Capitol News
There is activity in each of the branches of government that can affect the green industry, even if the issues do not specifically involve floriculture. This month, immigration reform, interests rates and a pending Supreme Court ruling are making headlines across the nation.
Immigration Reform Debate
Since early March, immigration reform has dominated the headlines, spurring heated debate, nationwide protests and media attention. The outcome of the debate is paramount for growers who use immigrant labor to supplement their workforces. Currently, the H-2B visa category allows U.S. employers in industries with peak load, seasonal or intermittent needs to augment their existing labor force with temporary workers.
The proposed bill that industry organizations are backing, introduced by Sen. Arlen Specter (R-PA), is referred to as the "Chairman's Mark." It has three major components: 1) Security and enforcement enhancements, including a phased-in requirement for employers to electronically verify the eligibility of prospective employees. 2) A temporary worker program known as H-2C, which would allow foreign guest workers to fill mostly non-agricultural jobs for a three-year term, renewable once. 3) Acknowledgement of the undocumented workforce by allowing most undocumented workers a chance to obtain a non-immigrant visa to stay and continue working indefinitely, subject to conditions.
A compromise reached between Senate parties on April 6, 2006, separates illegal immigrants into three groups: "Illegal immigrants here more than five years could work for six years and apply for legal permanent residency without having to leave the country. Those here two years to five years would have to go to border entry points sometime in the next three years, but could immediately return as temporary workers. Those here less than two years would have to leave and wait in line for visas to return," stated the Associated Press. President Bush expressed his support of the compromise proposal.
At press time, the bill remains in the Senate while members are recessed for the Passover/Easter holiday. Upon their return, should Senate leaders get the 60 votes necessary to advance the bill, it will move to a conference committee to resolve differences with a House version. Recently, Senate and House Republican leaders Bill Frist (R-TN) and Dennis Hastert (R-IL) indicated they would like a provision that makes illegal immigration a felony dropped from the bill.
If enacted, the immigration reform bill could prove problematic to execute. "Among other things, it places a tremendous burden of documentation and verification on millions of immigrants themselves, the federal bureaucracy and employers," the Wall Street Journal explained in a recent issue.
Interest Rates Rising
The Federal Reserve recently raised short- and long-term interest rates, a move that is pushing up the cost of business and consumer loans. Even a small increase can raise monthly payments by hundreds of dollars.
Ben Bernanke increased short-term rates one-fourth of a point — from 41Ú2 to 43Ú4 percent — on March 28 during his first policy meeting as the new Federal Reserve chairman. The increase is the Fed's fifteenth consecutive quarter-point raise since June 2004.
The statement released after the meeting stated, "some further policy firming may be needed to keep" growth and inflation risks "roughly in balance." The Fed indicated that the statement's language is intended to keep options open and does not imply that rates will rise in the future.
Roughly a week later, long-term interest rates rose on April 3. The foundation for long-term rates is the yield on the 10-year U.S. Treasury note; it rose as high as 4.905 percent. The upturn is partly due to economic growth in the United States and abroad, reported the Wall Street Journal. While the Fed controls short-term interest rates, it exerts less influence over long-term rates; other factors affect them, including expectations about inflation and investor demand for bonds.
Verdict Watch
Small-business advocates have been watching the Supreme Court case of Rapanos v. U.S. Army Corps of Engineers closely, especially with new jurists John Roberts and Samuel Alito now seated. The outcome of the case "…in favor of the feds probably would expand the government's authority to regulate construction, making building of all sorts — commercial, industrial and residential — more costly. The decision also will be viewed as a key indicator of the court's broader attitude toward property rights," reported Fortune Small Business magazine.
The case concerns John Rapanos who started clearing a 200-acre plot in Midland, Mich., to build a shopping center. He was working on what his lawyer calls a lot of dry, sandy land. State and federal agencies objected to Rapanos' actions because he did not possess a wetlands permit.
The land is 20 miles from the nearest navigable water source, the Kawkawlin River, though a man-made drain on the property connects to a creek that flows to the river. Federal officials claimed a "hydraulic connection" to the river, reported Fortune Small Business.
At trial, Rapanos was found criminally negligent of violating the U.S. Clean Water Act of 1972. He appealed to the Supreme Court, which heard the case in late February. "The developer argues that the federal government is abusing its authority to protect the environment. If the government prevails, his lawyers say, 'every puddle will have the full protection of the federal government,'" reported Fortune Small Business. A verdict is still pending.
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