The talk on the Hill these days is the Lame Duck Session that is coming after the election and the great concern about the fiscal cliff with its forced 10 percent across the board cut in the federal government budget (known as sequestration) that is due to hit on January 1. Members of both parties are itching for the debate. However, a bipartisan group of Senators are working on a compromise.

The sequestration would impact boating by cutting funding for the Sport Fish and Boating Trust Fund, which provides money for fish restoration, boating safety, pump outs, fishing and boating outreach, and boating access. Cuts would also hit the Coast Guard and the Army Corps of Engineers. The Coast Guard could see funds for search & rescue and boating safety cut, and the Corps could see its boating programs cut, including dredging projects and lake management. Sequestration will hit all federal departments.

Without Congressional action, up to $600 billion of expiring tax cuts and automatic spending cuts are set to take effect at the end of 2012. It they hit all at once, the impact could amount to as much as a 4- to 5-percent reduction in gross national product. Most economists are now saying this lack of Congressional action would be enough to push the nation’s economy into another recession and major consequences for the financial markets. Others are saying it is a good step to get our nation’s fiscal house back in order.

The fiscal cliff is a result of an extension of the Bush-era tax cuts for two years that ends on Dec. 31 and the Budget Control Act of 2012 passed in August to extend the nation’s debt limit. That act included a requirement that the debt limit could not be increased without spending cuts equal to or greater than the amount of the debt limit increase.

So what will be the “grand bargain?” The Super Committee failed last summer. Can Congress rescue the economy and the nation’s budget? What are the options?

Option 1—Congress and the President could agree to delay the issue to some time in 2013. If this occurs, the Bush tax cuts would not expire and the tax increases would be delayed until after the next President takes office. GOP candidate Romney has asked Congress to follow this path if he wins.

Option 2—Compromise with partial passage of some Bush tax cuts and some spending cuts. The true nature of a compromise would be dependent on the election results.

Option 3—Over the cliff is a less likely scenario with Congress and the White House failing to reach any agreement whatsoever.

Option 4—The grand bargain, which is probably a long shot for the Lame Duck Session, would be to reach an agreement that would address spending reductions, tax reductions, and maintenance of the federal government for the near term. Remember, the fiscal cliff issue will come up again in 2013 when the debt ceiling issue comes before Congress.

Senator Charles Schumer (D-New York) introduced S. 3537, the Boating Capacity Standards Act, on Sept. 13. It would require the Coast Guard to set maximum passenger capacity and maximum weight capacity standards for recreational vessels no matter the size. It would also require manufacturers and operators of passenger vessels to permanently display in a legible manner and clearly visible to vessel passengers such passenger capacity requirements and a notice of the need to balance vessel weight to avoid capsizing.

The bill has no Senate co-sponsors and lacks a House companion bill. It has been referred to the Senate Committee on Commerce, Science, and Transportation. MRAA is working with NMMA on the bill.

On Sept. 20, Rep. Don Young (R-Alaska) introduced H. Res. 801 to recognize America’s hunters, anglers, trappers, recreational boaters, recreational shooters, the industry, state fish and wildlife agencies, and the U.S. Fish and Wildlife Service for their leading role in restoring healthy populations of fish, wildlife, and other natural resources. There is one co-sponsor. A companion resolution has not been introduced in the Senate. The resolution has been referred to the House Committee on Natural Resources.

The resolution thanks the manufacturers of fishing tackle, electric trolling motors and marine electronics and users of of motorboat fuel, recognizing a spirit of cooperation between users and government. Rep Young introduced his resolution because the abundance of game and nongame wildlife can be attributed to $14,000,000,000 in spending since 1939, the first year the federal government distributed money to the states. He also said this year is the 75th anniversary of America’s greatest conservative story and the founding of current angling, hunting and boating programs.

MRAA joined with the National Marine Bankers Association to voice strong concern about a recent proposed rulemaking by the Consumer Financial Protection Bureau that would adversely impact the ability of liveaboards to obtain financing on boat purchases.

In a letter responding to a Federal Register docket, MRAA President Matt Gruhn and Chairman Dave Foulkrod expressed their concern that the definition of “dwelling” would include houseboats, and other vessels and vehicles in a new rule being written to enforce the Congressionally passed Dodd-Frank Bill. This new definition would have the effect of severely reducing the availability of credit to individuals who live aboard boats.

“The problem, as we see it, is marine lenders often times do have the expertise or ability to lend on marine loans and the new definition of ‘dwelling’ complicates the issue,” said Gruhn and Foulkrod in the letter. By including liveaboard vessels as dwellings, marine loans issued to these individuals will be exposed to the disclosure requirements of Dodd-Frank intended for real property.

MRAA is concerned too few lending institutions are currently writing boat loans, and this change to established procedures will reduce further the number of organizations willing to make boat loans.

MRAA asked the CFPB to re-consider its language defining “dwelling” so as not to severely reduce the availability of credit to the group of people who choose to live aboard a boat.

The following link will take you to a letter that 50 GOP Freshmen Congressmen signed to the Ways and Means Committee, encouraging passage of the extenders (Bush Tax Cuts). The committee is expected to be reviewing the extenders soon.

The Marine Retailers Association of the Americas is encouraging passage of the tax extenders and has supported this letter. Failure to pass the Bush Tax Cuts at this time may have negative consequences to the economy.

Click here to read the letter.

Larry Innis
MRAA Legislative Affairs