President-elect Obama, Congress Sent Strategies On Energy, Transportation, Housing, Taxes, Pensions, and Forestry
On January 13 the American Forest & Paper Association (AF&PA) urged quick action by Congress and the incoming Obama Administration to revive the economy and help preserve the $200 billion forest products industry’s 1 million jobs.
A copy of AF&PA’s Economic Stimulus Fact Sheet with details of the plan is available here.
AF&PA President and CEO Donna Harman issued the following statement:
“We need quick action to revive the economy. Forest products are essential to many other sectors, which makes our industry’s recovery central to the broader economy’s recovery. Reduced access to functioning capital markets and a struggling banking system hurts capital-intensive businesses like ours and our customers’. The decline in advertising and consumer goods has reduced the demand for associated paper and packaging materials. A record decline in new home construction has caused the demand for wood products to plunge. The result is a significant threat to a $200 billion manufacturing sector, its 1 million employees, and the sustainable forestry practices that our industry makes possible.
“We need sound strategies for reviving the American economy and preserving jobs through the downturn, and we urge Congress and President-elect Obama to consider our proposals as part of an overall economic stimulus plan so that our industry and its workers can contribute to an economic recovery.”
Late last week Harman and representatives of AF&PA member companies presented their ideas to senior members of President-elect Obama’s economic and environmental transition teams. The plan has also been shared with leaders of the U.S. House of Representatives and the U.S. Senate.
Details of AF&PA’s plan include:
Support Manufacturing and Green Jobs
Support Existing Renewable Energy Investments: The forest products industry is the nation’s largest source of renewable biomass energy, generating approximately 80 percent of the nation’s supply. The consumption of the BTU equivalent of 200 million barrels of oil is prevented annually because AF&PA member paper and wood products mills generate an average of 65 percent of their energy needs from carbon-neutral renewable biomass. Congress should recognize and preserve the industry’s significant contributions to renewable energy and preserve the green jobs it supports by extending the Section 45 biomass tax credit to include on-site use of electricity produced from biomass.
Renewable Portfolio Standard (RPS): As the largest producer of renewable biomass energy in the country, the forest products industry has opposed a national renewable portfolio standard (RPS). AF&PA believes that if a federal RPS is enacted, it should recognize the industry’s existing renewable electricity and promote sustainable forest management. Previous federal RPS proposals have not made the renewably-sourced electricity generated at existing forest products facilities eligible for renewable energy credits, but did make eligible the same energy generated by others. Such a policy does not recognize the industry’s renewable energy contributions nor preserve and promote the industry’s green jobs.
Encourage the Use of Wood in Green Building: Wood is the ideal green building material. The federal government should encourage green building without granting an exclusive monopoly to any one green building rating system.
Improve Transportation Efficiency: Increase gross vehicle weight limit from 80,000 to 97,000 pounds for vehicles equipped with an additional axle. This decreases highway congestion and fuel consumption, while increasing manufacturing and agriculture efficiency.
Revitalize Housing: Enhance the Home Buyer Tax Credit to stimulate purchases of new and existing homes and providing low-rate mortgages for future home purchases. Arresting the decline in home values and easing the foreclosure crisis are critical to restoring consumer confidence and beginning the economic recovery.
Provide Tax Relief
Corporate AMT/NOL (Net Operating Loss) Reform: Help industries that have incurred losses in recent years by enacting provisions similar to those in 2002’s Job Creation and Worker Assistance Act and extend to five years the current two-year carry-back period for NOL’s incurred in 2008 and 2009, as well as suspend the 90 percent limitation on the utilization of AMT NOL’s for losses generated or taken as carry forwards for 2008 and 2009. This would help alleviate financial burdens on companies struggling from cash flow and tight credit problems, help prevent further layoffs, and retain jobs.
TREE Act Provisions: Make permanent the expiring TREE Act provisions of last year’s Food, Conservation, and Energy Act of 2008 (P.L. 110-234) to continue the 15 percent tax rate on the sale of timber by “C“ corporations and modernize the rules under which timber REIT’s operate. Letting this credit expire equates to a tax increase on an already weakened industry.
International Tax--Section 956 Modification: Ease restrictions on certain, short-term international loans to help capital intensive industries, like the forest products industry, that are especially harmed from the current lack of available capital.
Protect Pensions and the Companies That Pay Them: With the economic downturn decreasing the value of many pension plan assets, the reforms in last year’s Worker, Retiree and Employer Recovery Act should be expanded to ensure a healthy private pension system for American workers.
Invest in Public Resources: the Nation’s Forests: As part of efforts to invest in publicly-owned resources like highways and schools, Congress and the Administration should invest needed resources to better manage the nation’s public resources through hazardous fuel reduction, burned area reforestation and rehabilitation, while improving the ability to fight catastrophic fires.