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Watch the Construction of One World Trade Center

WCOE News - Thu, 09/11/2014 - 10:53am
Oh how resilient America is! In light of the horrific acts perpetrated on September 11, 2001, we remember, we grieve, we rebuild, and we persevere. 
One World Trade Center, completed in 2014, is a shiny example of a large scale curtainwall. Photographer Benjamin Rosamond compiled a 2 minute time lapse video, spanning 3 years, resulting in a beautiful representation of the construction of this striking façade. I thought you may appreciate this construction video: http://vimeo.com/102482573
WCOE, USA salutes the women who were (and are) a part of this reconstruction effort.
God Bless the USA! 
By: WCOE member, Jane Hilboldt, Hilboldt Curtainwall
Categories: Latest News

Thursday’s Thoughts on Leadership: “Do or do not; there is no try!”

InteroMojo - Thu, 09/11/2014 - 9:00am

Yoda, the Jedi Master from Star Wars, offered the simplest piece of advice that saved the universe: “Do or do not; there is no try!” In other words, when you and your team decide to do something – a goal, project, program, etc. – then commit to it and see it through with gusto. Anything less than your full effort will likely result in unsatisfactory outcomes.

I offer one last passage from former Navy SEAL Commander Mark Divine’s book Unbeatable Mind to shed light on goal-setting and commitment. Divine’s suggestions allow for analysis and personal dialogue, and will keep you on the path of success:

  1. Be optimistic, and expect to win.
  2. Make sure that the goal is very motivating to you and your team.
  3. Seriously desire to win or achieve the goal. Ask yourself how badly you want the victory before you decide to act.
  4. Understand the difference between your skills and knowledge now and what will be required to succeed at a high level. If the difference is too much to overcome in the time frame you have, then you should “wave off” and choose another mission.
  5. Ensure that you have the mental and physical capital to pull it off in a way that does not impact other mission-critical goals.
  6. Once you commit, then “burn your boats,” press forward and never, ever quit!


Categories: Latest News

The Employee Health Care Protection Act Protects Small Businesses and Their Employees

House Small Business Committee News - Thu, 09/11/2014 - 12:00am

House Small Business Committee Sam Graves (R-MO) today released the following statement on House passage of the Employee Health Care Protection Act (HR 3522), which would give Americans in the group insurance market the opportunity to keep their policies in 2014 through 2019 and also give small businesses and their workers the option to choose plans even if they don’t comply with the Affordable Care Act’s rules.
“Complying with Obamacare has been a nightmare for small businesses. Under the health care law’s rules, costs are increasing for nearly two-thirds of small businesses that provide health insurance to their employees, according to a CMS report released in February. The frequent delays and changes with the Small Business Health Options Program (SHOP) have also made assurances of more competition and choice ring hollow. Despite the President’s promise that you could keep your plan, millions of Americans have had their plans cancelled, and many employees of small businesses are likely to get those notices this Fall. The Employee Health Care Protection Act is desperately needed because it gives small businesses and their workers the option to keep or choose the health plan they want, despite the ACA’s benefit requirements. This will provide more affordable options than what is available under Obamacare.”
The Committee has conducted extensive oversight of the Small Business Health Options Program this Congress. In June, Graves wrote to CMS Administrator Marilyn Tavenner to again request information about the SHOP enrollment. In January, Graves requested enrollment numbers and related information from Health and Human Services Secretary Kathleen Sebelius. To date, the information has not been produced.

List of SHOP delays and mismanagement:
• On April 1, 2013, the Obama Administration announced that the employer health insurance choice on the federal SHOP exchanges would be delayed until 2015, limiting employers to one single plan.
• On June 19, 2013, a GAO report requested by Chairman Graves confirmed the administration was ill-equipped for the implementation of the SHOPs, showing potential for “implementation challenges going forward.”
• On September 26, 2013, HHS announced the SHOPs online enrollment would be postponed from October 1 until November, forcing small businesses to enroll using paper forms. That same day, White House Press Secretary Jay Carney clarified the enrollment would begin on November 1, 2013.
• During a Ways and Means Committee hearing on October 29, 2013, CMS Administrator Marilyn Tavenner said the SHOPs would be operating at the end of November.
• On November 22, 2013, the Administration extended the Obamacare federal exchange signup deadline (for January 1 coverage) from December 15 to December 23.
• On November 27, 2013, the day before Thanksgiving, the Administration announced a fourth SHOP-related delay, postponing online enrollment for a full year.


