THIS WEEK IN WASHINGTON
September 18, 2020
Welcome to the Georgia edition of This Week in Washington. Thank you for your interest in politics and policy from the Peach State to the Potomac.
 
Total Spectrum published its first edition of This Week in Washington on January 23, 2017. The initial goal was to keep you both aware of and involved in legislative issues and regulatory matters that are important with articles written by experienced experts who are involved in these issues every day. We wanted to introduce you to key Senators and Congressmen, and we also wanted to provide you with perspectives on the political process – because legislating and governing does not happen in a vacuum.
 
We have been humbled by the outstanding response to This Week in Washington. A number of readers and clients have been approached about expanding our reporting, and we have responded.
 
Our goals have not changed. But now This Week in Washington will have more.
John McKechnie will continue to report on banking and financial services, Ramona Lessen will continue to report on important committee hearings, Jesse Weathington will continue to give us the latest in Georgia with his Gold Dome Report, Al Jackson will continue to watch defense and defense appropriations issues,  and former Congressman Erik Paulsen, Steve Gordon and I will continue to write on all things Washington in Heard on the Hill. As always, make sure to check out the Infographs for an in-depth look at current hot topics.
 
Patrick Robertson is new to the Total Spectrum family, but he is far from new to Washington. Patrick served former Senator Jay Rockefeller for nine years – the last five as his assistant chief of staff. He worked closely with the Senate Finance Committee on tax, trade, and trade adjustment issues, and he also worked closely with the Senate Commerce Committee. He now has spent over 10 years in the private sector and has wonderful relationships with Senate and House Democrats and their staff. Patrick is a graduate of American University’s Washington College of Law, and his in-laws live in Tucson.
 
Total Spectrum Spotlight will provide short but meaningful video interviews with both news makers and news shapers. We will work to ask the questions you would ask – and keep our interviews precise and focused. Find this new feature in the right-hand margin, just below the Infographs.
 
The NEW This Week in Washington starts now.
We lead off with Patrick Robertson’s first Washington Whispers column. Erik Paulsen recently wrote an op/ed in Newsweek about the need for our trade agreements to prioritize American intellectual property, and we are reprinting it here. We write about what happened in August and some of the things to watch as we go forward toward the election in Heard on the Hill. Al Jackson provides an update on defense, and Ramona Lessen reports on a Senate Homeland Security hearing in August on the U.S. Postal Service.  
 
And finally, Steve Gordon interviews former Congressman Erik Paulsen in our inaugural episode of Total Spectrum Spotlight.
 
Thanks for your interest in Washington. Thanks as always for reading – and now watching – the NEW This Week in Washington. We will be back in two weeks with another issue.
 
Y’all stay safe, healthy AND sane…

Todd Smith
Chairman, Georgia Group
Jesse Weathington
Director, Georgia Group
‌
Partner and
Georgia Group Chairman

Partner and
Georgia Group Director

Partner

Partner
INFOGRAPHS
Click image to download
Uninsured Americans face barriers to Covid-19 testing and treatment
What's in the MORE Act
Ranked-choice voting, explained
Total Spectrum Spotlight

In this newest addition to This Week in Washington, we are excited to present short and meaningful interviews with newsmakers and news shapers by way of Total Spectrum Spotlight.  

Click below to watch our inaugural edition in which Steve Gordon and former Representative Erik Paulsen discuss Congress’s most pressing agenda items – additional economic stimulus related to COVID-19, funding the federal government, and other legislative action needed before the November election.
Heard on the Hill
by Todd Smith, Partner and Georgia Group Chairman; Steve Gordon, Managing Director; and
U.S. Rep. Erik Paulsen (2009-2019), Strategic Consultant

Congress was out of Washington in August, so this is our first report in quite a while. Let’s start by reviewing August’s happenings and bring you up to date on news to the present.
 
This August in Washington – The normal on steroids in this very abnormal year.
A usual August In Washington for staff, associations, campaign staff, consultants, and lobbyists is relaxed and low key. It is a great time to catch up on reports and strategic thinking, catch up with friends, have a leisurely lunch with business colleagues, and squeeze in a short vacation.
 
This August was anything but usual. We have – like most Americans – spent the last six months siloed. Zoom meetings have taken the place of most interaction. Some restaurants are closed, and some have opened for take-out and limited on-premise dining. A few restaurants opened for outside dining, which is probably healthier but who wants to eat in 90-degree heat and 90 percent humidity.
 
We were struck by a Downtown DC Economic Update published by Washingtonian magazine. The results were dramatic and highlighted what we knew. Working from home is the new normal, and there’s very little business or tourist travel coming to Washington.
  • Only 5% of office workers in downtown Washington were in their workplaces at the end of July.
  • Economic activity in downtown Washington was only 12% of what it was the previous year
  • Restaurant sales were 20 to 40% of what they were a year ago
  • Sales at destination stores were 30 to 50% of what they were a year ago
  • Hotel occupancy was 8% in June.
  • The Walter Washington Convention Center is closed and will remain closed through the end of the year.
  • The sole bright spot was downtown housing, where condo prices rose from $617 per square foot in 2019 to $663 per square foot in the first half of 2020.
 
