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TAUC Legislative & Regulatory Update, December 2020

With the contentious 2020 election behind us, here is the state of play in Washington and its potential impact on the union construction and maintenance industry:

President: Former Vice President Joe Biden has been declared the winner. President Trump has yet to concede, and his campaign has filed at least 36 lawsuits challenging the ballot counts in six battleground states. Despite these efforts, a number of battleground states have certified their results.

House of Representatives: Democrats will retain control of the U.S. House of Representatives. The Democrat's majority appears to have been reduced to approximately 5-7 seats, making for a very narrow margin on floor votes. House Speaker Nancy Pelosi (D-CA) has been renominated by the Democratic Caucus for Speaker of the House. Kevin McCarthy (R-CA) has been re-elected as Minority Leader.

Senate: While control of the Senate is still unknown at this point, most anticipate Republicans will retain a narrow majority in the 117th Congress. The final breakdown will not be known until early January due to two run-off elections in Georgia. The current partisan breakdown in the Senate is 50 R's/46 D's/2 Independents (who caucus with the D's) -- making the current spit 50-48 with two races undecided.

Regardless of the outcome of the runoffs, bipartisanship will continue to be required to move major bills through the Senate since neither party will have a filibuster-proof majority, nor the ability to override a presidential veto without the other party. Senators Mitch McConnell (R-KY) and Chuck Schumer (D-NY) have been reelected as Republican and Democratic leaders, respectively.

Presidential Transition

Despite the lack of a concession by President Trump, President-elect Biden and Vice President-elect Harris have begun moving forward with the formal transition to assuming office on January 20, 2021. They have established a transition team responsible for ensuring that the transfer of power between the current administration and the Biden-Harris administration, and have established agency review teams to review the operations of each agency and prepare the Biden Administration to be able to "hit the ground running on Day One."

The U.S. Department of Labor Agency Review team is headed by Chris Lu, senior strategy advisor for FiscalNote and a former Deputy Secretary of Labor during the Obama Administration. TAUC has sent a letter to the DOL Agency Review Team highlighting the policy priorities of the union construction and maintenance industry. Specifically, the letter called on the Biden-Harris Administration to priorities comprehensive multiemployer pension reform, including authorization of composite plans; strengthening joint labor-management registered apprenticeships; strengthening enforcement of prevailing wage laws and addressing worker misclassification; and continuing support for Project Labor Agreements.

Several names have been circulated for potential DOL Secretary nominees. Names mentioned for the position include: California Labor Secretary Julie Su, Boston Mayor Marty Walsh (former Secretary-Treasurer of the Boston Building Trades and LUINA member), Senator Bernie Sanders, Representative Donald Norcross (D-N.J.) (IBEW member), Representative Andy Levin (D-MI) (a former labor organizer), former Secretary of Labor Perez and former Deputy Secretary Seth Harris.

COVID Relief

Congress continues discussions over the next COVID relief package. Negotiations have been stalled for months. While there is consensus that additional relief is necessary, agreement on the structure and scope of an aid package has been difficult to reach in the pre-election hyper-political environment. With the election generally over, there is hope that Congress can finally agree on a relief package before adjourning for the year.

House Democrats have moved several COVID response packages since May in an unsuccessful effort to get agreement with the Trump Administration and the Senate Republicans. The most recent bill totaled $2.2 trillion - down from the $3 trillion-plus HEROES Act passed by the House in May.

Prior to the election, Senator Majority Leader McConnell had been working to limit the size of the COVID relief package and manage disagreements within the Senate Republican Conference. He was unable to secure the votes in the Senate necessary to pass a $500 billion package. Senator McConnell said in a post-election press conference that he wants the next COVID aid package enacted this year. He also said that Senate Republicans will not accept coronavirus bill with a price tag over $1 trillion. The election results may have strengthened McConnell's negotiating leverage in the lame-duck, but the Trump Administration and the Georgia Senate run-offs remain wildcards in reaching an agreement in the lame duck session.

In recent days, a bipartisan group of senators have announced an agreement on a consensus framework for a broad coronavirus aid framework. The legislation would provide $908 billion in aid - including addition financial support for business -- and shield businesses from coronavirus lawsuits for a few months to allow states to develop their own liability reforms. There is no guarantee that this package will move forward since it does not have the support of leadership in either the House or Senate at this point.

