U.S. House a Republican Lock; U.S. Senate, Not So Much

Over the next 72 hours or so, I’ll be sharing my Election Day thoughts, including previews and postgame wrap-up.

The U.S. House 

There was a point in time about a month ago where a flip of control of the U.S. House seemed possible. But now it’s a virtual lock that the GOP will stay in control of the House.  Intrade.com has the chances at 96 percent of the House remaining in GOP control. If the president gets re-elected, that legislative firewall stays in place. I believe Mitt Romney’s first debate performance and his campaign throughout October is the leading factor. A firewall offers some protection (no more bad legislation and the opportunity for congressional oversight on agency actions) to job creators, but would still leave in place the worst elements inside agencies like the EPA and NLRB.

The U.S. Senate

On the Senate side, what looked early on like a free throw to gain control of the Senate quickly turned into a half-court shot scenario for Republicans. GOP nominees Todd Akin and Richard Mourdock not only frittered away their chance at a US Senate seat, but also caused an election that should have been about an economy crawling along and 40-straight months of 8 percent or higher unemployment to instead get hijacked by a series of outrageous and offensive comments. It’s undisciplined gaffes like these that should cause both parties should think long and hard about their 2014 candidate recruitment efforts. No one wants scripted automatons running for office, but candidates should engage their brains before they decide to wax philosophical about divisive issues.  

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry

Kyl and McCain propose solution to sequestration

If you have the opportunity, please take a look at Thursday’s editorial in the Wall Street Journal that looks at the coming automatic and drastic spending cuts that are about to hit the Department of Defense.

As I wrote in a recent column, the formal name for these automatic cuts is called sequestration, a budgetary tool in the Gramm-Rudman-Hollings Deficit Reduction Act of 1985. By this process, money to be doled to government agencies based on congressional appropriations is “sequestered” by the Treasury.

These are across-the-board cuts, affecting everything from the Department of Defense to subsidized school lunch programs.

The cuts are all a result of Congress and the president failing to agree to a debt reduction plan under the Budget Control Act of 2011. You’ll recall this is the law that gave us the so-called Supercommittee.

The Arizona Republic this week reported on a George Mason University study that Arizona stands to lose nearly 50,000 jobs. The Phoenix Business Journal, citing a separate National Association of Manufacturers analysis, reported that the state could be facing cuts of up to over 100,000 jobs.

These cuts could be absolutely devastating to our state’s economy, the nation’s economy and, most importantly, to our nation’s defense and standing in the world.

I applaud Sen. John McCain, Sen. Jon Kyl and Phoenix Mayor Greg Stanton for sounding the alarm bells over these cuts. Sens. McCain and Kyl together have introduced legislation that offers $109.3 billion in offsets required to replace one year of defense and non-defense sequestration. Their bill seeks to replace every three retiring federal employees with only two new hires, and it would freeze federal salaries through June of 2014. Mayor Stanton has been heading up a task force for the U.S. Conference of Mayors that is assessing what sequestration will mean for America’s cities, joining mayors from around the nation in warning of the damage these cuts could inflict on the nation during a time of tepid economic recovery.

The chatter in some corners is that the president and Congress will work out some sort of deal to avoid sequestration, but companies are already poised to issue layoff notices in anticipation of the fast-approaching January 2 deadline.

But uncertainty is exactly the opposite of what businesses need to grow and prosper. Whether it's the implementation of the health care law, these defense cuts, or whether we're staring down a huge tax hike (see the NAM briefing below), do we really want to engage in this high stakes game of chicken?

If you were running for re-election, is this the kind of news you’d want to campaign on?

Reflections on a citizenship ceremony

From Katie Whitchurch, Director of Government Relations:

Earlier this afternoon, I stood in the upper gallery of a courtroom in the Sandra Day O’Connor U.S. Courthouse in downtown Phoenix and watched as 99 people from 37 different countries took the oath of citizenship.

Ninety-nine people in every shape, size, age and nationality, but each story we heard was the same: America was a land of opportunity and freedom. One man had left his birth home due to repression, one woman had come to America simply for the chance at a better life. Each though, spoke with a quavering voice as they expressed their pride in being able to truly call this land home. During the national anthem I watched as a woman in a wheelchair, unable to stand on her own, enlisted the help of fellow participants to stand and hold her hand over her heart. After the President’s message, God Bless the USA played over the loud speakers and a court clerk rushed tissue paper over to a young man in the second row who had been brought to tears.

