Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
I hope you all had an enjoyable Labor Day weekend! The weekend also marked the end of the $300 bump in unemployment payments, the day so many have been looking forward to in order to see job applications hopefully skyrocket. Time will tell.
This Saturday is New Orleans North in downtown Joliet on Chicago Street from 5 to 11 pm. Get your tickets ASAP and save $5 vs. purchasing at the door. For full info on activities and for online purchases, visit www.neworleansnorthjoliet.com and we’ll see you Saturday! If you are interested in volunteering to help us out, send an email to Kelly at kbaltas@jolietchamber.com
Reminder:
The application for the $250 million State of Illinois Back to Business (B2B) Grant Program is now open! B2B offers small businesses access to funds that can help offset losses due to COVID-19, bring back workers, and continue to rebuild from the pandemic.
*Government Affairs Roundup brought to you by Silver Cross Hospital*
Back to Springfield
The Illinois House of Representatives is returning to Springfield on Thursday, likely to vote on the clean-energy bill that’s had everyone in knots all summer. House Democrats will first caucus Wednesday, presumably to nail down support for the compromise legislation that’s emerged from Gov. J.B. Pritzker’s office, according to a memo sent to lawmakers from Tiffany Moy, the House speaker’s chief of staff.
The legislation, Amendment 1 to SB 1751, calls for a 45 percent reduction in carbon emissions in coal plants — the primary focus is the Prairie State Energy Campus — by the year 2035 and then full closure by 2045. It differs from the Senate bill by including a reduction in carbon emissions a decade before the closure date.
The governor’s office says the legislation “puts consumers and climate first.” A spokesperson said the goal remains to “save jobs, gradually put Illinois on a path to clean energy in the years ahead, and foster job growth in clean energy industries.”
The Illinois Clean Jobs Coalition, which represents labor interests, “strongly supports” the amended legislation, saying in a statement it represents “the reasonable path forward to a true climate and equitable jobs bill.”
And Rep. Ann Williams, who’s aligned with environmentalists, said the measure “strikes the right balance between all of our goals but also ensures this is a climate bill, not a utility bill.”
Reducing carbon emissions has been the sticking point in the legislation that has pitted the governor and environmentalists against labor and business interests. The amendment follows last month’s Senate passage of an energy bill.
The clock is ticking to get House approval without a veto. The legislation includes funding for nuclear plants operated by Exelon that have struggled economically for years. The company has set Monday “as the day it pulls the plug on the Byron nuclear plant” in northern Illinois unless the General Assembly passes legislation to rescue it, according to E&E News. But plowing money into a site run by Exelon, which has been the center of a corruption scandal, hasn’t sat right with some lawmakers. The thinking is that the legislation will be more palatable if a provision is added that reduces carbon emissions from coal plants.
Leadership reiterated how close they are to a deal: “Our governor wants real action on clean energy and we’re going to get that. He wants those plants in central Illinois to take some action to clean them up a little bit. Labor wants jobs protected. We want a path for our solar, clean energy developers to continue their important work and minority members want strong diversity language.”
Monday’s Unemployment Cliff
More than 9 million Americans lost their unemployment benefits and millions more will see their weekly incomes plummet as a host of federal pandemic jobless aid programs expired. Three programs covering a combined 12.1 million people ended on Monday without action from the White House or Congress.
Twenty-six states pulled out of at least some of those programs earlier this summer as businesses struggled to fill a record-breaking 9 million job openings. But there are still 5.4 million gig workers, contractors and others not covered by traditional unemployment insurance who will lose their weekly benefits. Another 3.9 million Americans receiving extended aid saw those payments disappear on Monday as well. And a separate 3.9 million Americans will no longer receive a $300 weekly supplement to other job aid programs, leaving them with substantially less money.
On top of that, the August jobs report released on Friday showed a significant slowdown in the rate of hiring, indicating a tougher job market in September.
President Biden, moderate Democratic lawmakers and virtually all Republicans have argued that it’s time for the additional support to expire after several months of rapid job growth, up until August, and inflation lingering at uncomfortable heights. Recent studies have also shown a noticeable uptick in job growth in states that pulled out of those unemployment insurance (UI) programs but with limited impact on labor force participation.
“The question is, is expanded UI substantially holding back job growth? And I do think that it is,” said Adam Ozimek, chief economist at Upwork. “I think that the end of UI expansion will accelerate job growth and get people back to work, but it won’t end the economic damages from the pandemic,” he added.
