Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”

Chamber members:

Participation has been slow so far. We’re asking all to please click on the link below for an important survey regarding the current state of business in a mid-year 2021 check in. This feedback is extremely important so that we can use this in conversations going forward on what type of programs and assistance would be best as all continue to recover from the pandemic.

A reminder about Monday, August 16 as an addition to your calendars as we host our quarterly “Legislative Coffee” with U.S. Representatives Bill Foster, Lauren Underwood, and Marie Newman. We’ll cover topics such as the budget, infrastructure, taxes, the recent executive order, and more. We’ll begin at 8 am and discuss through 9:30 at the Joliet City Hall Council Chambers. We hope you can join us and thank CITGO for being our coffee series sponsor. Here is the rsvp & info link:

*Government Affairs Roundup brought to you by Silver Cross Hospital*

Update on Infrastructure Talks
Lawmakers negotiating on an infrastructure package said they were still struggling to resolve a dispute over how much to increase public-transit funding. The disagreement could delay their goal of advancing the bill in a Senate vote early this week. Democrats said Sunday that other issues beyond transit were still being resolved, including details of broadband funding and a pay requirement for contractors. Lawmakers and aides said they were also still haggling over which leftover Covid-19 relief funds could be tapped to help pay for the bill.

Negotiators and other key leaders aired some issues on the Sunday shows, so it could be a stretch to think the bill text will be revealed Monday. Lead GOP negotiator Sen. Rob Portman (Ohio) and House Speaker Nancy Pelosi (D-Calif.) made separate appearances on ABC’s “This Week with George Stephanopoulos,” and gave incompatible takes about when the bipartisan package should head to the president’s desk. Marianne looked at their differing views.

Pelosi said that while House Democrats are “rooting for the infrastructure bill to pass,” she reiterated her pledge that the House will not take it up unless the Senate also passes a separate $3.5 trillion social spending package. “I won’t put it on the floor until we have the rest of the initiative,” she said.

But Portman warned that Pelosi’s path could result in nothing at all moving forward. He said Pelosi’s stance was “entirely counter to what President Biden has committed to” and “inconsistent with the agreement we have on a bipartisan basis.”

Portman said the bipartisan group was “90 percent of the way there” as of Sunday morning but pointed to transit as a remaining sticking point. But a Democratic source says that transit isn’t the only thing that is still holding things up, saying the group still needs to hammer out an agreement on water funding, broadband, highways, bridges and using unspent coronavirus relief money to pay for the bill.

Sen. Mark Warner (D-Va.), who is part of the bipartisan group, said on “Fox News Sunday” that the group is “down to the last couple of items” and predicted legislative text by Monday afternoon. But with the Democratic and Republican to-do lists not even matching… we’ll see.

U.S. Set to Push Global Economy Over the Recovery Line
The U.S. economy likely returned to its late-2019 size during the three months through June, helping to lift global output above its pre-pandemic level for the first time. U.S. gross domestic product figures will be released Thursday.

Economists surveyed by The Wall Street Journal estimate that figures to be released Thursday will show that the U.S. gross domestic product rose at an 8.5% seasonally adjusted annual rate in the second quarter. That likely left U.S. GDP—the value of all goods and services produced across the economy, adjusted for seasonality and inflation—above the $19.2 trillion level reached in the final quarter of 2019, the last before the spread of Covid-19 pushed large parts of the global economy to shut down and contract, they say.

The combined economic output of the Group of 20 leading economies exceeded its pre-pandemic level in the first quarter, according to estimates by the Organization for Economic Cooperation and Development. With the U.S. and a number of other large economies crossing that threshold in the second quarter, it is likely that global output is now higher than the level recorded in the final quarter before the coronavirus struck, the group says.

Republicans Focus Tax Hike Opposition on Capital Gains Change
President Biden has called for taxing capital gains at death as a way to raise taxes on the wealthy and help pay for his social spending proposals. GOP lawmakers, along with business groups and conservative organizations, argue such a move would hurt family-owned businesses and farms.

It’s unclear how effective the GOP attacks will be, given that Democrats plan to include protections for family farms and small businesses in legislation based on Biden’s plans. But Republicans think their messaging could be effective, given that some Democrats representing rural areas have also raised concerns about the proposal.

