1/19/17

Poli%cal Intelligence

Featuring:
David Fialkov, NATSO

Sponsored by:

Donald Trump has

less than a zero
percent chance of
winning the elec%on.
He has no hope of
winning Pennsylvania
and without
Pennsylvania, he has
no hope of becoming
President.

David Fialkov, addressing the California

Independent Oil Marketers Annual
ConvenBon, September 8, 2016

1/19/17

Im telling you, Trump can win

this thing if you cant see that,
youre either crazy or blind.
Ernie Brame, Kenly 95, speaking to David

Fialkov one week before the elecBon

2016 Electoral College Map

Hillary Clinton Donald Trump
WA
12
OR
7

WY
3

CA
55

UT
6

AZ
11

306

ME*
4

ND
3

MT
3
ID
4

NV
6

232

MN
10

SD
3

IA
6

NE
5
CO
9

KS
6
OK
7

NM
5

AK
3

TX
38

WI
10

MO
10

IL
20

NY
29

MI
16
OH
18

IN
11

KY 8

PA
20
WV
5

VA
13
NC
15

TN 11
AR
6
LA
8

MS
6

AL
9

GA
16

SC
9

RI 4
CT 7
NJ 14
DE 3
MD 10

FL
29

Source: RealClearPoli/cs, Electoral College Map, 2016.

MA 11

Hillary Clinton (D)

Running Mate: Tim Kaine
Popular Vote: 48.1%
States Carried: 20 + DC

DC 3

Donald Trump (R)

Running Mate: Mike Pence
Popular Vote: 46.5%
States Carried: 30

*Clinton won Maines statewide vote, but Trump received an electoral vote
for winning the 2nd district

1/19/17

2016 House Seats Gained and Held

Democra5c gain Democra5c hold Republican hold Republican gain

Source: Na/onal Journal research, 2016; AP, 2016.

Map of 2017 Governors

Democra5c governor Republican governor Independent governor
WA
MT

ME

ND

OR

MN
ID

SD

NY

WI

WY
NV

MI
PA

IA

NE
UT

IL
CO

CA

KS

AZ

OK

NM

MO

TX

WV

VA

KY

NC

TN
AR

SC
MS

AK

OH

IN

AL

MA
RI
CT
NJ

GA

DE

LA
FL

MD

Source: Na/onal Journal research, 2016.

1/19/17

Map of State Legislatures

WA

Democrat:
Republican:
Split:
Nonpar5san:

14
32
3
1

MT

ME

ND

OR

MN
ID

SD

NY

WI

WY
NV

MI
PA

IA

NE
UT

IL
CO

CA

KS

AZ

OK

NM

TX

WV

VA

KY

NC

TN
AR

SC
MS

AK

OH

IN

MO

AL

MA
RI
CT
NJ

GA

DE

LA
FL

MD
DC

Source: Na/onal Journal research, 2016.

Agenda

Quick ElecBon Recap (Why I Was Wrong)

TransportaBon/Highway Policy
Fuels Policy
Healthcare Reform
Tax Reform
Payment Systems
Labor
Food Service
Horizon
NATSO PoliBcal Engagement

1/19/17

Quick Elec%on Recap

(Why I Was Wrong)

Quick ElecBon Recap (Why I Was Wrong)

Republican margins by ideology
80
60
40
20
0
-20
-40
-60
-80
-100

2000

2004

2008

2012

2016

Liberal

-68

-72

-79

-74

-74

Moderate

-8

-11

-21

-15

-11

ConservaBve

65

68

58

65

66

Liberal

Moderate

ConservaBve

1/19/17

Quick ElecBon Recap (Why I Was Wrong)

Republican margins by race (2000-2016)
40
20
0
-20
-40
-60
-80
-100

2000

2004

2008

2012

White

12

17

12

20

2016
21

Black

-81

-77

-91

-87

-80

Hispanic

-27

-9

-36

-44

-36

Asian

-14

-12

-27

-47

-36

White

Black

Hispanic

Asian

Quick ElecBon Recap (Why I Was Wrong)

White, college/ non-college, voter preferences

45
39

40
35
30

25
23

25
20

18

17

14

15
8

10

11
4

5
0
2000

2004

2008

R-D % margin (non-college educated whites )

2012

2016

R-D % margin (college educated whites)

1/19/17

2016 Electoral College Map

Hillary Clinton Donald Trump
WA
12
OR
7

CA
55

AZ
11

ME*
4
MN
10

SD
3

WY
3
UT
6

306

ND
3

MT
3
ID
4

NV
6

232

IA
6

NE
5
CO
9

KS
6
OK
7

NM
5
TX
38

AK
3

WI
10

MO
10

IL
20

NY
29

MI
16
OH
18

IN
11

KY 8

PA
20
WV
5

VA
13
NC
15

TN 11
AR
6
LA
8

MS
6

AL
9

GA
16

SC
9

RI 4
CT 7
NJ 14
DE 3
MD 10

FL
29

Source: RealClearPoli/cs, Electoral College Map, 2016.

