The 111th Congress has convened and the Democrats have picked up seats in both the House and Senate.  The country also has a new President, Barack Obama, who will take office on January 20.  President Obama will have to deal with some of the most difficult issues a new President has faced in modern times.

Many are wondering what these changes will mean for the horse industry.  “For the most part, issues affecting the horse industry are not partisan,” noted AHC president Jay Hickey.  “Like most industries, our legislative concerns don’t clearly split along party lines.  Democrats may approach issues from a different perspective than Republicans, and vice-versa, but the industry works on a bi-partisan basis with members of Congress from both sides of the aisle.”  Nonetheless, since the Democrats now hold larger majorities in both houses, there may be less partisan “gridlock” that has prevented Congress from acting on a lot of legislation in the past.  But the margins are not so great that the Democrats can simply push through whatever they want.  They will still need some Republican support, particularly in the Senate, to pass legislation.

In the “new” category, Congress will have to deal with a down economy, “bailouts” of various industries, a giant tax stimulus package to assist industries and states and preserve jobs, and to fund energy alternatives, health care and two wars.  So there will be many new issues that impact the horse industry tangentially.  But Congress will also be dealing with issues that are important to the horse industry that were not dealt with in the last Congress and will be part of the legislative mix.

Tax issues and the state of the economy will have a staring role in the coming months.  The inclusion of the Equine Equity Act in the farm bill that was passed in the last Congress was a victory for the horse industry.  Beginning in 2009, all race horse will be depreciated over 3 years, regardless of when they are placed in service.  Previously, race horses were depreciated over 3 or 7 years.

But the second part of the Equine Equity Act, reducing the holding period for horses to one year from two for capitol gains purposes, was not passed.  This issue will once again be pushed by the horse industry, along with the Pari-Mutuel Conformity and Equality Act, which would repeal the 25% withholding tax on winning wagers over $5,000 when the odds are at least 300-to-one.

The increase of the Section 179 expense deduction to $250,000 and the reinstatement of bonus depreciation were benefits to the horse industry that were included in last year’s tax stimulus bill.  Both expired at the end of 2008, but it is likely that Congress will extend both provisions in this year’s stimulus bill.  As Congress considers these bills it will be important to remind Congress of the $102 billion impact of the horse industry and the 1.4 million jobs the industry supports.

In the “old” category, the last Congress tried to enact comprehensive immigration reform several times, but failed.  The problems with immigration and a large undocumented work force have not gone away and Congress will have to deal with this, although it is not likely to be one of the first issues to be considered.

The horse industry relies heavily on foreign labor.  Some of this labor is provided by the H-2A agricultural and H-2B non-agricultural temporary worker programs, which are costly and inefficient.  In addition, the H-2B program is capped by Congress at 66,000 workers a year, making competition for these workers from all industries intense.  The horse industry also relies on a large number of undocumented workers who must be considered in any comprehensive package.

The AHC supports a comprehensive approach to our immigration problems that would address a better guest worker program and a way to handle undocumented workers in the U.S.  The last Congress considered the AgJobs bill that dealt specifically with undocumented agricultural workers and would have reformed the H-2A program.  In addition, the Save Our Small and Seasonal Businesses Act would have provided some cap relief to H-2B users.   Both of these bills will be debated again.

“The agricultural industry laid a good foundation for reform with the AgJobs bill and that will be pushed again in this Congress,” said Hickey.  “Senator Obama and Representative Hilda Solis (D-CA), who has been nominated to be Secretary of Labor, supported AgJobs, so there is reason to hope for action in this Congress.”

Internet gambling will continue to be a topic in Congress.  The Unlawful Internet Gambling Enforcement Act (UIGEA), passed in 2006, contains provisions protecting racing’s activities allowed under the Interstate Horseracing Act (IHA).  However, rules adopted by the Bush Administration in November could prove troublesome to the industry.   It is likely there will be efforts to modify the restrictions on internet gambling during this Congress in order to regulate, license and tax it.  The horse industry will need to watch any such efforts closely to ensure that any legislation does not adversely impact the current interstate wagering allowed on pari-mutuel horse racing under the IHA.

Last Congress several bills were introduced to prohibit the shipping, transporting, or sale of horses for slaughter for human consumption, including the American Horse Slaughter Prevention Act and the Prevention of Equine Cruelty Act.  Neither bill was voted on in the House or Senate, but it is likely the same bills will be reintroduced.  The election of Congressman Henry Waxman (D-CA) as chairman of the House Energy and Commerce Committee, replacing Congressman John Dingell (D-MI), could impact the passage of the slaughter prohibition bill.  That committee has jurisdiction and Congressman Waxman was a cosponsor of it in the last Congress, while Mr. Dingell was not.

Members of Congress can be expected to look at animal welfare in general, including the welfare of horses, in the 111th Congress.  Some members raised welfare issues regarding racing and showing last year and there is no reason to think that will not be a concern again.

Legislation was introduced in the last Congress to ensure equestrians are not unfairly excluded or removed from federal public lands to which they have traditionally had access, including the Right to Ride Livestock on Federal Lands Act and the Preserving our Equine Heritage on Public Lands Act.  The American Horse Council will be working to make sure similar legislation is reintroduced.  But we will need substantial support from horse owners and recreational riders to have any chance of passing this legislation.

Other bills that could impact the horse industry are likely to come up as well, including the Travel Promotion Act, which could positively impact equine tourism.

No matter what legislation is introduced in the coming months, it will be important for the new Congress to hear from members of the horse industry.  This is why the AHC, in cooperation with its member organizations, has launched a new grassroots initiative called the Congressional Cavalry program.   All individual horse owners, breeders, veterinarians, trainers, competitors, recreational riders, service providers, or anyone who desire to join the grassroots efforts of the horse community in Washington are encouraged to join.  It costs nothing and the AHC will let you know if legislation that effects the horse industry is introduced and when and how to contact your members of Congress.  If you would like to sign up for this program or have any questions please call the AHC (202) 296 4031 or email ahc@horsecouncil.org.

A new Congress has convened, just like it does every two years.  Some of the players may change, but if the industry works together as it has in the past, we will adjust and continue to be successful.