Legislation Impacting Printers: Topping the Agenda

WELCOME TO 2010! The New Year offers that opportunity at redemption, the chance to purge all of the evil associated with 2009. It was truly the year from hell. You know it's bad when even Tiger Woods walked away from the year sighing and rubbing the back of his head.

But turning the calendar page is not going to solve any of our ills. Psychologically, we need some separation from '09. But the structural damage needs to be addressed, as does the notion that once the economy is back on its feet, not everything will be back to normal. Is a fundamental shift afoot, with more and more printed content quickly draining from print shops and into the coffers of online marketing?

Well, don't lose sleep just yet. We can't solve all the maladies impacting the beloved printing community in one fell swoop or wave the economic prosperity wand. But we can share with you some of the most pressing legislative issues of interest to printers, along with a look at what's being done from an advocacy standpoint.

Here to help us with background and interpretations is Lisbeth Lyons, vice president of Government Affairs at Printing Industries of America (PIA). We'll take a view of five hot-button items that carry the most meaning to you.

One area we won't touch, however, is healthcare. The components of President Obama's golden child are volatile, with changes occurring on a daily basis. It would be an exercise in futility to speculate at this point, and it may be a done deal by the time you read this anyway. Visit www.printing.org or your favorite mainstream news organization for the latest updates on Congress' historic bill.

A look at the top five issues:

Consumer Products Safety Improvement Act

This old news is bad news. The bipartisan Consumer Products Safety Improvement Act (CPSIA) was actually passed by the Bush Administration, but given a one-year stay until testing and certification issues could be ironed out. This was a knee-jerk-reaction bill in light of the rash of products produced in China that were found to have dangerous levels of lead.

The CPSIA also covers phthalate, such as plasticizers that can be found in printing inks, coatings and adhesives. New content limits for lead and phthalates are already in effect, but testing won't start until Feb. 10, 2010.

Basically, anything that a consumer aged 12 and under may touch must now undergo advanced testing. Problem is, the testing/certification guidelines have not been set, yet the CPSIA is supposed to go into effect next month.

"Most of those on Capitol Hill would acknowledge there's a lot of unintended consequences with this bill, including the fact that children's books and other printed material—flash cards, workbooks, coloring books, children's menus, greeting cards—have to be subject to testing and certification," Lyons says. "It's mainly a cost issue for our members, and it's also very disruptive to the on-demand manufacturing process."

Currently, the PIA is working with the Consumer Products Safety Commission (CPSC) to obtain an exemption for printed materials. PIA already garnered some administrative relief by getting books that are printed CMYK on the Commission's approved list, and thus won't require testing. Those still vulnerable to testing would include books with spot inks, foil stamping, staples or adhesives.

Absent a blanket exemption for printed products—which is not likely at this juncture—PIA is working on obtaining a legislative fix, according to Lyons. Unfortunately, Congress and the CPSC are pointing at each other as to who can provide relief.

If nothing changes, printers and publishers stand to take a hard hit to the wallet. Bob Terry, engineering/environmental and safety manager for Hess Print Solutions in Downers Grove, IL—and an active voice in the PIA relief effort—notes that third-party tests can range from between $500 and $2,500. Costs vary on the makeup of the book, according to Terry. Even more distressing is the turn time on test results, which generally take three to six weeks, thus potentially devastating for delivery dates.

"To date, printers and suppliers have had hundreds of books, other printed matter, and individual components such as inks, coatings and coils, tested. There wasn't a single case of a test result found to be over the lead or phthalate limits," Terry remarks. "We've repeatedly asked the CPSC why ordinary books and other printed matter remain subject to the CPSIA requirements, since we have provided proof that books have been found to be safe using conventional printing methods."

Just prior to press time, the PIA formally petitioned the CPSC, requesting an extension of the current stay of enforcement.

Estate 
(Death) Tax

The Maya Calendar might predict that Dec. 21, 2012, will spell the end of the world as we know it, but for many businesses large and small, Jan. 1, 2011, is looking pretty bleak. That is the date when the Estate Tax repeal is due to sunset.

Some quick background: The so-called "death tax" repeal was phased in over a 10-year time frame as part of the Economic Growth and Tax Relief Act of 2001. The Act fully repealed the tax for 2010, but it returns New Year's Day next year at a rate of up to 55 percent. It strikes at the heart of the printing industry, traditionally a family venture.

Lyons points out that the death tax can deplete estates, force family owned businesses to lay off workers and liquidate, and coerce owners into decision-making that is death tax, rather than business, motivated.

Unfortunately, she says that the current Congress has made its intention clear that the death tax repeal will not become permanent. By the same token, there is enough motivation in reforming it to a less crippling level.

