U.S. Chamber: MACE Presentation 2013 by Doug Loon

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Mid-America Chamber ExecutivesFederal Issue Update

May 9, 2013

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Small Business Outlook Survey

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Small Business Outlook Survey

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

State of American Business

Forecast = Economic Growth: 1 ½ - 1 ¾ for first half of 2013

2 ½ by the end of 2013• Housing starts

• Energy Prices

Economic Uncertainty:• Tax Increases

• Regulatory Pressures

• Continued Unemployment

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

U.S. GDP Actual and Potential Quarterly, Q1 1970 to Q4 2011

Real GDP

$

$

$

$

Forecast

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

American Jobs and Growth Agenda

Reducing Deficits and Debt - address runaway spending and reforming entitlements and the tax code.

Developing More American Energy - create millions of jobs while making the country more secure.

Expanding American Trade - two-way investment and tourism to open international markets and reduce commercial barriers at home and abroad.

Reforming the Regulatory Process - ease the burden on capital markets, health care, environmental, labor, and other rules.

Enacting Comprehensive Immigration Reform - ensure that our economy is supplied with able workers at all skill levels.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

http://immigration.uschamber.com

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

American Jobs and Growth Agenda

Comprehensive Immigration Reform

Four Legged Stool:

Border Control

Work Visa Programs

Employer Verification

Legalization

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

What’s Next on Health Care?

• Legislative – Ongoing fixes in Congress

– Repeal of employer mandate

– Health Insurance Tax (HIT)

• Regulatory – DOL, HHS, & IRS

• State Implementation (2013): • Exchanges • and Medicaid

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

What’s In The Health Care Law?

Tax hikes which total more than $500 billion over 10 years  

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Federal Spending, Deficits and Debt

Federal Deficit:

• 2011 deficit was $1.3 trillion.

• 2012 deficit at $1.1 trillion

• The fourth consecutive annual deficit exceeding $1 trillion.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Federal Spending, Deficits and Debt

Federal Debt

• Gross debt at $16 trillion dollars ($11 trillion held by the public / $5 trillion as intergovernmental holdings).

• Could lead to:• higher interest rates• weak dollar• less private investment• lower economic and job growth • and decline in our global competitiveness.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Federal Debt

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Government Outlays

Discretionary Mandatory Net Interest

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Spending Projections

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

The Fiscal Cliffs

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

How Did “The Cliffs” Start?

Budget Control Act of 2011 – Set the stage:

• Debt limit increase - $900 billion increase in debt limit and $917 billion in discretionary budget cuts.

• Sequestration - The Act mandates $1.2 trillion in Spending Cuts over ten years beginning this year through sequester process. $85 billion in cuts slated for 2013.

• $600 billion tax bill on January 1, 2013 because of expiring tax provisions.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

The Sequester

• Started March 1

• $85 billion in 2013 / $1.2 trillion over 10 years.

• 2.3 % “across the board cut” in federal programs – NOT ENTIRELY.

• Budget Control Act confined cuts largely to discretionary accounts.

– 4.6 % cut in Non Defense Discretionary

– 7.9 % cut in Defense

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

The Deal – Big Things Left Out

• Growth-oriented tax reform postponed

• Runaway spending not curbed

• Entitlement programs still headed toward insolvency

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Reducing Deficits and Debt

Three Bucket Strategy:

Entitlement Reform

Comprehensive Tax Reform

American Energy

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Tax Reform: Why we need it

• The United States has the world’s highest corporate tax rate.

• The United States is the only country that has a worldwide system of tax.

• Taxpayers spend 6.1 billion hours a year complying.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Tax Reform

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Comprehensive Tax Reform

• Lower the corporate tax rate

• Adopt a Territorial Tax System

• Simply Tax Code

• Make reforms permanent

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Third Bucket: American Energy

U.S. Energy Resources – America’s next big thing:

– Encourage smart development of America’s vast energy resources—traditional, unconventional, and alternative.

– Expand access to onshore and offshore federal lands for energy development.

– Invest in clean coal and policies to expand renewable energy and emissions-free nuclear power.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Third Bucket: American Energy

• Shale activity alone generated $237 billion in economic activity and $62 billion in government revenues in 2012.

• By 2035, we can double the economic impact, double the number of jobs, and generate a cumulative $2.5 trillion in government revenues.

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Key 2013 Dates

March 1: Sequestration begins

March 27: Appropriations extension FY 2013 expires (discretionary)

April 15: Budget Resolution

May 19: Hit debt ceiling

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Political Challenge

• Polarization

• Congress: 85% won with better than 55% of the vote

• Poll on deficit reduction: – 49 % favor cuts alone

– 48 % favor cuts AND tax increases

• Generic Vote: 43% Dem40% GOP

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Partisan Vote Record

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

The Good News!

U.S. Outperforming Competitors

New Energy Boom

Growth in Global Markets

Revival of U.S. Manufacturing

U.S. Demographic Edge

Enterprising States

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

Services to Chambers

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

**SAVE the DATE**

- 2013 Regional Government Affairs -Conference

Chicago, Illinois New Orleans, LAOctober 9-11 October 23-25

MilleniumKnickerbocker Omni Royal Orleans

U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

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U.S. CHAMBER OF COMMERCE 100 Years Standing Up for American Enterprise

U.S. Chamber of CommerceMidwest Regional Office

Questions?

Doug LoonVice President, Regional Affairs

[email protected]