Congress at Work: Promoting Jobs for Government Contractors, Women, Vets and More…

The Congress at Work series of articles is designed to give you a glimpse of various types of legislation currently under consideration. While either the Senate or the House of Representatives may initiate a bill proposal, be aware that many bills never become law; they may never make it out of committee, be blocked by a Senate filibuster, delayed, lack enough votes, never be agreed upon by the two houses, or vetoed by the president. 

Tested Ability to Leverage Exceptional National Talent Act of 2017 (TALENT) (H.R. 39) – This is the last law that was signed by President Obama, just an hour before he left the White House to attend the inaugural proceedings on Jan. 20. This nonpartisan Act made permanent a program the Obama Administration pioneered in 2012. It permits unconventional innovators to contract with the government for short-term rotations (usually between 6-month and 2-year terms) as part of the Presidential Innovation Fellows program. The bill was introduced on Jan. 3 by Rep. Kevin McCarthy (R-CA). 

Promoting Women in Entrepreneurship Act (H.R. 255) – This bill was introduced on Jan. 4 by Rep. Elizabeth Esty (D-CT). It would authorize the National Science Foundation to encourage its entrepreneurial programs to recruit and support women, extending their focus beyond the laboratory and into the commercial world. The Act was passed by both chambers of Congress and is presently awaiting the President’s signature.

BRAVE: Boosting Rates of American Veteran Employment Act (H.R. 974) – Sponsored by Rep. Kathleen M. Rice (D-NY), this bill would authorize the U.S. Department of Veterans Affairs to give preference, when awarding contracts, to companies that employ a large percentage of veterans. It was introduced on Feb. 7 and passed the House on Feb. 13. The bill presently is with the Senate for consideration. 

GAO Access and Oversight Act of 2017 (H.R. 72) – Introduced on Jan. 3 by Rep. Buddy Carter (R-GA) and signed into law on Jan. 31, this bill grants the Government Accountability Office access to the National Directory of New Hires. The agency can use this national repository of employment, unemployment insurance, and quarterly wage information to evaluate fraudulent programs and pursue litigation if an entity in the executive branch improperly denies GAO access to information. 

A bill to provide for an exception to a limitation against appointment of persons as Secretary of Defense within seven years of relief from active duty as a regular commissioned officer of the Armed Forces (S.84) – This bill was introduced on Jan. 10 by Sen. John McCain (R-AZ), passed in both chambers and was signed into law on Jan. 20, the first day of the Trump Administration. The Act basically authorizes a one-time exception to the long-standing rule that no military service member can serve as Defense Secretary within seven years of separating from service. The exception applies specifically to President Trump’s Secretary of Defense appointment of James Mattis, a four-star Marine general who has been separated from the service for less than four years. The reason the law exists is to ensure that the Defense Secretary, who is the top-ranking official of the Pentagon and most of the American military, be a non-uniformed civilian. This provides a counterbalance to the Chairman of the Joint Chiefs of Staff, who is America’s top-ranking military official. 

Disapproving the rule submitted by the Department of the Interior known as the Stream Protection Rule (HJ Res. 38) – The original rule created by President Obama sought to protect the nation’s waterways from debris generated by a practice called surface mining. This resolution to roll back the stream protection rule was introduced on Jan. 30 by Rep. Bill Johnson (R-OH). It passed in the House on Feb. 1, passed in the Senate on Feb. 2 and was signed into law on Feb. 16.

Life Insurance for Solving Middle-Age Financial Priorities

The older we get, the more financially complicated our lives become. It seems like one day we wake up and we have a mortgage, ongoing home repair and maintenance demands, a 401(k) plan siphoning money from our paychecks, two to four cars in the driveway, two or more children headed for college and life, auto, health, disability, and long-term care insurance policies.

In other words, suddenly a substantial portion of our income is spread across a dozen different expenses and savings vehicles. Unfortunately, when assets get spread too thin, there might not be enough available to cover all the costs. Important long-term goals like retirement could end up at the short end of the stick.

That’s why it’s important to explore various savings and insurance vehicles to see if there are solutions suitable to combine a variety of your financial needs. For example, there are life insurance policies designed to address multiple priorities, including contingencies you might or might not need – such as disability payouts or long-term care.

The most important distinction among life insurance policies is between term and whole life. A term policy lasts for only a specific period of time and will provide a specified “face value” insurance payout in the event of your death. That’s all it does – when the term ends, so does the coverage.

The second type is called whole life because it remains in force for as long as the owner has paid-up premiums, so potentially for his or her whole life. However, in additional to a one-time payout to beneficiaries when the owner dies, whole life also features a cash value account, which accumulates over time using a portion of each premium payment. The cash account can be accessed by the owner while he’s still alive for whatever he needs it for, such as disability payouts, long-term care, to pay for college tuition, buy a new car, pay medical bills or even to pay the premiums for the insurance policy itself.

Some types of whole life policies permit the owner tax-free access to the death benefit to pay for long-term care expenses or if he or she receives a fatal diagnosis, such as cancer. This feature protects the owner from having to deplete other assets, and whatever amount remains of the death benefit at the owner’s death will still pass on to heirs.

Interestingly, older whole life policies were originally written with a term – they matured when the owner turned 100 years old. That means the policy will pay out the death benefit while the owner is still alive. But now that life spans extend much longer, today’s policies are typically written to mature when the owner turns 121.

Whole life policies also provide some tax advantages. Paid premiums cannot be deducted; however, the cash account accrues tax-deferred and distributions are tax free up to the amount (basis) paid in premiums. In addition, the death benefit paid out to beneficiaries is not considered taxable income, although it may be subject to federal estate taxes. If you’re worried about using up all of your assets during retirement and not leaving anything to your children, consider that life insurance is a viable way to leverage annual premiums into a larger inheritance for heirs.

