Update from Washington, D.C.

Presented by:

The Franklin Partnership, LLPOctober 2015

About The Franklin Partnership

• Bi-partisan Washington, D.C.-based government relations firm

• 80 years combined experience

• Representing metalworking industry since 2003

• Clients include: • Manufacturing associations

• Defense manufacturers

• Hospitals

• Research institutions

• Municipalities

• Non-profits

Be Safe While in Hawaii…68,000 New Government Hospital Billing Codes

• Walked into lamppost, subsequent encounter

• Sucked into jet engine, subsequent encounter

• Burn due to water-skis catching on fire

• Other contact with cow, subsequent encounter

• Problems in relationship with in-laws

The Speaker’s Chair: A Job Nobody Wanted…

A Difficult Fall: Procrastination as Usual

Congress continuously allowed key laws to expire or passed short-term patches:

• Tax Provisions (R&D, 179, Bonus)

• Highway Trust Fund

• Export-Import Bank

• Debt Ceiling

• Federal Government Funding

• Sequestration

Expired Tax Provisions – R&D, 179, Bonus

• No Comprehensive Tax Reform Until 2017- Questions over how to treat pass-throughs remain

- Some international taxation reform possible

• Expired Tax Provisions – Tax Extenders bill- R&D Lapsed for 16th Time

- Bonus Depreciation Expired

- Section 179 Reverted to $25,000

• House: Make R&D, 179, Bonus Depreciation permanent

• Senate: Pushing for 2 year extension of all provisions- Retroactive to Jan. 1, 2015 and through Dec. 31, 2016

Administration Not Slowing Down…

•NLRB Ambush Elections – April 2015

•Workforce Innovation and Opportunities Act – June 2015

•Power Plants Greenhouse Gas Rule – June 2015

•Heavy Duty Engine/Vehicle Emissions – June 2015

•NLRB “Joint Employer” for Temps Ruling – August 2015

•Department of Labor Overtime Rule – October 2015

•Ground Level Ozone Emissions – October 2015

•OSHA Electronic Recordkeeping – October 2015

•Combustible Dust Standards – February 2016

•Injury Illness Prevention Program (I2P2) – October 2016

Power Plants Emissions Rule

• 32% Carbon Emissions Reduction by 2030 over 2005

• Cost of Regulation on You:- EPA says: electricity will increase 6-12% annually

- Industry says: electricity increases of at least 20%

If you spend $200,000 annually on electricity, then expect:

6% Increase = $12,000

12% Increase = $24,000

20% Increase = $40,000

If material supplier spends $250m/year on electricity, then:

6% Increase = $15,000,000

12% Increase = $30,000,000

20% Increase = $50,000,000

2016 – GOP Likely Retains House

2016 – Republicans Battle to Hold Senate

2016 – Race for the White House Intensifies

Political Update

CA-25: Steve Knight (R) – Lean RDems: Santa Clarita Water Board member Maria Gutzeit, Agua Dulce Councilman Lou Vince

IL-10: Robert Dold (R) – Toss UpDems: Highland Park Mayor Nancy Rodkin Rotering, former U.S. Rep. Brad Schneider

MI-07: Tim Walberg (R) – Lean RDem: state Rep. Gretchen Driskell

MI-10: OPEN, Candice Miller (R) Retiring – Solid RReps.: Shelby Township Treasurer Michael Flynn, businessman/frmr. MI-04 candidate Paul Mitchell, state Sen. Phil Pavlov, frmr. State Sen. Alan Sanborn, state Sen. Jack Brandenburg, state Rep. Todd Courser, frmr. State Rep. Leon Drolet, state Rep. Andrea LaFontaine

Key Races

MO Gov: OPEN, Jay Nixon (D) Term-Limited – Toss UpDem: AG Chris Koster

Reps.: Businessman & '12 Sen. cand. John Brunner, state Sen. Bob Dixon, ret. Navy SEAL Eric Greitens, frmr. st. Hse. Spkr., frmr. U.S. Atty. Catherine Hanaway, Lt. Gov. Peter Kinder

MN-02: OPEN, John Kline (R) Retiring – Toss UpDems: St. Jude Medical VP Angela Craig, physician Mary Lawrence

Reps.: Tea Party activist David Gerson, frmr. state Sen. John Howe, conservative radio host Jason Lewis, frmr. state Rep. Pam Myhra, frmr. state Rep. Kurt Bills, frmr. state Sen. Ted Daley

NE-02: Brad Ashford (D) – Toss UpReps. Don “Bits” Bacon retired Air Force Brig. Gen., frmr State Sen. Chip Maxwell, aerospace engineer Cory Van Blarcom

