TOP FEDERAL ISSUES

The Pennsylvania Business Council supports its members and our allied national associations (The Business Roundtable, BIPCA, US Chamber, National Association of Manufacturers and others) in advancing federal public policy that improves the American business climate. Federal issues in which PBC is engaged at a grassroots level for its members are described below:

Card Check Legislation/"Employee Free Choice Act"

The “Employee Free Choice Act” (EPCA) would drastically change the way American workers unionize.  Current law protects workers’ right to unionize through a federally supervised secret ballot in which workers are free from intimidation by fellow workers, union organizers, and their managers.  The secret ballot has always been a hallmark of American democracy.

If adopted, this legislation would replace the private ballot with a “card check” system that allows a union to organize if a majority of employees simply sign a card.   There would be no privacy.  A union organizer could hand the card to the employee and stay with the worker until the card is signed and returned.

Because Pennsylvania is not a Right-To-Work state, workers who do not join the union would still be required to pay union dues if a successful “card check” union organization had taken place.

The loss of the secret ballot, however, is just one of the problems created by the “card check” bill.

If the employer and union are unable to reach agreement during collective bargaining, each party would be empowered to refer the dispute to the Federal Mediation and Conciliation Service for binding arbitration.  This provides little incentive to reach a good faith agreement, when delay provides the hope of a more generous deal from federal mediators who have no knowledge of the business and no stake in the outcome.

The new legislation would treat every business, from a small firm with dozens of employees to a multi-national corporation with thousands of employees the same.

1.  Please take a minute to send a personal letter to your US Senators and US House Members, voicing your concerns with the so-called “Employee Free Choice Act.” 

2.  Add your firm's name to a "Super Letter" signed by thousands of Pennsylvania businesses. You can sign-on to the same letter electronically, by using this  website link: http://www.mbausa.org/action-alert-urge-pennsylvania-legislators-to-protect-your-right-to-a-democratic-workplace/, or download a PDF of a form which can be completed and returned to grass roots organizers by clicking here. 

Pension Protection Act – Temporary Relief

There is growing concern among firms that have legacy defined benefits pension plans that the severe decrease in the value of pension fund investments combined with federally mandated full funding requirements will create another economic catastrophe later this year.  As every private investor knows, long-term investment values are down 30 percent or more.  For pensions, this means plans that were fully funded less than one year ago, are now woefully underfunded.  Hopefully, this is a temporary situation that solves itself.  When market prices return, those plans will once again be adequately funded. 

Current law, however, won’t wait.  The Pension Protection Act (PPA) of 2006 made significant changes to the Employee Retirement Income Security Act (ERISA) of 1974.  These were good, and generally well received, changes.  Among the amendments, new requirements assuring full funding of defined benefits plans.  The legislation, however, did not foresee the collapse of equity and investment values that transpired.  Without Federal action to provide temporary relief from the requirement of the PPA, employers will be forced by law to contribute hundreds of billions of dollars into their funds.  Sales and earnings are down.  The money to make the required contributions can come from just one place: cutting current expenditures like salaries, benefits, 401(k) contributions, and even jobs.

This is clearly an unintended consequence of a well intended law.  With firms already struggling to survive, making huge pension contributions could be more than some firms can afford even with spending cuts.  When the economy returns from the recession, the pension funds will be overfunded.  Money put into the funds cannot be withdrawn.  Firms could forego new payments until liabilities catch-up with over-funding, but that’s little comfort now. 

In an odd “double whammy” for state governments, huge pension contributions in 2009 and 2010 will significantly reduce the tax liability and therefore the corporate tax revenues paid to the states.  (In the simplest terms, Pennsylvania will lose 9.99 percent X a firm’s Pennsylvania CNI apportionment X the firm’s pension contribution.)  This comes at a time when state and local governments too, are coping with very tough economics.

Sources of more information appear below.

Some PBC members are interested in assembling a workgroup to study this issue more closely; confer with colleagues around the nation, and seek temporary federal relief.  If you would be interested in joining the work group, please send an email to PensionProtection@pabusinesscouncil.org.

The US Department of Labor at http://www.dol.gov/EBSA/pensionreform.html.

The IRS at http://www.irs.gov/retirement/article/0,,id=165131,00.html.

A PDF of the National Association of Manufacturers (NAM) talking points: NAM Temporary Pension Relief.