Click Image to View 2016 4th Quarter Winter Edition of the TirePAC Newsletter


  • President Trump's First 100 Days
  • Republican budget committee staffers are preparing a major tax-code bill they hope to move through congress in the first 100 days of the Trump Administration.
  • "Because Mr. Trump has made it clear he wants to do tax reform in the first 100 days, House Republicans are going to be ready," Kevin Brady (R-TX) Chairman of the House Ways and Means Committee said in a recent interview. "I'm confident that this blueprint will grow the economy significantly, simplify the tax code for families and lower their tax burden and bust up the IRS, redesign it so it's focused on customer service."
  • The committee staff is already working on two pieces that may prove particularly tricky. One is a border-adjustable corporate tax, which would be imposed on imports and removed from exports. That can be quite complicated for banks and insurance companies.
  • The second idea is taxing non-corporate business income at a lower rate that other individual income. Currently, both are taxed the same way on the owners' individual returns. Mr. Brady said is team is working on the "final design."
  • The House plan and Mr. Trump's plan are similar, in that they both lower individual and business tax rates, repeal the estate tax and rely on assumed economic growth to cover part or all of their budgetary costs.
  • An important element of any reform bill is the repeal of the Estate tax, a top TIA legislative priority for over a decade.
  • The Estate tax issue was fiercely debated in the presidential campaign. Trump pledged to repeal the tax. Clinton promised to raise it to 65% while lowering the exemption for estates to $3.5 million.
  • Mr. Trump plans to eliminate the estate tax. As a partial offset, he would end step-up in basis - which currently excuses unrealized gains in an estate from capital gains tax - for estates over $10 million. Wall Street Journal models suggest that these changes would raise GDP by 0.7% over 10 years and create 142,000 full-time equivalent jobs. After-tax incomes for the bottom four-fifths of Americans would rise by 0.6% to 0.7%, mainly due to wage growth. For the top fifth of the population, after-tax incomes would rise between 0.9% and 1.7%.
  • TIA has been active in meeting with decision makers to express the position of association members. Recent meetings include;
  • 2704 Treasury Regulations Update:
  • Congressman Warren Davidson (R-OH-8), Protect Family Farms and Businesses Act
  • William Frazier, Managing Director, Valuation & Financial Opinions, Stout Risius Ross, Inc.
  • Harold Apolinsky, Estate Planning Law Specialist, Sirote and Permutt
  • James Valvo, Counsel and Senior Policy Advisor, Cause of Action Institute
  • House Tax Reform/Legislative Update:
  • George Callas, Senior Tax Counsel for House Speaker Paul Ryan
  • Macroeconomic Scoring in the 115th Congress:
  • Bill Beach, Vice President for Policy Research, Mercatus Center
  • Steve Entin, Senior Fellow, Tax Foundation
  • House Legislative and Budget Reconciliation Update:
  • Rick Limardo, Coalitions Director, House Committee on Ways and Means
  • Ashley Palmer, Senior Policy Advisor to House Budget Chairman Tom Price
  • Senate Death Tax Update/Legislative Updates:
  • Paul Poteet, Senior Advisor and Tax Counsel, Conference Chair Senator Thune
  • Jonathan Slemrod, Policy Advisor, Senate Majority Whip Cornyn
  • Erica Suares, Policy Advisor, Senate Majority Leader McConnell
  • Tax Reform/Death Tax Update:
  • Ryan Ellis, Senor Fellow Conservative Reform Network.
  • American Highway Users Alliance Annual Meeting
  • The American Highway Users Alliance is considered the leading advocacy organization serving as the united voice of the transportation community promoting safe, uncongested highways, and enhanced freedom of mobility.
  • The Alliance represents motorists, tire dealers, RV enthusiasts, truckers, oil refiners, tire manufacturers, automobile manufacturers, car dealers, motorcyclists, and a broad cross-section of business that depend on safe and efficient highways to transport their families, customers, employees, and products.
  • At the recent annual meeting, the following slate of officers for 2017 was approved unanimously:
  • Honorary Chairman
  • The Honorable Norman Y. Mineta
  • Former Secretary
  • U.S. Department of Transportation
  • Past Chairman
  • Governer Bill Graves
  • Advisor
  • American Trucking Associations
  • Chairman
  • Thomas F. Jensen
  • Senior Vice President - Transportation Policy UPS
  • Vice Chairman
  • Stephen Handschuch
  • President and CEO
  • Motor & Equipment Manufacturers Association
  • Treasurer
  • Roy E. Littlefield
  • Executive Vice President
  • Tire Industry Association
  • In 2015 Congress passed a 5-year transportation bill. Unfortunately, full funding was not a part of the bill. The Highway Trust Fund is again running out of money.
  • To address the shortfall and possible funding solution (including new, reinitiating former taxes, or increasing industry taxes), we heard from and met:
  • John Sandell, Tax Counsel - House Ways and Means Committee (Rep. Brady)
  • Bobby Andres - Professional Staff Member, Senate Finance Committee (Sen. Wyden)
  • Nick Wyatt, Tax Professional Staff - Senate Finance Committee (Sen. Hatch)
  • The Honorable Richard Neal (D-MA)
  • The Honorable Sam Graves (R-MO)
  • The Honorable Tom Rice (R-SC)
  • Jay Timmons, President and CEO National Association of Manufacturers
  • Steve, Sandherr, President & CEO, Associated General Contractors of America
  • Mike Joyce, Senior Vice President & Chief, Legislative Affairs, American Trucking Associations
  • To develop highway user positions to present to Congress, the alliance has created the following policy task forces:
  • Fixing the Highway Trust Fund:

