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

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It is a busy start to the week with legislative news coming from Washington D.C. as the finish line is near on the infrastructure bill, the beginning stages of passing the reconciliation budget begins as more information moves forward with the $3.5 trillion plan, and the debt ceiling still looms so we’ll see where that discussion goes throughout the week.

All of these topics will be covered on Monday, August 16 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*

Senate Democrats Outline $3.5 Trillion Antipoverty, Climate Plan
Senate Democrats released an outline of the $3.5 trillion antipoverty and climate plan they hope to approve this fall, further detailing their ambitions for the major legislative effort that they intend to approve without Republican support.

The plan, which is set to offer universal prekindergarten, two free years of community college, and expanded Medicare to cover hearing, dental and vision care, is the second of two major packages encapsulating President Biden’s agenda that lawmakers are pushing through Congress this year. The first, the roughly $1 trillion infrastructure plan, is nearing final passage in the Senate.

Democrats are planning to raise taxes on corporations and high-income households to cover the cost of the $3.5 trillion plan, which also calls for a federal paid leave benefit, a series of energy tax incentives, and a program to push the U.S. to receive 80% of its electricity from clean sources by 2030. The plan outlined by Senate Majority Leader Chuck Schumer (D., N.Y.) on Monday also includes offering a pathway to citizenship for certain migrants to the U.S. and lowering the price of prescription drugs.

It doesn’t include a measure to increase the U.S. government’s borrowing limit, meaning Democrats will seek to raise the debt ceiling with GOP support in the coming weeks. Treasury Secretary Janet Yellen said in a statement Monday that Congress should raise the debt limit on a bipartisan basis.

Congress voted in July 2019 to suspend the debt limit until July 31, 2021. The Treasury uses emergency accounting maneuvers to conserve cash so the government can keep paying its obligations to bondholders, Social Security recipients, veterans and others.

Mr. Schumer wrote in a letter to Senate Democrats on Monday morning that the Senate will take up the budget plan for the bill, a key first step toward crafting the overall package, after the Senate wraps up the $1 trillion bipartisan infrastructure bill. Mr. Schumer has said that the Senate won’t break for its August recess until it has passed both the infrastructure plan and the budget outline for the $3.5 trillion plan.

Approving the outline for the bill, called a budget resolution, will help unlock a special process called reconciliation that will allow Democrats to advance the broad set of party priorities without any Republican support in the Senate. Mr. Schumer set a target of Sept. 15 for committees to submit their pieces of the legislation.

Senate Moves Closer to Passing Infrastructure Bill
The roughly $1 trillion bipartisan infrastructure bill cleared a final set of procedural hurdles in the Senate, putting the legislation on track to easily pass the chamber in the coming days.

While Republicans and Democrats disagreed throughout the weekend on how to consider additional amendments to the legislation, they moved forward with procedural votes on a bipartisan basis. As many as 19 Republicans joined with Democrats on the various procedural motions.

The bill will face a more complicated path in the House, where House Speaker Nancy Pelosi (D., Calif.) has said she wouldn’t bring it up until the Senate also passes a $3.5 trillion antipoverty and climate bill.

Senate Majority Leader Chuck Schumer (D., N.Y.) is also pushing for Democrats to approve the budget outline for the $3.5 trillion package in the coming days.

Republican support for the infrastructure bill remained robust even after Congress’s nonpartisan scorekeeping found that it would add $256 billion to the deficit over 10 years. The estimate contradicted bill negotiators’ claims that its cost was fully covered with savings and new revenue. But that finding from the Congressional Budget Office did inflame existing opposition from some Republicans to the bill, complicating efforts to quickly wrap up the amendment process.

The bill provides $550 billion in new funding on top of money authorized for existing federal infrastructure programs. Of that $550 billion, $65 billion is dedicated to expanding access to broadband, $110 billion will go toward rebuilding bridges and roads, and $55 billion is aimed at water infrastructure. Repurposing Covid-19 aid and delaying a Trump-era Medicare rebate rule are among the sources of funds for covering the cost of the plan.

Among the amendments lawmakers were grappling with were those related to a measure that seeks to raise money through tougher tax enforcement of cryptocurrency transactions. Dueling groups of senators have proposed amendments seeking to clarify how the bill defines a broker, which the legislation would require to report gains reaped to the Internal Revenue Service.

Faceoff on the Debt Ceiling
Senator Schumer is about to double-dog dare Senator McConnell and his members to vote against a debt ceiling increase this fall. Just weeks after the minority leader implored his counterpart to tack a debt ceiling increase on to their party’s massive reconciliation bill — lifting the $28 trillion borrowing cap without any GOP votes — Schumer instead is maneuvering to make Republicans squirm.

The tentative plan: Tack the debt-ceiling hike on to a short-term funding bill designed to avert a government shutdown at the end of September, a move that would require GOP support. The Democratic leader is, in short, betting the GOP will cave rather than risk the blame for destabilizing an already shaky economy.

