Valdosta Daily Times

February 2, 2014

The Business of Legislation

Issues that could affect the economy this year

Stuart Taylor
The Valdosta Daily Times

VALDOSTA — It’s hard to predict what a new year will bring for the legislative branch of the United States.

You might end up with something akin to the 111th Congress, which between Jan. 3, 2009 and Jan. 3, 2011 enacted more than 30 acts, or you might end up with something like last year, the first year of the 113th Congress, which enacted four acts last year and one act this past January.

Legislative predictions are, at best, a tough call, but it’s something you want to keep an eye on, regardless of the nature of your business, whether you’re running it from the kitchen table or doubling down on an expansion. And with various members of the House and Senate talking about addressing jobless benefits, minimum-wage increases and immigration, among others, possible legislation or lack thereof could have a far-ranging impact throughout the country and in Lowndes County.

It’s something Dr. Sherman Yehl has seen previously. Before becoming a political science professor with Valdosta State University, Yehl spent decades working with cities, going from an assistant city manager in Iowa to a city manager in Texas and Florida to working as governance advisor in Iraq with USAID.

He works in the classroom now, but he’s seen the ground-level impact legislative acts — or the lack of them — can have on communities. While he would offer the same caveat noted at the beginning of this article, he can make a fair guess as to what could happen as the result of legislation passing or not.



Jobless benefits

With long-term unemployment benefits expiring this past December, the Senate has been having a stalled conversation about whether to extend them or let them die. The Senate is roughly divided by party lines on this issue, though several Republican senators have indicated they’d vote for an extension.

But, even if it passes the Senate, it faces a tougher test in the House, and even if passed, would then return to the Senate.

“The unemployment program really seems to be on the hit list for Republicans for whatever reason,” said Yehl. “I think it’s going to be difficult for the House leadership to pass a bill that the Senate would agree on.”

Unlike some legislation where it’s hard to suss out the impact it has on individuals, unemployment benefits can play a direct role.

“There are some impacts on the economy. Obviously, people who are unemployed have less resources to pay for food, clothing and gas, those types of things. I’m not an economist, so I can’t make any broad proclamations, but even being able to put a little bit of money into the local economy helps.”



Minimum wage increase

Democrats, generally speaking, want to see the minimum wage raised, with the dominant number being $10.10 per hour, though a few have suggested raising it higher. As in previous raises in the 2000s and the 1990s, it would most likely be introduced in several steps.

Republicans, generally speaking, want to see it stay where it is, though a few have suggested abolishing it all together. Their main argument is that raising it would reduce the number of jobs available.

“Here’s the problem: For many, many years minimum-wage jobs were ideally sought by either high school-age kids or kids who have just graduated from high school and hadn’t decided what to do. Now, we’ve seen with the big change in manufacturing, the global economy and the rise of service jobs in the U.S., there’s a large sector of employees who, through no fault of their own, have to rely on minimum-wage jobs to support themselves. That wasn’t always the case. It was usually a supplementary job for, again, high school kids and young people, not really the type of job people needed to support their families on.

“The economy has changed and as a result, I think, the minimum wage needs to be looked at either through a system of tiering or trying to figure out how minimum-wage jobs can be more fruitful for those who are trying to support their families.”

Though there’s been a lot of talk of it, Yehl doesn’t see an increase passing if it is introduced.

“I don’t see the House approving it, even though it’s an election year. As long as your base is satisfied with the way things are, there’s little impetus for change. Now, I may eat those words 10 months from now.”



Immigration

Immigration reform has the distinction of being an issue that politicians of all stripes acknowledge needs to be addressed. It’s not a question of yes or no, but rather how?

Republicans favor increased border security and a piecemeal approach to reform. For their part, Democrats seek an overhaul of the whole system, offering a path to citizenship for workers.

“Sort of the beauty about legislation is, particularly comprehensive legislation like, for example, the Farm Bill, not everyone gets what they want, but everyone gets something.”

But with both sides so far apart on both implementation and outcome of immigration reform, the odds of a compromise are slim.

“There’s not enough payoff for Republicans to look at immigration reform as anything but negative to them in the long term.”

A lack of any reform would leave things where they are now. In recent years, some agribusinesses have had trouble harvesting crops due to a shortage of laborers.

“That would do one of two things. You’d either increase agriculture prices here because there’s not enough supply, or it would increase imports into the U.S.”



Debt Ceiling

The last few years have seen an ever-escalating debt-ceiling standoff, culminating in a 16-day government shutdown this past October. While some Republican senators and House members have reinforced their stances that debt-ceiling raises should come with conditions, Yehl doesn’t see it going to the extent of a shutdown.

“I think they’re going to go to the brink again, once or twice, but I don’t think they’re going to, as they say, pull the trigger. For one, this is an election year. I don’t see them going all that far down the road, but I do think there will be some gamesmanship on the debt ceiling.

“The realization is today that we are in a global economy. The United States is still a pretty big player. ... If there’s some thought that the United States isn’t going to pay its debts ... (the system) is going to be impacted and not in a positive way. When one of your largest economies decides it’s

going to default on its debts, that’s not a real confidence booster.”