  • The potential for tax reform bills in 2017 offers a critical legislative vehicle to fix the trust fund.
  • In addition to previously endorsed concepts, we've proposed new concept:
  • Virtual mileage-based fee concept would be a non-tracking alternative to mileage-based user fees.
  • Treasury would calculate a new fuel Tax tied to the number of light duty and heavy duty miles driven.
  • Tax Paid by terminal operators at the rack (as current).
  • Other Options -
  • Find $120-160 billion in general funds for net bailout.
  • Abolish HTF and go to annual appropriations.
  • Embrace "split-funded" nature of program.
  • Fuel price stabilization through dynamic fuel taxes.
  • Annual fees by vehicle, mileage or fuel.
  • Other taxes that can be deemed user taxes.
  • Graves has mentioned tire taxes several times.
  • General agreement with the idea of keeping the tax/fee base "broad".
  • Reform spending out of HTF or formalize a user fee / general fund split on highway programs.
  • Support MABs / Wyden-Hoeven tax credits as a supplement.
  • Support supplement from International Tax Reform windfall.
  • Support continued funding of state experiments with direct VMT fees.
  • Greg will provide both candidates with our position on the Highway Trust Fund.
  • Vehicles, Energy & the Environment:
  • Continued advancement in vehicle & energy technology.
  • Balancing environmental concerns with market reality.
  • Highway Users supports policies that increase safe, reliable and affordable mobility.
  • Issues that have emerged:
  • Crash mitigation / avoidance technology.
  • Impaired driving prevention technology.
  • Advanced fuels development.
  • Affordability & vehicle choice.
  • Protected spectrum.
  • Increased energy access.
  • Consistent fuel and vehicle standards across USA.
  • Safety:
  • Highway Users supports policies striving "towards zero deaths" (TZD) by 2050.
  • Separate, guaranteed funding programs for USDOT offices dedicated to highway safety.
  • Promoted safety culture across highway users / industry.
  • Use of data-driven safety investments and preventing diversion of safety funds.
  • Other issues raised included:
  • Infrastructure security.
  • Cybersecurity.
  • Maintain objective metrics for performance standards.
  • Safer work zones, including positive and training to reduce hazardous conditions for drivers.
  • Vehicle-to-Infrastructure safety device deployment.
  • Encourage deployment of the latest safety device standards (MASH).
  • Freight and Mobility & Congestion Relief:
  • Expand focus beyond Congestion Relief to "Enhancing Mobility".
  • Bring in bottlenecks & freight bottlenecks into the message.
  • Embrace the role of technology.
  • Build the bottleneck removal case for more funding overall.
  • Infrastructure Quality:
  • Robust funding is needed for high quality infrastructure.
  • Funding increases must be accompanied by trust from highway users that the funds are used cost-effectively.
  • A new approach to defining pavement quality is needed that should be based on maintaining a "good state of repair".
  • FHWA research and metrics should consider life-cycle costs and benefits such as durability, drivability, safety, reduced operating costs, and sustainability.
  • Promote new V21 technology to assist road users with operations - particularly in work zones, on curves and hills, at intersections, and in dangerous weather.
  • New techniques should be promoted by FHWA that lower the cost of construction and other roadwork, and the time that road users are delayed by road projects.
  • Reducing the number of structurally deficient bridges. Reduce functionally obsolete bridges.
  • The association is represented on the "Fixing the Highway Trust Fund" and the "Vehicle Energy and the Environment" task forces.
  • TIA's Legislative Update is written by:
  • Roy Littlefield, TIA Executive Vice President
  • Contact: 301.430.7280 ext. 108
  • rlittlefield@tireindustry.org


The November Elections

With less than two months until November 8, it is no secret that most of the nation's political attention and energy is focused on the upcoming elections.

