With the New Year just weeks away, a look back on RILA’s 2011 legislative agenda finds some remarkable wins for the retail industry. The retail industry is a powerful force in Washington and we at RILA are proud to be its representative. As an employer of nearly 15 million Americans, the retail industry is recognized by policymakers for the critical role it plays in America’s economy.
We at RILA are eager to build on the successes of 2011 to ensure the retail industry’s continued success in 2012.
Please take a moment to learn more about the industry’s top 5 legislative accomplishments of 2011 and how we are positioned for even greater success in 2012.
1. Debit Swipe Fee Reform Prevails…Again
This year RILA successfully defended the Durbin Amendment, which was signed into law in 2010, from an aggressive attempt by the banks to undo critical debit swipe fee reforms. RILA’s 2011 campaign targeted 18 states with grassroots, earned and paid media and orchestrated the retail industry’s most aggressive shoe-leather lobbying campaign in recent memory. The campaign partnered with hundreds of small business owners, resulting in thousands of contacts with targeted offices and generating hundreds of media hits. In the end, the effort produced a win on behalf of the broad merchant community, a win that will save merchants and consumers money and bring competition to a market where there previously was none.
As one observer said:
“Big banks have not lost many fights in Washington in the aftermath of the Wall Street bailout, but Wednesday’s vote underscored at least one limit on their power. Wall Street can beat almost anyone in a legislative brawl, but it cannot defeat the entire American retail industry.”
Looking Ahead to 2012: RILA has always viewed debit swipe fee reform as the first front in the war to bring competition to the electronic payments market. In 2012, RILA will build on the successes of the past two years to strengthen the debit reforms, build transparency and extend these reforms to credit cards.
2. Amazon Forced to Collect Sales Tax in Several States; Federal Solution Imminent
After more than a decade of very little progress on this industry priority, a new RILA-led campaign to level the playing field between online-only retailers and Main Street retailers, as it relates to collecting and remitting sales taxes, produced a number of victories in 2011. While sales tax has always been owed on purchases made online, Amazon.com and other e-tailers have used a pre-internet loophole to avoid collecting and remitting the tax. This results in a perceived price advantage online, compared to purchases made in a store. In September California Governor Jerry Brown signed into law legislation that closes the loophole. Several other states, including Illinois, Texas, Arkansas, Tennessee and Connecticut also took action in 2011.
The tremendous success in the states has translated into momentum in Washington. Bipartisan bills introduced in the House and Senate are gaining traction and spell the end for the special treatment that Amazon and other e-tailers have enjoyed at the expense of Main Street.
Looking Ahead to 2012:
RILA has always argued that a comprehensive federal solution is the best way to level the playing field. Strong bipartisan support in the House and Senate suggests that 2012 will be the year that this loophole is closed once and for all. In recent weeks a number of high profile conservatives have spoken out strongly in favor of a comprehensive federal solution to this issue.
Sen. Lamar Alexander (R-TN): “I’ve been around long enough and observed Congress enough to say this is going to happen.”
Merrion, Paul, “Durbin gains key support for revitalized Internet sales tax bill,” Chicago Business, 11/09/11
Rep. Mike Pence (R-IN) “I don’t think Congress should be in the business of picking winners and losers. Inaction by Congress today results in a system today that does pick winners and losers.”
Gruenwald, Juliana, “Congress Urged to Close Online Sales-Tax Loophole,” National Journal, 11/30/11
Gov. Haley Barbour (R-MS): ”The time to level the playing field is now, as there are no effective barriers to complying with the states’ sales tax laws.”
Amy, Jeff, “Barbour backs plan to tax online, catalog sales,” Associated Press, 12/5/11
Al Cardenas, Chairman, American Conservative Union: “When it comes to sales tax, it is time to address the area where prejudice is most egregious — our policy towards Internet sales.”
