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The 2010 Legislative Agenda — Employee Ownership and Public Policy
By Anthony Mathews
The U.S. economy is stretched to an extent never before contemplated, and the solutions to that crisis are creating deficits that casually throw around that “t” word that stands for an amount of money that we would probably respect if we could really wrap our minds around it — but we canï¿½t so we don’t. We all agree that something has to be done to rehabilitate our economy, and it is inevitable that eventually every tax break will be examined in that process. There are few, if any, that are superior to the tax advantages ESOP companies live with every day, so ESOP proponents have a responsibility to continually prove that those advantages are a worthwhile investment that pays great dividends to society as a whole.
ESOP proponents efforts must include not only defensive response to challenges but, even more importantly, proactive advocacy. They must be proactive both to support favorable legislation and to influence public policy.
On the legislative front, there is not a great deal on the horizon in the 111th Congress. House Resolution 692 introduced by Dana Rohrabacher; House Resolution 204 proposed by Congressman Maurice Hinchey; and H.R. 3586 introduced by Congressman Ron Kind, which were proposed by members of both parties and supportive of ESOPs and employee ownership, were discussed in detail in an earlier volume of our newsletter. In yet another increasingly rare bi-partisan effort, Congressman Charles Boustany, R-La., and Congressman Earl Pomeroy, D-N.D., recently added to the legislative agenda by jointly proposing H.R. 5207, the ESOP Promotion and Improvement Act of 2010. Most recently, Senate Bill 1612 introduces identical provisions into the Senate’s legislative agenda.
These companion bills propose to:
The ESOP Association advises that all these pieces of legislation offer ESOP proponents a significant opportunity to both support favorable legislation and work to shape public policy related to employee ownership by writing to legislators encouraging their support of these pieces of legislation specifically and of employee ownership in general. All who are interested see employee ownership as a significant cornerstone of the recovery of our economy. The association offers an advocacy kit that can be very useful in both efforts at www.esopassociation.org.
For those of us who have an interest in employee ownership (in whatever form that might take), there is no more important arena for our attention than the arena of public policy. In the past, the public image of ESOPs, especially, has been shaped in large part by spectacular disasters. When you ask the average person about ESOPs you will get references to ENRON, Worldcom, United Airlines, The Tribune Company, and a few others. Those examples, any knowledgeable person will confirm, represent both a very small percentage of such efforts in the country and, more importantly, represent anomalies — rare occurrences in contrast to the many installations of employee ownership programs (including ESOPs as well as broad based stock option programs, worker cooperatives and many other forms) that are busily creating wealth for employee owners all over the country.
It is becoming even more important for employee ownership proponents to tell those real, typical stories to counteract the image that employee ownership has developed from those high-profile failures. Stories need to be told of the many companies that were headed to closure or sale to private equity or some other outcome in that array that, instead, become machines for success and wealth creation for significant numbers of people who would not otherwise have it, thereby stabilizing communities and families while generating real success and growth in a world that is increasingly competitive. Most important of all, employee ownership proponents must make the case that employee ownership (in whatever form) improves lives. That’s the message that needs to be delivered — aggressively, compellingly and constantly.