The strategy sets up a hugely consequential game of chicken between the two leaders. They won’t have much time: Lawmakers will have only a few days to plot a path forward when they return from their summer recess in mid-September. Without an agreement, the government will shut down Oct. 1, and the Treasury could run out of money a few days after.

The entire situation gives flashbacks to when Republicans demanded spending cuts in return for raising the borrowing cap while President Obama was in the White House. The brinkmanship led Standard & Poor’s in 2011 to downgrade the nation’s credit for the first time ever. Here’s what each side is saying this time around …

The view from the majority: Democrats note that McConnell in the past has been a broken record about never allowing the nation to default. They argue that Republicans dealt with the debt ceiling under President Trump without a fuss. For the GOP to now say they want spending reforms in order to lift the cap after doing nothing of the sort the past four years, they argue, is disingenuous.

For that reason — and the obvious economic risks — Democrats think McConnell’s position is unsustainable and he’ll have to cave. “To create a fake crisis … at this moment with this much going on in the world and this much going on in this country, with Covid and dealing with the variant, would be the epitome of irresponsibility,” Senator Warner (D-Va.) told reporters last week.

The view from the minority: Republicans say that they’ve staked out a clear position on this early, so they cannot be blamed for balking at the last minute. With inflation soaring, they argue, Democrats shouldn’t be spending $3.5 trillion on a reconciliation package atop a $2 trillion pandemic package and another $1 trillion on infrastructure. They’re loath to be seen as enabling what they view as an irresponsible spending spree when the nation’s debt is already massive.

Republicans also argue that Democrats easily have the power to act on this alone, and if they choose not to, it’s their own fault. “They control the House and the Senate and the White House,” said Senator Blunt (R-Mo.). “It’s easy for them to deal with if they want to.” Senator Romney (R-Utah) agreed, telling reporters that Democrats are “the ones massively adding to the debt. … There’s no need for a compromise when they can do it by themselves.”

So why aren’t Democrats using reconciliation? It’s all about the moderates. Centrist Democrats are already having a hard time swallowing the $3.5 trillion price tag. Adding a debt ceiling increase would only lead them to demand a slimmer package. Bottom line – each side is confident the other will blink. For the sake of the economy, hopefully one of them is right.

U.S. Jobless Claims
U.S. jobless claims fell slightly to 385,000 last week, as worker filings for new unemployment benefits settled this summer at a level that is nearly double the pre-pandemic average.

The decrease in filings reported by the Labor Department on Thursday comes as the economic recovery faces risks from the Covid-19 surge driven by the Delta variant, supply-chain constraints and a shortage of available workers. The four-week moving average, which smooths out volatility in the weekly figures slightly decreased to 394,000.

Continuing claims for regular state programs, which provides an approximation of the number of people receiving benefits, dropped by 366,000 to 2.9 million in the week ended July 24, the most recent figures for that reading.

Claims have hovered between 368,000 and 424,000 since late May, elevated above pre-pandemic levels but significantly lower than early in the pandemic. The 2019 weekly average, ahead of the pandemic, was 218,000.

The trend, some economists say, could be happening while the labor market continues to recover from the pandemic and be part of a development where claims remain higher because of greater awareness of unemployment insurance programs.

Economy Ads 943K Jobs for July, Unemployment Dips to 5.4 Percent
The U.S. added 943,000 jobs in July as a summer rush of travel and recreation spending powered the economy through surging coronavirus cases, the Labor Department reported Friday. The unemployment rate fell to 5.4 percent in July from 5.9 percent last month, according to the monthly jobs report, as employment growth exceeded the 850,000 consensus job gain projected by economists.

The U.S. was expected to see another strong month of job growth as consumers spent the summer enjoying activities restricted by the coronavirus pandemic. The rapid spread of COVID-19 among unvaccinated Americans, along with several red flags from private-sector data, raised questions about the strength of the labor market last month. But the delta variant appeared to have little impact on hiring in July as job growth accelerated for the fourth consecutive month.

More than a third of July’s job gains came from the leisure and hospitality sector as Americans continued to shift their spending away from goods and toward experiences. Restaurants and bars added 253,000 jobs, hotels and resorts added 74,000 jobs and arts, entertainment and recreation added 53,000.

Public schools also added 221,000 jobs in July, though the Labor Department acknowledged that those figures could be inflated by seasonal adjustments and the way COVID-19 upended hiring cycles.

Other industries boasting strong jobs gains included professional and businesses services (60,000), transportation and warehousing (50,000), and health care (37,000), while the retail sector lost 6,000 jobs in July.

June’s initially reported gain of 850,000 jobs was revised up to 938,000 in the July report, and May’s gain of 583,000 was revised up to 614,000 — a total of 119,000 between the two months. The strength of the labor market also pushed wages higher, with average hourly earnings increasing by 11 cents in July and 4 percent year-over-year.

