GOVERNMENT AFFAIRS UPDATE ARCHIVE

4/10/08
Yesterday, two anti-business proposals advanced out of House Committee.  These proposals are now on the House floor awaiting a vote by the full Illinois House.  Please contact your legislators today, and urge them to vote "NO" on each of these job-killing proposals.

Proposal 1- Doubling the Individual Income Tax Rate

A proposed constitutional amendment, HJRCA 42, would double the state income tax on individuals, or married couples, that earn $250,000 or more.  This huge tax increase will hit small business owners and act as a tremendous disincentive to locate high paying jobs in our state.  Also, at a time Washington is looking to remove the "marriage penalty" from the federal tax code, Illinois would enshrine one in its Constitution if this proposal were to pass.

Please contact your House member in opposition to HJRCA 42  

Proposal 2 - Reinstatement of the Structural Work Act

HB 2094, as amended, will reinstate the Structural Work Act which was repealed in 1995 due to its negative impact on the economy.  The Act allows workers injured on the job to sue third parties outside of the workers' compensation system.  It will lead to higher construction costs and create a tremendous new potential liability for employers, contractors, local governments and professional service firms.

Strengthening Manufacturing, Creating Good-Paying Jobs in Northern Illinois
About a year ago, I came across an article in the paper that said the aerospace industry was facing production delays because of a shortage of high-end fasteners (nuts, bolts and screws). I immediately picked up the phone and called my friends at Acument Global Technologies, which owns a fastener plant in Rockford. They said they had been thinking about re-entering the aerospace fastener market, and we agreed to set up some meetings with aircraft manufacturers.

Over the next several months, we learned of a severe shortage industry-wide for aerospace fasteners. Acument moved ahead with plans to restart aerospace manufacturing, and last week we held a news conference to announce the rebirth of Camcar Aerospace in Rockford, IL. Camcar Products Co. originally opened in 1943 to develop fastening solutions for the B-24 Liberator heavy bomber during World War II.

The new company will immediately hire 50 new employees with the potential for hundreds more when the plant is operating at full capacity. In addition, I was able to secure $750,000 in federal funds for a joint Research & Development venture between Camcar Aerospace and Northern Illinois University to create new titanium components for our nation’s defense.

Northern Illinois is quickly emerging as an “aerospace cluster” with advanced technology and production occurring at Hamilton Sundstrand (currently hiring 150 new engineers in Rockford), Woodward, Smiths Aerospace (GE Aviation), Ingenium Aerospace, Kaney Aerospace, and smaller suppliers to the industry, such as Superior Joining Technologies in Loves Park, Forest City Gear in Roscoe, and many others. The aerospace market represents one of the biggest growth markets for our manufacturers, as the worldwide number of airplanes is expected to double from 18,000 today to more than 35,000 by 2024.

Aerospace will provide good-paying jobs for many generations to come, and it’s great to see so many northern Illinois manufacturers involved in this advanced growth market.

Securing Our Borders, Building the Fence
This past week, the U.S. Dept. of Homeland Security announced it was using its waiver authority in an effort to finish building 670 miles of fence along our southern border by the end of this year. To date, 309 miles of fence have been constructed with another 361 miles to be built by the end of the year. Of the 361 miles of fence left to be built, 267 miles are being delayed by federal, state and local regulations.

The waivers to certain environmental and land management laws would allow the federal government to cut through the red tape to complete portions of the fence in California, Arizona, New Mexico and Texas. It will facilitate additional pedestrian and vehicle fence construction, towers, sensors, cameras, detection equipment, and roads in the vicinity of the border. 

I strongly support this initiative to more quickly complete the border fence, especially because the work will still be completed in an environmentally friendly manner. Our national security is at stake, and we must do everything we can to expeditiously finish the border fence to keep terrorists and other foreign criminals from entering our country.