The Conventions
Steve Gordon loves conventions. He has been to every Republican national convention since 1984, and has watched most of the Democratic national conventions. Political conventions used to be designed to turn on the faithful who either worked for, volunteered with, or contributed to the two political parties. But conventions have changed because parties and the political process have changed. Conventions are now made-for-tv-productions primarily focused to sway independents. But they are still instructive – by listening to the messages and watching the messengers.
 
The Democratic Convention –Week of August 17
Speakers included Progressives (Senator Bernie Sanders, Congresswoman Alexandria Ocasio-Cortez), Party Leaders (former President Barack Obama, Former First Lady Michelle Obama, President Bill Clinton, Senate Minority Leader Chuck Schumer and others), Republicans (Former Ohio Governor John Kasich, Former Secretary of State Colin Powell) and the Standard Bearers (former Vice President Joe Biden and Senator Kamala Harris and their families).
 
The goal was to create a perception of a united front of Democrats, Progressives, and moderate Republicans whose focus is a white-hot determination to defeat Donald Trump. They showed a diverse but united party and downplayed details of their agenda.
 
The Republican Convention – Week of August 24
Speakers included conservatives (Congressman Jim Jordan, Senator Tom Cotton), black and female Leaders (Senator Tim Scott, Kentucky Attorney General Daniel Cameron, Secretary of Housing and Urban Development Ben Carson, Former UN Ambassador Nikki Haley, Iowa Governor Kim Reynolds, Senator Marsha Blackburn, Senator Joni Ernst, and others), Party Leaders (Leader Mitch McConnell, US House Minority Leader Kevin McCarthy) , and the Standard Bearers (Vice President Mike Pence, President Donald Trump and their families).
 
The goal was to show the strength of support President Trump has with minorities and women, and the Administration’s accomplishments. They showed a diverse party and united party and downplayed details of their agenda.
 
August Unemployment Numbers
The U.S. unemployment rate in August fell for the fourth straight month to 8.4%. We are clearly on the right road back.
                       MONTH                      UNEMPLOYMENT RATE
                       Jan 2020                     3.6%
                       Feb 2020                    3.5%
                       Mar 2020                    4.4%
                       Apr 2020                    14.7%
                       May 2020                   13.3%
                       July 2020                    10.2%
                       August 2020                8.4%
 
The number of unemployed people dropped in August by 2.8 million to 13.5 million as many employers continued to rehire employees following the COVID-19 lockdown.
 
September – Congress ties up loose ends
Additional Stimulus legislation
We said in July that we could not imagine a situation where the Administration and the Speaker didn’t find a way to pass additional legislation. It is never over until it is over, but the odds are not good.
 
The first hurdle was that Majority Leader McConnell had to get his caucus to agree on a compromise bill. We are told that Senator McConnell had a daily call in late August with members of his caucus to hammer out the details for a ‘skinny bill’. Over in the House, about 100 Democrats want the Speaker to compromise and move closer to the Administration’s position on the terms for additional legislation.
 
Senate Democrats filibustered the Republican’s skinny bill when it was brought to the floor. Sixty votes were needed to break the filibuster and move the bill forward. Fifty-two of 53 Republicans voted for the skinny bill, but no Senate Democrats voted for it.
 
The Speaker said this week that the House would stay in session under an agreement that was reached on a COVID-19 package. However, that does not mean that House members will stay in Washington, rather that the House will technically stay in session when Congress leaves Washington at the end of the month. Members of the House would be subject to a call to return to Washington to vote for a compromise package.
 
Republican leadership in the Senate and the White House are convinced that Democrats do not want to give President Trump anything that looks like a victory. We were told by a chief of staff for a Republican senator that “Democrats have purposely avoided getting an agreement because they see it as politically beneficial to them.” Look for action after the election.
 
BREAKING. President Trump urged Republican Senators Wednesday morning to go big on new stimulus spending – much bigger than they have gone so far. President Trump also called Democrats heartless “for not wanting to give stimulus payments to people who desperately need the money – it wasn’t their fault that the plague came from China.”
 
It appears that the sweet spot where both the Administration and the Speaker could agree is $1.5 trillion. But the sweet spot for Senate Republicans is $1 trillion – about half the caucus would prefer to spend less than $1 trillion, while about half would prefer to spend more. Senate Democrats would have to carry the bill in the Senate and we expect about half of the Republican Senators to vote for it.
 
Appropriations for the fiscal year that starts October 1
Both the Senate and the House are going to start working next week on a ‘clean’ continuing resolution that will retain this fiscal year’s levels of funding into the next fiscal year. The only question is how many months the continuing resolution will cover… and that will ultimately get worked out. A government shutdown has been ruled out by both the Administration and the Speaker of the House.
 
Transportation
The Senate and the House both passed surface transportation bills, but Senate Republicans thought the House bill was too green. We’ve been told to expect a one-year extension of the current law that expires on October 1st.
 
