TAUC Legislative & Regulatory Update, September 2021
Summer is winding down, but as temperatures cool, things are just starting to heat up on Capitol Hill! Here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.
Congress Considers Bipartisan Infrastructure Bill and Budget Reconciliation Package
Last month, following back-and-forth negotiations, the Senate passed the trillion-dollar Infrastructure Investment and Jobs Act (IIJA). At the end of July, the bipartisan group of Senators leading discussions reached a compromise on revenue sources, such as repurposing $205 billion of unused COVID relief funds and $53 billion in untapped enhanced unemployment benefits, setting the stage for passage. IIJA passed on a 69-to-30 vote that included 19 Republican votes. The infrastructure package, which also serves as a 5-year transportation reauthorization bill, represents a significant increase in federal transportation investment.
After the Senate advanced IIJA, Democratic infighting in the House threatened to derail passage. Led by Problem Solvers Caucus Co-Chair Rep. Josh Gottheimer (D-NJ), a group of House moderates sought to force a vote on IIJA before agreeing to advance a budget resolution necessary for budget reconciliation. Progressives worried that passing the bipartisan infrastructure measure first would allow moderates to whittle down spending levels in reconciliation. However, Speaker Nancy Pelosi reached an agreement with the group, committing to floor votes for both measures before September 27th. In exchange, the moderates agreed to adopt a special rule (H. Res. 601) that automatically passes the Senate-passed budget blueprint (S. Con. Res. 14) that provided $3.5 trillion in reconciliation instructions. Progressives maintain their commitment to advancing the reconciliation measure first, creating another potential standoff with Speaker Pelosi later this month. However, pressure is growing from the White House, the business community, and the public to enact the popular bipartisan legislation.
After the House adopted the special rule, the Senate-crafted budget resolution set the stage for the budget reconciliation process. Budget reconciliation is a special process, or tool, that allows the majority to bypass the filibuster, allowing legislation to advance through the Senate with 51 votes rather than the usual 60. The process involves instructing relevant committees to change spending, revenues, deficits, or the debt limit by specific amounts, which the Budget Committee then packages into one bill. Reconciliation can only be used in certain circumstances, including policies that directly impact the budget through revenues and spending. The Senate parliamentarian also has power over deciding whether specific provisions are allowed to be part of the budget resolution. According to Senate Majority Leader Schumer, his office has been in constant contact with the Senate parliamentarian to ensure a thorough passage of the budget reconciliation.
Given the inability to secure 60 votes in the Senate to allow for consideration of the PRO Act, which would make it easier for labor unions to organize in companies, Senate Budget Chairman Bernie Sanders (I-VT) has reiterated his intent to include elements of the bill in the budget reconciliation measure. While many of the provisions - such as allowing secondary boycotts -- are likely ineligible in the budget reconciliation process due to the Byrd Rule, which precludes the inclusion of any provision that does not directly impact the budget, some elements that do not change underlying labor law and policy could be included in the reconciliation package. The House Education and Labor Committee recently released a Committee Print outlining labor-related provisions, including fines of up to $50,000 on firms for labor rights violations and penalties of up to $100,000 for violations that result in an unjust firing. On a related note, the Education and Labor Committee portion of the reconciliation bill also includes $80 billion for workforce development training programs and expands registered apprenticeship programs.
The House Ways and Means Committee also released details of its portion of the reconciliation bill. Under the proposal, a new national paid medical and family leave plan would take effect in July 2023, providing up to 12 weeks of federal benefits to cover leave-related lost wages. Workers must provide, or expect to in the future, at least four hours of care per week to be eligible. The program would create a floor of $315 in weekly leave benefits and replace up 85% of lost wages for low-income workers, decreasing to 5% for high-income earners (over $250,000).
