Industry NewsAssessing the Midterms’ Impact on Lodging

Assessing the Midterms’ Impact on Lodging

The new Senate Republican Majority, combined with a larger House Republican Majority, will significantly alter the policy landscape for the business community and the lodging industry, says the government affairs team at AH&LA. The association anticipates a busy year legislatively that includes smaller, targeted measures getting to the President’s desk and being signed into law, though likely not any grand compromises on issues like immigration or the nation’s fiscal policy. When it comes to issues impacting the lodging industry, here’s what AH&LA expects to come down the pike:

With Congress’ new focus on oversight of the Administration, AH&LA believes this agenda will include added Congressional scrutiny and discussion regarding the recent NLRB decision on joint employer and other onerous labor related regulations.

“These are huge issues for our industry, which Congress will be addressing through the appropriations process,” said Brian Crawford, AH&LA’s vice president of government and political affairs. “What I mean by that is, they will attach defunding amendments or riders to appropriations bills that they will hopefully be able to pass definitely out of the House and possibly out of the Senate and send them to the President. This is going to force the President to either come back to the table and negotiate with Congress or veto legislation, which will begin the process anew. Regardless, I think it’s going to highlight the overreach the business community sees within the Administration when it comes to labor relations issues.”

Additionally, there is the possibility of a minimum wage debate occurring, particularly in the Senate, as 2016 in-cycle members in competitive states may want to take this issue off the table and forge a compromise. AH&LA has been battling dramatic wage hikes on the state level, and has had victories thus far in San Diego and Rhode Island.

“I think you’re going to see a renewed effort by the Obama Administration, but possibly also by Republicans eying the nomination for the White House, to try to get the minimum wage issue off the table,” Crawford said. “The President has proposed $10.10 phased in over a number of years. I think that it is plausible that you might see a minimum wage vote out of the Senate some time during the next Congress. The real question is going to be, will the conservative House take up a vote to raise the minimum wage?”

While it was expected that the President would issue an executive order in the coming weeks that would address undocumented workers, the results of the election could alter the President’s thought process. Any executive action on immigration will undoubtedly cause a negative reaction from House and Senate Republicans and would dampen prospects for Congressional action on immigration. That said, both House and Senate GOP leadership have expressed an interest in potentially tackling this issue in 2015, and we could see some smaller targeted actions to “fix” the executive order or address enforcement and/or business concerns later in the year.

“I think if the President were to take executive action, that would be a short-term fix because it would only last until the end of his presidency,” Crawford said. “Congress, specifically the House, might have an incentive to try to get this done prior to the 2016 election cycle. Unfortunately, one of the key issues we’ve been working on here at AH&LA, which is H2B visa reform, has not been part of the discussions coming out of the White House with regards to addressing the undocumented workers in the United States. So it remains to be seen what the President will do on immigration reform, but we do expect he will proceed, and that might come some time in December.”

AH&LA anticipates that the new Congress will vote on another repeal of the Affordable Care Act and follow that with action on smaller bills to change burdensome and unworkable parts of the law.

“I think it’s important to note that repealing Obamacare is not a political reality,” Crawford said. “You would need to have 60 votes in the Senate, and then you would also have to convince the President to repeal his signature legislative achievement, which is never going to happen. But there are legislative fixes that can be passed through the House and the Senate.”

Legislation to change the definition of full-time from 30 to 40 hours is at the top of the list, as well as a repeal of the medical device tax, the definition of small business, and a delay or repeal of the employer mandate.

The House passed the Save American Workers Act back in April to restore the traditional 40-hour work week, but the Senate did not take action on its own version of this legislation. In response, AH&LA partnered with the employer community to launch a new campaign called More Time for Full Time.

“This will be a huge priority for us the beginning of next Congress,” Crawford said. “(Senate Majority Leader) Mitch McConnell also said they’re going to plan on repealing medical device tax and also trying to repeal the employer mandate. From my personal opinion, that’s pie in the sky because that’s tantamount to repealing Obamacare. So I think that probably won’t happen but that might be an issue they bring up to try to pacify the conservatives.”

Patent reform likely provides the best, early opportunity for a legislative win in 2015, AH&LA said. Both House and Senate Republican leaders on this issue have stated their intent to revisit legislation quickly.

“The House passed the patent reform bill in late 2013, and the Senate was very active last year trying to get to a compromise but they just couldn’t get there,” said Vanessa Sinders, AH&LA’s senior vice president and department head of government affairs. “Senate Republican leadership John Cornyn, who was very involved on patent issues this past year, has made comments that he wants to take this up, as have other members, as have House Republican folks too. That’s something that we’re going to be focusing on here at AH&LA. We’re going to be part a new kind of Main Street coalition, working with the tech companies to reach a compromise. I think it could be a good win early in the year.”

Negotiations continue to pass BrandUSA reauthorization before the end of the year. With the House passing its reauthorization legislation on such a strong vote this past summer, and the Senate already moving companion legislation through the committee process, the prospect of BrandUSA reauthorization becoming law is relatively high.

“The Senate has taken committee action on it, and so we’re hopeful that that can potentially become part of an end-of-year larger legislative package, like get attached to the continuing resolution or omnibus appropriations bill,” Sinders said. “We’ll continuing working on both of those.”

AH&LA is hopeful that final action on a long-term TRIA extension occurs in the coming weeks during the lame duck session. The Senate passed its reauthorization bill earlier this year on a huge bipartisan vote, but action has stalled in the House.

“That is a huge priority for the industry and something we’ve been working on for a long time,” Sinders said. On Nov. 5, AH&LA and 80-plus hotel industry organizations sent a letter to House leadership calling on them to act. “We’re really looking for the House to take a leadership position and pass something so we can get this done before the end of the year.”

The new Republican majority may also make it more difficult to have Congressional oversight over achieving a level playing field within the short-term online rental marketplaces (STORM) and underscores that a state and local strategy is critical. In particular, reaching out to conservative leaning groups and stakeholders at the grass roots level, and highlighting safety and security concerns, will be essential, AH&LA said.

“I think we’re going to have to redouble our efforts with conservatives,” Sinders said. “It’s also a reason and reinforces the need we talked about all along for our strategy on short-term online rentals to focus on a state and local effort because that’s where a lot of these decisions are made. Combine that with the fact that there is this new Republican majority, and I think that makes it even more important.”