Committee Leaders Applaud Passage of Employee Health Care Protection Act

Education & the Workforce Committee - Thu, 09/11/2014 - 12:00am
House Education and the Workforce Committee Chairman John Kline (R-MN) and Health, Employment, Labor, and Pensions Subcommittee Chairman Phil Roe (R-TN) issued the following statements after the House passed H.R. 3522, the Employee Health Care Protection Act:
“The president promised time and again if people liked their health care plan they could keep it,” said Rep. Kline. “But the American people are discovering the president failed to keep his word, leaving them with political gimmicks, cancelled policies, and broken promises. Today the House passed legislation to allow hard-working Americans to keep the health plans they like, providing workers and small businesses more affordable health care options. I urge the Senate to support the legislation without delay.”
“When President Obama reassured people repeatedly that if they liked their current health care plan they could keep it,” said Rep. Roe, “he was ignoring clear warnings that this promise couldn’t be kept. As a physician, I anticipated that insurance would become increasingly unaffordable and that many Americans would lose access to their existing policies. I am proud to join my colleagues in the House in taking this important step to alleviate some of the chaos the president’s health care law is causing, and I hope the Senate will do the same.”

America’s Entrepreneurial Decline At An All-Time Low

House Small Business Committee News - Thu, 09/11/2014 - 12:00am

The Small Business Subcommittee on Contracting and Workforce, under the chairmanship of Rep. Richard Hanna (R-NY), today conducted a hearing to examine the declining rate of small business creation over the past 30 years and the state of entrepreneurship during this latest economic recovery.
The rate of new business creation has dropped by nearly 50 percent from 1978. In 1978, there were 12 new businesses created for each existing business while in 2011 this dropped to 6.2 new firms.  Under the Obama Administration, entrepreneurial job creation has declined by one-third to 7.8 percent. By comparison, the average rate for entrepreneurial job creation under the previous three presidents was 11.3, 11.2, and 10.8.
“Our economy is facing a crisis that most Americans are not aware of – a decline in entrepreneurship,” said Chairman Hanna. “For the first time in over 30 years, more businesses are dying off than being created. Today’s hearing provided further evidence that Washington must do more to provide a better regulatory and tax environment for enterprise growth. We must not allow a declining rate of business formation and sluggish growth to be considered the new normal, and we should pursue policies which unleash the economic power of entrepreneurship and the American spirit."

Materials from the hearing are available on the Committee’s website HERE.

Notable Quotes:
John Dearie, Executive Vice President, Financial Services Forum, Washington, DC said, “New businesses create an average of 3 million new jobs annually, while existing firms of any age, type, or size, in aggregate, shed a net average of about 1 million jobs each year, as some businesses fail and others incorporate technology and become more efficient. Were it not for new businesses, there would be no net new job creation in most years.”
“…the policy needs and priorities of new businesses are unique. Start-ups are different from existing businesses. While they confront challenges similar to those of existing businesses, their ability to successfully navigate those challenges is more limited
Jonathan Ortmans, Senior Fellow, Kauffman Foundation, Washington, DC said, “Congress should… examine the role regulatory accumulation may play in depressing entrepreneurial activity. As new regulations are enacted on top of existing rules, businesses are faced with the challenge of navigating an increasingly complex regulatory regime. A handful of ideas have been proposed to address this challenge, including the establishment of a Regulatory Improvement Commission and the automatic sunset of major rules after a set amount of time.”
Chad Moutray, Chief  Economist, National Association of Manufacturers, Washington, DC, said, “Beyond these issues, the best way to increase firm formation is to have a growing economy. Policymakers need to adopt pro-growth measures that will enable manufacturers and other businesses to expand, to hire more workers and to invest in more capital spending. A healthy economy will encourage more participants, and that should spur more entrepreneurship and innovation. The pro-growth priorities of manufacturers include, but are not limited to: passing comprehensive tax reform, providing regulatory relief, expanding trade opportunities, enacting sensible energy policies, investing in more infrastructure, encouraging research and development, and developing the next generation of workers.”