Some people get life insurance through their employer, but that’s usually only enough to tide a family over for a year or two. If you’re interested in exploring how to use life insurance benefits to solve for multiple financial priorities, consider the advantages of various types of whole life policies.

Technology: Major Trends at CES

Industry gurus and eager consumers often face a tough task separating breakthrough trends from over-hyped gimmicks amidst the clamor and marketing frenzy that characterizes the annual Consumer Electronics Show (CES) in Las Vegas. Opinions vary concerning the products, but here are some of the categories that attracted significant interest at the show.

  • Virtual reality as a corporate tool. VR is not new, but after more than a few years large corporations like Boeing and Ford are beginning to recognize that virtual reality can deliver in the workplace as well as in the marketplace. Sales and marketing pros are increasingly excited about how VR can give potential customers a taste of new product lines. Experts also anticipate that companies will recognize the value of VR as a low-risk training tool to improve workplace health and safety. It’s been a long time coming, but new software upgrades and improved headset design have positioned VR to expand well beyond its gaming origins. Demos using VR in a business setting attracted major crowds at the show, with attendees eager to don headsets and try out industrial/business apps for themselves.
  • Artificial intelligence (AI) can now anticipate needs, and voice recognition goes beyond mere dictation to allow users to access and link all the various applications – such as customer management and email – to service customers while on the move. Experts believe we will see more anticipatory AI programs, such as automobile software that records driving routes and calendar information. They also can scan local traffic information to provide alternate route options to avoid traffic delays without the need for driver input.
  • Autonomous driving systems are designed to port airborne delivery drones and large delivery vehicles. It may take a few years for consumers to accept the idea, but transportation experts believe eventually we will see autonomous driving on major freight routes. In the meantime, expect to see more assisted-driving options in automobiles – programs that monitor for signs of driver inattention, issue suggestions for a rest break, and offer dashboard alerts for corrective action if the highway surface becomes slippery or hazardous. Think of these monitoring and driver-assistance programs as a precursor to self-driving vehicles by demonstrating how automation can support safer driving.
  • Inherent connectivity. Increasingly, consumers are becoming comfortable with the increased interconnectivity of the Internet. No longer will we rely on our personal interaction with visible hardware to provide the technological support for our work and leisure time. As computers have shrunk in size, we have become used to the idea of computer capabilities being embedded into products ranging from phones to automobiles and appliances – capabilities that allow these products to communicate and respond without our prompting. We can expect to see this embedded computing power to improve efficiencies and make our work and home life smoother and more productive.

Stock Market: Romp or Rout? The Markets Under a Trump Presidency

The biggest question on Wall Street is whether the Trump Presidency will be good (or bad) for investors. The year started with confidence as the Dow Jones Industrial Average overtook the 20,000 mark, but many questions remain on how President Trump will address international trade and monetary policies, and how he plans to spur job creation. Here’s a look at some of the factors that investment pros are considering.

The Dow Jones Industrial Average hits 20,000 on Jan. 25

The Dow Jones hit a historical high within days of Trump taking office – breaking through 20,000. It’s taken some 17 years for the Dow to hit this mark – since the market collapse in 2000 – and its climb up from 19,000 on Nov. 22, 2016, makes it one of the fastest 1,000 point gains in the Dow’s history. Is this a big deal? Yes. However, many analysts are quick to note that hitting a historical high packs more of a psychological punch than anything else. Is it meaningful? Well, yes … and no. The Dow is regarded as an indicator of confidence (or lack of it). However, many pundits are anxious to remind investors that the Dow comprises only 30 stocks – and that other market indexes comprise many more companies. For example, there is the Standard and Poor’s 500 or the 2,000 small capitalization companies that make up the Russell market tracker. Depending upon your specific investment diversification strategy, you might not benefit substantially from the Dow’s exuberance. The overall consensus suggests we look on this milestone with guarded optimism. Benchmark milestones move markets, but the tide of optimism might or might not have legs. In the past, we’ve seen records broken only to see the Dow fail to remain above the target milestone for any appreciable time.

Reflation” and Capital Gains Anticipation

Some brokers are calling the post-inauguration surge a symptom of “reflation,” or a belief that the economy will prosper under Trump’s proposed tax cuts and increased government spending on infrastructure. These plans have yet to be fully articulated, but many investors are betting they will happen. Another element that has contributed to the recent historic Dow high is the anticipation of capital gains tax cuts. Brokers have observed that many investors have not done the usual year-end portfolio cleanup – dumping nonperforming equities – because they believe by postponing it they’ll face a lighter tax bill in 2017, when President Trump cuts capital gains taxes. If a significant number of investors are sitting on the sidelines waiting for more favorable tax terms and a backlog of investors are waiting to take their profits, this could have a negative impact on the performance of major indexes – including the Dow.

The Tide Could Turn – And Fast

Wall Street gurus continue to urge their clients to avoid emotionally charged decisions and to stick with their long-term portfolio planning goals. There are simply too many unknowns ahead. Like him or not, Trump is no ordinary Republican, and we have yet to see how successful he is in cutting taxes and increasing spending without creating a potential deficit crisis. Others note that the Dow’s 20,000-point milestone comes courtesy of a four-year trend that has seen domestic stocks outperforming equities in overseas markets. This unusually long streak has been bolstered by the dollar’s strong run – a positive that can turn negative if foreign borrowers and companies face difficulties paying back debt or buying U.S.-made goods when their own currency remains weak.

The observations above are intended as general commentary and are not intended to be a substitute for advice from your tax and investment professional advisors.