Treasury announces delay of employer mandate

The U.S. Treasury Department announced on Monday that it would delay the Affordable Care Act's employer mandate for medium-sized businesses. Employers with 50-99 employees will not be required to provide health insurance for full-time employees until 2016.

You can find an overview of the recent delay here, and U.S. Chamber President Tom Donohue’s statement on the delayed mandate here.

As the implementation of the healthcare law plays out, the Arizona Chamber will continue to share updates about the law and what it means for Arizona businesses in real time and … without delay.

Glenn Hamer's testimony before House ad-hoc Committee on International Trade and Commerce

WRITTEN TESTIMONY BY GLENN HAMER

PRESIDENT AND CEO

ARIZONA CHAMBER OF COMMERCE AND INDUSTRY

BEFORE THE HOUSE AD-HOC COMMITTEE ON INTERNATIONAL TRADE AND COMMERCE

FEBRUARY 10, 2014

Representatives Forese and Miranda and committee members, for the record my name is Glenn Hamer and I am the president and CEO of the Arizona Chamber of Commerce and Industry. On behalf of Arizona’s job creators, I thank you for the opportunity to provide testimony at this important hearing.

I believe you have convened this hearing at a critical time in our state’s relationship with our neighbor to the south, a relationship that continues to improve and strengthen thanks to outstanding leaders like Sandra Watson at the Arizona Commerce Authority; Margie Emmermann at the Arizona Mexico Commission; and Hank Marshall at the City of Phoenix, who you will hear from later in this panel.

Last month we celebrated the 20^th anniversary of the implementation of the North American Free Trade Agreement, a trilateral trade pact that created incredible market access for manufacturers, increased consumer choice and was integral to the creation of millions of jobs here in the U.S.

With 20 years of positive experience under our collective belts, the U.S., Mexico and Canada are now part of the Trans-Pacific Partnership trade talks, an agreement poised to link the markets of Asia and the Americas, accounting for 792 million people and a combined GDP of $27.5 trillion. [1] The NAFTA nations together are stepping strongly into the next generation of international trade.

The importance of trade with Mexico is not lost on the Arizona Chamber of Commerce and Industry or the larger business community. We are fully cognizant of the six million U.S. jobs that depend on trade with Mexico and the $12 billion in trade between Mexico and Arizona in 2012 alone.[2] A productive, meaningful relationship with Mexico is critical to our country and our state’s economic health.

To that end, the Chamber in 2012 formed a Trade and Tourism Committee, which serves as our one-stop public policy shop for trade and international travel promotion. Under the auspices of this committee, our Chamber has advocated for improved transportation links between our state and Sonora, increased international flights from Mexico and better resources and infrastructure to process the trade flowing between our two countries.  Last year, Sonora Gov. Guillermo Padrés Elías was a featured speaker at our Arizona Manufacturers Council Manufacturer of the Year Awards. The governor reminded everyone in attendance of the unique and special relationship between our two states and why our two states’ economic futures are so intertwined.

In 2013 alone, I had the distinct pleasure of traveling to Mexico City with our Speaker of the House Andy Tobin and members of this committee as part of a bipartisan delegation of lawmakers and business leaders to visit with members of Mexico’s Congress, and I have traveled to Guadalajara with Phoenix Mayor Greg Stanton to kick-off new air service between those two cities by Volaris Airlines, a Mexican low-cost carrier, adding to the already robust offerings to and from Mexico by U.S. Airways from their Phoenix hub.

Our professional sports teams have also recognized the importance of the Mexican market and the positive role sports can play in forging new relationships. I can tell you from my experience on the Guadalajara trade mission that having the Diamondbacks’ World Series hero Luis Gonzalez as part of your delegation makes an incredibly positive impression. Our NFL Arizona Cardinals have played a regular season game in Mexico City and have a huge broadcast presence in Mexico, where their games are broadcast to 18 cities throughout the country, including Mexico City and Guadalajara. The NBA’s Phoenix Suns have not only participated in trade missions to Mexico, but they are the first NBA team to conduct their own youth basketball clinics in that country.

That Arizona is actively courting new business opportunities in Mexico might come as a surprise to some, but not to longtime Arizonans, who can point to a rich legacy of cross-border leadership.

Former Southern Arizona Congressman Jim Kolbe is a nationally recognized expert in the importance of trade between the U.S. and Mexico. His contribution to the U.S.-Mexico relationship is so consequential that it is not hyperbole to say that without Jim Kolbe, there might not be a NAFTA.

