A quick glance at the results of the mid-term elections might leave one feeling that the ESOP community will face challenging days ahead. Certainly the retirement and defeat of key ESOP advocates in Congress—primarily in the House, where tax laws originate—pose a challenge. But there is good news too.
The “Bad” News
First, let’s look at the more challenging news.
We will lose some crucial, long-time ESOP Advocates next year.
In particular, three key friends of the ESOP community—and influential members of the House tax committee—won’t be returning to Congress in 2019: Representatives Erik Paulsen (R-MN) and Peter Roskam of (R-IL) were defeated in their re-election bids. Rep. Dave Reichert of (R-WA) retired.
Another major loss: Representative Virginia Foxx (R-NC)—the Chair the House Committee with jurisdiction over the Department of Labor and a longtime supporter of ESOPs—will lose her influential post when the Democrats take control of the House in January.
On the key Senate tax committee that will be involved with ERISA law changes, three ESOP champions will not return: Senators Dean Heller (R-NV) and Claire McCaskill of (D-MI) were not re-elected; Sen. Orin Hatch (R-UT) will retire.
Sen. Hatch’s departure also will be felt on the Senate Committee that has jurisdiction over the Department of Labor.
On the more positive side, turnover in other key Senate committees was less pronounced than in the House.
Support Continues to Grow
While we will be bidding farewell to many elected officials who have supported ESOPs so well, we also are greeting a host of new supporters.
In 2018, 39 new ESOP supporters emerged: 30 in the House and 9 in the Senate. Of these new supporters, the vast majority (33) will return to Congress in 2019.
This year our ESOP advocates in Congress took several actions that provided a strong show of support for ESOPs.
In October, at the start of Employee Ownership Month, 27 influential members of the House of Representatives wrote a letter urging President Trump to rein in the DOL’s overzealous and unfair enforcement of regulations that apply to ESOP companies.
In August, the Main Street Employee Ownership Act was signed into law. The measure is designed to makes it easier for small companies to make use of the Small Business Administration’s 7(a) program to finance their transition to become employee-owned businesses, such as ESOPs.
The number of ESOP advocates gained in 2018 is a testament to you, our members. By visiting elected officials in Washington, and—more importantly–inviting them to visit you in their home districts, you provide an indelible, first-hand view into the world of employee ownership. That kind of experience turns doubters into believers, and believers into staunch supporters.
If we continue to show members of Congress what employee ownership looks like, our supporters on Capitol Hill will continue to grow—and they will continue to take on prominent positions in the key House and Senate committees.
The net result: Positive ESOPs laws will remain—and perhaps even expand—into 2019 and beyond but only with your continued efforts and outreach.