BMJ Stone
EZG Manufacturing
Federated Insurance
Fraco USA, Inc.
Hohmann and Barnard, Inc.
Hydro Mobile, Inc.
iQ Power Tools
Kennison Forest Products, Inc.
Mortar Net Solutions
Non-Stop Scaffolding
Pullman Ermator
Southwest Scaffolding
Tradesmen's Software, Inc.
January 19, 2011 7:00 AM CST

Lame Ducks

Wrapping up the 111th Congress

By ,

Before November’s new Members of Congress officially begin their terms, the 111th Congress was attempting to finish legislation and adjourn for the year. The two issues most pressing – expiration of the 2001 and 2003 tax cuts and various tax extenders, and funding for the federal government – were being dealt with just before Christmas.

Both the Senate and the House have passed, and the President will sign, a compromise tax bill that includes many provisions that otherwise would expire at the end of 2010:

  • Extends through 2012 the 10 percent, 25 percent, 28 percent, 33 percent, and 35 percent income tax brackets

  • Renews and extends for 13 months expired funding for emergency unemployment benefits

  • Cuts the Social Security payroll tax from 6.2 percent to 4.2 percent for one year

  • Allows businesses to write off the full cost of capital investments for one year

  • Extends the “patch”to prevent millions of additional taxpayers from having to pay the alternative minimum tax (AMT).
Another central component of the tax bill is an issue that the MCAA has worked very hard throughout the 11th Congress: the estate tax.As an active member of the Family Business Estate Tax Coalition, the MCAA has urged Members of Congress to fix the state tax and prevent tax rates from returning to a high level for 2011. The current bill language would make changes to the estate tax, effective Jan. 1, 2011, in the following ways:
  • A 35 percent estate,gift and generation-skipping tax rate

  • A $5 million reunified inflation-adjusted exemption for estate, gift and generation-skipping taxes

  • An estate executor election for decedents dying in 2010.
As of this writing, the Senate and House are considering legislation to keep the federal government funded for all or parts of fiscal year 2011. The MCAA continues to work with both the House and Senate on language that would encourage the Department of Defense (DoD) to establish 50-year life-cycle cost as a criterion for the award of design and construction contracts for military construction projects.

The MCAA and our allies have met with DoD and Congressional officials to argue that pursuing a 50-year life-cycle cost criterion would benefit taxpayers significantly, as operations and maintenance costs will lower. Further, there are other safety, environmental, and efficiency benefits that are in the best interests of our military men and women and the U.S. taxpayer. We remain hopeful that the final spending bill passed by the 111th Congress will include this important language.

The Senate has been unable to push for a long-term omnibus spending bill, and it is looking more likely that both the House and Senate will pass a short-term continuing resolution that will fund the federal government through February 2011. At that point, the new Congress will have to set spending levels for the remainder of the fiscal year (through Sept. 30, 2011) and begin working on funding for fiscal year 2012, which begins on Oct. 1, 2011.

As discussed in previous columns, there will be much change in the membership of the 112th Congress. New members, new committee chairmen, and a new legislative agenda and outlook will continue to provide opportunities for the MCAA to work with our allies on the issues important to us and see good public policy enacted.We look forward to the convention in Las Vegas and speaking with you about opportunities for legislative wins.

About the Authors

Matthew B. Keelen, founder and President of the government affairs firm The Keelen Group, is a widely known and highly regarded lobbyist and political strategist with experience building relationships with key figures and a reputation for consistently delivering hard-earned victories. Acknowledged for his innate ability to establish and develop long lasting political relationships, Keelen has dozens of time-tested relationships with Members of Congress, including many who are in positions of considerable influence today. To learn more about The Keelen Group, visit

Michael J. Falencki is the Chief Operating Officer and Vice President of policy for The Keelen Group, a government relations/lobbying, consulting and strategic services practice in Washington, D.C. Michael spent more than four years working on Capitol Hill and has spearheaded policy, legislative, and communications strategies for a host of clients, including the Mason Contractors Association of America, AT&T, The Society of the Plastics Industry and Archer Daniels Midland. To learn more about The Keelen Group, visit


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