Council.
On January 22, 2018, Congress passed a Continuing Resolution (CR) to keep the government funded through February 8, 2018 and end a three-day government shutdown. The CR also reauthorized the Children’s Health Insurance Program for six years, delayed the Cadillac Tax until 2022, and addressed the following key health care issues that are seen as critical to our regional economy.
- Two-year suspension from January 1, 2018 to January 1, 2020 of the medical device excise tax, which unfairly targets an important industry to Greater Philadelphia by taxing medical device sales regardless of profitability. The tax stifles innovation by increasing the effective tax rate for many medical technology companies, thereby reducing financial resources that should be used for R&D, clinical trials, and investments in manufacturing.
- A one-year suspension of the Health Insurance Tax (HIT) up to January 1, 2019. If Congress failed to act, HIT would have driven up premiums for large employers, small businesses, families, seniors, and individuals. The one-year delay of HIT provides direct relief for families and businesses that otherwise would have seen their premiums jump as much as $500 for family coverage.
Budget & Appropriations
As Congress continues to work towards a FY18 Omnibus Appropriations Bill, we urge our congressional delegation to consider the region’s highest-priority appropriations requests as determined by our CEO Council members. We believe that federal investment in these sectors of our regional economy ensures tremendous economic return as well as innovations and breakthroughs that will provide for a better quality of life not only for the residents of northern Delaware, southern New Jersey, and southeastern Pennsylvania but also the nation as a whole.
1. Federal Funding for Research
Research in our region is leading to major breakthroughs in innovation, new technologies, life-saving medical treatments, and regional job growth. The federal government’s increased federal funding for research above inflation levels is key to advancing our economy and global competitiveness.
The CEO Council is a member of a broad-based coalition of 75 business organizations across the country called “Business for Federal Research Funding,” which brings increased focus to research funding. In an October 26, 2017 letter to Senate and House leadership, the Business for Federal Research Funding Coalition pushed for an agreement to raise spending caps and allow the appropriations process to proceed.
The CEO Council urges leadership to arrive at an agreement that would enable spending levels in the U.S. Senate Appropriations Committee’s FY18 Labor, Health and Human Services, and Education Appropriations bill, which would provide the National Institutes of Health (NIH) with $36.1 billion, an increase of $2 billion above last year’s level, and almost a billion more than approved by the House Appropriations Committee.
Additionally, we urge our congressional delegation to consider the following language submissions that will accelerate market entry and lead to disruptive breakthroughs:
- Enable and increase the allocation of federal grant funds to small businesses for commercialization activities. Currently, grantees are prohibited from utilizing their grants to fund critical commercialization efforts that enable them to attract private capital and accelerate their market entry;
- Expand the definition of eligible recipients to include organizations that facilitate and accelerate commercialization of technologies that are developed at research institutions; and
- Discontinue the practice of avoiding risk-averse research grants that may overlook innovative research projects that could lead to future massive breakthroughs in science and technology.
2. Amtrak’s Northeast Corridor
The CEO Council urges our regional congressional delegation to ensure that Amtrak’s Northeast Corridor’s (NEC) rail infrastructure receives critical investment in FY 2018 by fully funding the Federal-State Partnership for State of Good Repair, a federally authorized grant program for rail/NEC.
The House Appropriations Transportation, Housing, and Urban Development (THUD) Subcommittee has acknowledged the importance of Northeast Corridor infrastructure renewal by including $500 million in funding for the Federal-State Partnership for State of Good Repair grant program in the Fiscal Year 2018 THUD appropriations bill. This $500 million could be leveraged (via State matching requirements) into another $500 million – bringing the total investment up to $1 billion to reduce the state of good repair backlog on publicly-owned or Amtrak-owned infrastructure, equipment, and facilities.
We applaud Congressmen Pat Meehan, Ryan Costello, and others for their January 12, 2018 joint letter to House Appropriators underscoring the importance of investing in the Northeast Corridor (NEC) through this grant program as a priority given its impact on the region’s—and the nation’s—economic vibrancy. We urge all House members of our delegation to protect the funding levels for the Federal-State Partnership for State of Good Repair grant program in the Fiscal Year 2018 THUD appropriations bill.
Unfortunately, pending appropriations legislation in the Senate includes only $26 million for this important program in their FY 2018 THUD bill. We urge our U.S. Senate members to push Senate Appropriators to fully appropriate the $500 funding for the Federal-State Partnership for State of Good Repair grant program as authorized under the Fixing America’s Surface Transportation Act.