Promoting Renewable and Alternative Energy Projects in Northern Illinois
For many years, I have been a strong supporter of several initiatives researching and developing renewable and alternative energies in northern Illinois. I highlighted many of these projects during a speech I gave to the Green Communities Coalition in Rockford last week.  The planning stages, methane digesters, and a pending wind farm. In addition, I helped secure funds to start the New Uses Ag Tech Park in Belvidere and Freedom Field in Rockford, two initiatives that are researching and developing the latest in renewable and alternative energies.

The prices for gasoline and natural gas are at all-time highs, and we must do everything we can to reduce our dependence on costly foreign oil. I support a comprehensive, balanced energy plan that expands the use of renewable and alternative energies while increasing domestic production of gasoline and natural gas. Northern Illinois is doing its part to help our country become self-sufficient for our energy needs.

Congressman Don Manzullo

Manzullo Votes to Cut Wasteful Spending, Balance the
Budget, Reject Huge Tax Increases on American Families
(March 14th)  

(WASHINGTON) Congressman Don Manzullo (R-Egan) will vote later today for a budget resolution that calls on Congress to cut wasteful Washington spending, balance the budget and pay off the national debt, enact a moratorium on earmarks, and avoid huge tax increases on American families.

The Republican substitute for the Fiscal Year 2009 Budget Resolution – which Manzullo will support on the House floor – sets forth a budget blueprint for the federal government the next 5 years. It spends significantly less than the Democrat version and the President’s budget request. The Republican version would start to pay off the national debt by 2013 without increasing taxes on Americans. It would also repeal the Alternative Minimum Tax that unfairly snares many middle-income taxpayers.

The Democrat version of the budget resolution would allow the 2001 and 2003 tax relief provisions to expire in 2010. Failure to extend the tax cuts will cause all income tax rates to increase, cut the child tax credit in half, bring back the marriage tax penalty, and revive the death tax at its highest level. It will also surge tax rates on capital gains and dividends, which will hurt seniors living off their investments. The tax increases will harm Americans in the following ways:

• 113 million taxpayers will see their taxes go up by an average of $2,216.
• Over 5 million individuals and families who would have seen their income tax liabilities completely eliminated will now have to pay taxes.
• 45 million families with children will face an average tax increase of $2,864.
• 15 million elderly individuals will pay an average tax increase of $2,934.
• 27 million small business owners will pay an average tax increase $4,712.

“With gasoline and food prices skyrocketing and millions of Americans barely getting by, the last thing we should be doing is saddling our citizens with thousands of dollars of tax increases,” said Manzullo, who has voted 212 times since January 2007 to cut spending. “We can fund our priorities and begin to pay off our debt by cutting wasteful spending, and we can do it without increasing taxes that Americans can’t afford. We have got to get our financial house in order.”

Manzullo to Seek Further Federal Funding for
Rakow Road Widening Project in McHenry County

(WASHINGTON) Congressman Don Manzullo (R-Egan) announced today he will seek more federal road dollars to help fund the vital Rakow Road widening project that will help reduce severe traffic congestion in southeast McHenry County.

In a meeting with McHenry County government and business leaders this morning, Manzullo pledged to seek further funding for the $23 million project in this year’s federal appropriations process. In 2005, Manzullo secured $5.72 million in the long-range federal transportation bill for the Rakow Road widening project.

“Rakow Road is a significant regional arterial road that carries tens of thousands of McHenry County residents to work and school each day,” Manzullo said. “The widening project will double capacity on Rakow Road and reduce the significant congestion motorists experience each day. Reducing traffic congestion continues to be my number one priority for the people of McHenry County, and I am glad to again seek a federal investment in the Rakow Road widening project.”

The 3-mile-long widening project calls for widening the two-lane Rakow Road to six lanes from Ackman Road to Pyott Road and to four lanes from Pyott Road to Route 31. Up to 40,000 motorists currently travel Rakow Road each day and up to 60,000 are expected to travel the road by 2030.

