This will be my post for the week. It has been a very interesting week at work due to changes in government rules and procedures. As an intern for the public policy department, one requirement is to learn about these changes and determine how it will effect the firm and its clients. Among changes that have gone into effect over this past week have been the removal of 1099 of health care reform, changes in Senate rules, and proposal accepted by Congress and the White House to remove all earmarks for FY 2011-FY 2012. All three of these changes have a significant impact on the advocacy performed by the firm across many departments but mostly affecting its most notable, public policy. I will explain these three changes and what the firm has done in response.
First, removal of 1099 requirement in the Health Care Bill. For those of you who are not familiar with 1099 Requirement, basically what it requires is that anytime a business spends or receives more than $600 a form with the IRS needed to be filled out. Initially, this was supposed to get rid of underground business sector that was costing the government money, but ended up becoming a huge hassle for small business owners and the IRS. All the sudden, the IRS could not process the amount of forms that were coming in and business owners were bogged down by filling out all the paperwork. Overall, the 1099 requirement proved to be a burden on the system and both Democrats and Republicans wanted it gone. But there was one problem. The 1099 requirement made the government money. People were paying taxes on every expenditure of $600 and the government was collecting it. There is a rule in Congress called the cut go rule that requires for every cut something has to replace it. In other words, if a bill that returns profit to the government is removed, something else has to be taxed in order to make up for this loss of money, which is exactly what the Democrats wanted. The Republicans say that the money received by the 1099 taxes was phantom money anyways and there is no reason why something else should be taxed. Anyways, they came to a compromise and the 1099 repeal went through.
Second, there were rules that have been made in the Senate to facilitate bipartisanship and cooperation. The elimination of secret holds, removal of forced reading of amendments, and a reduction of necessary appointees by the Senate where among these changes. It seems that Senator Reid and Senator McConnell have demonstrated the ability to work together and although, the Senate is known for its deliberation, it seems that this Congress will have better cooperation than the rest.
And finally, the loss of earmarks. Earmarks are important for many public entities including state governments, cities, universities, and companies. Although, earmarks are important for government to give out, there are many other forms in which the government can give out aid. Federal grant support, municipal disclosure, agency rule making, and policy proposals can all be ways in which the public and still receive money from the government.
The firm is acutely aware of all action that occurs inside of government and modifies their approach to what procedures and rules are in place. With previous Senators, Members of Congress, Ambassadors, and many other people with long history in government, from what I have noticed, seems to stay one step ahead of the game.
ie. On Tuesday, I attended a fundraiser for Senate Foreign Relations Ranking Member Dick Lugar. Former Senator Trent Lott, who recently joined the firm, hosted the event.
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