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NCA’s Washington Weekly Update 10-25-21

Situational Awareness
The House and Senate are in session this week facing a self-imposed deadline to pass the infrastructure and reconciliation packages this week. While negotiations continue, the Senate will consider two nominations and the House will consider several bills on the suspension calendar.

Racing to the Reconciliation Finish Line

President Biden is scheduled to meet with Pope Francis in Rome on Friday and then attend the Glasgow global climate conference on November 1, which provides a meaningful deadline for House and Senate negotiators to reach a deal on a reconciliation package. Conference calls and hastily scheduled meetings have been occurring since last week and over the weekend to work on constructing a package all 50 Senate Democrats can support and still placate an equal number of progressives in the House. Much of the package has been written, but the major sticking points have been the overall size of the package and tax provisions used to fund the bill.

Senators Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have been at the epicenter of negotiations in an attempt to garner their support for the bill. Although Manchin has received the bulk of the attention in the press, Sinema’s demand to leave corporate and personal tax rates at their current levels has forced negotiators to revamp how the bill will be funded. While raising rates on the highest income earners is the simplest way to achieve increased revenues according to the Joint Tax Committee, Senate Finance Committee Chairman Ron Wyden (D-Ore.) has shifted to drafting a new tax on unrealized capital gains of the wealthiest Americans with $1 billion in annual income or three consecutive years of $100 million or more. The tax would apply to things like stocks, bonds, real estate and art and imposed whether or not the asset is sold. It is expected that annual decreases in value would be deductible, but details are still being worked through. It is also unclear exactly how the value of some assets, such as real estate and art, would be determined. It is estimated that this new policy would affect roughly 700 taxpayers and is similar to one espoused by then presidential candidate Elizabeth Warren.

In addition to an entirely new tax regime to pay for the bulk of the package, the overall size of the bill has been dropped to $1.75 trillion, approximately half of the original $3.5 trillion. This has forced leadership to scale back many of the social programs contained in the bill, including programs such as paid leave for family, medical or parental needs from 12 weeks to four. It is expected that other programs will need to be dialed back in order to meet the lower spending threshold, but details have yet to be officially released.

Debt Ceiling Looms – Again

While much of Washington is focused on the multi-trillion reconciliation bill, the federal government faces an early December deadline to lift the debt ceiling again due to the short-term agreement reached last month. The legislative calendar in November is interrupted by Veteran’s Day and the Thanksgiving holidays, which means Congress will have to make procedural decisions sooner rather than later on how they plan on lifting the limit in time. Senate Minority Leader Mitch McConnell (R-Ky.) has said he and Senate Republicans will not support increasing the debt this time, unlike the agreement reached in September that allowed a short-term increase. With only 50 votes in the Senate, Democrats may be forced to use the reconciliation process to avoid the 60-vote requirement that stymied the process last time. Senate Majority Leader Chuck Schumer (D-N.Y.) has resisted using the reconciliation process claiming it is cumbersome and time-consuming. House Speaker Nancy Pelosi (D-Calif.) indicated over the weekend that she is open to using the process in the House.

OSHA Flexing on COVID-19 Protections

The proposed $3.5 trillion reconciliation package continues to be at the center of discussions in Washington with Last week, the Occupational Safety and Health Administration (OSHA) indicated that they may take over state workforce safety programs because they did not adopt emergency COVID-19 rules issued earlier this year for health care workers. Arizona, South Carolina and Utah are under scrutiny for failing to align their standards to the recent emergency rule. This move is significant considering the agency is preparing to issue an emergency temporary standard (ETS) requiring employers with more than 100 employees to mandate inoculation for COVID-19 or implement rigorous testing requirements. The ETS is still being reviewed by the Office of Management and Budget at the White House, but is expected to be issued soon.

Trauger Speaking in Minnesota and Texas This Week

Today I have the pleasure of providing a government relations update at the 6th Annual Master Speaker Series at Oak Ridge Country Club in Hopkins, Minn.. I will be joined by Kristen LaCount of The Country Club in Brookline, Mass.; Matthew Allnatt of the Jonathan Club in Los Angeles; Casey Newman of River Oaks Country Club in Houston; Randy Ruder of the Beach Point Club in Mamaroneck, N.Y.; and Matt Norman of Norman and Associates. On Tuesday, I will be in Houston at Lakeside Country Club to speak at a meeting of the Texas Alliance of Recreational Organizations.