McHenry County transportation officials are finishing up the Phase I environmental study on the project and will conduct a public hearing from 4 to 8 p.m. March 19 at Crystal Lake South High School to seek public comments on the initial plans. The Phase II study – which involves acquiring needed land and drawing contract plans for the project – could start this summer and is expected to take about two years to complete. Construction could begin the fall of 2010.

In addition to Rakow Road, Manzullo has secured significant federal funding for the Western Bypass of Algonquin ($19 million) and the Route 47 widening project through Huntley ($6.7 million). In addition, he worked with U.S. Senators Dick Durbin (D-IL), Barack Obama (D-IL), and the entire Illinois Congressional Delegation to secure an additional $6.2 billion in federal road funds in 2005 for the State of Illinois. Manzullo is continuing to work with State Sen. Pam Althoff (R-McHenry), State Rep. Mike Tryon (R-Crystal Lake), the McHenry County Better Roads Coalition, and local officials to ensure both projects are included in any capital bill the state approves this year.

Manzullo: Democrat Energy Bill Rewards Dictator
Hugo Chavez at Expense of U.S. Energy Companies

(WASHINGTON) Congressman Don Manzullo (R-Egan) today voted against a Democrat leadership bill that would raise taxes on American energy companies and hike gasoline prices at the pumps for Illinois motorists.

And unbelievably, it rewards Venezuelan Dictator Hugo Chavez and his country’s Citgo oil company by exempting Citgo from an $18 billion tax the bill slaps on American oil companies ExxonMobil, ConocoPhillips and Chevron. The tax increase would also affect BP and Shell, which have significant US operations.

“As we fight to strengthen American manufacturing and battle to keep jobs in our country, it’s unconscionable that this Democrat-controlled Congress would penalize American companies at the expense of their foreign competitors. And unbelievably, the big winner in this case is none other than the anti-American Venezuelan Dictator Hugo Chavez,” Manzullo said. “This bill would not only cost American jobs and reward our enemy, but it would hike already high gasoline prices even further. This is an awful bill that is all wrong for America.”

In 2004, Manzullo helped lead efforts to pass legislation that gives manufacturers a tax incentive to keep jobs in the United States. They would receive a phased-in tax deduction only on work completed in our country. Energy companies qualified for the deduction, which started at 3 percent in 2005, rose to 6 percent in 2007, and will rise again to 9 percent in 2010.

The Democrat bill, which the House passed 236-182, eliminates the deduction and raises taxes on American companies ExxonMobil, ConocoPhillips and Chevron as well as British-owned BP and Dutch-owned Shell. Citgo, a subsidiary of the Venezuelan government, is exempted because it doesn’t produce its own crude oil, but merely refines the oil into gasoline, distributes and sells it in the United States. Citgo’s parent, PDVSA, produces the crude oil in Venezuela.

Congressman Manzullo supports a comprehensive, balanced energy plan that expands the use of renewable and alternative energies, rewards conservation, and increases domestic production of gasoline and natural gas.

(WASHINGTON) U.S. Rep. Don Manzullo (R-IL) today joined several colleagues and American manufacturing groups in urging House Democrat leaders to call up bipartisan legislation that would help level the playing field for U.S. manufacturers consistently harmed by the unfair trade practices of foreign governments.

H.R. 2942, which Manzullo co-sponsored last year with Reps. Duncan Hunter (R-CA), Tim Ryan (D-Ohio), and others, would penalize foreign governments that give their companies a competitive advantage over U.S. manufacturers by manipulating their currencies.

Specifically, the bill would define foreign currency manipulation as an illegal export subsidy actionable under U.S. trade law. It would allow the U.S. government to slap countervailing duties on any country manipulating its currency. In addition, the legislation adopts a provision from a prior Manzullo bill that made it easier to charge foreign countries with currency manipulation.

“For too long, certain foreign governments have illegally manipulated their currencies to give their companies an unfair competitive advantage over U.S. manufacturers,” said Manzullo, who spoke at a Capitol Hill news conference today renewing his support for the bill. “This legislation would penalize those countries and help level the playing field for our manufacturers. I have no doubt that American workers can compete with anyone in the world, but the competition must be fair.”