Freight Rail Service: Improving the Performance of America’s Rail System

WASHINGTON, D.C. – Senator John D. (Jay) Rockefeller, IV, Chairman of the Senate Committee on Commerce, Science, and Transportation, today announced a Full Committee hearing on Wednesday, September 10, 2014, at 2:30 p.m. titled, “Freight Rail Service: Improving the Performance of America’s Rail System.”

The hearing will focus on rail service issues throughout the country, including congestion and locomotive and railcar shortages. Stakeholders will discuss the impacts of rail service issues on various industries and the economy.


Graves' Statement on Study Showing Regulatory Burden Costing Small Manufacturers

House Small Business Committee News - Wed, 09/10/2014 - 12:00am
House Small Business Committee Chairman Sam Graves (R-MO) today released the following statement regarding a new study from the National Association of Manufacturers that highlights the regulatory burden that confronts small manufacturers: 

“Small businesses face record levels of red tape under President Obama’s policies, and America’s small manufacturers can attest that the regulatory burden is a growing problem.  A study showing that federal regulations annually cost $2 trillion should be a wake-up call to this administration. Compliance costs are soaring for small businesses, which often do not have the employee expertise to decipher and handle more government paperwork and other mandates. The study finds that small businesses are annually spending $11,724 per employee to comply with federal regulations. The number increases for small manufacturers to $34,671 per employee, which means that small manufacturers are spending two-and-a-half-times more on federal regulatory compliance than large manufacturers. They are forced to invest in attorneys, accountants, consultants, tax preparers and other advisors, rather than their companies. Under this burden, the economy cannot sustain the growth needed to restore the good jobs and wages that can put more Americans back on track to budget for educational goals, homes and retirements. Small manufacturers and the entire economy would benefit from a major course correction away from burdensome government. It’s time for Washington policies to start working with small businesses for growth, not against them.”

Chad Moutray, the Chief Economist for the National Association of Manufacturers, will testify in tomorrow’s Small Business Committee hearing: The Decline in Business Formation: Implications for Entrepreneurship and the Economy.


Committee Examines SBA Management and Urges Transparency and Compliance with the Law

House Small Business Committee News - Wed, 09/10/2014 - 12:00am
The House Small Business Committee, led by Chairman Sam Graves (R-MO), today examined the priorities and plans of the Small Business Administration (SBA) with testimony from Administrator Maria Contreras-Sweet, who has led the SBA since April. The Committee examined the ability of the SBA to meet its statutory obligations to the programs that most benefit small businesses and their role in the economy. 

“The SBA is responsible for managing a set of core programs designed to help small businesses succeed, but the agency has a recent history of ignoring the law and being sidetracked by its own pet projects,” said Chairman Graves. “The Committee remains concerned that the SBA’s resources are not focused on reforms and programs that Congress has mandated. For instance, the number of small businesses trained in many of the SBA’s proven entrepreneurial development programs has been in decline while the agency spends millions of dollars to fund unauthorized efforts that duplicate services available from other federal agencies and the private sector. This diversion of resources also comes at the expense of implementing contracting reforms signed into law two years ago that will help small businesses compete in the federal procurement arena. Over 40 of the tasks assigned to the SBA to implement the law remain incomplete.”

Materials from the hearing are available on the Committee’s website HERE.


Rokita Statement: Hearing on "Improving Department of Education Policies and Programs Through Independent Oversight"

Education & the Workforce Committee - Wed, 09/10/2014 - 12:00am

A free and democratic society requires government transparency and accountability. We all want the federal government to serve the best interests of every American – those directly affected by federal programs and those whose tax dollars fund federal programs. To get there, we need to know what’s working and what isn’t. And we need to know the steps an agency should take to turn things around. 

The Department of Education administers roughly 80 programs tied to K-12 schools; 80 programs just at the elementary and secondary education level. It requires a massive bureaucracy to administer so many programs, and the greater the bureaucracy the greater the opportunities for mismanagement. That is why the House has taken action that would begin streamlining these programs, because a more efficient Department of Education can do a better job supporting our nation’s schools.