Congressman Kolbe was also critical in the expansion of the border travel zone, which governs how far Mexican nationals in possession of a valid Border Crossing Card may travel before requiring additional documentation. Because of Rep. Kolbe’s work in 1999, Mexicans crossing the border into Arizona may travel as far north as Tucson, where they can enjoy world-class resorts and shopping destinations. Along most of the U.S.-Mexico border, Mexican visitors may travel only 25 miles north before requiring an additional form[3], though last year, the Department of Homeland Security expanded the border zone in New Mexico, where business leaders there cited Arizona’s positive experience as a case study for increased travel access.[4] The Maricopa Association of Governments is now leading an effort for the entire state to be considered as part of the border travel zone as a means to further grow the tourism opportunities between Arizona and Mexico.[5]

Congressman Kolbe’s work for the border and Arizona continues. As you know, he is now co-chairing the Transportation and Trade Corridor Alliance, which is charged with linking Arizona to the global economy by improving our state’s trade and logistics offerings by identifying ways to increase the value of our trade corridors.

We should also recognize Congressman Matt Salmon, who has fully embraced his role as chairman of the Western Hemisphere Subcommittee of the House Committee on Foreign Affairs. Congressman Salmon in December convened a hearing in Tucson that was attended by Representatives Schweikert, Sinema and Barber where US-Mexico trade was the main topic.

Arizona is also home to the Arizona Mexico Commission. The Chamber commends Margie and the AMC for being at the forefront of travel visa policy, trade promotion and transportation. It is because of the AMC that the governors of Arizona and Sonora have had a direct line of communication for over 50 years.  

In just the last few years, Arizona has dramatically stepped up its efforts to promote our state’s outstanding business environment to the rest of the world. Mexico figures prominently in that strategy. Sandra can discuss how the ACA, in partnership with the AMC, has re-opened the once shuttered Arizona state office in Hermosillo, Sonora, ensuring that once again Arizona has a presence in our neighboring state’s largest city.

And now we’ve learned of the partnership between Phoenix and the state to open a trade office in Mexico City, which speaks to Hank’s and Mayor Stanton’s hard work. Arizona leaders know that so much more can be done to grow the $6.3 billion in goods Arizona exports to Mexico, $1.8 billion of which comes from the metro Phoenix area. [6]

There are so many positive things happening between Mexico and Arizona and our state leaders are redoubling their efforts to forge closer ties with our southern neighbor. Mexico finds itself in a unique period in its history that creates new opportunities for Arizona. Mexican President Enrique Peña Nieto is a reformer who understands that Mexico must embrace change if it is to assume its rightful place as an economic power.

This is not to say that challenges do not remain. While Arizona’s business community is excited about the overhaul of the country’s major port for Mexican produce, the Mariposa Port of Entry in Nogales, by improving its layout and capacity, we are concerned about the staffing resources that will be deployed to the port.

I still believe that 2014 can mark the passage of a package of immigration reform bills. I am hopeful that legislation would look for opportunities to improve the human resources devoted to our ports of entry, not just the areas between our ports that are the responsibility of the Border Patrol. Adequate staffing is so vitally important to reducing the miles-long backups of legitimate trade into Mexico. The budget deal passed by Congress last month included funding for 2,000 new CBP officers slated for the nation’s busiest ports of entry is a positive sign.

We also must greatly improve our transportation links in the border region. Congress took a positive first step by designating the highway between Las Vegas and Phoenix as Interstate 11, an integral link in the so-called Canamex trade corridor linking all three NAFTA nations, which will also connect the country’s two largest metro areas not connected by an interstate. But we must also reduce the bottlenecks that prevent freight from reaching the interstates in the first place. Mariposa Rd., also known as Arizona 189, needs to be expanded or reconfigured in such a way that trucks leaving the port of entry can bypass the congestion of Nogales and head north on Interstate 19.

In a time of tight federal and state budgets, we understand that there are no easy solutions to the challenges of port staffing and transportation infrastructure, but please know that you have a willing partner in Arizona’s business community in addressing these challenges.

Once again, on behalf of the Arizona Chamber of Commerce and Industry, I very much appreciate the opportunity to be here today and I would be happy to take any questions you might have.