As we have previously reported, the political dynamics of the coming two years will be shaped significantly by which party emerges from the elections with control of the Senate (the House is expected to stay in Republican control). The fact that both parties' presidential candidates boast historically high disapproval ratings has made the outcome of many of the down ballot races, including those for the Senate, all the more uncertain.

At present the breakdown of the 2016 Senate elections can be summarized as follows:

  • The Senate is currently comprised of 54 Republicans, 44 Democrats and two Independents both of whom caucus with the Democrats. To take control of the Senate, the Democrats either need to pick up five Senate seats or pick up four Senate seats and hold the White House (with the Vice President casting the tie breaking vote in the Senate).
  • There are 34 Senate seats up for election in 2016. Ten of these seats are currently held by Democrats and 24 are currently held by Republicans. Even if the Democrats win control of the Senate this year, they will be facing tough odds in 2018 with 25 Democratic seats up for election and only eight Republican Seats.
  • Now that Senator Rubio has changed his mind about running, just five of the 34 seats up for election are open while the remaining 29 have incumbent candidates. Of the five open seats, three are presently held by Democrats (CA, NV, MD) and two are held by Republicans (LA, IN).
  • Of the ten Democratic seats up for election this year, nine of them, including two of the three seats open seats, are (at this time) considered safe seats for the Democrats (CA, CO, CT, MD, NY, HI, OR, VT, WA). This number has increased since our last election alert as Colorado went from being one of the Democrat's biggest defensive challenges to being a near sure thing for incumbent Senator Michael Bennet. After a number of the Republican establishment's top choices declined to run, El Paso County Commissioner Darryl Glenn won what the Denver Post referred to as a "bizarre primary that featured a menagerie of chaos" and has since been trailing Senator Bennet by double digits in the polls.
  • Of the 24 Republican seats up for election in 2016, 15 of them are (at this time) considered safe seats for the Republicans (AL, AK, AR, AZ, GA, IA, ID, KS, KY, LA, OK, ND, SC, SD, UT). This list has changed since our last election alert due to a number of developments. First, as discussed further below, former Senator Evan Bayh's late decision to run has thrust Indiana into play for the Democrats. Additionally, Senator John McCain survived a primary challenge from the right and is now leading by double digits. Finally, while the Republicans are still favored to carry Missouri, the polling margin between Republican Senator Roy Blunt and his Democratic challenger, Missouri Secretary of State Jason Kander, is now less than five percent, casting Missouri as less of a sure thing for Republicans than was previously expected.
  • Senate candidates from both sides are facing challenges created by their parties' presidential candidates. In recent years, straight ticket party voting has increased significantly with 84 Senators currently being members of the same party that carried their state in the 2012 Presidential election. For Republicans this raises concerns as Hillary Clinton maintains a solid lead against Donald Trump in a number of states with competitive Senate races including Illinois, Pennsylvania, New Hampshire and Wisconsin. On the Democratic side, the Clinton campaign's efforts to appeal to disillusioned Republicans by casting Donald Trump as an outlier from the party has made it more difficult for Democratic Senate candidates to try to link Republican Senate candidates to Donald Trump.

As a bottom line - there are now nine seats that are expected to be very competitive and on which the control of the Senate will most likely hinge.

With Colorado essentially off the table, the biggest chance for the Republicans to pick up a seat is in Nevada where Minority Leader Harry Reid is retiring. At present, polls are showing the race between Democratic former Attorney General Catherine Masto and Republican Representative Joe Heck to be the closest Senate race in the country. Moreover, Donald Trump and Hillary Clinton are polling very close in the state, making it unclear how the presidential race could sway the Senate outcome.

Now that Senator Rubio is running, seven of the eight Republican seats expected to be highly competitive have incumbents running.