Most countries allow their currencies to “float” so they are valued by market conditions. China and a few other countries take actions to weaken the value of their currencies. A lower currency makes it less expensive for a company to export its goods to another country. Economists estimate China’s currency misalignment gives Chinese products a 15-40 percent competitive advantage over products made in the United States.

Manzullo has been extremely active in cracking down on China’s currency manipulation practices. Manzullo previously authored a House Resolution to urge the Administration to use all available means to force China and others to stop manipulating their currencies to the detriment of U.S. manufacturers. Manzullo and Senator Olympia Snowe (R-ME), former chairs of the House and Senate Small Business Committees, also instructed the General Accounting Office to conduct an investigation to quantify the damage currency manipulation causes to U.S. manufacturers.

As Chairman of the House Small Business Committee, Manzullo held several committee hearings on the issue of currency manipulation and has testified on numerous occasions for the need to halt foreign currency manipulation to level the playing field for U.S. manufacturers.

Manzullo: Enhanced Tax Incentive for Manufactures
Would Stimulate Economy, Create Jobs in America

[WASHINGTON]  U.S. Rep. Don Manzullo (R-IL) and several colleagues will introduce legislation early next week to stimulate the economy by accelerating an existing tax incentive to help manufacturers create and keep jobs in America.

The “American Jobs Creation and Economic Stimulus Act of 2008” would accelerate a domestic manufacturing tax deduction to give large and small manufacturers a larger tax break on the goods they produce in the United States. Manzullo’s legislation will be co-sponsored by Chief Deputy Minority Whip Eric Cantor (R-VA), House Ways and Means Trade Subcommittee Ranking Member Wally Herger (R-CA), and others.

The tax deduction – which Manzullo helped create in 2004 – currently provides a 6 percent tax rate reduction for manufacturers on the goods and services they produce in the United States. The tax rate reduction is scheduled to increase to 9 percent by 2010, but the bill Manzullo and his colleagues introduced today would accelerate the phase-in to 9 percent retroactively to Jan. 1, 2008.

“By accelerating this tax relief, we will help our manufacturers survive these difficult times and give them an incentive to expand and create jobs in America more quickly. Furthermore, it will help our manufacturers keep jobs in America because the tax benefit is limited to goods produced in the United States,” Manzullo said. “This legislation will provide a significant stimulus to our economy and fits within the parameters outlined by the President today. It should be part of any comprehensive economic stimulus bill Congress considers in the next few weeks.”

Manzullo, co-Chair and Founder of the House Manufacturing Caucus, helped author the domestic manufacturing tax deduction in 2004 during debate over how to replace the Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) program that provided tax incentives to U.S. exporters. The World Trade Organization had ruled FSC/ETI an illegal subsidy and forced Congress to eliminate it. During debate over how to replace FSC/ETI, Manzullo convinced his colleagues to spread the deduction to both small and large manufacturers and limit the eligibility to domestic production to encourage manufacturers to keep jobs in the United States.

According to the Internal Revenue Service, 402,710 small manufacturers that paid taxes at the individual rate (S-Corporations, LLCs, partnerships and sole proprietorships) in 2006 and 41,668 larger manufacturers that paid corporate income taxes in 2005 (2006 corporate figures not yet available) benefited from the manufacturing tax deduction.

Manzullo: Democrat "No-Energy Bill" Would Skyrocket Gasoline, Natural Gas Bills for Northern Illinois Residents

[WASHINGTON] Congressman Don Manzullo (R-Egan) will vote later today against a Democrat leadership bill that would do nothing to increase energy supplies in the United States, increase taxes and regulations on existing energy producers, and raise gasoline and natural gas prices in northern Illinois and throughout our nation.

The inclusion of tax hikes and new burdensome regulations in the bill, combined with a refusal to allow new domestic production of oil and natural gas, would wreak havoc on the American economy, according to an independent analysis by CRA International, a leading economic forecasting and consulting organization. The study estimates the bill would cause 4.9 million Americans to lose their jobs by 2030, cost the average American household $1,700 each year, and reduce U.S. economic output a staggering $1 trillion.

