A completely Republican-controlled Congress will convene on Jan. 6 for the first time since 2005. Here are four major issues Senate Majority Leader Mitch McConnell and Speaker John Boehner should try to tackle in 2015.
Keystone XL
McConnell has already announced that Keystone XL will be the first item on the Senate’s agenda. The initial application for the pipeline project was submitted Sept. 19, 2008, before President Obama was elected. Evidently, six years in office is not enough time for Obama to decide if Keystone XL should be built.
The biggest organized interests opposed to Keystone XL’s construction are environmentalist groups, who fret over oil spills and increased carbon emissions.
But the oil will be produced and used regardless of whether Keystone XL is built — it is only a matter of where the oil is going. If oil is not transported by pipeline, it will move by rail. Trains are susceptible to crashes, which damage the environment and can kill bystanders, as seen in the fatal July 2013 derailment in Lac-Megantic, Quebec. The State Department’s environmental impact study found the pipeline would have limited environmental impact if constructed.
The same study found that the pipeline would support 42,100 jobs. Not all of these jobs would be permanent, but the economic gains are clear. That is why many labor unions, including the AFL-CIO, support Keystone XL.
Passing a bill to approve Keystone XL would force Obama to take a position on the pipeline within 10 days. Will he pander to the misplaced concerns of environmentalists, or put the economy first?
Social Security Disability Insurance
By late 2016, people who are too disabled to work may be hurting even more. Payments to Social Security Disability Insurance beneficiaries will automatically be reduced in late 2016 if Congress does not act.
Congress could simply reallocate the proportion of payroll taxes that is split between the Disability Insurance Trust Fund and the Old Age and Survivors Insurance Trust Fund, as it did in 1994. This would temporarily solve the disability insurance crisis, but at the expense of the Social Security program overall. Instead, Congress would be wise to tighten eligibility for disability insurance, or implement reviews of current beneficiaries’ status, so that those who become able to work no longer receive benefits.
Even though benefits would not be automatically reduced until 2016, it is imperative that Congress act as soon as possible. “If lawmakers act sooner rather than later, they can consider a wider array of options and more time will be available to phase in the changes, giving the public adequate time to prepare,” the Social Security and Medicare Boards of Trustees wrote earlier this year. “Earlier action would also provide more opportunity to ameliorate any adverse impacts on vulnerable populations, including lower-income workers and people already significantly dependent on program benefits.”
Obamacare
It will be nearly impossible for Congress to repeal Obamacare’s biggest provisions as long as Obama is in office. With new leverage, the GOP Congress might be able to convince Obama to agree to sensible reforms.
Obamacare’s employer mandate requires employers of at least 50 workers to provide health insurance to employees. Citing adverse effects on job creation with little effect on health coverage, the liberal Urban Institute advocated elimination of the employer mandate in a May 2014 report. Obama has delayed the employer mandate’s implementation before — why not end it permanently?
Obamacare’s medical device tax hits manufacturers of prosthetic limbs and pacemakers. By extension, the tax hurts those who rely on those products, namely, amputees and people with heart disease. For legislation that claims to make healthcare affordable, this provision clearly makes care less affordable for vulnerable swaths of Americans.
There was speculation Congress might attempt to repeal the tax before the end of 2014, but larger debates over government funding ended up taking most of the attention. The likelihood of repealing the medical device tax should increase with a more conservative Congress.
Tax reform
The United States has the worst corporate tax code in the developed world.
Only Chad and the United Arab Emirates have top marginal corporate income tax rates higher than the U.S. rate of 39.1 percent. Corporations in other countries typically have to pay value-added taxes at higher rates than U.S. state sales taxes. But foreign corporations also avoid taxation on income earned abroad. Only three developed countries tax income that corporations earn abroad and then try to invest domestically — the United States, unfortunately, is one of them.
Obama has expressed some interest in corporate tax reform, but he is unlikely to support legislation that does not also reform the individual tax code.
Congress needs to drastically simplify the individual income tax code. It takes the average person or business $715 and 26 hours just to file an income tax return, according to the Taxpayer Advocate Service, let alone earn the income that must be paid to the government.
Congress also needs to ensure that tax reform does not spur endless changes to the tax code. The tax code changes an average of once a day. Taxpayers cannot keep up, whether they file as individuals or corporations.
If Congress and Obama can manage to achieve everything on this list, 2015 will end with a freer, more prosperous America.