While economists have quarreled for months over how much the federal programs have held back job gains, they widely agree that it’s not the only factor keeping potential workers on the sidelines. Roughly 5.6 million Americans said they were unable to work because their employer closed or lost business due to the pandemic, and another 1.5 million said they weren’t even able to look for a job because of a pandemic-related restraint, according to the August jobs report released by the Labor Department on Friday.
The ‘Great Resignation’ is Likely to Continue
Most Americans expect to look for a new job as the pandemic continues. Some 55% of people in the workforce, meaning that they’re currently working or actively looking for employment, said they are likely to look for a new job in the next 12 months, according to Bankrate’s August jobseeker survey, published Monday. YouGov Plc conducted the survey of 2,452 adults for Bankrate from July 28 to July 30.
The survey comes at a remarkable time given the experience of the past year and a half, said Mark Hamrick, senior economic analyst at Bankrate. “There have been a lot of epiphanies and reckonings that have occurred during the time with respect with how we’re prioritizing ultimately our values, and of course how work fits into that.”
The data confirms trends seen in the labor market recently. While millions remain unemployed, certain industries are struggling to find workers. The unemployment rate fell slightly to 5.4% in July but remains higher than pre-pandemic. Those claiming unemployment insurance benefits fell to a pandemic-low of 2.82 million in the week ending Aug. 14, although it is still elevated.
At the same time, job openings surged to an all-time high of 10.1 million at the end of June, according to the Bureau of Labor Statistics (the data lags the unemployment report by one month.) Separations also edged up to 5.6 million, and the quit rate was 2.7%, just below the April high of 2.8%.
Why people are looking to leave jobs
There are multiple reasons why Americans are looking to find new work, with flexible working conditions top of mind for job seekers, according to the survey.
Some 56% of those surveyed said that flexibility was their primary reason to look for a new job, topping higher pay and job security. This trend was the same even for the lowest-paid workers — 52% of those making $30,000 or less still put flexibility as their top reason to look for a new job, over higher pay.
Other surveys have shown similar results. Nearly 40% of consumers surveyed by Ally Bank in August said they’re considering changing jobs in the next six months, citing remote work, career advancement and flexibility as top desires. Of course, this economic backdrop has given workers more leverage to negotiate than they have had in previous years.
“If there ever were a time for someone to be in a position to make a reasonable request of their employers, this would be the time,” said Hamrick. On the other side of the coin, he said it’s becoming increasingly important for employers to do what they can to not only attract new workers but retain the ones they have.
What Recess? Committees Cooking on Reconciliation Bill
It is still recess, but with deadlines looming throughout September there’s plenty percolating on Capitol Hill in the coming days and weeks from the reconciliation package to stopgap spending and more.
Committees continue what started last week: markups to debate and assemble their slices of the $3.5 trillion reconciliation package. Last week the House Natural Resources and House Oversight committees took on the challenge. Later this week seven more panels dig into what policy priorities and programs will make the cut to be included in the massive social spending measure starting Thursday and continuing Friday.
While Democrats work through their wish-list to build the package, Republicans are using the markups to voice their opposition to the package as a whole, taking swipes at the Democrats’ go-it-alone strategy, the price tag and what they view as an explosion of federal influence over wide swaths of the American economy. GOP amendments and complaints will continue this week as Democrats forge ahead on their signature package.
One challenge in covering the Dems’ $3.5 trillion reconciliation bill is conveying the sheer enormity of it. Nobody really even knows what to call it. Is it a jobs package? A human infrastructure bill? A climate bill? Social welfare legislation? Yes.
Because Dems aim to pass into law every major domestic priority on which they can find agreement, it is all of those things and more. The New York Time’s Jonathan Weisman has one of the better distillations of the breadth of this legislation by looking at its “cradle to grave” qualities and how they would affect the relationship between Americans and the federal government:
Consider a life, from conception to death. Democrats intend to fund paid family and medical leave to allow a parent to take some time off during pregnancy and after a child’s birth.
When that parent is ready to return to work, expanded funding for childcare would kick in to help cover day care costs. When that child turns 3, another part of the bill, universal prekindergarten, would ensure public education can begin at an earlier age, regardless of where that child lives.
Most families with children would continue to receive federal income supplements each month in the form of an expanded child tax credit … And at high school graduation, most students would be guaranteed two years of higher education through expanded federal financial aid, geared toward community colleges.
