Washington Watch

Washington Watch

The power shift in Washington means a new set of priorities. Now's the time to do what you can to make sure legislators' agenda matches up with yours.

So the Democrats have regained a majority in the House and Senate. Some characterize this as divided government. Others call it a reinstatement of checks and balances. Whatever you call it, industry must be vigilant about how the new power players could affect U.S. business and markets.

The new legislators may not have material handling on their minds in putting forth their agendas, but you can be sure the bills they'll be introducing in their first year will shape what goes on in the country's factories and distribution centers. (See the box, On the Agenda,)

Fred Thimmel, president of Bryant Products (Ixonia, WI, www.bryantpro.com) and chairman of the Conveyor Equipment Manufacturers Association's (www.cemanet.org) government affairs committee, says a flurry of new bills is customary whenever new legislators arrive. This year's flurry of activity is more intense due to the unusually large freshman class.

"While many intriguing bills have been introduced, it is far, far too early to say if any will gain traction," he says. "Conversely, bills that have sat in committee are generally dropped from consideration and their bill numbers are recirculated for use on new pieces of proposed legislation. Casualties of this process are numerous bills dealing with medical and product liability reform, expansion of employer liability in medical malpractice cases and greater oversight of OSHA findings."

Jason Poblete, an attorney in the regulatory litigation group of Reed Smith LLC (www.reedsmith.com), expects labor issues to be priorities early on. Before re-entering the private sector he served as spokesman and senior adviser to Bill Thomas (R-Calif.).

"Ted Kennedy (D-Mass.) chairs the health committee in the senate and Congressman George Miller (D-Calif.) is taking the lead of the Labor Committee," says Poblete. "They'll bring a disproportionate interest to OSHA. But if they want to pass any legislation it will have to be on a bipartisan basis if they want the president's signature. Healthcare appears to be the starting point for the Senate, but there will be different issues trial ballooned, especially as they enter the budget consideration period. We'll see how the industries respond."

With so many presidential candidates making themselves known for the 2008 election, chances are the legislative agenda will lighten considerably as that election nears. That's why businesspeople need to keep an eye on both parties. Poblete expects immigration, pension and healthcare issues to move forward. Minimum wage will be another big issue early on, especially leading up to the summer.

Early signs coming out of OSHA (www.osha.gov) point to a focus on helping businesses to be more compliant with existing regulations. Homeland security will be mixed in with immigration reform and port security, which will place new security demands on the private sector. "When you have massive national immigration reform, there may be dislocations in the economy that will affect all industries," says Poblete.

Strength in Numbers
To address possible regulatory changes, industry associations are engaging their members and partnering with other associations that have lobbying leverage. Rick Blasgen, CEO of the Council of Supply Chain Management Professionals (www.cscmp.org), says he's expecting logistics to be a key area of focus for many government power brokers.

"To me, when something affects commerce as transportation has, I think it will get increased attention," he says. "With ports it started with security. It's a congestion issue, and those politicians who say every single container ought to be inspected have no idea what they're talking about. That will just stop the world in its tracks. When it affects goods getting to people, that's when attention will be driven to it."

Indeed, when it comes to trade issues, free and safe can be conflicting priorities. That's why House Bill H.R. 1 is getting a lot of industry attention. The bill would require 100% scanning of U.S.-bound containers loaded in China and the Netherlands. Last year, Patty Murray (D-Wash.) led the opposition to the bill and will remain a key opponent. It will come down to whether customs can successfully convince Congress and the media that 100% risk assessment and scanning will create the same level of security as 100% physical inspection.

Blasgen is making sure CSCMP participates with the International Warehouse Logistics Association (IWLA, www.iwla.com) and the Warehousing Education and Research Council (WERC, www.werc.org), to educate law makers on such concerns.

"Just as we expect supply chain partners to collaborate, so should associations," Blasgen says. "We underestimate our ability as voters and professionals to educate lawmakers on what it is they need to know to make our country better in terms of the supply chain profession. We can have more of a voice if we're joined at the hip."

Joel D. Anderson, President & CEO of the IWLA, agrees that the global supply chain will be high on the legislative priority list. The IWLA's job is not only to educate lawmakers, but to lobby them.

"The environmental agenda will move into the workplace on the diesel particulate issue and I believe it is here that business is vulnerable," he says. "Business may have to adopt a pollution reduction strategy just as they have for accident prevention."

Of course, environmental issues are connected to healthcare, and when it comes to warehousing, balancing the well being of workers against the costs of keeping them healthy could become an even greater challenge for U.S. businesses.

"Healthcare will be a big campaign issue, and that's a very serious problem," says Bob Shaunnessey, executive director of WERC. According to WERC's annual salary survey, the average warehouse worker makes about $25,000 a year. Family health coverage can cost $15,000-$20,000 a year.

