New Congress, Same Challenges

This month brings the opening of a new session of Congress. And it’s one that will have some important changes affecting retailers.

Republicans have regained control of the House and narrowed Democrats’ majority in the Senate. That should put the brakes on the most extreme anti-business legislation like the Employee Free Choice Act (or “card check”) bill. But it won’t mean carte blanche for the business community. Hopefully, it will be a time of compromise and balance, not stalemate.

The major debates of 2011 will focus on the economy, and NRF’s priority will be policies that encourage job creation and economic recovery. Congress is expected to share this perspective, with the outcome hinging on how successfully lawmakers can work in a bipartisan fashion. We will urge them to put partisan differences aside for the good of the economy. That’s both good policy and good politics — those who help create jobs and restore vitality to the economy will be rewarded by the voters in 2012.

It wasn’t easy or pretty, but the two parties did pull together to temporarily renew the Bush-era tax cuts during the lame duck session, avoiding a massive tax hike that would have sent consumer spending plummeting and taken jobs with it. But the debate will now turn to overall tax reform, likely with lower rates but a broader base, and it is clear that we need policies that promote both deficit reduction and job growth in order to have a robust economy. Even though it was rejected by President Obama’s deficit commission, proposals to create a nationwide Value Added Tax are likely to return, and NRF will point to our Ernst & Young study showing a VAT would be devastating for jobs, GDP and retail spending. NRF will also fight protectionists’ efforts to raise the cost of merchandise from China.

House Republicans plan to vote to repeal the 2010 health care reform law, a move NRF would consider supporting given the measure’s punitive employer mandates and penalties that amount to a tax on jobs. President Obama would veto repeal, but his administration has shown flexibility on issues like “mini-med” plans, and we hope to work on ways to return to the original goal of making health care more accessible by making it more affordable.

Some issues will arise on the regulatory front rather than in Congress. NRF is working with the Federal Reserve to ensure that final regulations on debit card swipe fees result in a significant reduction and are not watered down by the banking industry. And even though “card check” appears dead, it will be necessary to watch the Labor Department and National Labor Relations Board for anti-business alternatives.

As these and other issues move forward, NRF will ensure that our industry’s advocacy footprint truly matches our economic might. Stay tuned.