MA 11

Hillary Clinton (D)

Running Mate: Tim Kaine
Popular Vote: 48.1%
States Carried: 20 + DC

DC 3

Donald Trump (R)

Running Mate: Mike Pence
Popular Vote: 46.5%
States Carried: 30

*Clinton won Maines statewide vote, but Trump received an electoral vote
for winning the 2nd district

TRADE VS.
AUTOMATION

1/19/17

TRADE VS. AUTOMATION

Since 1979 Lost 7 million manuf. jobs, producBvity
more than doubled. (85%-15% robots vs. trade)
Economics gekng beler.

1/19/17

TRADE VS. AUTOMATION

ProtecBonism cant stop it.

Not newjust faster and broader
Pace = faster. Scope = broader.
New industries being created
Displaced workers poorly suited
Low-skill / educaBon jobs

ContracBng middle StraBcaBon

Trump / Hillary Ignored in Own Way

Transporta%on/Highway
Policy

1/19/17

TransportaBon/Highway Policy
NATSO has long supported a fuel tax increase.
Without a good soluBon, you are leq with a
bad soluBon.
Rest Area CommercializaBon
Tolling

10

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And its only going to get worse

11

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12

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As Federal Infrastructure Spending

Declines, States Focus on Upkeep

Trump: $1 Trillion Infrastructure Plan

Good News, Bad News
Private Money (Tax IncenBves)
ROI (Not Unreasonable!)
What is infrastructure?

Without a good soluBon, you are leq with a

bad soluBon.
Rest Area CommercializaBon
Tolling

13

1/19/17

Rest Area CommercializaBon

Long-standing ban
Squeezing through excepBons
Vending
Tourism-promoBng media

Truck parking
Alt Fuel Corridors

Tolling
Ban on exisBng interstates
New capacity = okay
Inecient / less revenue
Urban vs. Rural

Pilot Program

14

1/19/17

BiparBsan Compromise?
"A program of tax credits isn't going to get
the job done, no maWer how largeWe need
signicant, direct spending."
Senate Minority Leader Chuck Schumer (D-NY)

Americans Favor New Federal

Spending for Infrastructure Projects

15

1/19/17

Fuels Policy

Renewable Fuel Standard

The mechanism for growth

The growth of the biofuel industry has

been bolstered by laws and regulations
that support fuels with a smaller carbon
footprint.
BIOFUELS INDUSTRY

AUTO
INDUSTRY

OIL INDUSTRY

Blender/distributor
RIN
Blended
fuel

Renewable
fuel

Renewable Fuels
(biodiesel, ethanol)
made from corn,
soybeans, etc.

RINS are
generated for
each batch of
renewable fuel
produced.

EPA sets
blending
goals.

Refineries must blend Vehicles built

before 2001 can
in the renewables
run on E10; newer
themselves or
can handle E15.
purchase RINs for
Flex-fuel vehicles
another company to
use E85. Diesel
blend.
engines can run
on fuel up to 20
Refineries incur
percent biodiesel.
renewable volume
obligations
with fuel produced or
imported.
RVO RIN

16

1/19/17

Point of ObligaBon

Biodiesel Tax Credit

Expired at end of 2016
Producer vs. Blender
Is it dead? Or mostly dead?
Tax Reform = Key

17

1/19/17

Bulk Tank Issues Found at Various

Customers:

ULSD UST Corrosion

Increasing reports of corrosion in ULSD USTs.
Supply-Chain Problem, NOT retailer problem.
Current ASTM fuel standards do not appear to protect all
problems related to fuel quality.

