Avionics News January 2013 - 19

BELTWAY BRIEFING
BY J A M E S A . H U N T E R , G O V E R N M E N T R E L A T I O N S D I R E C T O R , A R E N T F O X L L P

Fiscal Cliff Consumes Fall Agenda in Washington
sibly some minor changes to entitlement programs. President Barack Obama and congressional RepubAnother possible outcome was that Congress would licans spent the fall sparring over tax rates for wealthy simply extend the Bush tax cuts for middle- and households, as middle-class tax cuts and agency budgets hung in the balance. In order to avert the so-called working-class families, delay sequestration, and adfiscal cliff, Congress and the president were forced dress budget cuts and entitlement reform when the president requests an increase in the nation’s to try to work out an agreement on how to debt limit early this year. address the Bush tax cuts, which were set Regarding agency budgets, even if sequestrato expire on Dec. 31, 2012, and budget setion is delayed, the FAA will inevitably see a questration, which was scheduled to begin reduction in its budget because Republicans will this month and result in approximately $110 continue to insist on domestic spending cuts billion in cuts to federal agencies in 2013. as part of any future budget deal. These cuts An agreement had not been worked out bewill impact certification, inspections and other fore we went to press, and as of early Decemservices and force the FAA to make tough deciber, neither party had conceded ground on the James A. Hunter sions about how it allocates its resources. question of raising tax rates on the wealthiest 2 percent of households. The president had proposed raising $1.6 trillion in new revenue derived Other Issues from these taxpayers, while Republicans offered a $2.2 In addition to the fiscal cliff, Congress spent Detrillion plan, which included $800 billion in new revenue cember negotiating a mix of individual and business by limiting tax deductions, and $600 billion in spendtax provisions, such as the Alternative Minimum Tax ing cuts and savings from entitlement programs. Neither exemption and the Research and Development Tax party viewed the other’s proposal as a serious offer. Credit that are important to big and small businesses Due to the disagreement over tax rates for the alike. This tax package is bipartisan and was on tap to wealthy, it appeared that lawmakers may not be able to pass Congress before the end of the year. reach an agreement before the end of the year. Failure Lastly, another matter of concern that has threatto reach a deal means tax rates will go up to pre-2001 ened to impact interaction with FAA officials is a prolevels for almost all taxpayers, including those that posal attached to a postal reform bill that would place own a business and file an individual return. Likewise, limits on agency-sponsored conferences and require failure to address sequestration means the Federal federal workers to provide greater justification for atAviation Administration’s budget will be reduced by tendance at industry events. This proposal, sponsored more than $1 billion in 2013. by Sen. Tom Coburn (R-Okla.) and Sen. John McCain As we went to press, it appeared more likely, (R-Ariz.), passed the Senate unanimously last April. however, that the president and Congress would agree However, as we went to press, the final postal reform to a last-minute, short-term fix that would include bill had not yet been negotiated by House and Senate some increase in revenue via the top 2 percent of leaders, and its chances of passage appeared greatly households, along with some spending cuts and posdiminished as a result. 

AVIONICS NEWS

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JANUARY

2013

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Avionics News January 2013

Table of Contents for the Digital Edition of Avionics News January 2013
