CAPITOL LOOKOUT: Some summertime civility in Washington

Posted on Written by Michael Sciulla
Michael Sciulla

With NMMA president Thom Dammrich set to descend Wednesday on Capitol Hill to discuss the state of the U.S. recreational boating industry with members of the Congressional Boating Caucus, there are signs that an increasing number of members of Congress are at work behind the scenes to get around the gridlock that has paralyzed our nation’s capital for far too long.

Just last week, a bipartisan group of more than 70 members of the U.S. House and Senate gathered outside in sweltering heat on the lawn of the Capitol complex to announce the introduction of a package of 17 bills designed to make government more efficient, more effective and less wasteful.

Never in my nearly 40 years of working in Washington, D.C., have I ever seen such a disparate group of legislators willing to take the heat for the common good.

What drove these members of Congress out of their comfortable, air-conditioned offices and into the bright sunshine is a rapidly growing citizens’ movement of Republicans, Democrats and independents known as No Labels whose sole purpose is to find practical ways to bring our elected leaders together so they can begin to solve our nation’s problems.

In the three years since it was launched by a group of savvy Washington Beltway insiders with years of experience in politics and the media, the group has grown to more than 600,000 members. Included among these are 81 members of Congress — 43 Democrats, 37 Republicans and one independent — who are known as “Congressional Problem Solvers.”

No Labels has become the largest group to organize forums on Capitol Hill for rank-and-file members to discuss issues with colleagues across the political spectrum.

The group is co-chaired by Sen. Joe Manchin (D-W.Va.) and former Republican governor of Utah and 2012 presidential candidate Jon Huntsman. Manchin gave those attending the NMMA’s American Boating Congress last May a well-received speech about how he uses his boat, which he keeps on the Potomac, as a platform to bring together members of Congress who don’t normally have the opportunity to talk to one another in a relaxed setting.

Beyond convincing 81 members of Congress to join hands and refrain from viewing members of the opposite party as the enemy, No Labels’ signature achievement to date has been congressional adoption of its “No Budget, No Pay” proposal in which legislators don’t get paid until they actually adopt a budget.

Among the 17 bills introduced last week under the “Make Government Work” banner is the following legislation designed to improve the functioning of government. A video of Manchin and other Congressional Problem Solvers explaining this legislation can be found at http://www.nolabels.org/make-government-work.

• H.R. 2643 would cut 50 percent of federal agency travel and replace it with video conferencing.

• H.R. 2689 and S. 1308 would reduce energy waste in federal buildings by incentivizing private contractors to identify energy savings and paying them with dollars saved instead of with taxpayer dollars.

• H.R. 2686 would put a halt to the automatic spending increases in federal agency budgets.

• H.R. 2506 and S. 1231 would eliminate duplicate agencies and programs.

• H.R. 2694 and S. 1304 would require separate divisions within a government agency or department to purchase everyday items in bulk rather than separately.

• H.R. 2590 and S. 1296 would merge the electronic health records of the Defense and Veterans Affairs departments.

• H.R. 1869 and S. 554 would change the congressional budgeting cycle to every two years instead of every year to better synchronize with congressional elections.

A companion package of proposals under the “Make Congress Work” banner that I reported on back in January 2012 when No Labels was just getting under way can be found at http://nolabels.3cdn.net/8d014e07ce35694e8b_djm6iiu5h.pdf.

Meanwhile, the Senate’s top Democratic and Republican tax writers, Finance Committee Chairman Max Baucus (D-Mont.) and the committee’s top Republican, Orrin Hatch (R-Utah), are undertaking a novel approach to rewriting the U.S. tax code.

They’ve given lawmakers until July 26, the end of this week, to make their arguments for putting various so-called tax expenditures — from the popular mortgage interest deduction to business tax breaks, which now cost the U.S. Treasury more than $1 trillion a year — into a tax reform bill. Tax rates would be adjusted higher or lower, depending on the amount of tax expenditures ultimately approved by Congress.

As of 2012 the largest tax expenditures were:

• $171 billion: exclusion for employer-sponsored health insurance

• $138 billion: exclusion of pension contributions and earnings

• $87 billion: mortgage interest deduction

• $76 billion: accelerated depreciation of machinery and equipment

• $66 billion: preferential treatment of capital gains

• $$51 billion: exclusion of net imputed rental income

• $42 billion: deferral of income from controlled foreign corporations

• $39 billion: exclusion of interest on state and local bonds

• $33 billion: charitable contribution deduction

While the deductibility of mortgage interest on boats as second homes is of major interest to the boating community, no one, to the best of my knowledge, has ever put a verifiable number to the cost of this tax expenditure. That said, it must be a minuscule portion of the $87 billion cost of the entire mortgage interest deduction and is at risk solely because of the image of boating as the preferred recreation of so-called wealthy fat cats.

Whether efforts to reform the tax code will succeed in this Congress is anyone’s guess, given the polarization that prevails between Democrats and Republicans.

In the meantime, the NMMA’s effort to educate Congress via the Congressional Boating Caucus about the challenges facing this industry, as well as the jobs and revenues it generates, could not come at a more propitious time.

Michael Sciulla established boating’s first federal political action committee and testified more than 30 times on Capitol Hill during a 28-year career at BoatUS, where he managed the organization’s government relations and public affairs operations while also serving as editor of its 650,000-circulation flagship publication.

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Comments

2 comments on “CAPITOL LOOKOUT: Some summertime civility in Washington

  1. Jeff Erdmann

    As Michael correctly points out there are no numbers on how much interest deduction for qualified boats as 2nd homes costs government but here is what we know.

    Currently mortgage interest is deductible for both primary & qualified 2nd homes with combined principal balances up to $1 million plus an optional $100k line of credit.

    2nd homes (homes – cabins – condos – town homes – RV’s – boats) qualify for a mortgage interest deduction if they have a place to sleep, cook & toilet.

    According to the Joint Committee on Taxation, the entire mortgage interest deduction cost the Treasury $69.7 billion in 2013, meaning that if it went away tomorrow, the Treasury would have $69.7 billion for new spending, deficit reduction, and/or tax cuts elsewhere.

    Repealing the entire 2nd home mortgage interest deduction could raise $8 billion per year, about 1/4 of one percent of the $3.034 trillion projected revenue for 2014.

    Singling out boats “a small drop in an $8 billion bucket” could not raise enough to justify scuttling more jobs in the already sinking recreational marine industry that currently employs about a million U.S. workers (that pay income taxes).

    We should learn from successes like Florida’s sales tax cap & mistakes, like the 1990 luxury tax designed to soak the rich that backfired devastating the U.S. marine industry eliminating tens of thousands of U.S. jobs while raising only a few tenths of a million dollars in its first year. Adding salt to the wound the government paid unemployment benefits for the jobs lost.
    Jeff Erdmann

  2. Jopie Helsen

    I just read your article on the link about the group of No Labels politicians. I am glad you send the link because it gives me some hope that there may be light at the end of the tunnel for cooperation in government and having them think about the USA first. Having been in the marine industry since 1970, every downturn that I faced was caused by government not by anything wrong I did in my business. The luxury tax, the prepaid sales tax (Florida) which had a great impact on our company that 1st year, the Wall Street fiasco that caused banks to stop making loans and I could make the list much longer. Our industry is always the first to get hit and the last to recover. Maybe I am just getting cynical in my old age.

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