112th Congress what's in store--legislatively speaking--for business? Staff from FEI's Washington, D.C., office went right to the source--senators from both sides of the aisle--to find out what's on tap for business in this year's session of Congress.

• Author: Crooks, Christina
• Position: Legislation

A5 the United States Senate and House of Representatives settle in to the work of the 112th Congress, it appears to be anything but smooth sailing ahead for business. Several divisive issues to be addressed on the congressional agenda could significantly impact businesses for the foreseeable future.

President Barack Obama has called for an overhaul of the tax code and tax reform for corporations, while expressing the need to do so in a way that does not impact the nation's already historically high deficit. Health care and financial reform laws enacted in the last Congress are expected to face intense scrutiny in the new Republican-controlled House. But any significant changes would most likely be blocked in the Democratic-controlled Senate or by the president's veto pen.

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With numerous major issues on the table, what policy changes can businesses expect this year? FEI went straight to the source to ask lawmakers from both sides of the aisle to give their perspectives on the issues that senior-level financial executives should watch during this Congress and how these executives can play a role in the policy debate.

For this article, FEI staff spoke with Sen. Harry Reid (D-Nev), majority leader of the Senate; Sen. John Boozman (R-Ark.), who served five terms in the House before being elected to the Senate in 2010; and Sen. Thomas Carper (D-Del.), a former member of the House and governor of Delaware. The proposals under discussion for tax reform, health care and financial reform are reviewed below and from all estimates this Congress is gearing up to be one of the busiest in recent memory.

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Uncertainty & Tax Reform

With a new Republican House majority and the universal recognition that deficit reduction, spending and tax reform go together, the time could be now for significant tax reform much in the style of 1986.

At a March hearing of the Senate Finance Committee, Chairman Max Baucus (D-Mont.) pointed out that there have been more than 15,000 changes to the tax code since 1986. With so many changes, the tax system has become complicated and opaque to U.S. businesses. Further, businesses are left with decision-making that is hindered by uncertainty of the laws and regulations--often not knowing if something is going to be renewed.

For example, a recent federal study notes that in the 1990s there were less than one dozen tax provisions that required annual renewal. At the time of this publication, there are more than 140 provisions that require yearly congressional attention.

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Tax reform proposals have been...