"It's an election-year issue," Lyons notes. "There are plenty of representatives and moderate senators from states with a lot of small businesses, farms and ranches, who are up for election in 2010. They don't want to be responsible for letting that tax completely fade away and then come back full force.

"We're pushing for reform, since repeal is off the table. There's a bill right now that we support, for example...that is a combination of raising the exemption level to $5 million per estate, per couple, and lowering the tax rate to 35 percent."

Another possibility is a one-year extension of the 2009 tax rates, which PIA doesn't support, since business owners need certainty in their planning and tax liability. The most likely scenario is that it gets addressed as part of larger, overall tax reform this year, according to Lyons.

Do Not Mail/Postal Reform

The sad state of the economy has somewhat stymied the Do Not Mail cause. For one, U.S. mail volume is down drastically, taking the air out of the anti-mail balloon. Secondly, environmental-based bills that have such a negative impact on jobs won't fly in a down economy and an election year.

In the past three years, more than a dozen states introduced Do Not Mail-type legislation, and all died on the vine.

"This is one issue where industry and labor stand shoulder to shoulder. That piques a lawmaker's interest when labor and industry both say they oppose something," Lyons notes. "It's a huge small business issue, since more than 300,000 small businesses rely on the mail to advertise; sometimes, it's their only means of advertising. So, we've been successful in beating this down with the economic message and by correcting some of the environmental myths that are associated with our industry."

Still, this is not the time to be complacent, according to those closely monitoring the Do Not Mail factions. Notable resolutions were introduced at the municipal level in enviro-friendly California hot spots such as San Francisco, Oakland and Berkeley. Municipal resolutions sent to the state have no teeth, but the groundswell of opinion they can generate could prove pivotal down the road.

"It is critical that we don't let our guard down on Do Not Mail," states Jim Andersen, president and CEO of IWCO Direct in Chanhassen, MN, and an active supporter of mailing rights. "A Do Not Mail Registry would mean more jobs lost in our industry and would cost American jobs as a whole, while doing further damage to our fragile economy. We must help our legislators and the public understand that Do Not Mail proposals are unnecessary because our industry already provides free and effective options for those who want to reduce the amount of advertising mail they receive."

One area of perhaps more immediate concern is a smaller scale, U.S. Postal Service reform initiative. When reform was enacted in 2006, most observers felt that it would need to be revisited in 10 years. Dramatically reduced mail and the recession have changed that. Lyons believes the number of postal facilities and labor costs are the two most pressing internal issues the USPS needs to reconcile.

Employee 
Free Choice Act

The Employee Free Choice Act (EFCA) was the Number 1 labor issue; President Obama campaigned on it. Perhaps Union Free Reign Act would be a more appropriate name.

What EFCA would do is throw away a democratic process of secret balloting, one that is overseen by the government, and replace it with a majority sign-up card check process. The name in itself is ironic—card check campaign signatures are made public to management, union officials and co-workers. Unlike an election, the card check period is open-ended, and union organizers can continue to scrounge for signatures until a majority is reached. No longer protected by the secret ballot, workers would be vulnerable to intimidation and other coercive tactics.

One of the features of EFCA is a binding arbitration requirement. Once a union is certified by the National Labor Relations Board, union and employer must begin contract negotiations within 10 days. Mediation may be brought in if a pact is not hammered out in 90 days, and arbitration could ultimately determine the final contract.

EFCA took a back seat in 2009 as attention continually drew closer and closer to healthcare. No votes were taken in either the House or Senate. Conservative and moderate House Democrats have already taken tough votes on climate change and healthcare, Lyons notes, and would like to see the Senate lead the charge this time around.

"Once healthcare is finished, there's going to be a real rush—especially in the Senate—to address EFCA," she says. "We don't support any kind of compromise; it's such a flawed premise to begin with that you can't improve upon it. We'll see some kind of movement on it early this year."

Climate Change/Cap and Trade

The impact of carbon dioxide on climate change has brought about calls for emissions restrictions. A cap and trade program would limit nationwide emissions of greenhouse gases, and require industries and energy companies to purchase emissions certificates to continue operations.

Certificates would be traded on an open market, permitting companies to purchase or sell credits based on their needs for emissions. Over time, the available certificates would be reduced, thus theoretically lowering emissions.

Given the importance of the elections in the fall, such a big-ticket item is not likely to see the light of day this year, according to Lyons. "If they don't start cap and trade in the Senate until March or April, and there's no consensus on it going into the summer...there's no way they're going to deal with anything that large after July in an election year," Lyons says. Still, the Obama Administration is committed to cap and trade. PI