Op-Ed, “The Chief Threat to American Competitiveness: Our Tax Code,” National Review Online, 11/8/11
3. Trade Agenda Alive
The stalled trade agenda finally moved again this fall when the Obama Administration cleared and Congress approved long-stalled free trade agreements with South Korea, Colombia and Panama. American merchants and consumers will benefit from the implementation of these agreements as they create new economic opportunities, expand U.S. exports, and sustain and grow well-paying U.S. jobs that rely on trade. However, the greatest benefit of this year’s activity on the trade front is that it clears the way for additional job-creating trade agreements, most importantly the Trans-Pacific Partnership (TPP).
Looking ahead to 2012:
RILA has actively engaged in negotiations between TPP nations. A 21st Century TPP agreement would generate considerable new investment opportunities and sustain and grow well-paying U.S. jobs. Specifically, RILA has advocated for a policy on textiles and apparel that embraces today’s global value chains and the millions of American jobs that depend on them.
The outlook for a TPP improved in November when President Obama said:
“I am confident that we can get this done. Together we can boost exports, create more goods available for our consumers, create new jobs and compete and win in the markets of the future.”
Jackson, David, “Obama seeks ‘Trans-Pacific Partnership,’” USA Today, 11/12/11
4. Workforce Fairness Prevails in the House
This summer, Big Labor’s most trusted government ally, the National Labor Relations Board (NLRB), reversed decades of precedent in their decision on Specialty Healthcare. The decision paves the way for unions to gerrymander workplaces to cherry pick a small segment of workers to establish micro-unions. Micro-unions will create unnecessary divisions within a workplace, undermining staffing flexibility while also reducing career development opportunities by limiting cross-training. In addition, the NLRB engaged in a rulemaking to produce ambush elections, with as few as 10 days between notice and a vote. Taken together, the actions of the NLRB represent an attempt to bypass Congress to implement the goals of the panned Employee Free Choice Act.
In December the U.S. House of Representatives passed legislation that would overturn the NLRB’s decision in Specialty and ambush elections. The Workforce Democracy and Fairness Act passed the House with 235 – 188. Attention now turns to the democratic-controlled Senate where obvious challenges exist.
Looking ahead 2012:
The pathway to appealing the decision in Specialty, is a long and complicated one, made more difficult by dysfunction at the NLRB. Effectively, an appeal could only occur if an employer refused to recognize a micro-union formed in their workplace. Failure to bargain with the disputed union would result in an unfair labor practices charge, which the employer would challenge before the NLRB and possibly in federal court. With the NLRB likely become inoperative next year, as the panel drops to just two members, that appeal process will be delayed indefinitely, leaving employers and employees with effectively no process to appeal. RILA will remain extremely active and aggressive in the pursuit of legislation to overturn the NLRB’s ill-conceived decision in Specialty Healthcare and ambush elections.
5. Retail Input Moves Health Care Reform Rulemaking
The RILA-formed and –led Employers for Flexibility in Health Care (EFHC) Coalition was successful in a variety of early rulemakings related to the implementation of health care reform. The coalition has become the leading employer voice on regulations affecting the employer mandate. This summer, the departments released proposed regulations on issues important to RILA members, such as employers’ interaction with insurance Exchanges, individual eligibility standards for health insurance premium tax credits, and the production of a uniform summary of benefits and coverage template. Two areas where the agencies have adopted RILA proposed solutions are the development of an affordability test safe harbor for employers and the definition of full-time employees.
Looking ahead to 2012:
The employer community eagerly awaits the proposed regulations on the definition of a full-time employee, automatic enrollment, and employer tax penalties for failing to comply with the coverage mandate. These regulations are expected to be released in the coming months. Given the enormous implications these reforms will have on retailers and the nearly 15 million people they employ, RILA will be at the forefront of the regulatory process providing input and the industry’s perspective.
Honorable Mention: Product Safety Law Changes to Fit Real World
RILA successfully lobbied to amend the Consumer Product Safety Act of 2008 (CPSIA). While RILA supported the creation of the law in 2008, RILA sought and received minor changes to the law in 2011. One change in particular will benefit retailers considerably. The August 14, 2011 effective date for new product lead limits would have forced retailers to destroy millions of dollars of existing inventory that was deemed safe for sale up until that deadline. RILA successfully lobbied to change the implementation date to reflect the date of manufacture, rather than the date of sale, a move that likely saved retailers tens of millions of dollars.