What's Washington Doing These Days?

As you know, there's been a lot of drama in Washington recently around the federal budget, the debt ceiling and taxes -- all issues that one way or another can affect our industry.

Right through New Year's as the nation waited to see if we would jump off the fiscal cliff, NTMA's Washington advocacy team worked hard to protect our interests and ensure that important tax priorities for manufacturers did not get tossed out during negotiations.  Thanks to their hard work, our industry emerged from that first round of uncertainty in good shape.  The highlights that affect our companies include the following:

• Estate Tax exemption of $5 million per individual/$10 million per family; excess taxed at 40% rate (this is indexed for inflation, meaning in 2020 the first $17 million per family is exempt);
• Extension through 2013 of 50% Bonus Depreciation and flexibility to use AMT credits instead;
• Extension for 2012 and 2013 of expanded Section 179 Expensing with $500,000 maximum amount and the $2 million phase-out threshold;
• Extends R&D Tax Credit through 2013, making it retroactive to January 1, 2012 at 20% and 14% for the simplified credit;
• Makes Section 127 Employer Education Assistance provision permanent.

Keep your seat belts fastened because there's more action to come -- whether we want it or not! 

The House of Representative today (January 23) approved a bill that would allow the debt ceiling to be raised for three months.  The bill is expected to pass the Senate and the President said that he would sign it, thus temporarily defusing an issue that could have developed into a crisis in the coming weeks.

Next up on Washington's agenda, severe budget cuts through sequestration that were kicked down the road at New Year's are scheduled for the end of February.  The federal government's budget expires on March 27^th.  

As we face this series of deadlines, the continuing posturing on both sides of the aisle in Congress and at the White House is creating a lot of uncertainty around the country.  But NTMA's advocacy team will be right in the mix, fighting for both our short-term interests and longer term priorities, like pushing for a permanent and comprehensive overhaul to our tax system that treats small businesses fairly, and addressing the skills gap that is constraining our companies' ability to fill high-tech positions.

Don't lose hope -- Washington politics may not be pretty, but we're doing our best to look our for manufacturers!  We'll continue to keep you updated in the coming weeks on the issues that matter to you most.