“I think rural and even suburban Democrats are understanding just how dangerous that proposal is,” Rep. Kevin Brady (Texas), the top Republican on the House Ways and Means Committee, told The Hill on Thursday. He added that Republicans have launched an “all-out effort” to prevent Biden’s proposal from becoming law.

Currently, capital gains are not taxed at death. Additionally, when heirs sell an asset, they must pay capital gains taxes on the difference between the value of the asset when it was sold and the value of the asset when they received it, not on the difference between the value of the asset when it was sold and the value of the asset when it was initially purchased. This concept is known as “stepped-up basis.”

President Biden is proposing to end stepped-up basis for capital gains in excess of $1 million per person and tax those gains at death. The administration is seeking to prevent owners of family businesses and farms from being hurt by the proposal by providing those taxes on the appreciation of these businesses would not have to be paid until they are sold or stop being family owned and operated.

Optimism about America’s Direction in Next Year Drops Nearly 20 Points Since May
As President Joe Biden completed 100 days in office, the country was optimistic about the coming year, but now, just after hitting the six-month mark, Americans’ optimism about the direction of the country has plummeted nearly 20 points, a new ABC News/Ipsos poll finds.

A majority — 55% — of the public say they are pessimistic about the direction of the country, a marked change from the roughly one-third (36%) that said the same in an ABC News/Ipsos poll published May 2. In the early May survey, Americans were more optimistic than pessimistic by a 28-percentage point margin. Optimism is now under water by 10 points. Looking ahead to the next 12 months, fewer than half — 45% — now report feeling optimistic about the way things are going, a significant drop from about two-thirds (64%) in the May poll.

The decline in optimism has occurred across the board among Democrats, Republicans and independents. Optimism is down about 20 points among Democrats and Republicans and down 26 points among independents. Among Democrats, about 7 in 10 (71%) now say they are optimistic about the direction of the country over the next 12 months. That’s much lower than the near universal (93%) approval from Democrats on Biden’s handling of the pandemic. In politics today, partisans usually are more unified in their support or opposition to particular issues or people.

Federal Spending Plan Up Next
The annual summer spending rush has arrived, as Congress attempts to pass government funding bills before federal coffers run dry on Oct. 1. This week the House takes up its first fiscal 2022 spending bills, starting with a package of seven bills: Labor-HHS-Education, Agriculture, Energy-Water, Financial Services, Interior-Environment, Military Construction-VA and Transportation-HUD. Two other spending bills, the Commerce-Justice-Science, State-Foreign Operations and Legislative Branch bills, are also on the House schedule.

While a continuing resolution stopgap bill is still very possible, given the slow pace of spending action in the Senate, House Democrats aren’t thrilled with the prospect. (Of course, CRs are never popular, yet still extremely common.)

It has been quite a long time since the last time all 12 spending bills were passed and signed into law before the start of the next fiscal year. A CR would be especially hard for Democrats to swallow because it would prolong funding levels locked in last year, when Republicans controlled the Senate and Donald Trump was still in the White House.

Overpaid Unemployment Benefits Total in the Billions During Pandemic
States overpaid billions in unemployment assistance after enhanced and extended benefits were approved last year, according to a federal watchdog. A Government Accountability Office report issued Monday said the Labor Department found $12.9 billion in overpayments made in several unemployment programs from April 2020 through March 2021, including some benefit payments that were a result of fraud.

In March 2020, Washington lawmakers approved an expansion of the unemployment-benefits system in response to the Covid-19 pandemic and the related economic downturn. Two programs were created: one that offered unemployment assistance to gig workers, the self-employed and others not previously eligible for benefits, and another that extended payments after state benefits were exhausted, which typically occurs in six months or less. Lawmakers also provided a federally funded enhancement on top of amounts approved by states. Initially the enhancement was $600 a week. Since late December 2020, it has been $300 a week.

The number of overpayments represents about 2% of the roughly $660 billion in unemployment benefits paid out by the Treasury Department during the year ended March 31, 2021, though right- and left-leaning analysts at think tanks agree with the GAO that the overpayment rate is likely understated. The Treasury figures don’t include unemployment benefits paid by states, but do include all the enhanced and extended benefits, which were federally funded.

