Earlier this month, over 40 HR professionals from Georgia [pictured right with Rep. John Lewis (D-GA) - fourth from right], Maryland [pictured below with Senator Ben Cardin (D-MD - third from the right], Virginia and the District of Columbia traveled to Capitol Hill to conduct a series of meetings with their elected officials in support of extending the tax preference of employer-provided educational assistance under Section 127 of the tax code. Their discussions, conducted at a time when the nation and Congress must decide how to address the approaching ‘fiscal cliff’ of the $16+ trillion federal debt and a series of tax cuts set to expire at the close of 2012, couldn’t have been more timely.
Originally enacted into law in 1978, Section 127 affords employers to offer up to $5,250 per year tax-free to employees for pursuit of an undergraduate or graduate degree. Section 127, which has been extended numerous times throughout its history and has proven to be a valuable recruiting and retention tool for employers, is set to expire at midnight on New Year’s Eve 2012.
During their meetings, a number of which were conducted with their representatives and senators, members shared their personal stories of how employees and employers have benefited from this valuable tax break. When questioned about the budgetary impact of extending the benefit once again, members argued that while the program has a ~$1 billion price tag each year, investing in America’s workforce pays significant dividends down the road in the form of a more educated workforce, enhanced earning potential for employees receiving the benefit and increased tax revenues resulting from higher wages.
Through its Day Inside the Beltway program, SHRM provides state councils and chapters with the opportunity to enhance the visibility of the HR profession among lawmakers and their staffs. Such visits, coupled with in-district meetings by members of SHRM’s Advocacy Team (A-Team), help to educate lawmakers about the role HR plays in today’s workplaces, as well as how such employer offerings – like the Section 127 educational benefit – are a ‘win-win’ for the country.
The Impending Fiscal Cliff – It’s for Real!
Election Day (November 6) is less than 50 days away. While the country understandably is focused on the upcoming elections, a major event is likely to occur in the weeks after Congress returns to Washington following the elections. By then, we’ll know whether President Obama or Governor Mitt Romney will be sworn in as president on January 20, 2013. We’ll also know which political party will control the U.S. Senate and House of Representatives when the 113th Congress convenes on January 3.
What we won’t know is what, if anything, President Obama and the returning Congress will do to address the fiscal cliff confronting the country at the close of 2012. To get a flavor of how grave this issue is, click HERE to read a brief article on the subject and/or HERE to watch a brief news segment with former U.S. Senator Sam Nunn (D-GA) about what’s at stake come December.
As Congress turns its attention to the fiscal cliff following the elections, SHRM’s federal and member advocacy activities for the remainder of 2012 will be focused on educating Members of Congress of the importance of “doing no harm” to employer-provided health care and pension assistance while, at the same time, work towards extending employer-provided educational assistance.