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Analyzing Potential Changes Ahead: Effects Felt at Federal, State and Regulatory Levels

We are now 10 months into a new administration and a new congressional session. After spending much of the first few months addressing COVID-19 relief, Congress has shifted gears and is focused on legislation aimed at bringing Democratic priorities to life. Among those priorities are a bipartisan infrastructure bill totaling roughly $1.2 trillion, $580 billion of which is new spending, and a $3.5 trillion budget reconciliation package that will touch nearly every aspect of the economy and Americans at nearly each stage of their lives. In addition to the legislative calendar, the ushering in of a new administration—even one that’s 10 months along—brings a rush of appointments that will affect federal policies in every corner of the government. 

Congressional Activity 

NCA’s Policy Agenda outlines five key issue areas the association is focused on that affect private clubs: taxes, health care, labor, environment and immigration. Each of those five areas will be touched on when Congress drafts the details of the $3.5 trillion budget reconciliation package. Without getting too far in the weeds on parliamentary procedure, reconciliation is a way for the House and Senate to consider items that affect the federal budget with only a simple majority of 51 votes in the Senate. There are additional rules in the Senate that dictate what types of things can be included in a package, but the simplest way to explain it is that all provisions of the bill must have a demonstrable effect on the federal budget. This means changing a policy itself is not enough; it must influence federal expenditures—either increasing or decreasing spending. Even with this strict limitation on reconciliation language, there is likely going to be a significant effort to include policy language on health care, labor and immigration issues. As of this writing, the House has just begun its process of crafting the reconciliation bill and a paucity of details is grist for the D.C. rumor mill, but NCA will be focused on the reconciliation package and translating that into potential consequences for the club community. 

WOTUS Changes 

While Congress continues their work on far-reaching legislation, the regulatory landscape is changing as well. The Environmental Protection Agency (EPA) has begun the process of wading back into the navigable waters rulemaking again after six years of continuous legal and regulatory action. The Trump Administration’s Navigable Waters Protection Rule (NWPR) became effective in 2020 and has been subject to litigation ever since. The Biden EPA announced earlier this year that they would embark on a two-step process to repeal the NWPR and begin the notice and comment procedure to craft a new rule. This is essentially the same strategy used by the Trump Administration when the Obama Waters of the United States (WOTUS) rule was struck down by the courts. NCA and allied groups in the Water Advocacy Coalition will be weighing in with the EPA throughout the process to press for maintaining the principles of clarity and certainty in any iteration of rules affecting jurisdiction and the regulated community. 

Gubernatorial Elections 
While Congress hashes out what could arguably be the most significant shift in federal spending in 50 years and challenges to regulatory issues continue, there are two regularly scheduled gubernatorial races in New Jersey and Virginia as well as a special recall election in California that could have implications on the federal political landscape. The recall election of Governor Gavin Newsom in California has raised concerns among Democrats both in the state and in Washington, D.C., because if voters recalled Newsom it would mean a Republican would most likely replace him and have appointment powers should a Senate seat become open prior to a regularly scheduled election. That could tip the balance of control in the Senate to Republicans. The outcome of this race will have been decided by the time this article publishes due to the election being held on September 14. 

Virginia’s gubernatorial elections, which always occur the year after a presidential election, trends toward the opposite party that won the White House. For example, when George W. Bush won the White House in 2000, now-Senator Mark Warner won the governor’s race in Virginia in 2001. Current Senator and Former Vice-Presidential Candidate Tim Kaine (D) won in 2005 after Bush was reelected in 2004. In 2009, the year after President Obama was elected, Republican Bob McDonnell won the governorship. When Obama was reelected in 2012, Virginia Republicans were in the midst of a scandal with Governor McDonnell and his wife accused of receiving lavish gifts from a donor, which paved the way for Democrat Terry McAuliffe to buck the historic trend to claim the governor’s mansion in Richmond. Virginia’s current governor, Ralph Northam, was elected in the aftermath of President Trump’s election in 2016. As an electorate, however, Virginia has trended Democratic in recent years with the northern suburb counties becoming ever more a deeper shade of blue. Virginia law does not allow governors to run for consecutive terms so after four years, McAuliffe is running to reclaim the governorship. McAuliffe is a former Clinton operative and known as a prolific fundraiser. Republican Glenn Youngkin has won the party’s nod and at the moment is trailing McAuliffe in the polls by an average of five points, though one poll has them nearly tied. On November 2, we will see which of the two trends are stronger. 

New Jersey Governor Chris Murphy (D) is running for reelection and faces a Republican challenger in Assemblyman Jack Ciattarelli. Ciattarelli ran in the Republican primary four years ago and finished in second place. Carrying the Republican endorsement this year, polling shows Ciattarelli again in second place, this time in the general election, down by roughly 15% to the incumbent Murphy. New Jersey was among the hardest hit states in the pandemic last year and Governor Murphy has faced some criticism over his handling of it, though it will be difficult for Ciattarelli to make up that much ground against an incumbent. 

Stay Engaged 
Washington, D.C., tends to operate in cycles—not unlike golf seasons in much of the country—and we are in high season until the Christmas holiday. Once we get into January of an even year the upcoming elections have a way of occupying much of the thinking on Capitol Hill. With redistricting at the state level and control of Congress very much on the line, Democrats will likely be taking a slightly more defensive posture to protect the moderates in their ranks while Republicans will be looking to score points anywhere and everywhere they can. If you would like to keep up with more political activity NCA is engaged in, be sure to sign your ClubPAC prior authorization form to receive the monthly ClubPAC Insider. 

Joe Trauger is NCA’s Vice President of Government Relations. He can be reached at 202-822-9822 or [email protected]