However, even the leanest federal agency can still be susceptible to waste, fraud, and abuse. We must remain vigilant in our oversight, both in Congress and the offices of our independent partners. The Government Accountability Office and inspectors general are at the forefront of this important effort. Their knowledge and investigative authority are vital tools in the fight against government corruption and mismanagement.        

Chairwoman Foxx noted several reports by GAO affecting higher education policies with recommendations that remain open. Here are just a few examples affecting K-12 education policies:                                                                      

  • “Education Could Do More to Assist Charter Schools with Applying for Discretionary Grants”;
  • “Students with Disabilities: Better Federal Coordination Could Lessen Challenges in the Transition from High School”;                                                          
  • “Selected States and School Districts Cited Numerous Federal Requirements as Burdensome, While Recognizing Some Benefits”; and
  • “Education Research: Further Improvements Needed to Ensure Relevance and Assess Dissemination Efforts.”
 Each report embodies a new opportunity to serve the American people more effectively and spend taxpayer dollars more wisely. President Reagan once noted, “Government is the people’s business, and every man, woman, and child becomes a shareholder with the first penny of tax paid.” I am fighting for all those people so that they can build better lives for themselves and their families. It is our responsibility to protect their tax dollars and ensure the American people receive the highest level of government service they expect. 

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Foxx Statement: Hearing on "Improving Department of Education Policies and Programs Through Independent Oversight"

Education & the Workforce Committee - Wed, 09/10/2014 - 12:00am
Independent oversight is a central tool to ensure the federal government spends taxpayer dollars wisely and administers programs and policies in the most efficient and effective way. When you consider the challenges facing our schools and workplaces, as well as the tsunami of red ink confronting taxpayers, the need for responsible administration of the federal government has never been more important.

The Government Accountability Office and each agency’s Office of Inspector General play vital roles in the oversight effort. The hard-working staff of these nonpartisan entities are the taxpayers first line of defense against  waste, fraud and abuse of tax dollars. They also help identify areas where programs and policies can be improved to ensure the American people receive the best services possible. 

Like all federal agencies, the Department of Education has a responsibility to take the concerns and recommendations offered by these independent investigators seriously. There is certainly no shortage of improvements needed at the department. In recent years, the GAO has issued numerous reports highlighting areas where programs and policies should be strengthened, including reports entitled:                                                                       
  • “Use of New Data Could Help Improve Oversight of Distance Education”;
  • “Foreign Medical Schools: Education Should Improve Monitoring of Schools That Participate in the Federal Student Loan Program”;                                                          
  • “Better Oversight Could Improve Defaulted Loan Rehabilitation”; and
  • “Improved Tax Information Could Help Families Pay for College.”
These reports are in addition to those routinely released by the Inspector General’s office. The examples I just cited are especially noteworthy, because they include recommendations not yet implemented by the department. Agencies may not agree with every recommendation in every report. In fact, this committee may question various recommendations from time to time. 

However, each independent report represents an opportunity for a federal agency to consider changes and improve. Whether it’s the solutions outlined by the GAO and IG offices, or a set of changes proposed internally by an agency, action must be taken. The American people deserve no less.

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Rockefeller Urges Surface Transportation Board to Address Needs of Businesses, Consumers in Evaluating Revenue Adequacy

WASHINGTON, D.C. – Senator John D. (Jay) Rockefeller IV, Chairman of the Senate Committee on Commerce, Science, and Transportation, last week submitted a statement to the Surface Transportation Board’s (STB) Ex Parte Proceeding 722 on Railroad Revenue Adequacy, urging STB to address the concerns of the shipper community, and focus on individuals and businesses who use the rail system, in order to move toward a more balanced system. 

“While the railroads prosper under the regulatory system established by the Staggers Act, today’s shippers and...