The CEO Council is a founding member of the Coalition for the Northeast Corridor (CNEC), which represents the spectrum of transportation and business community stakeholders whose employees rely on the corridor to conduct commerce, create jobs, and drive the U.S. economy forward. The Coalition is a regional and national advocacy effort led by market participants that benefit most from a strong and vibrant NEC.
High-Skilled Immigration Reform
To end the recent government shutdown, a deal was struck to take up a bipartisan immigration bill in order to continue government spending through February 8th. The CEO Council supports reforms to our immigration system that will attract and retain high-skilled immigrants and foreign-born workers as vital talent to regional businesses that are heavily invested in knowledge-based professions. Specifically, the CEO Council urges support for reforms to our immigration system that:
- Significantly increase the caps on the annual number of H-1B visas and employment-based green cards through the establishment of a market-based system. This increase is important given the overwhelming demand from U.S. businesses for skilled foreign workers to fill positions that cannot be filled from the domestic labor pool.
- Exempt foreign-born advanced STEM degree graduates from U.S. universities with U.S. work experience from the annual employment-based visa cap if they have an offer of employment from a U.S. business in a related field. This will complement similar reforms in the H-1B program and help U.S. business to remain competitive.
- Establish a new visa program for immigrant entrepreneurs who launch businesses in the U.S. and create jobs. This program will help attract and retain talented entrepreneurs to the U.S. who will boost economic growth and innovation.
- Eliminate country-specific caps for employment-based immigrant visas. The current system’s country-specific caps for employment-based visas does not account for variations in population, advanced degree graduates, and other criteria that differs greatly between countries.
- Streamline and improve the visa and green card application processes by enacting reform that will reduce visa application backlogs and streamline processes to make the immigration system more efficient, effective, and transparent. This includes recapturing unused visas from previous years and requiring interagency coordination to reduce waiting times for application approvals.
- Use new company-paid visa and green card fees to help fund STEM programs in U.S. schools to train the next generation American workforce.
The CEO Council looks forward to working towards these reforms, which will greatly benefit the economic competitiveness of the Greater Philadelphia region.
As we anticipate the release of the Administration’s details for an infrastructure spending package, the CEO Council is eager to work with our regional congressional delegation to develop a bipartisan plan to invest in our nation’s infrastructure.
The CEO Council urges Congress to consider the establishment of alternative funding options such as tolling or public private partnerships as important components of a transportation infrastructure financing plan:
- State transportation agencies should have the expanded ability to toll existing federal aid highways or interstates contingent upon making a measurable improvement or enhanced capacity to that existing highway or interstate. Specifically, we believe that if toll lanes are added to a federal aid highway, then states should be able to toll all the lanes rather than just the lanes that will be constructed. The current requirement, which limits tolling to new lanes, is impractical and will not generate enough revenue to construct significant projects.
- States should be incentivized to adopt Public Private Partnership (P3) enabling legislation and establish P3 units to evaluate projects for viability will give state and local governments flexibility in using P3s and provide them with an additional financing solution.
In addition, the infrastructure spending package should provide increased, direct federal investment to allow public transportation agencies across the country to address an estimated $90 billion state of good repair backlog – the bulk of which is concentrated in the nation’s large metropolitan rail systems that carry the majority of the nation’s transit riders.
Additionally, the national infrastructure initiative should:
- Prioritize the restoration of aging infrastructure, improving capacity on existing assets and expansion where conditions warrant;
- Distribute increased infrastructure funding through existing FAST Act formula programs and funding mechanisms to expedite the flow of funding and project delivery;
- Allow for accelerated review and approval processes to speed project delivery and better leverage federal resources, especially within cross-agency permitting and multi-agency reviews; and
- Provide sustained and dedicated revenues to ensure the long-term solvency of the Highway Trust Fund.
Carl D. Perkins Career and Technical Education Act
We urge Senate members of our delegation to take up the overwhelmingly bipartisan reauthorization to the Carl D. Perkins Career and Technical Education Act (Perkins Act) before the bill lapses in Committee at year end. The House Committee on Education and the Workforce approved with unanimous support the “Strengthening Career and Technical Education for the 21st Century Act,” which updates federal Career and Technical Education (CTE) policies to help more students gain the knowledge and skills they need to compete for in-demand jobs. In 2016, the House passed similar legislation with overwhelming support, but the bill did not receive Senate consideration.
The CEO Council is focused on creating clear pathways for the alignment between job seekers and employers. One important way to assure that the region benefits from an educated and skilled workforce is the reauthorization of the Perkins Act. High-quality CTE programs, supported by the Perkins Act, are an effective tool for improving student outcomes and help prepare both secondary and postsecondary students with the necessary academic, technical and employability skills required for successful entry into the workforce. CTE prepares students both for college and careers and are critical to meeting the needs of the 21st century economy.