Government Report: February 11, 2011

AAF Government Report

February 11, 2011

Clark Rector Jr., Executive Vice President – Government Affairs

Daniella Martinez, Federation Intern

Budget Cuts Across the US

With federal stimulus money being phased out and state tax revenues barely covering the effects of the economic downturn, governors across the country are having to reduce programs covering subjects such as education, healthcare, and local governments. 28 of 31 states that have released budget proposals for the 2012 fiscal year project shortfalls. 17 of those project shortfalls of more than 10%. States are facing a cumulative budget deficit of $175 billion through 2013 and many experts agree that tax revenue will not recover until the unemployment rate drops significantly. While many governors have opted to slash state government spending rather than raise taxes, many lawmakers believe that new sources of revenue must be found. AAF will be on the alert for possible state proposals to tax advertising in order to find new monies.

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Harkin Bill Targets Advertising

Senator Tom Harkin, D-Iowa, has reintroduced his `Healthy Lifestyles and Prevention America Act' or the `HeLP America Act'.  The legislation (S.174) has a number of provisions that would be very harmful to advertising.

The bill would disallow the federal tax deduction for the advertising and marketing of tobacco products.  It would allow the Federal Trade Commission to use the amorphous “unfairness” standard for children’s advertising rulemaking. Finally, the bill would allow the FTC to have so-called notice and comment rulemaking authority which would dangerously streamline the process and eliminate much of the opportunity for consumers, businesses and other interested parties to provide valuable input into proposed rules.

The legislation has not yet been scheduled for any hearings.

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Chamber of Commerce Targets Copyright Infringement

The U.S. Chamber of Commerce has said pushing Congress to pass laws tackling copyright infringement will be its top priority. Businesses on many fronts including record labels, Hollywood studios, and pharmaceutical companies are suffering due to copyright infringement and the sale of counterfeit goods on the Internet. The Chamber is hoping to get the Online Infringement and Counterfeits Act bill, which the Senate Judiciary Committee approved last fall, finally onto the floor. The bill will allow federal authorities to shut down websites with infringing content by seizing their domain names.

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D-Block Bill Introduced

The Chairman and Ranking Minority member of the House Homeland Security Committee introduced legislation to reallocate a chunk of the spectrum (ie: D-block) for use as a public safety network rather than auctioning it off. Chairman Peter King. R-N.Y., and Rep. Bennie Thompson, D-Miss., have included a funding mechanism in the bill, which the FCC has estimated will cost between $12 and $16 billion over the next 10 years. Funds would come from auctioning the Advanced Wireless Services (AWS) spectrum, which is currently allocated to the federal government and would bring in $5.5 billion. While President Obama has formally endorsed reallocating the D-block to public safety officials, Congress and wireless operators are split on the issue.

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