Even after that, income supplements and generous work force training programs — including specific efforts to train home health and elder-care workers — would keep the government present in many adult lives. In old age, people would be helped by tax credits to offset the cost of elder care and by an expansion of Medicare to cover dental, hearing and vision services.
Even this description doesn’t capture the bill’s ambitions when it comes to policies on taxes, climate and immigration. While previous Democratic administrations shied away from emphasizing the “government” part of new government benefits, members of the White House staff are embracing it.
“If we get this passed, a decade from now, people are going to see many more touch points of government supporting them and their families,” Heather Boushey, one of President Joe Biden’s top economists, tells Weisman.
Before Democrats pass any of this, they will need to deal with keeping the government open after annual funding bills expire Oct. 1 and raising the debt limit. There will be an enormous amount of parliamentary intrigue about how they navigate around those two legislative monsters.
Many don’t believe a Democratic Congress and President will allow a government shutdown or a debt default. How Biden, Speaker Pelosi and Senate Majority Leader Schumer find the votes will be interesting, but keep your eye on what’s more important: the substance of the reconciliation bill, which is what this Congress will be remembered for.
September Agenda
Federal coffers run dry in just a few weeks and the climate-fueled catastrophes that raged last week could add another layer of complexity to getting enough parties to “yes” on stopgap funding and the debt ceiling. Hurricane Ida walloped the East Coast from Louisiana to New York and fires are still raging across the West. States have already requested federal emergency funding and Democrats may try to tack that on to the anticipated continuing resolution.
Keep an eye out: A list of “anomalies” is expected to head from the White House to Capitol Hill this week. That’s a roundup of programs and priorities that the Biden administration wants funded that aren’t already add-ons to a CR.
Also in the mix is the looming debt ceiling, which the White House and Democratic congressional leaders have said they’ll attach to the must-pass government funding bill. But Senate Minority Leader Mitch McConnell (R-Ky.) and other Republicans are holding firm that they’ll oppose this.
Here’s where some Republicans could have a tough decision: If there’s a must-pass spending bill that includes an increase in the debt limit, which the GOP has vowed to vote against, and emergency funding that would send significant aid to communities ravaged by flooding and wildfires…where do GOP votes fall? They’ll face a choice between standing firm on the debt limit stance and sending money back home during a crisis.
Business Groups Aim to Divide Democrats on $3.5T Spending Bill
Business lobbyists are increasingly optimistic that they can water down tax hikes and other measures in Democrats’ $3.5 trillion spending plan opposed by corporate America. Their confidence was boosted by an agreement struck between Speaker Nancy Pelosi (D-Calif.) and 10 centrist House Democrats that ensures a Sept. 27 vote on the bipartisan $1 trillion infrastructure bill passed by the Senate earlier this month.
By agreeing to a stand-alone vote, Pelosi softened her stance that both bills must be passed together, a priority for progressives in her caucus. Business groups see that as a huge win, believing that progressives will lose some leverage over components of the reconciliation package if the House passes the $1 trillion infrastructure bill first.
U.S. corporations broadly support the bipartisan bill that would create new spending on roads, bridges, broadband and water without raising taxes on businesses. But they oppose the tax hikes that would pay for the $3.5 trillion party-line proposal, which would ramp up spending on childcare, education and climate change mitigation.
Industry lobbyists are confident they can chip away at the planned corporate tax increases and make significant changes to a Democratic proposal to overhaul international taxes on multinational corporations, arguing in both cases that such provisions would slow the U.S. recovery from the coronavirus recession.
K Street is also eager to flex its muscle on Democratic plans to expand Medicare, increase taxes on capital gains, eliminate tax deductions for fossil fuels and allow the government to negotiate drug prices. “The business community has made progress with certain Democrats on legitimate policy concerns with some of these proposals and their implications on the economy and international competitiveness,” said a lobbyist with ties to Senate Democrats. “A lot of those arguments are landing.”
Business interests have Democratic allies in Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) and the group of House moderates led by Rep. Josh Gottheimer (N.J.) — all have expressed concerns about the size of the spending plan and potential tax hikes. Only a handful of defections among House Democrats — or just one in the 50-50 Senate — would doom the reconciliation package.
The U.S. Chamber of Commerce, which placed digital ads backing the moderates as they took fire from other House Democrats, applauded the efforts by centrists to “decouple” the $1.2 trillion and $3.5 trillion bills. The Chamber and other business groups are preparing for potential progressive opposition to the infrastructure bill when it comes up for a House floor vote. In doing so, they’re rounding up GOP support for the measure to boost its chances of landing on President Biden’s desk.