  • The Republican Senator that appears to have the greatest risk losing is Illinois Senator Mark Kirk who won President Obama's former Senate seat in 2010. In 2010, a year that was very favorable overall for Republican candidates, Senator Kirk only beat his Democratic opponent by a close vote of 48% to 46.4%. Senator Kirk is being challenged by Democratic Representative and Iraq war veteran, Tammy Duckworth, who has been consistently leading in the polls.
  • Also amongst the group of most at risk Republican Senators is Senator Ron Johnson in Wisconsin. Senator Johnson is facing former Senator Russ Feingold in a rematch of the 2010 election in which Senator Johnson unseated Senator Feingold by a vote of 52% to 47%. Senator Feingold has maintained a solid lead over Senator Johnson in the polls and some commentators have observed that Senator Johnson's campaign strategy has looked more like that of a challenger than of an incumbent.
  • One of the elections that is expected to be most significantly impacted by the top of ticket dynamics is the Pennsylvania Senate race where Senator Pat Toomey is trying to defend the seat he won in 2010 by a margin of just 2%. Senator Toomey is running against former state and federal environmental policy official Katie McGinty. Recent polls have been split as to which candidate they show to be leading the race, however, the polls have shown Hillary Clinton to be maintaining a consistent lead over Donald Trump which could hurt Senator Toomey's chances if the party-line voting trend of prior years continues.
  • In New Hampshire, Senator Kelly Ayotte, who was also elected during the 2010 Republican wave, is expected to face Democratic Governor Maggie Hassan in her bid for re-election. In 2010, Senator Ayotte won the seat previously held by Republican Senator Judd Gregg by solid margin of 60.1% to 36.8%. Governor Hassan was first elected in 2012 and won re-election in 2014 by a vote of 52.6% to 47.4%. The two women have been polling very close to one another and, at present, this race appears to be a toss-up.
  • Senator Marco Rubio's late June decision to run for another term in the Senate significantly lessened (though did not completely eliminate) the Democrat's chances of finding a gain in Florida. Senator Rubio has been polling consistently ahead of his challenger Democratic Congressman Patrick Murphy in a state where the presidential candidates are neck in neck.
  • While still close enough to qualify as an at-risk seat, Republicans have been pleased to see a strong campaign showing by Ohio Senator Rob Portman paying off. The last three major polls have shown Senator Portman as having a double digit lead over his challenger former governor Ted Strickland. The Democratic Senatorial Campaign Committee (DSCC) has scaled back its advertising in the state and there have been suggestions that the DSCC may pull out from the state all together.
  • On the other hand, one race that was not expected to be particularly close but that has now fallen into the at-risk column is the North Carolina senate race. Senator Richard Burr is seeking a third term and facing a challenge from former state representative Deborah Ross. The polls have shown Senator Burr to be maintaining a slight lead, though a recent CBS poll showed Ross with a one point lead. As the presidential candidates have been polling very close to one another in North Carolina, this could prove to be another state where the outcome of a close Senate election may be driven largely by the top of the ticket.

The remaining seat at risk for Republicans is the seat in Indiana being vacated by Senator Dan Coats. From the outset, this seat in a relatively strong Republican state was considered safe for the Republicans and their candidate Representative Todd Young. However, in mid-July, former Senator Evan Bayh announced that he would run again for the seat that he gave up when he retired from the Senate in 2010. Senator Bayh, who served two terms as senator and two terms as governor and is the son of long serving Indiana Senator Birch Bayh, brings with him significant name recognition and nine million dollars in campaign funds that had remained untouched since 2010. Senator Bayh has been polling ahead of Representative Young despite the fact that polls show Hillary Clinton trailing Donald Trump significantly in the state.

As can be ascertained from the above, the unique presidential election appears to be impacting certain senate races more than others. Interestingly, apparently in an effort to appeal to Republican voters who do not support Donald Trump, some of the Republican Senate candidates have been trying to garner support by arguing that a Republican Senate will be necessary to check Hillary Clinton if she becomes president.

At this point, the odds of one party having control of both chambers of Congress and the White House after November are not high, though possible. Rather it appears likely that we are looking at a split of control and the potential for continued partisan discord. On the other hand, and somewhat counter intuitive, small business often does well with split control in that both parties tend to try to court us more.

Continuing Resolution

Senator Majority Leader McConnell has scheduled the first vote on the CR for 5:30 p.m. today, September 19. Details of the CR have not yet been finalized as talks continued this weekend between Senator McConnell, Senator Reid, Speaker Ryan, and the White House. Needless to say, text of the CR must be agreed to and ready before today's vote.

Senator Mitch McConnell

Today's vote will be on the motion to invoke cloture on the motion to proceed to HR 5325, Legislative Branch Appropriations Act, 2017-a bill passed by the House that is now before the Senate. H.R. 5325 is the legislative vehicle for the CR to meet the constitutional requirement that revenue measures originate in the House.

If there are no snags on agreeing to final text, Senate leaders expect the CR can be passed by close of business Wednesday, September 21, after which the Senate will adjourn till after the elections.

If the House doesn't pass its own CR before Wednesday, and the Senate passes its bill and adjourns, it's likely the House will take the Senate's CR and adjourn also. Via Senator Reid, the Senate's CR is being cleared beforehand with the White House so the President's signature can be assured.

No firm date has been set for the beginning of a post-election session, but November 14 or 15 is most likely.

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