Shifting alliances. Partisan bickering. Fragmentation. To intervene or not to intervene. Nothing really moving forward. Sound familiar? It was the state of health care legislation on Capitol Hill last month. It’s tough enough to sponsor and administer affordable health benefits for your employees, without shortsighted government intervention mucking up the works.

There continue to be a number of competing camps in the congressional health care debate—a key factor that may favor you as this wrenching soap opera looks toward the 107th Congress.

On another front, the Clinton Administration, to no one’s great surprise, appears poised to impose its ERISA claims regulations (as final regulations) at any moment. Can you guess who will claim to have invented them?

These regulations are bad news. Virtually everything the Dingell/ Norwood "patients’ bill of rights" (PBOR) does, this does, too. The regulations do not include an explicit right to sue employers and health plans…but bend over backwards to be friendly to consumer

litigation. The NAM, in front of a Labor Dept. panel, testified against these regulations, which have since been in the Administration’s bullpen. Litigation (with the support and involvement of the NAM and like-minded business interests) is all but certain to follow.

The perceived disintegration of congressional efforts is becoming a convenient excuse for the White House to issue rules that establish many of the same protections for most Americans with private health insurance. The rules will set new federal standards for the handling of claims under employee health benefit plans.

Publication of the rules could also yield political dividends for Vice President Al Gore, allowing him to claim that the Administration is moving to protect patients while the Republican-controlled Congress fails to act.

The new standards, prepared by the Labor Department over the past three years, would expand the rights of more than 130 million Americans who receive health insurance through private employers, the largest source of coverage in the United States. The stalled legislation would cover all of them, plus 38 million people with other types of insurance now regulated by the states. The new rules specify what information must be given to patients, set deadlines for decisions on claims and establish procedures to help patients appeal the denial of benefits.

All private employee-benefit plans will have to revise their claims and appeal procedures to comply with the rules.

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Two NAM-member small and medium manufacturers (SMMs) testified on your behalf last month before congressional committees.

Tony Raimondo, chairman and CEO of Behlen Manufacturing Co. (1,423 employees – Columbus, NE), testified before the House Small Business Committee about the importance of death tax repeal and other issues.

Tony said, "The importance of repealing the death tax to our small and mid-sized members is no surprise since they spend, on average, a staggering $52,000 a year on death tax planning.

"The time and money spent preparing for the death tax simply does not help a business in any other way. This diversion of valuable human and financial capital achieves absolutely no economically useful purpose. It does not increase productivity, expand the workforce or put new products on the shelf. A business pays this cost every year, not just at some uncertain future date when an even bigger bill comes due."

At the same time Raimondo was getting his points across about death tax repeal, Collie Hutter, COO of Click Bond, Inc., (80 employees—Carson City, NV) testified before the House Ways and Means Oversight Subcommittee on the importance of the R&D tax credit. Collie said, "The R&D tax credit is serving its intended purpose as an incentive to spur R&D that would not otherwise be performed. I cannot overstate how the incentive value of the R&D credit would be enhanced exponentially if the credit were permanent.

"It would reduce the number of variables we have to contend with in our long-range planning. Every R&D dollar spent is potentially at risk. The assurance that the R&D tax credit is there reduces the perceptible risk. It would be a positive to know that the credit will be there when the research is done."

She also remarked, "Not only my company, but also the many other companies, large and small, that are constantly juggling their limited supply of capital between intangible and tangible projects, would benefit from a permanent credit."

Given the support of both major presidential candidates for a permanent R&D tax credit (amazingly they actually agree on something), its prospects next year appear better than ever.

Congress will need to hear from you about the need for death tax repeal and a permanent R&D credit. Only you can make a difference in 2001. Remember the new White House residents and the whole 107th Congress roll into Washington soon! Active participation with your fellow NAM members around the nation and inside the Beltway will be critical in the important transition year ahead.