“With record gasoline and natural gas costs continuing to squeeze the pocketbooks of northern Illinois residents and business owners, this legislation would cause our energy supplies to dwindle further and our energy costs to skyrocket,” Manzullo said. “It makes no sense to strap our energy producers with new taxes and regulations without giving them the opportunity to produce more energy domestically. This reckless bill would merely cause these energy suppliers to pass along the tax increases to motorists, homeowners and business owners while forcing the United States to continue to rely on expensive, foreign energy. The result would be even higher prices to fuel our cars and heat our homes.”

Manzullo supports a comprehensive, balanced energy plan that expands the use of renewable and alternative energies while increasing domestic production of gasoline and natural gas. The northern Illinois congressional district Manzullo represents is a hotbed of alternative and renewable energy technologies with several ethanol plants, methane digesters and wind farms in operation, and several other research and development projects studying hydrogen power and other alternative technologies.

“One of the reasons our gasoline and natural gas prices have been surging in northern Illinois is because we can’t produce enough to meet demand in our country,” Manzullo said. “This bill would actually reduce the current amount of energy production in the United States, sending prices even higher. We need a balanced energy bill that encourages more domestic supplies of gasoline and natural gas while expanding the development and use of renewable and alternative energies.”

Business group sues over governor's health care plan

Gov. Rod Blagojevich's plan for a multimillion-dollar expansion of a health care program without legislative approval has landed the state in court, with a business group claiming in a lawsuit Tuesday that it would be unconstitutional to spend the money.

"The message ultimately, when it's played out, will be: 'We've got a constitution; Governor, obey the constitution,' " said businessman Ron Gidwitz, chairman of the Illinois Coalition for Jobs, Growth and Prosperity, the group that filed the lawsuit.

Blagojevich has embarked on a piecemeal expansion of government-subsidized health care since lawmakers failed to support his plan to pay the huge cost of ensuring that everyone in Illinois has access to affordable insurance.

As part of that expansion, the Blagojevich administration has said it intends to go ahead with plans to add about 147,000 parents and caretakers to the Family Care insurance program, despite the objections of lawmakers.

A bipartisan legislative committee last month rejected the administration's proposal to operate an expanded Family Care program. But Blagojevich contends the legislature's Joint Committee on Administrative Rules didn't have the constitutional authority to block the rule to expand the program, which has an expected cost of $43 million this year.

Blagojevich is making promises he may not be able to keep, the business coalition contends. People might sign up for health care that is never delivered and hospitals might provide services for which they aren't reimbursed.

They want a judge to stop the state from expanding the program or spending any money on it.

"Every Democratic leader in Illinois should join us in fighting this lawsuit and help protect the hardworking people who rely on us for health coverage so they can keep seeing a doctor," Blagojevich spokeswoman Abby Ottenhoff said in an e-mail.

The business group, whose founding members include the Illinois Chamber of Commerce, said it filed the lawsuit Tuesday in Sangamon County. The lawsuit names Illinois Department of Healthcare and Family Services Director Barry Maram and state Comptroller Daniel Hynes as defendants.

Gidwitz, a former Republican candidate for governor, said Maram and Hynes were named in the lawsuit -- and not Blagojevich -- because they would carry out the governor's directive to expand the Family Care program.

A Hynes spokeswoman said in an e-mail that they were reviewing the lawsuit and had no further comment.

The Blagojevich administration has argued it has the power to raise eligibility levels for the program. It wants to expand income eligibility to almost $83,000, from $38,000, for a family of four. The state had already signed up 500 families by last month.

Democratic state Rep. John Fritchey of Chicago, a member of the legislative panel that rebuffed Blagojevich's move to expand the program, said it's important the governor wasn't named in the lawsuit.