Federal Appeals Courts Reject Clean Water Act “Permit Shield” Defense

WLF Legal Pulse - Tue, 09/09/2014 - 10:39am
Featured Expert Column – Environmental Law and Policy by Samuel B. Boxerman, Sidley Austin LLP with Katharine Falahee Newman, Sidley Austin LLP In the past two months, two federal circuit courts examined the extent of the Clean Water Act’s (“CWA”) “permit shield” defense and reached similar conclusions—the defense cannot be used by a party that […]
Categories: Latest News

Regulatory Capital Rules: Regulatory Capital, Implementation of Tier 1/Tier 2 Framework

Office of Advocacy - Tue, 09/09/2014 - 9:45am

On September 4, 2014, the Farm Credit Administration (FCA) published a proposed rule on Regulatory Capital Rules: Regulatory Capital, Implementation of Tier 1/Tier 2 Framework.  FCA is seeking comments on this proposed rule that would revise the regulatory capital requirements for Farm Credit System (System) institutions to include tier 1and tier 2 risk-based capital ratio requirements (replacing core surplus and total surplus requirements), a tier 1leverage requirement (replacing a net collateral requirement for System banks), a capital conservation buffer, revised risk weightings

Categories: Latest News, SBA Advocate

GSA Seeks Public Comment on Environmental Impact Statement for Consolidated FBI Headquarters

GSA news releases - Tue, 09/09/2014 - 1:00am
GSA) and the FBI will prepare an Environmental Impact Statement to analyze the potential impacts of acquiring a consolidated HQ.

Graves: Waters of the U.S. Regulatory Overreach Protection Act Is Needed To Protect Family Farms and Small Businesses

House Small Business Committee News - Tue, 09/09/2014 - 12:00am

House Small Business Committee Chairman Sam Graves (R-MO) released the following statement in support of the House vote on the Waters of the United States Regulatory Overreach Protection Act (HR 5078), which would prohibit the Environmental Protection Agency (EPA) and the Army Corps of Engineers from finalizing their proposed rule that would redefine “waters of the United States” under the Clean Water Act:

“This unprecedented ‘waters of the U.S.’ proposal is indicative of many of the problems with the federal government,” said Chairman Graves. “This proposed rule creates more confusion, and applies an Washington-knows-best mentality to an issue with many variables at the local level. Under this expansive Clean Water Act proposed rule, all tributaries, including small streams and ponds that only flow irregularly or when it rains, fall under this definition as federally-controlled waters and would be subject to the Clean Water Act’s permitting and other onerous regulatory requirements. Despite the obvious consequences for farmers, home builders and other small businesses, the EPA did not conduct a Small Business Advocacy Review panel and the agencies did not assess the impact of the proposed rule on small businesses as required by law. The Waters of the United States Regulatory Overreach Protection Act is needed to protect family farms and small businesses from this gross overreach by this Administration.”

The Committee held a hearing on the Waters of the U.S. proposed rule on May 29, 2014. Small business leaders have overwhelmingly maintained that the rule creates more confusion, would be economically detrimental on many levels, and wouldn’t improve water quality.


Witnesses Warn: NLRB Assault on Franchise Businesses Will Destroy Jobs

Education & the Workforce Committee - Tue, 09/09/2014 - 12:00am
The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), today held a hearing to examine efforts by the National Labor Relations Board (NLRB) to rewrite the existing standard for determining joint employer status under the National Labor Relations Act. During the hearing, members listened as small business owners and other witnesses described how this radical effort would destroy the franchise model and American jobs. 

“Each day more than eight million Americans go to work at our nation’s 757,000 franchise businesses,” said Rep. Roe. “The franchise model has encouraged entrepreneurship, the growth of small businesses, and job creation …Yet today we are discussing an effort that will force small businesses to close their doors, or at the very least, discourage new small businesses from being created. Workers will once again be on the losing end of this Big Labor bailout, and at a time they can least afford it.” In July, NLRB General Counsel Richard Griffin issued an unprecedented decision that determined McDonald’s Inc. and certain franchisees were joint employers. Griffin has also urged the board to overturn decades of precedent in favor of a far more expansive joint employer standard. 

Labor law expert Todd Duffield explained the implications of this effort, “The [traditional] test is clear, it makes sense, and it’s worked for over 30 years … Congress should understand that these are not small, technical legal changes to labor law. The consequences of changing the board’s current joint employer standard threatens established business relationships and will cause significant economic upheaval.”

Those concerns were echoed by men and women engaged in the franchise business. Catherine Monson, chief executive officer of FASTSIGNS International, warned of the harmful impact that would be inflicted on employers and employees alike. “Such a rule change could completely upend the franchise model and have devastating consequences for franchising as an economic force in the United States … [I]ndividual entrepreneurs would be deprived of the opportunity to own their own business, franchisors would be denied the opportunity to expand their business, and millions of jobs will be lost.”

