Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
It’s been an interesting week since the last Roundup email was published with the State of the Union address and the indictment of former Speaker Mike Madigan. Read below for more information and next week we’ll share the chambers state legislative agenda notes that were shared as part of lobby day 2022 this week in Springfield.
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Takeaways from Biden’s State of the Union address
President Biden traveled down Pennsylvania Avenue to the U.S. Capitol Tuesday evening to deliver his first State of the Union address. The speech came at a precarious moment. The international crisis sparked by Russia’s invasion of Ukraine is shifting by the minute. At home, Biden’s political standing has taken a beating.
The positive poll ratings the president enjoyed in his first months in office are a distant memory, sapped by historically high inflation, the prolongation of the COVID-19 pandemic and the chaotic U.S. withdrawal from Afghanistan.
The State of the Union, which draws an audience in the tens of millions, offered Biden an opportunity to try to pull some discontented voters back onto his side — all while giving due gravity to the situation in Eastern Europe.
Here are the main takeaways:
Biden claims Western unity as a victory over Putin
Russia’s invasion of Ukraine was always going to loom over everything else on Tuesday. Biden, trying to find a point of traction in a volatile situation, hammered home that Western unity against Russian President Vladimir Putin can be viewed as a victory in itself.
Raising the specter of what happens “when dictators do not pay a price for their aggression,” Biden emphasized the importance of NATO, and of multilateral action in general. “It matters. American diplomacy matters,” Biden insisted.
“He thought NATO and the West wouldn’t respond. And he thought he could divide us here at home,” Biden said. “Putin was wrong. We were ready.”
Maintaining Western unity has been Biden’s big success through the crisis so far. It is an achievement that White House aides talk about frequently, and Biden may also be right that it has come as an unpleasant surprise to Putin. How much the specific issue of building international alliances resonates with American voters is an open question, however.
“I get it” on inflation
“I get it” were the words Biden used to address one of the most pressing challenges he faces: inflation. The president sought to make sure that voters struggling with surging prices did not believe he was leaving them to their fate.
“My top priority is getting prices under control,” he said. Biden argued that making more goods in American would help slay the inflation dragon. “Instead of relying on foreign supply chains, let’s make it in America,” he said, as some lawmakers erupted into chants of “USA! USA!”
Biden heralds a new COVID-19 dawn, cautiously
The nation is exhausted after almost two years of COVID-19–related lockdowns. The pandemic has become politicized since its earliest days. “Stop looking at COVID as a partisan dividing line,” Biden beseeched lawmakers. “See it for what it is — a god-awful disease.”
There is no taking politics out of the equation now, for good or for bad, however. Biden has come under pressure recently as some Democratic-led states have moved to ease restrictions.
In Tuesday’s address, he reminded Americans that the Centers for Disease Control and Prevention (CDC) had recently shifted its guidelines so that “most Americans in most of the country can now be mask free.” The reminder was necessary. The CDC’s shift was a sizable piece of good news for Biden that had got drowned out by Russia’s invasion of Ukraine.
An attempt to defang GOP attacks
There are just eight months left before midterm elections in which Democrats face the very real possibility of losing control of both the House and the Senate. In addition to Biden’s low approval ratings, Democrats are worried about the power of GOP attacks against them.
Earlier this month, a leaked memo from House Democrats’ campaign arm warned that Republican assaults tying Biden’s party to concepts like “wokenes,” a porous border and the “defund the police” movement were “alarmingly potent.”
Biden worked hard to neutralize those attacks, especially in the later parts of his speech, on Tuesday. He could hardly have been more direct on one of the most controversial topics of all. When it came to the knot of problems around violent crime, policing and justice, he said, “The answer is not to defund the police. It’s to fund the police. Fund them with resources and training — resources and training they need to protect their communities.”
He also laid out measures he was taking to secure the border, including setting up joint patrols with Mexico and Guatemala. More broadly, he sought to push back on the idea that he had somehow surrendered to the left — a notion that is met with bemusement by progressives themselves but which is popular in conservative media.
