Had enough of the political rhetoric already? Hang in there. There are more than nine full months before we can all go to the polls to elect the next president of the United States.

In truth, what happens between now and then is just as important, if not more. Just ask Chris Brown, manager of Federal Affairs for the Air Conditioning Contractors of America (ACCA).

"Democrats will be inclined to rally around their presidential candidate and oppose the Bush administration on its legislative priorities. This will lead to a lot of partisan warfare," noted Brown. "However, even with this outlook, several items on the legislative agenda important to HVACR contractors could be addressed by Congress" this year.

It is Brown's belief that Congress will address the uninsured and the cost of health care. In his estimation, the rising cost of health care is the most important issue facing contractors today, as well as owners of other small businesses.

"To combat this problem, ACCA's No. 1 legislative priority has been the enactment of Association Health Plans (AHPs), which would allow contractors to purchase health insurance in larger pools, similar to big corporations and unions," said Brown.

"The Small Business Health Fairness Act passed the House last year, but is facing opposition from several Senate members and the health insurance industry. However, the current crisis in health care costs will require the Senate to act this year to address the uninsured and passage of AHP legislation would be an important tool to address this problem, while also helping contractors."

Expect tax cut legislation to be debated, too. According to Brown, House Republicans are expected to push legislation extending the life of tax cuts passed in the 2003 tax cut law, "including IRS Section 179 Expensing that will expire in January 2006."

Look also for the estate tax issue to surface again. In June of last year, the House passed a bill that would permanently repeal the estate tax after 2010; currently the estate tax is being phased out between 2002 and 2009 and will be completely repealed in 2010.

"Unfortunately, it will return in 2011 due to Congressional budget rules that limit the length of a tax break," said Brown. "Opponents of permanent repeal of the estate tax in the Senate are currently citing the budget deficits as a reason to not pass this legislation."

Other tax legislation may include a reduction in corporate tax rates and legislation to change how a business calculates pension liabilities. Brown said this legislation would also increase the limits on contributions to IRA and 401(k) retirement plans.

"The Senate again will attempt to pass the energy bill, which passed in the House late last year. This legislation is important to the HVACR industry because it would require the federal government to develop a public service campaign educating consumers and small-business owners on the importance of the energy savings resulting from properly conducted maintenance of HVACR systems," said Brown, noting this is a key component of ACCA's American Living Campaign for Sustainable Comfort. (To find out more regarding this campaign, see the Oct. 23, 2003, issue of The News, or go to ACCA's Web site, www.acca.org.)

Political Fallout

As usual in an election year, Brown said politics would play an even larger role on the success or failure of this legislation. Much political attention will be focused on the Democratic primaries between now and March. In addition, both parties will be gearing up to defend vulnerable seats in the House and Senate.

So, what does this political maneuvering mean to contractors?

"Potential victories by the Republicans in Senate seats could result in more business-friendly senators who will work for the interests of small businesses," answered Brown. "It could also mean a better likelihood for passing favorable legislation instead of engaging in gridlock.

"Yet, the most important thing from this side of the track is to continue to push the agenda for HVACR contractors and stay visible on Capitol Hill.

"Regardless of the final outcome, 2004 is shaping up already to be a year of political warfare, hopefully in addition to some policy-making that will benefit our industry."

Mark Skaer is editor-in-chief. He can be reached at 248-244-6446, 248-362-0317 (fax), or markskaer@achrnews.com.

Publication date: 02/02/2004