Clint Ehlers, a FASTSIGNS franchisee, shared these concerns: “If franchise owners have less independence and control, they can also expect lower profits. If profits are lower, there will be less demand from entrepreneurs to start franchised businesses … A revised joint employer standard will result in fewer new franchised businesses, at a time when our economy is thirsty for growth and expansion.”

Small-business owner and franchisee Jagruti Panwala added, “Mr. Chairman, I am no intermediary. I am a business owner and job-creator … I strongly urge this committee, and the National Labor Relations Board, to consider the tremendously adverse impacts on franchisees and workers.”

“The American people deserve to know what the federal government is up to and how it will affect their families,” concluded Rep. Roe. “Today’s hearing has helped shine a light on those consequences and I hope encouraged the NLRB to change course.”

To learn more about today’s hearing, read witness testimony, or to watch an archived webcast, visitwww.edworkforce.house.gov/hearings.

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ICYMI: The Student Loan Debt Solution Is All About Jobs

Education & the Workforce Committee - Tue, 09/09/2014 - 12:00am
By Representative Virginia Foxx (R-NC)
Many college graduates are delaying some of life’s most important decisions – including starting a family and buying a home – because they face a pile of debt with no job prospects.  A record number of young adults live with their parents and roughly half of college graduates under the age of 26 rely on mom and dad for financial help.  

President Obama wants people to believe that shaving a few dollars off monthly student loan payments will solve the problems plaguing graduates. That’s the essence of a proposal being touted on the campaign trail that would raise taxes and allow some graduates to refinance federal student loans. 

Let’s be honest: This scheme is more about helping politicians survive an election than helping graduates survive the Obama economy. Sadly this is not the first time young Americans have been used as pawns in political messaging.

In the summer of 2013, interest rates on most federal student loans were set to double. The president included a long-term, market-based solution in his budget proposal and urged Congress to pass it to prevent an interest rate spike. 

The Republican-led House passed a bill mirroring the president’s request. Yet the Obama administration rejected it and the Senate refused to back it, demanding instead a short-term fix.

Why the flip-flop? According to one press report, Democrats hoped to kick the can down the road to “rally younger voters to the polls” in the 2014 elections.

Fortunately, a long-term solution became law. We averted an interest rate spike and provided students and families more certainty. We did the right thing by taking the threat of an interest rate hike off the table, leading to some politicians’ current search for another election-year gambit to rally voters.

This political gambit fails to address the core of the problem: graduates entering a job market that lacks good-paying jobs. No monthly payment is affordable if you are underemployed or out of work.
The best way to help young Americans with debt burdens is to get our economy moving again – precisely what House Republicans are trying to do. The House has advanced more than 40 jobs bills, many with bipartisan support, that would open new doors of opportunity for struggling graduates. Yet all of these bills are collecting dust in the Senate. Sen. Harry Reid (D-Nev.) may not agree with every detail of every bill, but that is no excuse for his total inaction.

Recently, Congress did come together to pass a bipartisan fix for our broken workforce development system. We got the job done because the House acted, the Senate came to the table, and the administration got out of the way. Now we have a reformed law that will help put people back to work.

Our nation desperately needs more bipartisan successes like this. Job creation will remain the House’s number one priority until every graduate and struggling worker who needs a job can find one. Meanwhile, we are also taking steps to strengthen higher education for current and future graduates.

If we enact a series of commonsense reforms, the federal government can help more Americans turn the dream of a college degree into reality. For starters, Washington should encourage more innovation, such as competency-based education, so students can earn a degree at a faster pace and lower cost.

Federal policymakers should empower students and families to make smart decisions by enhancing financial counseling and delivering better information to students looking for the right college or university.

We should improve federal student aid. Many students take out loans when other financial assistance is available. It is time to streamline the confusing maze of aid and grant programs, and make it easier for students and families to apply for help.

Congress should also strengthen the options available for students to repay their loans. The current system encourages students to borrow more than they need and can afford. We should pursue policies that ensure low-income individuals get the help they need, while also protecting taxpayer dollars.