“Anyone who needlessly delays or tries to kill this bill is holding back our nation,” Suzanne Clark, president and CEO of the Chamber of Commerce, said in a statement last week. “I don’t know how anyone could go home and explain to their constituents that they voted to block money to fix a crumbling bridge or to replace lead water pipes running into schools.”
Progressives have insisted that the House must first pass the party-line reconciliation package before approving the Senate-passed infrastructure bill.
“We’ve been very clear and very consistent from the beginning that the only way that this infrastructure plan has a chance is if reconciliation comes through,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) said last week, adding that she believes the infrastructure bill won’t get enough GOP votes to cancel out progressives.
Big business may have time on its side. To beat the Sept. 27 deadline, Democrats will need to act quickly to finalize a reconciliation package that satisfies both progressives and moderates. Those efforts will come at a time when Congress also needs to pass government spending bills to avoid an Oct. 1 shutdown, not to mention the looming debt ceiling debate.
“[House Democrats] are probably going to blow by that September date,” said a lobbyist who used to work for House Republicans. “There is just too much on their plate right now.”
Pelosi last week committed to rallying Democratic support for the infrastructure bill. She added that the House would need to pass the measure by Sept. 30 anyway, as some surface transportation programs are set to expire on that date. Those factors might make it difficult for a large number of progressives to vote against the $1 trillion infrastructure bill, especially if the larger party-line package isn’t close to being ready, business lobbyists said.
Democratic committee chairs have begun working out the details of the $3.5 trillion spending plan, but the process is still very much in the early stages. Senate Finance Committee Chairman Ron Wyden (D-Ore.) unveiled a draft international tax plan Wednesday that would enact stricter penalties on companies shifting jobs and profits overseas. He did not say what tax rate corporations would pay. Lobbyists expect Democrats to raise the top corporate tax rate from 21 percent to 25 percent. That’s lower than the 28 percent rate proposed by Biden, but right in line with what Manchin said he’d be comfortable with.
Universal Paid Leave
Democrats have been pining for it for years and now, it looks like Congress is ready to make universal paid leave a reality as part of their reconciliation package. Unlike other proposals that need to surmount pockets of Democratic opposition, this one seems to be sitting pretty.
The biggest bones of contention are over how many weeks of leave to offer and which federal agency should run it: the Social Security Administration or Treasury Department. If it happens, Democrats are optimistic they’ll be rewarded in next year’s midterms, particularly by female voters.
The Family Medical Leave Act, enacted in 1993, requires that companies with 50 or more employees grant parents 12 weeks of leave to care for a new child. But it doesn’t guarantee pay. Only one in five private-sector workers now have access to employer-provided paid leave, according to the Joint Committee on Taxation.
What is being talked about – There are two different frameworks, one from Ways and Means Chair RICHARD NEAL (D-Mass.), the other from Sen. KIRSTEN GILLIBRAND (D-N.Y.). They’re both aiming to provide paid leave for up to 12 weeks — approximately two-thirds of an employee’s wages, but no more than $4,800 per month — for the birth or adoption of a child, to care for a family member with a medical condition or for a personal serious health condition.
The differences: Gillibrand’s Family Act calls for Social Security to run the program, while Neal’s version of the bill would have Treasury administer it. Also, Neal is pushing for 12 weeks for everyone, while the Senate and the White House are considering a less expensive package with different benefits for different types of leave.
KEY FACTIONS: The AARP is throwing its weight behind Neal’s plan, saying Social Security is strapped as it is and shouldn’t be saddled with another program. The interest group also worries the Senate proposal could end up tapping Social Security funds.
The White House is backing Gillibrand’s plan. Supporters of that version say it would save money because existing Social Security staff could administer the program. They’re also wary of Treasury’s ability to manage it well.
SHOW ME THE MONEY: The CBO pegged the cost of Gillibrand’s at as much as $500 billion and Neal’s at closer to $600 billion over a decade. The Biden administration, however, estimates that by phasing in benefits over a longer period of time, the price tag would be about $225 billion.
STAR POWER: MELINDA GATES, the billionaire philanthropist, has been pressing members of the Ways and Means Committee and Senate HELP Committee to ensure paid leave makes it in the reconciliation bill.
THE TIMING: Expect federal paid family leave to be one of the first bills on the docket in the House Ways and Means Committee. That means we could see the text as soon as this week.
Stay well,
Mike Paone
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
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