As the 112th Congress Draws to a Close…

BY Russell Harrison Posted: 1 Dec 2012

The 112th Congress of the United States will end on 4 January 2013, when our newly elected Congress is sworn into office.  As we approach the effective end of this Congress, sometime slightly before Christmas, we can review what our elected leaders have accomplished in the past two years, but a surprising number of issues have yet to be resolved.

This Congress passed a couple of significant pieces of legislation that affect engineers.  Although not all of them were welcomed.

Small Business

The SBIR and STTR programs were reauthorized for six years.  These programs are the source of federal research funds for small businesses, especially small technology companies.  The programs had been reauthorized more than half a dozen times for very brief periods of time, some as little as a month, while legislators tried to reach an agreement on program reforms.  In the end, the long reauthorization period will bring clarity and stability to the program, making it more useful to small businesses.

In addition to extending the programs for six years, Congress made several changes to the programs.  These include:

Increasing SBIR set asides from 2.5% of participating agency budgets to 3.2%
Allowing companies owned or funded by venture capitalists to participate in the program
Increasing the maximum amount of SBIR and STTR grants

IEEE-USA supported the reauthorization of these programs, although we didn’t take a position on any of the other reforms.  Now that Congress has acted, it should be easier for small businesses to participate in these programs, improving the competitiveness of small high-tech companies.

Intellectual Property

In September of 2011, Congress passed the America Invents Act (AIA).  This bill was the most radical change to U.S. Patent law of the past fifty years.  It was, and is, also opposed by IEEE-USA. 

The law seeks to update American patent law to make it more useful in the 21st Century.  Among other things, the law sets a First-to-File standard for patent cases, where two inventors are fighting over which came up with a given invention first.  The new standard is similar to European and Japanese patent law, but also favors large companies over smaller companies and independent inventors.

Now that the AIA is law, IEEE-USA is working with the U.S. Patent Office to make sure small investors are protected.  Efforts to do so may have taken a hit over the summer, when Joe Matel was appointed to the U.S. Patent and Trademark Office.   Mr. Matel had worked for Sen. Kyl, R-Ariz., and was one of the primary authors of the AIA.

Immigration Reform

Much to everyone’s surprise, immigration reform proved to be one of the more successful parts of IEEE-USA legislative agenda in 2012. 

With comprehensive immigration reform still stalled (if you call five years of little, or no, action stalled), attention shifted to other, smaller immigration reforms that could get passed this year.  High-skill visa reform quickly emerged as the most promising of these. 

The proposal, first floated in mid-2011, was to create additional green cards for international students who earn a Master’s or a Ph.D. in a STEM field.  Early proposals quickly ran into a political roadblock: Congress would not consider increasing the total number of visas while the U.S. economy was so weak. 

To overcome this, legislators, led by House Judiciary Committee Chair Lamar Smith, R-Texas, looked for a way to move visas around within the immigration system.  This movement would allow them to increase the number of STEM visas, without raising overall immigration numbers. 

The Diversity Visa program proved to be a promising source of the new STEM visas.   This program awards 55,000 visas annually to immigrants drawn at random from applicants all over the world.  Applicants have to have a high-school diploma, or local equivalent, but few additional qualifications.  The House Judiciary Committee voted to eliminate the program in 2011, and it had little political support in Congress. 

When it was created, the Diversity Visa Lottery was supposed to provide immigrants from countries that had not sent significant numbers of immigrants to the United States an avenue into the country.  And it succeeded.  Now, sustainable family-based immigration exists from the two areas targeted by the program: Africa and Eastern Europe.  Its success deprived the Diversity Visa program of a rationale for continuing.  That, and security concerns over a visa going to random people, made the program a tempting political target.

The debate over STEM visas culminated on 20th September, with a vote in the House on the STEM Jobs Act of 2012.  The bill, introduced by Rep. Lamar Smith, R-Texas, eliminated the Diversity Lottery program, and transformed all 55,000 of its visas into STEM visas.  Democratic leaders, who wanted additional provisions to help immigrants using family visas added to the requirements, attacked the bill.  Rep. Smith; and Democratic leaders, including Sen. Chuck Schumer, D-N.Y., and Rep. Howard Berman, D-Calif., had been negotiating a deal on these provisions for months, but the talks broke down in late July. 

Faced with a congressional recess for the election, Smith introduced his bill, and moved it to the House floor for a vote--on the last day of the congressional calendar before the election.   Because he brought his bill up for a vote after suspending the House rules, a procedure known as suspension, Rep. Smith needed a two-thirds vote to win.  He didn’t get it.  The final vote was 257-158, about 20 votes short of passage.

However, the bill did get a sizable majority, including all but five Republicans and thirty Democrats.  Congressional leaders, including Sen. Schumer, plan to continue negotiating a bipartisan compromise that could come up for a vote any day.  The September vote demonstrated that support for the STEM visa is broad and bipartisan, suggesting that a compromise bill could pass quickly, if a deal can be reached.

Budget

Congress passed a Continuing Resolution (CR) in September that allowed the federal government to be funded at 2012 levels through the end of December.  This step was necessary because the Fiscal Year starts on 1 October, and Congress failed to make much progress on the budget before then.  As it has done in previous years, most of the work on the FY 2013 budget was taken up during the Lame Duck session of Congress that began on 13 November.

So far so good, except that Congress had a number of other issues on its plate in November.  Most crucially, a number of major fiscal changes are scheduled to go into effect between 30 December  and 2 January 2013, including:

The expiration of the Bush/Obama tax cuts
The expiration of the 2% payroll tax cut
The introduction of a number of new taxes associated with the Affordable Health Care Act
Automatic sequestration cuts of 8.5% to 10% for all federal programs
The end of emergency unemployment benefits
Reductions in Medicare repayments

The combined effect of these changes will be to dramatically reduce government expenditures and increase tax revenue–resulting in as much as a 2.2% reduction in GDP in the first quarter of 2013 alone.

Congress will likely prevent some of these things from happening.  But it will take a herculean effort to get everything done in the five working weeks between the election and Christmas. 

At press time, it was not yet clear which items Congress would focus on. But it was clear that the FY 2013 budget will be tight one.  IEEE-USA is working to protect the parts of the budget that affect engineers, especially basic research and K-12 education funding. 

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Russell T. Harrison is IEEE-USA’s senior legislative representative for grassroots affairs.

 

 

 

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