The GAO report said $1.3 billion in overpayments had been identified as fraud, though that figure is likely to grow. The Labor Department doesn’t report overpayments as fraud until investigations are complete. “It is likely that states and territories have not yet reported substantial amounts of fraud overpayments, which could contribute to increasing amounts reported in the coming months,” the GAO said. Seven states and territories that have reported overpayments have reported no data on fraud overpayments.

Fraud in the unemployment system can take multiple forms, including criminal actors applying for and stealing benefits from individuals, and individuals who aren’t eligible for unemployment tapping the systems.

The GAO report might be significantly understating the level of overpayment and fraud, said William Yeatman, a research fellow at the right-leaning Cato Institute. He noted a February report from the Labor Department’s Inspector General stating that California, the most populous state, paid at least 10% of benefits to fraudulent claims since the pandemic began—and the figure could be as high as 27%, or $29 billion, for the state.

The unemployment system has struggled with inaccurate and incomplete data, Mr. Yeatman said. The GAO had similar findings. “Given the quality of the data is so poor, we may never really get a grip on the amount of waste that was caused by this burst of spending over the past year,” he said.

Andrew Stettner, a senior fellow at the left-leaning Century Foundation, also said the GAO report likely understates the level of fraud in the unemployment system. He added that much of the fraudulent payments were apparently a result of organized criminal activity, especially identity theft.

Mr. Stettner and others have said that unemployment benefits provided a lifeline for the millions of U.S. workers who lost their jobs because of the Covid-19 pandemic. States, which received $2 billion to fight fraud and modernize unemployment-insurance systems in this year’s stimulus law, are now doing a better job thwarting fraud with the use of new technology, he said. States are “in a better position to stop that fraud before it drains the government coffers in 2021 than they were in 2020,” Mr. Stettner said.

Employee Retention Credit (ERC) Small Business Workshop
Wed., Jul. 28, 2021, 11:00 AM
Join NFIB’s (National Federation of Independent Business) special guest, Matt Evans, CPA, SMA, CFM, as he reviews the benefits of the ERC program, a refundable tax credit that could be worth up to $33,000 per employee for qualified wages an eligible employer pays to employees after March 12, 2020, and before December 31, 2021.

In this FREE webinar, Matt will explain how to:

  • Determine ERC eligibility.
  • Calculate the amount of ERC.
  • Access and apply for the ERC; and
  • Utilize both the PPP and ERC programs.

NFIB hosts Beth Milito and Holly Wade will conclude the webinar with LIVE Q&A to answer your PPP, ERC, FFCRA, and EIDL questions.

Program Notices & Reminders – Expanded Information

Special Presentation: Small Business Compliance with Department of Labor
Did you know that most employees in the U.S. are covered by the federal Fair Labor Standards Act (FLSA)? As an employer, are you aware of and meeting your obligations?

The chamber recently joined with Andres Mendez, a Benefits Advisor with the U.S. Department of Labor’s Wage & Hour Division and the Employee Benefits Security Administration for an overview of the COBRA premium assistance under the American Rescue Plan Act of 2021, federal wage and hour laws, and how they are enforced.

Click here to view the special presentation:

Connect with the Workforce Center
The Workforce Center hosts various workshops, hiring events, and activities throughout the month. Be sure to connect with the Workforce Center and share their flyers and event announcements through your social media platforms.

Visit the Workforce Center of Will County’s web page for more information about the programs, services, and activities available for Will County businesses and residents.

Small Business Tax Credit Programs
Did you know that the American Rescue Plan extends a number of critical tax benefits, particularly the Employee Retention Credit and Paid Leave Credit, to small businesses?
Learn more

Small Disadvantaged Business Contracting Goal News
On June 1, 2021, the centennial of the Tulsa Race Massacre, the Biden-Harris Administration announced new steps to help narrow the racial wealth gap and reinvest in communities that have been left behind by failed policies. Specifically, the Administration is expanding access to two key wealth-creators – small business ownership and homeownership – in communities of color and disadvantaged communities.

  • Use the federal government’s purchasing power to grow federal contracting with small disadvantaged businesses by 50 percent, translating to an additional $100 billion over five years, and helping more Americans realize their entrepreneurial dreams.
  • Take action to address racial discrimination in the housing market, including by launching a first-of-its-kind interagency effort to address inequity in home appraisals, and conducting rulemaking to aggressively combat housing discrimination.

Learn more

Stay well,

Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
815.727.5371 main
815.727.5373 direct