He noted that he signed 80 bipartisan bills last year. He laid out a “unity agenda” comprising topics where there is some plausible hope of bipartisan action, such as the opioid epidemic and improved provisions for mental health.
Just as revealing were the topics he did not mention, such as student loan relief, and subjects that received only brief attention — the most surprising being a perfunctory mention of Supreme Court nominee Ketanji Brown Jackson.
In all, it was a speech intended to reintroduce the idea of Biden as a moderate centrist. As such, it might have some appeal to independent voters, even as it will irk progressives.
How President Biden’s State of the Union Plans Could Impact Small Business
In a recent Small Business Economic Trends Report, over two-thirds of small business owners say supply chain disruptions are impacting their business significantly or moderately, and a historically high number of small businesses reported struggling to increase their workforce. NFIB Research Center Executive Director Holly Wade explains, “The staffing shortage and supply chain disruptions are impeding their ability to fully realize sales potential. Many of them are saying that those two obstacles are causing lost sales opportunities, so they are not able to fully capture the increase in consumer spending at their business which is a huge frustration for small business owners.”
In his State of the Union remarks, President Biden outlined several plans for the economy. However, within those plans are at least four anti-small business policies that would severely set back the fragile small business recovery. They include:
- Passing the PRO Act, legislation that would dramatically upend long-standing employment law in favor of labor unions and at the expense of small businesses and their employees
- Mandating a comprehensive and inflexible paid family and medical leave program
- More than doubling the federal minimum wage to $15 an hour
- Increasing legal liability by making legitimate business-related pay differences difficult to defend in court and allowing unlimited damages
“Small businesses continue to be the foundation of America’s economy after two years of the COVID-19 pandemic and government restrictions,” Vice President of Federal Government Relations Kevin Kuhlman said following President Biden’s speech. “Now, small businesses are struggling with rampant inflation, supply chain disruptions, and an ongoing labor shortage with little relief in sight. We urge President Biden and Congress to pursue policies that won’t set back the fragile small business recovery such as new taxes and mandates and instead promote policies that will encourage economic growth.”
FAIR Act Coming Back Around
H.R. 963, the “Forced Arbitration Injustice Repeal (FAIR) Act,” which would effectively ban arbitration provisions in private contracts is reported to be back up for a vote in March, possibly as early as next week. Federal law has protected arbitration as a means of resolving disputes between businesses, consumers, and employees since 1925. Should it become law, this bill would not benefit claimants and would instead produce more class action lawsuits to the benefit of the lawyers who bring them.
The use of pre-dispute arbitration clauses in contracts benefits consumers, small businesses, and employees. For example, recent studies have found that employees and consumers prevailed more often, recovered more money, and resolved their claims more quickly in arbitration than in litigation. In addition, courts work to ensure that arbitration agreements of all types are fair and do not provide an advantage to any party.
Manchin proposes dramatically scaled down version of Build Back Better
Sen. Joe Manchin (D-W.Va.), who torpedoed President Biden’s Build Back Better agenda at the end of last year, on Wednesday laid out a dramatically scaled down version that he says he could vote for under the special budget reconciliation process.
Manchin said he could support a reconciliation package that reforms the tax code and lowers the cost of prescription drugs if the money raised is split between spending on new climate change proposals and deficit reduction and fighting inflation.
The West Virginia senator clarified he hasn’t made any formal counterproposal to the White House but is sketching the outlines of a proposal that he could support along with the rest of the Senate Democratic Caucus.
Whatever Manchin ultimately agrees to would have a different name than the Build Back Better Act, which he said in December he couldn’t support. “There’s not a proposal, there’s just a conversation,” he said of informal talks with White House officials.
“It just makes all the sense in the world. The one thing that we as Democrats all agreed on was the 2017 tax cuts were weighted unfairly. So if you want to fix the tax cuts and make everyone pay their fair share, whether it’s the very wealthiest or the corporations that pay nothing — I think the president identified that last night — then you have to fix the tax code,” he said. “Then you find out what revenues you have from that if you fix it,” he added.