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Riverdale Mills Corporation’s (RMC – 130 employees – Northbridge, MA) Jim Knott recently sued the federal government, following years of EPA abuse, for $15.35 million in total damages for malicious prosecution after being cleared of any wrongdoing. Knott had faced a six-year jail term and up to $1.5 million in fines. He’s suing three EPA agents individually for unlawful searches and seizures and for selectively enforcing EPA regulations. It only seems fair after their treatment of him.

In the course of defending himself against the two criminal counts of violating the Clean Water Act, Knott demanded the original logbooks of the EPA agents who took pH readings in fall ’97. Despite EPA denials of any exculpatory evidence, the logbooks show that a lawful pH reading of 7 was altered to look like a 4, and that other 7s were altered to look like 2s.

The pH readings taken by EPA during a second raid on RMC all show pH readings of 5 or above where the public sewer pipe begins, in compliance with EPA regulations.

A federal judge 7/27/00 granted Knott’s request for reimbursement of attorneys’ fees for defending against a criminal prosecution (see 9/00 JIT story) that was harassing in nature and without probable cause. Let us hope EPA has learned its lesson well.

The judge described the 11/7/97 raid on RMC as "a virtual ‘SWAT team’ consisting of 21 EPA law enforcement officers and agents, many of whom were armed, [who] stormed the RMC facility to conduct pH samplings. They vigorously interrogated and videotaped employees, causing them great distress and discomfort." The judge also noted that Knott suffered great personal humiliation by the criminal charges.

If you have a similar story—and we know they’re out there—we’d like to know. Contact Jeff Noah at (202) 637-3048 or jnoah@nam.org.

In testimony before the House Ways and Means Committee recently, the NAM called for a new pro-growth tax system that promotes rapid recovery of capital equipment costs.

"Clearly, all businesses, whether considered ‘old’ or ‘new’ economy, will benefit from a pro-growth tax system designed for a 21st century economy. In fact, the distinction between the ‘old’ and ‘new’ economies is largely artificial," testified NAM Vice President Dorothy Coleman. "The term ‘old economy’ brings to mind belching smokestacks, blue-collar workers, bricks and mortar—all aimed at making tangible things. In contrast, ‘new economy’ represents high- tech gadgetry, skilled workers, whistle- clean factories, computers and microprocessors."

Coleman explained, "In reality, though, this clear-cut distinction is not an accurate picture of either the economy or the modern manufacturing world. The integration of traditional manufacturing with the technological innovations of the past decade has transformed our entire economy."

"Technology, in turn, has led to a boom in productivity and this strong, steady increase in productivity has enabled the economy to achieve strong growth without significant inflation. A pro-growth tax policy that stops discriminating against capital investment is essential to continued economic growth," Coleman concluded.

Technology is the driving force in the world economy. In every field, the demand for an increasing level of technological expertise is rising dramatically. Today, 88 percent of NAM members report a shortage of qualified workers. By 2008, the U.S. economy will need more than 2 million new, highly skilled workers.

At the 10/2 press conference launching GetTech, NAM President Jerry Jasinowski said, "It’s not an exaggeration to say we believe programs like this [GetTech] are critical to our success in the ‘New Economy.’"

At http://www.gettech.org/, middle school students can now explore future career paths at a dynamic, interactive Web site. Exciting TV and radio public service announcements (PSAs), recently distributed to thousands of broadcast stations around the nation, will encourage students to "GetTech" and take advantage of the cool career opportunities open to those with the right skills.

Women in Film secured $2 million in Hollywood talent and special effects work to produce these outstanding PSAs, and other leading firms pitched in to produce exciting information kits, fliers, posters, print ads and fun specialty items that will carry the message nationwide to 14,000 U.S. middle schools, making it a snap for kids to "GetTech." A toll-free number (866-468-TECH) is available to all for more information, particularly those young people without convenient Internet access.

A special thanks goes out to GetTech’s founding sponsors for their commitments to this important campaign: The Timken Co., Manpower, Inc., Precision Metalforming Association Educational Foundation, Semiconductor Industry Association, StorageTek, Toyota and bridges.com. To learn more or get involved, contact Phyllis Eisen, (202) 637-3011, peisen@nam.org.

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