As the committees of jurisdiction craft reconciliation legislative text, tax-writing committees must develop revenue streams to finance the domestic investments. Democrats aim to increase taxes on high-income earners and the corporate rate. They are also considering efforts to target CEOs with salaries that exceed a certain ratio relative to their average employee and a tax on stock buybacks. Additionally, Democrats seek to repeal elements of the Tax Cuts and Jobs Act of 2017, including overhauling "step-up basis" laws for inherited wealth.
Committees with jurisdiction over elements of the reconciliation must report their portions of the package to the budget committees by September 15, where it will be combined into legislation to be considered on the House and Senate floor. Both House and Senate Democratic leaders are intent on attempting to consider the $3.5 trillion package in late September, although discussions on the elements to be included and the overall cost of the package could lead to delays in this process.
CEA Comments on PBGC Interim Final Rules
On July 9th, the Pension Benefit Guaranty Corporation (PBGC) issued an interim final rule (IFR) describing how the agency plans to administer approximately $94 billion in bailout funds through the Special Financial Assistance (SFA) Program. SFA funding provides relief to distressed multiemployer pension plans facing potential financial insolvency in the coming years. The 30-day comment period closed on August 9th, and TAUC joined with its partners in the Construction Employers of America (CEA) in submitting comments on the proposed rule.
The comments outlined CEA's support for federal efforts to enhance multiemployer pension long-term stability, including through SFA funds. The letter also highlighted several concerns with programmatic implementation, such as the need for trustee flexibility to avoid signatory contractors paying into plans on behalf of active participants that are likely to become insolvent before 2051. The letter also expressed serious concerns over the investment limits and discount rate projections the PBGC set on the money plans will receive under SFA. The IFR sets interest rates plans would need to generate at least 5.5 percent annual returns to ensure the money lasts for 30 years. The IFR would require that amounts received in SFA could only be invested in "investment grade bonds," which usually return no more than 3.5% annually. That would result in up to a 2% annual funding shortfall, further exasperating the funding issues facing failing plans. PBGC is reviewing comments and could revise the IFR. No timetable has been set for finalizing the rule.
OSHA Updated Guidance on COVID
On August 13th, the Occupational Safety and Health Administration (OSHA) issued updated guidance on protecting unvaccinated and other at-risk workers from the coronavirus. Key elements of the release include:
- Recommends that fully vaccinated workers in areas of substantial or high community transmission wear masks in order to protect unvaccinated workers
- Recommends that fully vaccinated workers who have close contacts with people with coronavirus wear masks for up to 14 days unless they have a negative coronavirus test at least 3-5 days after such contact
- Clarifies recommendations to protect unvaccinated workers and other at-risk workers in manufacturing, meat and poultry processing, seafood processing and agricultural processing; and
- Links to the latest guidance on K-12 schools and CDC statements on public transit.
The release reflects updated Center for Disease Control (CDC) guidance for vaccinated individuals, including:
- Added a recommendation for fully vaccinated people to wear a mask in public indoor settings in areas of substantial or high transmission.
- Added information that fully vaccinated people might choose to wear a mask regardless of the level of transmission, particularly if they are immunocompromised or at increased risk for severe disease from COVID-19, or if they have someone in their household who is immunocompromised, at increased risk of severe disease or not fully vaccinated.
- Added a recommendation for fully vaccinated people who have come into close contact with someone with suspected or confirmed COVID-19 to be tested 3-5 days after exposure, and to wear a mask in public indoor settings for 14 days or until they receive a negative test result.
OSHA Considering Heat-Related Regulations
OSHA is expected to issue a request for information regarding a proposed heat rule next month. Additionally, several states, including Washington and California, have undertaken efforts to promulgate indoor heat rules.
The CDC has advocated for the creation of temperature-based thresholds to protect laborers. The Biden administration appears supportive of such an initiative, numerous technical issues make it challenging to advance effective guidance quickly. As Congress crafts a reconciliation measure this fall, advocates will emphasize the importance of addressing climate change through domestic policy, potentially furthering these efforts.