In response to the bipartisan package, McConnell announced his intent to revise his targeted COVID proposal. He also stated that the proposal has President Trump's support. Speaker Pelosi said she will be reviving talks with Treasury Secretary Mnuchin, which were called off prior to the election.

While these steps demonstrate some progress on additional COVID relief, it is still very uncertain whether Congress can act on a package before the end of the lame duck session. It is also possible that elements of the various proposals and provisions to address expiring relief programs could be included in the end-of-year spending package. These discussions remain ongoing.

Paycheck Protection Program (PPP)

One of the key pieces of COVID relief legislation members hopes to address will be an extension of PPP. The federally funded loan program was created as part of the CARES Act as an incentive for businesses to maintain their payrolls. The Government-approved lenders made more than five million loans worth over $521 billion as of the end of July, according to the Small Business Administration.

On a related PPP issue, the Internal Revenue Service (IRS) issued new guidance to clarify that businesses receiving PPP loan forgiveness or have a reasonable expectation that the government will not require the company to pay back the money, cannot deduct business expenses paid for by the loan. Businesses that do not receive loan forgiveness can still deduct the business expenses used with the loan.

Multiemployer Pension Relief and Composite Plans

Another key aspect of potential COVID relief legislation or an end of year spending package is the inclusion of multiemployer pension reform and the authorization of composite plans.

The House has twice passed COVID relief legislation that included significant multiemployer pension relief and reforms. Among the reforms included in the bill are the authorization of a special partition program to allow the PBGC to recue failing multiemployer pension plans. Both House bills also included the GROW Act, which authorized the voluntary use of hybrid composite plans. The provisions included in the bill will both address the immediate need to rescue failing plans - that have been further weakened by the economic fallout due to COVID-19 - and includes important reforms that will provide trustees an additional tool to ensure that otherwise healthy plans remain solvent for the long-term.

The various COVID relief proposals discussed in the Senate to date have not included multiemployer pension provisions, although Senate Finance Committee Chairman Grassley (R-IA) - who's committee has jurisdiction over multiemployer pensions - has stated a willingness to work towards reaching a bipartisan reform agreement.

As part of efforts to generate support for including multiemployer pension reform as part of the next COVID relief package, TAUC is also working with CEA partners to secure signatures on a letter to congressional leaders organized by Representative Tom Emmer (R-MN) and Representative Tony Gonzalez (R-OH) for Republicans to sign urging bipartisan action on a multiemployer pension relief as part of COVID-19 response legislation. While the letter does not include a specific call for including the GROW Act, it is potentially an important signal to the Republican leadership that there is support within the Republican Conference for addressing the looming multiemployer pension crisis.

Apprenticeships

The House passed legislation, H.R. 8294, to reauthorize the National Apprenticeship Act, the primary federal law governing apprenticeships on a bipartisan vote of 246-140. The Senate will not consider apprenticeship legislation this year.

The legislation would expand access to apprenticeships and training opportunities by codifying standards for registered apprenticeships. The bill will also provide funding to expand youth apprenticeships and pre-apprenticeship programs. The sponsors of the legislation say the goal is to create nearly one million new apprenticeship opportunities over the next five years.

Under the legislation, no funding would be made available to Industry Recognized Apprenticeships (IRAPs). IRAPs were included in a training rule finalized by the Trump Administration earlier this year and would shift apprenticeship oversight and credentialing authority to industry groups. IRAPs were strongly opposed by TAUC and the union construction industry. The final rule explicitly exempted the construction.

Both TAUC and the CEA expressed strong support for the legislation, which would expand and strengthen privately funded joint labor-management registered apprenticeship programs.

Emergency Temporary Safety Standard

It is widely expected that President-elect Biden will issue a mandatory workplace safety rules to protect workers from exposure to the coronavirus. Currently employers are subject to a patchwork of state and local regulations related to COVID-19 workplace protections. TAUC and its partners in the Construction Employers of America have supported the establishment of consistent national set of safety rules for contractors to follow - although the devil will be in the details of the specifics of the standards and enforcement.

DOL Final Rule on Financial Factors in Selecting Plan Investments

The Trump Administration finalized a rule to amend rules governing a fiduciary's investment duties under ERISA. The DOL's stated purpose in adopting the Rule is to confirm that plan fiduciaries must select plan investments solely based on financial considerations that impact the economic value of the investments. The rule would require trustees to focus only on investment returns, undermining the ability of collectively bargained plans to investment in opportunities that produce unique "pecuniary" benefits - such as additional man hours and plan contributions.

12/04/2020