Key Races

NC Gov: Pat McCrory (R) – Toss UpDems: AG Roy Cooper, frmr. st. Rep. Kenneth Spaulding, st. Sen. Josh Stein

Ind: Pizza deliveryman, '14 Libertarian Sen. cand. activist Sean Haugh

NJ-05: Scott Garrett (R) – Lean RDems: Paramus mayor Richard LaBarbiera, Microsoft advertising executive Josh Gottheimer 

PA-08 : Mike Fitzpatrick (R) Retiring – Toss UpDems: Scientist/'14 candidate Shaughnessy Naughton, state Rep. Steve Santarsiero

Reps.: '08 nominee Tom Manion, frmr. Bucks Co. commissioner Andy Warren, state Rep. Scott Petri, Bucks Co. Commission Chair Robert Loughery

Key Races

2016: 24 Republicans Up vs. 10 DemocratsDems Need 4-5 Seats for Control

U.S. Senate Today…54R – 46D

1. Mark Kirk (R-IL)2. Ron Johnson (R-WI)3. Pat Toomey (R-PA)4. Kelly Ayotte (R-NH)5. Rob Portman (R-OH)6. Harry Reid (D-NV) - retiring

7. Marco Rubio (R-FL) – retiring; Depends on primaries

8. Michael Bennet (D-CO)9. Richard Burr (R-NC)10. Rand Paul (R-KY)11. Roy Blunt (R-MO)12. Dan Coats (R-IN) – retiring; Depends on GOP primary

13. Johnny Isakson (R-GA)14. Barbara Boxer (D-CA) – retiring

15. Lisa Murkowski (R-AK)

Most Competitive Senate Races

Illinois: Mark Kirk (R) – Toss UpKirk – 41% vs. Rep. Tammy Duckworth (D) – 45%

Pennsylvania: Pat Toomey (R) – Lean RToomey – 45% vs. frmr. U.S. Rep. Joe Sestak (D) – 35%Toomey – 52% vs. Allentown Mayor Ed Pawlowski (D) – 28%Toomey – 44% vs. Gov. Wolf Chief of Staff Kate McGinty (D) – 32%

Ohio: Rob Portman (R) – Lean RPortman – 43% vs. frmr. Gov. Ted Strickland (D) – 43.5%Portman – 48% vs. Cincy City Councilman P.G. Sittenfeld (D) – 28%

Wisconsin: Ron Johnson (R) – Toss UpJohnson – 39% vs. frmr. U.S. Sen. Russ Feingold (D) – 50%

Key Senate Races

2016:

Race for the White House

Republican Convention: Cleveland July 2016

Republican Nominee Needs 1,236 DelegatesMarch 1st “SEC” Primary: 624 Delegates

March 5 (KS, KY, LA, HI, MS, MI): 248

March 15 (OH, FL, IL, MO): 367

Ted Cruz’s Delegates Strategy Includes…American Samoa (9), D.C. (19), Guam (9), Northern Marianas (9), Puerto Rico (23) , Virgin Islands (9)

Pathway to Republican Nomination

USA TODAY Candidates

vs.

The New York Times Candidates

Source: The Boston Globe

Republican PrimaryTrump 27%, Carson 21%, Rubio 9%, Cruz 8%, Bush 7%, Fiorina 6%, Huckabee 4%, Paul 3%, Christie 3%, Kasich 2%, Santorum 0.5%, Graham 0.5%, Jindal 0.3%,

Hillary 46% vs. Trump 43%Hillary 43% vs. Carson 48%Hillary 45% vs. Rubio 44%Hillary 49% vs. Cruz 41%Hillary 43% vs. Bush 45%Hillary 43% vs. Fiorina 44%Hillary 47% vs. Kasich 39%

How they Measure Up…

In past 6 Presidential Elections…

19 States Voted Dem = 242 Electoral Votes

13 States Voted Rep.= 102 Electoral Votes

270 Electoral Votes to Win Presidency

In at least 4 of past 6 Presidential Elections…

Dems won states for 281 Electoral Votes

Reps. won states for 219 Electoral Votes

How You Can Become Involved

• Become involved with your trade association• Active from your desk• Attend town hall mtgs• Attend fundraisers• Annual Manufacturing Day• Support association’s PAC and Advocacy funds• Sign PAC Approval Forms• Participate in Media Outreach• Travel To Washington

Questions?

The Franklin Partnership, LLP

omar@franklinpartnership.com

@mfglobbyist