Lacking a Lifeline, Exelon CEO says Illinois Nuclear Plants Will Retire this Fall
U.S. energy company Exelon Corp. said that it still plans to retire uneconomic nuclear reactors at Byron and Dresden in northern Illinois this autumn unless a state or federal program is passed to save the plants. Exelon Chief Executive Christopher Crane said in the company’s earnings release that “passage of (federal) legislation remains uncertain and, regardless, will come too late to save our Byron and Dresden plants from early retirement this fall.”

The two reactors at Byron can generate almost 2,500 megawatts of power, while Dresden’s two reactors can produce more than 1,800 MW. One megawatt can power about 1,000 U.S. homes. Crane said the company remains “hopeful that a state solution will pass in time to save the plants,” but noted “clean energy legislation in Illinois remains caught in negotiations over unrelated policy matters.”

Exelon has blamed the planned nuclear shutdowns on market rules that it said favor fossil-fired and renewable plants over carbon-free nuclear energy. Exelon has said Dresden and Byron face revenue shortfalls in the hundreds of millions of dollars and together employ more than 1,500 workers.

In 2016, Exelon, which operates six nuclear plants in Illinois, won state subsidies that analysts have said provide about $230 million a year to keep its Clinton and Quad Cities plants operating. Exelon, however, has long sought subsidies for its other Illinois nuclear plants.

Exelon has been successful in winning subsidies in New York and New Jersey to keep its reactors operating to help meet those states’ clean energy goals. But when states do not provide subsidies, the company has retired reactors like Three Mile Island in Pennsylvania in 2019.

Landlords Sue to Stop Biden’s ‘Nakedly Political’ Eviction Ban
Trade groups representing property owners sued to block a new federal eviction moratorium that President Joe Biden himself warned this week was on shaky legal ground. The Alabama and Georgia chapters of the National Association of Realtors filed a motion in federal court to vacate the ban that the Centers for Disease Control and Prevention ordered last Tuesday. The same groups led a legal challenge against the prior federal eviction moratorium that expired Saturday — a lawsuit that prompted the Supreme Court to cast doubt on the CDC’s authority.

The real estate groups — which have warned that their members are facing substantial financial losses from the moratorium — said in a legal filing that the CDC caved to a “tidal wave of political pressure” from outraged Democrats when it revived the eviction ban despite clear warnings from judges who said the agency lacked the power to enforce it.

“The CDC appears to have acted in bad faith,” the groups said.

The new legal challenge will fuel further chaos around the federal government’s safety net for renters still struggling to pay bills during the pandemic. It will likely set off a race against time for policymakers to find ways to accelerate the release of $46.5 billion in rental aid, which was designed to backstop renters and make landlords whole but has faced severe state and local bottlenecks.

Landlords are taking on the Biden administration again after warning that they lost billions of dollars each month under the original ban, which the CDC first implemented in September. The revamped moratorium the agency imposed this week is targeted at areas with high levels of Covid-19, currently about 80 percent of counties.

A coalition of 11 housing industry groups — including the Mortgage Bankers Association and the National Association of Home Builders — said in a statement Wednesday evening that they opposed the new ban and that “the administration itself noted it lacks the legal authority for a more targeted eviction moratorium.”

“About half of all housing providers are mom-and-pop operators,” National Association of Realtors President Charlie Oppler said. “Without rental income, they cannot pay their own bills or maintain their properties.”

Biden allowed an earlier iteration of the eviction moratorium to expire Saturday because of a Supreme Court warning that the CDC exceeded its authority. But the White House reversed course this week and enacted a more targeted ban in response to a major backlash from Democrats who warned millions of Americans were at risk of losing their homes.

The administration initially said its hands were tied by the June Supreme Court opinion and tried to put the responsibility on Congress to extend the moratorium. But House Democrats could not muster the votes to pass an extension before leaving for August recess. The legislation was also expected to be blocked by Senate Republicans.

The industry groups suing the Biden administration on Wednesday recounted the timeline as evidence of why the ban should be overturned. They said the CDC extended the moratorium “for nakedly political reasons.” The new eviction ban the CDC announced Tuesday is scheduled to last until Oct. 3 and applies to counties experiencing high levels of community transmission of Covid-19. The Biden administration scaled back the scope of the ban as it scrambled to come up with a new safeguard for renters. But the revamped moratorium still left landlords “irate,” said National Apartment Association President and CEO Bob Pinnegar. Property owners were livid over the about-face after the CDC said in June that an eviction ban renewal through July was intended to be the final extension.

Finally, consider joining us for our August member luncheon next Wednesday, August 18th at the Holiday Inn. Our program is “Hiring a Diverse Workforce & Overcoming Challenges,” presented by Mario Lambert. Mr. Lambert is a Leadership Consultant, focused on Workforce Solutions, Business Development & Diversity-Centered leadership.

More details and reservations can be found here by following this link:

Stay well,

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