Manchin also said there is broad agreement among Democrats on passing legislation to reduce the cost of prescription drugs and suggested that modeling a program on what the Department of Veterans Affairs does to negotiate lower prices for military veterans would be a good idea.
“The other thing that we should all agree on is the high pharmaceutical prices, so you allow the negotiations. And I just said the organization that does the best job is the VA, the veterans administration gets some of the lowest prices. Maybe we should look at them and let them basically do [that] for our Medicaid and Medicare [recipients],” he said.
Manchin says half of the revenue raised from tax reform and prescription drug reform should be used to lower the deficit and fight inflation and the other half should be spent on whatever 10-year program has the most support in the Democratic caucus.
He suggested spending on an array of initiatives to fight climate change would likely unify his Democratic colleagues. “Half of that money should be dedicated to fighting inflation and reducing the deficit,” he said. “The other half you can pick for a 10-year program, whatever you think is the highest priority and right now it seems to be the environment — and that’s a pretty costly one — would take care of it.”
White House negotiators last year hammered out the outlines of a scaled-down agreement with centrist Sen. Kyrsten Sinema (D-Ariz.) and other Democratic senators to lower the cost of prescription drugs, but it didn’t go as far as some liberals, such as Sen. Bernie Sanders (I-Vt.), initially wanted.
Asked to clarify whether he wants the prescription drug proposal deal with Sinema and other lawmakers renegotiated, Manchin said he wasn’t intimately familiar with the details of that proposal. “I’m just throwing it out,” he said of his idea for prescription drug reform.
Asked about what he thought of the work already done on the issue with Sinema, Manchin responded: “I haven’t seen it.”
Manchin also declined to comment on the details of the tax reform he would like to see enacted. “I’m just saying reconciliation is for getting your financial house in order,” he said, adding that whatever tax reform comes to the floor may be different than what White House officials and senators negotiated last year.
“I’m talking about a fair tax system,” he said, declining to take a position on the wealth surtax that the White House unveiled as part of its framework in the fall. But he insisted that he’s not engaged in any formal talks with the White House. “Everybody knows pretty much where I am,” he said. “This is nothing new. What I just told you all … is nothing new. I’ve been saying it for a year.”
Economy adds solid 678K jobs in February, unemployment dips to 3.8 percent
The U.S. added 678,000 jobs and the unemployment rate dropped to 3.8 percent in February, according to data released Friday by the Labor Department. Unprecedented demand for workers and resilient consumer spending helped power another strong month of job growth in February. Economists expected the U.S. to add roughly 400,000 jobs last month, far less than the actual haul in the February jobs report and push the jobless rate to 3.9 percent.
“If we see more numbers like this moving forward, we can be optimistic about this year. Employment is growing at a strong rate and joblessness is getting closer and closer to pre-pandemic levels,” said Nick Bunker, economic research director at Indeed. “In these uncertain times, we cannot take anything for granted. But if the recovery can keep up its current tempo, several key indicators of labor market health will hit pre-pandemic levels this summer,” he said.
The Bureau of Labor Statistics (BLS) said the U.S. saw “widespread” job growth in February led by a surge in service sector hiring — a promising sign for industries still recovering from the onset of the pandemic.
Leisure and hospitality employment rose by 179,000 jobs in February, led by a gain of 124,000 jobs in restaurants and bars. Professional and business services added 95,000 jobs, the health care sector added 64,000 jobs and construction employment rose by 60,000 after staying flat in January. Transportation and warehousing employment rose by 48,000 in February, and retail trade employment rose by 37,000.
The BLS also revised the December and January job gains up by a combined 92,000 jobs. While the labor force participation rate stayed flat, the February jobs report showed other signals of labor shortages easing and more Americans returning to the workforce.