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[1] http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/index.aspx

[2] https://www.azpm.org/p/home-featured/2013/11/29/28795-az-week-state-strategizes-to-improve-trade-with-mexico/

[3] http://www.cbp.gov/xp/cgov/travel/id_visa/i-94_instructions/

[4] http://www.cbp.gov/xp/cgov/newsroom/news_releases/national/06072013_3.xml

[5] http://www.nogalesinternational.com/news/rest-of-state-wants-in-on-border-zone/article_af679486-512e-11e3-84eb-0019bb2963f4.html

[6] http://www.azcentral.com/community/phoenix/articles/20131120phoenix-to-open-trade-office-in-mexico.html

NLRB reintroduces rule to speed up union elections

It’s not yet Throwback Thursday, but the National Labor Relations Board announced today that it would resurrect a 2011 rule to speed up the Board election process and to eliminate defenses and procedures previously available to employers during a union election.

If adopted, the rule would limit employers' ability to communicate with employees during union campaigns by shortening the period in which a representation election is held. Under the proposed rule, an election could be held in as few as 10 days. It also imposes disturbing new mandates on employers, such as forcing them to turn over employees’ e-mail addresses.

A federal court overturned a substantively identical rule last year on a procedural technicality- the Board then lacked a quorum to pass the rule- but now, with a fully loaded Board, the “ambush election rule” has resurfaced. James Plunkett, Director of Labor Law Policy for the U.S. Chamber noted, “this is a significant policy change that is specifically intended to curtail employer speech and increase union organizing.” National Association of Manufacturers President and CEO Jay Timmons pointed out, “the Board’s own data do not support a need for a shortened time frame for a representation election. Currently, the average time in which an election is held is 38 days from the time a petition is received. In fact, over the past decade, the Board has either met or exceeded its own goal of the amount of days in which to hold an election.”

The rule is available for public comment through April 7, 2014. The Board will hold a hearing with opportunity for public testimony the week of April 7, 2014 as well. 

Affordable Care Act a mess, but piecemeal reform attempts come with risks

The rollout of the Affordable Care Act has been a story of ineptitude. The ham-fisted attempts to launch the healthcare.gov website alone have provided newspaper opinion pages enough material for a year of editorials. Prior to the passage of the Act, the Arizona Chamber was very vocal about the many contradictions and bad public policy contained in the law. We continue to be concerned with the counterintuitive assumptions the law is based on and the adverse outcomes these create.

The central problem with this law is that, under the guise of making insurance more accessible and affordable, the Act has done basically the opposite. First, it mandates that insurers provide more expansive coverage and fundamentally changes the way insurers calculate premiums. For example, insurance companies can no longer exclude those with pre-existing conditions or charge more for consumers with chronic conditions. They must allow dependents to stay on their parents’ plan until the dependent is twenty-six years old and the difference in price they may charge a young person vs. an older person is strictly limited.

Pre-Affordable Care Act, health insurance looked like most other types of insurance; premiums were calculated based on various factors that can predict the likelihood a person will access certain benefits (e.g., age, existing medical conditions). Now, all insurers must provide ten “essential health benefits” regardless of the likelihood that a person will utilize any or all of these benefits. This has the effect of increasing premiums and other costs for the young and the healthy, while decreasing costs for the old and the sick.

The Act attempts to pay for all of this by levying at least a dozen different taxes on employers, as well as a tax on healthcare innovation by taxing the sale of medical devices. Premium costs will increase for the young and the healthy, while employers’ ability to create jobs decreases and companies are taxed out of creating innovative new products.

Bottom line: the implementation has been rocky, to put it in polite terms. As a result, Americans are more skeptical about the law than ever, with 50 percent reporting an unfavorable opinion. The insurance companies didn’t ask for this law, and they have tried to navigate it in the least disruptive way possible. But the President keeps changing the rules in the middle of the game. The administration has authorized 19 delays, amendments and repeals to the law, creating a playing field with more seismic activity than San Francisco.

Now, there are proposals in Congress that, in an attempt to undermine a single piece of the Affordable Care Act, would essentially punish health insurers for complying with the law.  Although well-intentioned elected officials might believe they’re protecting taxpayers from an insurance industry bailout, these alterations would further destabilize the market that insurers are trying in good faith to navigate. Forcing a total collapse of the private insurance industry will push us toward a single-payer, total government-controlled healthcare system.

So as some in Congress attempt to protect taxpayers by targeting insurers, let’s carefully consider the consequences as we deal with the most complex health care law of our time. Attacking the Affordable Care Act in this piecemeal fashion will only get us further from the goal of affordable health insurance that is widely accessible. I would encourage Congress to instead focus on finding a feasible solution to our country’s ongoing healthcare crisis.