The House has already passed legislation addressing some of these issues, often with overwhelming bipartisan support. These efforts would make a real difference in the lives of students and they deserve consideration in the Senate.

Life after graduation should be filled with hope and excitement. For far too many, it’s become a time of hopelessness and anxiety. Countless college graduates are struggling because of the president’s failed economic and education policies.  Let’s stop treating young adults as political pawns and start working together to ensure they can build the future they deserve.

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Roe Statement: Hearing on "Expanding Joint Employer Status: What Does it Mean for Workers and Job Creators?"

Education & the Workforce Committee - Tue, 09/09/2014 - 12:00am
Each day more than eight million Americans go to work at our nation’s 757,000 franchise businesses. The franchise model has encouraged entrepreneurship, the growth of small businesses, and job creation. Countless men and women invest their tears, sweat, and savings to realize the dream of owning their own business, and the franchise model has helped turn those dreams into a reality. 

For most franchise employers, it’s tough staying afloat in even the best of times. It’s especially challenging when Washington bureaucrats change the rules in the middle of the game. In recent months, it’s become clear the Obama National Labor Relations Board is determined to rewrite a franchise model that has served workers, employers, and consumers well for decades. 

At the center of this effort is Richard Griffin. As the agency’s general counsel, Mr. Griffin has encouraged the board to blur the lines of responsibility between the franchisor and franchisee. Most recently, he determined McDonalds Inc. is a joint employer with its franchisees, a decision that no doubt sent a shockwave across the country. This radical effort is detached from reality for two important reasons. 

First, it pretends the franchise business model doesn’t exist. Since 1984, the NLRB has applied a straight-forward test to determine whether two separate entities are joint employers of a business establishment. The board analyzes whether the alleged employers share control over essential conditions of employment, such as hiring, firing, discipline, supervision, and direction of employees. Control over these matters must be direct and immediate.

The current standard makes perfect sense when one considers how the franchise model works in the real world. As chief executive officer of CKE Restaurants – a company that includes iconic brands like Hardee’s and Carl’s Jr. – Andrew Puzder is no stranger to the franchise business or this subcommittee. Here is how he has described the franchise business model:

The franchiser/franchisee relationship is built on a division of roles and responsibilities. The franchiser owns a unique system, which it licenses and protects as a brand. The franchisee operates an independent business under the brand's trademarks at one or more locations as a licensee. … Franchisees independently choose who they hire, the number of people they hire, the wages and benefits they pay, the training that such employees undergo, the labor practices they use, how their employees are monitored and evaluated, and the circumstances under which they're promoted, disciplined or fired.

Make no mistake, the current standard reflects the way franchise businesses have been owned and operated for decades. So why the sudden effort to dismantle policies that work? As the Wall Street Journal noted in reaction to Mr. Griffin’s decision:

This is a bonanza for trial lawyers who will be able to shake down the parent company for alleged labor violations at franchisees whose pockets aren't as deep. The other beneficiary is Big Labor. … Under Mr. Griffin's law, they can leap-frog their direct managers to corporate headquarters, which are more vulnerable to political pressure and less sensitive to local markets. 

Which leads to the second reason why this radical effort is so detached from reality – it fails to recognize the difficult challenges facing workers in the Obama economy. Our nation remains mired in a jobs crisis. Workers are frustrated. After six years of President Obama’s failed policies, I am frustrated too. Stocks prices on Wall Street are breaking new records while wages on Main Street remain flat. Meanwhile, the prices for essential goods and services like food, gas, and health insurance have gone up. 

That’s not right and working families deserve better. Yet today we are discussing an effort that will force small businesses to close their doors, or at the very least, discourage new small businesses from being created. Workers will once again be on the losing end of this Big Labor bailout and at a time they can least afford it.

I suspect some of my colleagues will protest today’s hearing. It will likely be noted the board hasn’t rendered a decision and suggested the committee is once again putting the cart before the horse. We’ve heard our colleagues sing that tune before and each time it has been followed by a radical shift in board policy. 

The American people deserve to know what the federal government is up to and how it will affect their families. Hiding the truth behind some process nonsense isn’t fair to the men and women who will have to live by the rules issued by this federal agency. Today’s hearing will help shine a light on those consequences and I hope encourage the NLRB to change course.

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