Ex-Speaker Madigan indicted on 22 public corruption counts
Longtime Illinois House Speaker Michael Madigan was indicted Wednesday by a federal grand jury on 22 counts for allegedly using his position as the top House Democrat to solicit “personal financial rewards” for himself and his associates, according to the U.S. Attorney’s Office of the Northern District of Illinois.
The former leader of the Democratic Party served as Illinois House speaker for all but two years from 1983 until his unseating in January 2021. Throughout that time he was widely viewed as a more powerful political force than anyone in the state, including its governors.
Now, Madigan, 79, is accused of “nearly a decade” of running “a criminal enterprise whose purpose was to enhance Madigan’s political power and financial well-being while also generating income for his political allies and associates,” according to a news release from the Chicago-area U.S. attorney’s office.
“The indictment alleges a long-term, multifaceted scheme to use public positions for unlawful gain, including no-show or low-show jobs for Madigan’s political workers and private gain for Madigan himself,” U.S. Attorney John Lausch, whose office led the investigation, said at a news conference. “The schemes describe involvement of a leader of state government, one of his close confidantes, top management of a large public utility, consultants and others.”
Madigan’s longtime confidante, Michael McClain, whose home was raided by the FBI in May 2019 in what was one of the first public acts of a long-running federal investigation, was also named in the indictment.
Pension Problems
Yet another reform stymied: When Governor Pritzker signed a bill kicking off the consolidation of the assets of the suburban and downstate public safety pensions, it was hailed as a potential step towards solvency for hundreds of funds. But a lawsuit filed last February by current employees, retirees, and local pension funds sidelined the merger. Many of the local funds are holding back from transferring funds to the consolidated pools while the litigation lingers.
Months later, “we are still waiting on a decision” from the court, Illinois Police Officers’ Pension Investment Fund (IPOPIF) government liaison Bukola Bello told lawmakers last week.
Now, state Rep. Michael Halpin has filed a bill giving the IPOPIF an extra year to transition. His bill would extend the deadline from July 1, 2022 until June 30, 2023. The bill is on track to head to the Senate.
The legislation drew a rebuke from Brad Cole, executive director of the Illinois Municipal League, who testified during a House hearing last week that the entire point of the funds merging was to generate bigger investment returns, and any delay would be costly. “The fact that there is a lawsuit is irrelevant,” Cole said. “Every day that is delayed by transferring these funds . . . collectively over time will cost millions of dollars.”
Building Blocks of Success: IDOT announces March dates for Disadvantaged Business Enterprise program workshops
The Illinois Department of Transportation is hosting free virtual workshops in March as part of its continuing Building Blocks of Success series for firms interested in participating in the Disadvantaged Business Enterprise program, strengthening their skills and bidding on state construction projects.
The workshop dates and topics are:
• March 16, 10 a.m. to noon: Force Account (T&M) Work
• March 17, 10 a.m. to noon: Contracts
• March 21, 10 a.m. to noon: Materials A to Z
• March 22, 10 a.m. to noon: Getting Paid
• March 24, 10 a.m. to noon: Daily Documentation
Future topics covered include understanding insurance and bonding requirements, scheduling work, avoiding pitfalls, steps needed to be certified as a DBE firm and more.
Building Blocks of Success will continue through April. Workshop information, including dates and times, is available through Eventbrite at bit.ly/DBEworkshops. Advance registration is required.
Questions can be directed to IDOT’s DBE Resource Center at (312) 939.1100.
As part of Gov. Pritzker’s historic and bipartisan Rebuild Illinois program, IDOT is helping to deliver the largest capital program in state history. IDOT strives to promote diversity, equity, and inclusion in the implementation of this program, including contracting and workforce participation.
Administered by IDOT, the DBE program provides minorities, women and other eligible small businesses opportunities to participate in highway, transit and airport contracts that are federally and state funded. For more information on becoming a certified DBE and learning more about IDOT resources that are available, visit www.idot.illinois.gov/dbe.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct