WASHINGTON OUTLOOK: POLICY & POLITICS

Obama Recess Appointments Likely to Trigger Legal Challenges, Prolong Business Uncertainty Over Regulations; Congress to Focus (Again) on Payroll Taxes, Debt Ceiling When it Reconvenes Later this Month  

On the heels of the New Year’s holiday and Tuesday’s neck-in-neck race between presidential hopefuls Mitt Romney and Rick Santorum in Iowa, President Obama on Wednesday moved ahead with controversial “recess” appointments to the National Labor Relations Board (NLRB) and Consumer Financial Protection Bureau (CFPB) that sparked immediate threats of a constitutional showdown in the courts by GOP congressional leaders. The cloud of uncertainty surrounding the appointments has also prompted concerns that businesses will be unsure which regulations to follow — thus, prolonging their hesitation to invest and create jobs. 

Obama Cordray  

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, left, with President Obama. Video and transcript of Obama’s comments . 

“We’ll know what [CFPB Director Richard] Cordray wants the rules to be, but we won’t know what they really are,” said an American Bankers Association official, citing the possibility that pending new mortgage-loan disclosure forms could be invalidated in the future (The Wall Street Journal, Jan. 6).

With Cordray’s appointment, the CFPB now has all the policing powers granted to it under the 2010 Dodd-Frank Act, including the power to supervise tens of thousands of non-bank financial institutions.

The five-member NLRB, which in December rushed to finalize new rules to accelerate union organizing activity (as an alternative to failed “card-check” legislation), would have been without a quorum this year if Obama had not acted [Roundtable Weekly, Dec. 9].

Rep. John Kline (R-MN), whose legislation to block the NLRB’s “quickie election” proposal cleared the House on Dec. 1, said the agency is “wreaking havoc on the nation’s workforce” and that its policies “are dramatically increasing the pressure and uncertainty facing business owners, making it more difficult to create jobs and plan for the future” [Roundtable Weekly, Oct. 21]. 

Similarly, former NLRB Chairman Peter Schaumber warned that Obama’s recess appointments “undermine legitimate government” and “will continue to chill business investment in the United States.” In a CNBC interview published today, he added, “Why produce here what you sell here with so much uncertainty in the law, with the law being changed in ways that are hostile to legitimate employer rights and interests and with these unprecedented recess appointments being made to continue those changes?” 

Wide_shot_SOI 

The  Roundtable’s 2012 State of the Industry Meeting on Jan. 31 in Washington follows the State of the Union address on Jan. 24. 

When Congress reconvenes later this month (Jan. 17 for the House and Jan. 23 for the Senate), payroll taxes will again be at the top of the agenda. Under the temporary payroll tax cut agreement reached just before Christmas, a bipartisan, bicameral conference committee of 20 lawmakers must now meet to determine a final bill (before the temporary extension expires at the end of February).

Also this month (as agreed to under last summer’s debt ceiling extension deal), Obama is soon expected to ask Congress for a third ($1.2 trillion) increase in the debt ceiling. The first ($400 billion) tranche came on August 2, followed by a $500 billion increase in September. Congress will have 15 days to act on Obama’s request.

Although Congress can pass resolutions of disapproval on these debt ceiling raises (which Obama can then veto), it is unlikely to do so in this case, given that lawmakers are out until at least January 17.

Obama is set to give his State of the Union address on Jan. 24, a day after the Senate officially comes back in session. (Borrowing from the Democrats’ playbook during the Bush Administration, Senate Republicans in recent weeks used “pro forma” sessions to technically keep the chamber in session and to block the potential for recess appointments.)

The Roundtable’s 2012 State of the Industry Meeting follows a week later — on Jan. 31 — with an expected array of U.S. policymaker guests and panel discussions on conditions in commercial real estate capital markets, looming congressional debates on deficit-reduction and tax policy, as well as opportunities to “green” jobs and foster economic recovery through energy efficiency retrofits of commercial buildings. 

Source:  The Real Estate Roundtable

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