To the 99 newest citizens of this great country, February 3 will forever be a special day. For those of us blessed enough to already call this nation home, it is a good time to reflect on the fact that, despite our occasional disagreements, this is a place that the world looks upon for leadership, freedom and peace.

If you have never experienced a citizenship ceremony before, I encourage you to do so. The flood of 37 different accents pledging allegiance to the flag, for the first time as citizens, is an incredible and moving experience. 

Participants are led through the oath of citizenship

Are we focused on recovery?

 By Arizona Chamber of Commerce and Industry Chairman Mark Dobbins

I believe I have observed a new truth. That is, the 2012 US Presidential campaign seems only to mock economic reality.

Reality for the vast majority of Americans is neither politically left or right. The people I know and those I meet in this great state of Arizona seem to be reasonably levelheaded when it comes to the basics of the economy. They want a decent well-paying job, a sound and affordable education for their children, a level financial playing field where healthcare and homeownership are a given for working families and not an unreachable goal.

Now being the eternal optimist, I have set myself a target to listen more closely for which candidate of either party who will show reality-based paths to a meaningful and sustainable economic recovery.

Three years ago the vision was hope and change. What we got from a business standpoint was a politically correct face to the nation’s wellbeing, while setting the wolves of big government regulars like the EPA and NLRB loose to impede or stop the recovery process in the name of social ideology.

For me, the issue is not ideology. The issue is not substituting one set of personal beliefs for another. We need strong and effective leadership.  I don’t believe partisan politics bears any resemblance to statesmanship or effective leadership. The issue is what is economic reality for early 21^st century Americans. Is there someone out there who can lead us to address:

• National security- It would be wonderful if this was not a necessary top priority.
• Affordable Healthcare – One size does not fit all.
• Affordable Relevant /Education systems- Over 30% of Arizona’s high school students fail to graduate. The nearly 70% who do may not have relevant job skills.
• Homeowner debt and the mortgage crisis

Well, so much for my national observations.  We have our own heavy load here at home in Arizona to balance our fragile recovery. Let’s help set the bar high by addressing economic realities as our primary focus to speed a full recovery and create the foundation for a more resilient future economy. Let’s walk the talk and give full attention to issues that have a direct and meaningful relationship to creating high wage jobs. Together we will build a better Arizona.

Alert - New Arizona Minimum Wage

From our friends at Greenberg Traurig:

Effective January 1, 2012, Arizona's minimum wage increased to $7.65 per hour, an increase of $0.30 per hour from the previous minimum wage. This increase applies to most Arizona employers.  

In 2006, Arizona voters approved Proposition 202, which set a state minimum wage that is tied to fluctuations in the U.S. Department of Labor's Consumer Price Index. Before Proposition 202, Arizona did not have a state minimum wage, and instead the federal minimum wage - currently $7.25 per hour - applied to most Arizona employers. Based on the 3.8% increase in the CPI from August 2010 to August 2011, in October 2011, the Arizona Industrial Commission resolved to increase the minimum wage for calendar year 2012 by $0.30…

You can find the full press release here. Included are links to the new labor poster from the Industrial Commission as well as contacts at Greenberg Traurig for further questions.

“A businessman goes to Washington Street” Highlights from Eggs & Issues Breakfast with Treasurer Doug Ducey

The Arizona Chamber of Commerce & Industry welcomed special guest and featured speaker Treasurer Doug Ducey on December 8th at the Eggs & Issues Breakfast at the downtown Phoenix Sheraton Hotel. Nearly 100 individuals attended the breakfast sponsored by Alliance Bank to hear from Arizona’s Treasurer who was elected to his first term on November 2, 2010.

The former CEO and President of Cold Stone Creamery brings a new energy and a results-driven approach to the office and the state government. Treasurer Ducey is integrating real world financial practices into the state’s Treasury operations and in less than a year, yielding significant positive results. Under Treasurer Ducey’s fiscal leadership, Arizona ended November 2011 with a positive cash balance at an average of $857 million – up 51% from the same time last year. Despite this encouraging positive trend line, the Treasurer emphasized that Arizona is not experiencing a budget surplus and it will not until its debt is under control and a savings account is built.