"This is not about personalities or politics, but about the sanctity of the process and the constitutionality of the administration's attempt to drastically expand health care without the consent of the legislature," said Fritchey, who has been critical of the governor's move.

Greg Baise, treasurer of the business group and head of the Illinois Manufacturers' Association, said the lawsuit isn't about opposing health care, but about how the Blagojevich administration does things.

"We certainly agree with the governor that health care is an important issue, but he can't unilaterally decide to expand a government program," Baise said.

The state has also expanded its breast and cervical cancer screening program to cover all women without insurance, and Blagojevich has detailed plans to expand the state's health insurance coverage for sick or injured young adults after coverage through All Kids ends on their 19th birthday

Manzullo Votes Against Massive Tax
Hike, Wasteful Washington Spending

[WASHINGTON] Congressman Don Manzullo (R-Egan) today voted against legislation that aims to temporarily shield taxpayers from the Alternative Minimum Tax by increasing taxes on other working Americans.

Manzullo strongly supports the effort to permanently protect middle-income Americans from getting caught in the web of the misguided Alternative Minimum Tax (AMT). But the bill approved by the House today shields those taxpayers for just one year by imposing $76 billion in new taxes on other taxpayers, primarily eliminating tax incentives that drive entrepreneurship and create jobs.

Instead of tax increases, Congress can more than make up the revenue through spending cuts and continuation of the tax relief that has spurred the economy and reduced the deficit by more than $250 billion the last three years, Manzullo said.

The AMT was created in 1969 to ensure 155 of the very wealthiest taxpayers in America paid a minimum income tax. Over time, increasing wages have forced more Americans to pay the AMT, which eliminates the ability to utilize many tax deductions and tax credits. Today, about 3.5 million Americans pay the AMT. Without action this year, another 19 million middle-income Americans will face an average $2,000 tax increase because of the AMT when they file their 2007 tax return next year.

Although the House passed the tax-increasing bill today, Senate Democrat leaders have indicated they may not include the tax increases in their version of the bill. Regardless, President Bush has vowed to veto the tax-increasing bill, and House leaders do not have the votes to override the veto.

“Once again, we are presented with a political vote that has absolutely no chance of becoming law,” Manzullo said. “House Democrat leaders need to stop playing games and present us with a bill the President will sign. Failure to act quickly will put another 19 million middle-income Americans at risk of a massive $2,000 tax increase next year.”

UPDATED 11/2/07
Battling Massive Tax Hike Proposals

As the Congressional session proceeds under the new Democrat leadership. The leadership’s 5-year budget earlier this year called for a repeal of the 2001 and 2003 tax cuts, which would create the largest tax increase in American history. If nothing is done by 2010, the average American family with children will pay an extra $2,800 a year in federal income tax.

Failure to extend the tax cuts by 2010 will cause all income tax rates to increase, cut the child tax credit in half, bring back the marriage tax penalty, and revive the death tax at its highest level. It will also surge tax rates on capital gains and dividends, which will hurt seniors living off their investments. The tax increases will harm Americans in the following ways:

• 113 million taxpayers will see their taxes go up by an average of $2,216.
• Over 5 million individuals and families who would have seen their income tax liabilities completely eliminated will now have to pay taxes.
• 45 million families with children will face an average tax increase of $2,864.
• 15 million elderly individuals will pay an average tax increase of $2,934.
• 27 million small business owners will pay an average tax increase $4,712.

And that’s just the start. House Ways & Means Committee Chairman Charles Rangel (D-NY) earlier this month introduced legislation that would add a 4-percent income tax surtax on individuals in the upper income brackets.

The big problem is that most of America’s 25 million small business owners – the job creators of our economy – pay individual, not corporate, income taxes and would be hit with the 4 percent surtax. In fact, small employers face a triple tax whammy because they would also lose a 9 percent deduction on items they manufacture in America and get squeezed by their larger competitors who would see an across-the-board corporate rate cut.

With costs for health care, energy and consumer goods continuing to rise, Americans can not afford to pay thousands of dollars more in income taxes each year.