Causes unknown; many theories:

Less sulfur?
More biodiesel?
Diesel OEM fuel system/engine changes (Bghter emission
standards)
Poor UST maintenance / housekeeping (water in the tank)

18

1/19/17

Tax Reform

Tax Reform
Top GOP Priority (Paul Ryan)
ParBsan vs. BiparBsan / Congress vs. Trump
Infrastructure Compromise?
Gas tax increase + tax cuts

19

1/19/17

Tax Reform
Reduce, Simplify Corp. Tax (20 vs. 15%)
Immediate expensing
Reduce credits/deducBons

Pass-throughs pay lower rate (25%?)

AcBve bus.income / reasonable compensaBon

Estate Tax Repeal

LIFO?

Border Adjustability
Lower Individual Rates

Healthcare Reform

20

1/19/17

Healthcare Reform
First order of business (good idea!).
Leading indicator of whats to come.
Trump vs. GOP Congress; ParBsanship vs. Compromise

Tension: Expand Access vs. Lower Costs

Pre-ExisBng CondiBons
Parents Plan UnBl 26

Repeal and??? Replace? Delay?

Dont make worse o and dont raise decit

Percentage Uninsured, By County

2013

2015

21

1/19/17

Healthcare Reform
What will it look like?
No pre-exisBng condiBons / parents plan
High risk pools

More age discriminaBon

No Employer/Individual Mandate (reporBng, etc.)
ConBnuous Coverage Requirements

No essenBal health benets

More HSAs, selling across state lines.
Tort reform

Payment Systems

22

1/19/17

Swipe Fees (Durbin Amendment)

1. Cardholder
presents the Card
2. Authorization request
Cardholder

8. Transaction
completed

Merchant
7. Approval

6. Approval
Merchant
Acquirer

5. Approval

Issuing Bank

4. Authorization
request

3. Authorization
request

23

1/19/17

Data Security
More defense than oense
EMV = Faade
Pump Delay UnBl 2020

Want PIN on all transacBons (credit too)

GOP Congress Not our friend

Labor

24

1/19/17

Labor
Joint Employer/Independent Contractor
Minimum Wage (States only)
Andy Puzder, CKE Restaurants, Inc.

On Replacing Human Workers

with Technology
Theyre always polite, they always upsell,
they never take a vaca%on, they never show
up late, theres never a slip-and-fall, or an age,
sex or race discrimina%on.
Andy Puzder, Nominee for Secretary of Labor

25

1/19/17

Restaurants Most Cited for

ViolaBng Labor Laws

OverBme Rule
Increase salary
threshold ($47,476 vs.
$23,660)
Leave DuBes Test Alone
Overturned by district
court; liBgaBon pending
(for now)

26

1/19/17

OverBme Rule

Food Service

27

1/19/17

Food Service
Menu Labeling
SNAP (Food Stamps)
Sugar Tax/Soda Tax

Horizon
Autonomous Vehicles
Amazon/Supply Chain DisrupBon

28

1/19/17

Autonomous Vehicles
They are coming and they will disrupt our
industry (and many other industries).
Economics
Safety

IllustraBve of automaBons impact on

workforce.

The Transport-Related Workforce

Occupa%on

Average
Number of
Annual Wage
Jobs

Total Annual
Wages

Taxi drivers & chaueurs

$25,690

178,260

$4,579,499,400

Bus drivers transit & intercity

$39,410

158,050

$6,228,750,500

Drivers/sales workers (delivering

food, newspapers)

$27,720

405,810

$11,249,053,200

Bus drivers school or special

client

$29,910

499,440

$14,938,250,400

Postal services mail carriers

$51,790

307,490

$15,924,907,100

Light truck or delivery services

drivers (UPS, FedEx)

$33,870

797,010

$26,994,728,700

Heavy and tractor-tailor truck

drivers

$41,930

1,625,290

$68,148,409,700

$35,760

3,971,350 $148,063,599,000

Total

29

1/19/17

Autonomous Vehicles
Biggest Obstacles
RegulaBons
State vs. Federal
Ethics
What about Hours of Service?

Restructuring highways (autonomous-only lanes)?

Public comfort

The economics will demand it and the incenBves will

be strong.

Supply Chain DisrupBon

Autonomous / Drones
Free trade
More than 75% of NAFTA = Truck

Amazon

30

1/19/17

Supply Chain DisrupBon

Amazon is gekng goods closer to the source
Less miles driven
Local, market-driven services

Is prime real estate today the prime real estate of

the future?

31

1/19/17

NATSO
Poli%cal Engagement

32

1/19/17

33