Treasurer Ducey also discussed his goals to bring more collaboration between state agencies and departments and to emulate Arizona after other states that have balanced budgets and created savings accounts in equally challenging financial environments. The Treasurer is prepared to tighten Arizona’s budget further, reminding those in attendance that a state’s inability to print dollars compels it to control spending and make better, more sound financial decisions.

Read more about the state of the Treasury in the Treasury’s Quarterly Update newsletter, Inside the Vault here.

Arizona stands to gain by embracing international trade

Written by Katie Whitchurch, Director of Government Relations

Over the course of the last month, Arizona has been home to a number of exciting events related to international diplomacy and trade:

On Thursday, November 10th, the Arizona Council for International Visitors held the first annual “Celebration of Citizen Diplomacy” at the Musical Instrument Museum in northeast Phoenix. Featuring speakers from the National Council for International Visitors, International Visitors Leadership Program with the US Department of State  and Congressman Ben Quayle for the keynote address, this event was designed to recognize the important contribution that regular citizens can play in international diplomacy.

On Wednesday, November 16th, I saddled up the pony and took a road trip down to Nogales, Sonora with the US Commercial Service and 50 other attendees for a Maquilla Expo and short tour of the city. A majority of American businesses attending were small to medium sized manufacturers looking to expand operations into the Mexican market and take advantage of Sonora’s continued growth. They were not disappointed. The Expo was brimming with manufacturers of all shapes, sizes and industries. Technical universities, pest control, sign production, corrugated boxes, supply companies, machine shops; these were just a few of the Mexican and foreign businesses already operating within Nogales. They were looking for suppliers, purchasers, partners – the opportunities were expansive.

Finally, on November 17th, the Arizona Chamber was a community partner at the timely “Building Strategic Partnerships with Korea: Korea’s Joint Local Government Investment Conference.” Our office was a supporter of the recently signed Free Trade Agreement and this conference served as the first step towards further expansion of Korea / Arizona relationships under the newly opened markets. Attendees at the event were given a detailed look at six of Korea’s markets and the various benefits they have to offer for foreign investors. In addition, President & CEO, Glenn Hamer, addressed attendees during lunch and praised the efforts of the Arizona Commerce Authority and Governor Jan Brewer for their work to promote Arizona as an international player. He thanked Yeon-sung Shin, the Consul General for Korea in Los Angeles for his attendance and recognition of Arizona’s importance to the Korean market.

All three of these events are indicative of Arizona’s continued growth in the realm of international trade and it could not come at a better time.

For the past ten years, Arizona has lagged behind the nation in embracing foreign trade. In fact, a recent article highlighted the disturbing fact that whilst the American average hovered near 64 percent, “…Arizona grew fourth-slowest of all states in international trade, at a sluggish 9.1 percent.” Northern Mexico continues to grow into a hub for manufacturing, especially in the areas of defense and aerospace and automotives, while Korea maintains high demand for key Arizona industries. Indeed, last year over 530 Arizona jobs were contingent upon exports to Korea, a number expected to grow by close to 100 percent with the signing of the FTA. In Mexico that number is even higher: with $5.05 billion worth of goods exported from Arizona to our southern neighbor last year and 235,700 jobs reliant upon trade.

It is time for Arizona to embrace its role as an economically competitive and business friendly state and seize upon the innumerable opportunities for growth.

These events have been a good start. They have highlighted the role of citizens in the spread of American ideals and culture. They have embraced our largest trading partner and neighbor, allowing manufacturers recovering from the recession an opportunity to expand their business. They have illuminated a new opportunity for growth and investment by opening the door to personal relationships with an economy recently rid of uncompetitive tariffs. It will be some time before we reach our full potential on the global stage but events like these place us on the right track.

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Interested in getting more involved in international trade? Looking for increased networking opportunities? I encourage you to check out the following websites and events:

Arizona Commerce Authority. More information available here.

Arizona Council for International Visitors. More information available here.

Arizona International Growth Group. More information available here.