"Right now the system is broke and it will take something serious to fix it," Shaunnessey continues. "You have a cost spiral that's partially driven by doctors protecting themselves against liability. So you have lots of tests and things happening in the healthcare system that, using normal judgment, you wouldn't do. But doctors resort to every test they can think of now to protect themselves against liability in case they might be sued. That's crazy. The way healthcare institutions raise rates in general to cover their expenses for people who are not insured is a tax on employers."

In summary, businesspeople need to keep their eyes on the new legislators. By communicating early and openly with them, both as individual taxpayers and through trade associations, business may find common ground. The associations related to material handling and logistics have an opportunity and an obligation to protect the interests of their members.

"If we handle the next five to ten years correctly on the policy side and on the safety and security side, we can be way ahead of the first responder unit in homeland defense," concludes attorney Poblete. "This is a good legislative season to take advantage of divided government. That's the silver lining. The days of congress beating up on the private sector are gone."

On the Agenda

  • The 9/11 Commission Recommendation Act (HR 1), which is pending in the Senate, would require the electronic sealing and scanning of all shipping containers before being loaded on ships bound for the United States. The CBO estimates the cost of container scanning to the federal government to be $160 million over five years. Total private sector costs would reportedly exceed $131 million in 2007 alone if the bill is enacted.
  • Access to Capital for Entrepreneurs Act (HR 578) would amend the Internal Revenue Code of 1986 to allow a credit against income tax for qualified equity investments in certain small businesses. Qualified equity investments would not exceed $500,000 or $250,000 in a qualified small business. This bill was introduced into the Ways and Means Committee on January 17, 2007.
  • Social Security for Americans Only Act (HR 190) would prevent the crediting of wages earned, and self-employment income derived, by individuals who are not citizens or nationals of the United States to coverage under the old-age, survivors and disability insurance program. This bill was introduced to the Ways and Means January 4, 2007.
  • Bio-Fuels & Renewable Energy Sources. A number of bills offering tax incentives to the bio-fuels industry have been introduced into both Chambers of Congress. Such incentives could benefit companies involved in bulk material handling.
  • Immigration Reform (S 9, HR 147, HR 134, HR 572 and HR 98) are among an array of proposed immigration legislation. The proposals seek better ways to deal with illegal immigrants and the companies that employ them and improve the tracking of documented immigrants.
  • OSHA Reform—Site Reporting Act (HR 141) would require the Secretary of Labor to revise certain regulations under the Occupational Safety and Health Act of 1970 to require employers to keep a "site log" for all recordable injuries and illnesses occurring among all employees on a particular site, no matter if such employees are employed directly by the site-controlling employer or by contractors or leasing services. This was introduced January 4, 2007.
  • National Right To Work Act (HR 697). This would repeal existing statutes that allow the firing of workers for refusal to pay union dues or "fees" to union officials. It would eliminate closed shops and forcing workers to pay dues in shops where unions exist. The law would not prevent anyone from joining a union. This was debated in House Committee January 24, 2007.

Q&A with OSHA
MHM asked an OSHA spokesperson for an update on the health and safety regulator's priorities for the coming year.

What's the link between industrial safety issues and some of the big items on the Administration's agenda, such as healthcare?
Just last month, OSHA released a new workplace safety and health guidance that will help employers prepare for an influenza pandemic. Guidance on Preparing Workplaces for an Influenza Pandemic, developed in collaboration with the U.S. Dept. of Health and Human Services, provides general guidance for all types of workplaces, describes the differences between seasonal, avian and pandemic influenza, and presents information on the nature of a potential pandemic, how the virus is likely to spread and how exposure is likely to occur.

OSHA is also working on a new guidance that will offer infection control information about standard precautions and transmission-based precautions as well as standards that will have special importance to pandemic preparedness and response.

Will there be a new approach to safety in the workplace with the new players in Congress?
At a recent ceremony attended by Assistant Secretary for Occupational Safety and Health Edwin Foulke in Lynn, Mass., Senator Kennedy and he agreed that they need to work together. We will, and Mr. Foulke is confident that the results will be productive.

Where are the biggest opportunities for improving safety, and in which industries?
OSHA has identified seven industries with high injury/illness rates and a high proportion of severe injuries/illnesses for focused targeting of outreach, education and enforcement activity. These industries include:

  • Public warehousing and storage
  • Landscaping and horticultural services
  • Oil and gas field services
  • Fruit and vegetable processing
  • Blast furnace and basic steel products
  • Ship and boat building and repair
  • Concrete and concrete products.

During fiscal year 2006, OSHA conducted 1,481 inspections within these seven industries. Many of these inspections were a result of local emphasis programs (LEPs), which area and regional offices develop to address specific hazards n their location. The objective of OSHA's effort is to significantly lower the disproportionately high injury and illness rates in these industries.

During fiscal year 2006, OSHA conducted 18,895 inspections (out of 38,579 total inspections) that were related to an LEP, showing that using local expertise and knowledge to target specific industries and hazards allows for more efficient use of OSHA's resources.

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