Leave No Judge Behind
Senate Republicans are continuing their effort to confirm as many Judges as possible before the end of the September.
 
Update: COVID 19 Vaccine
The U.S. Department of Health and Human Services and the Department of Defense released on Wednesday the most detailed plan yet for distributing and administering millions of doses of a future coronavirus vaccine for free to Americans. The Centers for Disease Control and Prevention is requiring states and jurisdictions to submit plans on how they will administer and distribute the vaccine by October 16.
 
The hope is that limited doses will be available to specific groups of people – for example, first responders – as early as November. The supply is expected to dramatically increase in 2021.
Gold Dome Report
 
The 2020 General Election is officially underway in Georgia, as election officials around the state started mailing some 1.1. million absentee ballots this week to voters who have requested them. From here until Tuesday, November 3rd be prepared to see political and campaign ads whenever you train your eyes towards a screen. Georgia’s dual Senate races coupled with the Presidential contest and battleground status have made the state a hotbed of campaign activity and have attracted large ad buys from national groups backing both parties and their candidates.  
 
The 14th Congressional District continues to generate headlines, although for slightly different reasons than of late: typically, the outspoken and no-holds barred rhetoric of GOP nominee Marjorie Taylor-Greene has no trouble attracting media attention, however this week her (former) opponent and the retiring incumbent took the focus. Democratic nominee Kevin van Ausdal abruptly ended his campaign after announcing he was moving out of state. The same day, current 14th District Congressman Tom Graves announced that he would not finish his term and would instead retire in the fall after completing his legislative work before the lengthy congressional recess. Neither event will impact the race, as Taylor-Greene is heavily favored to win, but both underscore the notion that in 2020, anything can and does happen.  
 
The surprises did not stop there. Those in Georgia who keep a close watch on happenings under the Gold Dome were likely taken unawares by the sudden announcement that Governor Brian Kemp’s longtime aide-de-camp, Chief of Staff Tim Fleming, would be departing the Administration for a private sector role at the end of September. Fleming has served as CoS since the outset of Kemp’s governorship in 2019 and has served the Governor throughout his public career. He will be replaced on an interim basis by current Chief Management Officer Caylee Noggle until a permanent replacement is named.  
Washington Whispers
by Patrick Robertson, Total Spectrum Strategic Consultant
 
With little more than a month to go before the 2020 election, one of the pressing questions in Washington is, “What would a Biden administration look like?” Currently, pundits are kicking around a variety of answers and President Trump has weighed in a number of times about what he thinks a Biden administration would look like.
 
Most of us know what to expect with a second Trump term. Taking COVID-19 out of the conversation, the President has promised to make the second term look a lot like the last four years, even promising new tax cuts and significantly further reducing the size of the government.
 
Before getting to the Biden campaign’s priorities, four things should be noted – first, little of anything can be done by either candidate until COVID-19 is controlled; second, while neither campaign is talking about it seriously, the national debt is going to be an issue in the next four years; third, a number of social issues like gun control will be at the forefront; and fourth, a Biden Administration will rejoin the World Health Organization (WHO) and alter the international relationships of the U.S., none of which are discussed below.
 
On the debt, the U.S. government currently owes more than $20 trillion to other countries and has about $5 trillion in liabilities for intergovernmental transfers. This year, the U.S. is projected to add $3.3 trillion to the debt, more than three times last year and the highest level as a percentage of the Gross Domestic Product (GDP) since 1945. It is rapidly approaching 100% of GDP. While current low interest rates will continue to keep debt service close to what it has been, this long-term issue will need to be reckoned with at some point, though not in the heat of this Presidential campaign.
 
With those gigantic caveats, former Vice President Biden has laid out an aggressive and sweeping agenda for his first 100 days. Some of his proposed actions are predictable, like repealing Trump-era environmental regulations and expanding worker protections. But the Biden agenda follows a tried-and-true Democratic playbook – expand government programs, raise taxes on corporations and the wealthy, and increase environmentally friendly policies.
 
Expansion of Government Programs
The Biden campaign has proposed a $1 trillion January 2021 stimulus plan plus a $3 trillion Build America Back Better proposal for later in the spring. The first stimulus would likely address COVID recovery and response, including more money for testing, state and local governments, potentially more direct payments to Americans, expanded unemployment benefits, and other stimulus payments.
 
The Build America Back better plan would fund American manufacturing, green energy technologies, and infrastructure. H.R. 2, The Moving Forward Act, passed earlier this summer by the House will serve as a model for this proposal. That bill included a lot of green energy provisions, infrastructure spending, expansion of community development tax credits, and other priorities of the House Democratic majority. You can find more information on the Moving Forward Act on the House Transportation and Infrastructure Committee’s website.
 
Advisors to the Biden campaign are pushing for bold stimulative action, and with interest rates so low, are comfortable with more debt to fund the spending. While this has often been the Democratic line, it is even better established in this campaign with the alternative being painted as a decade of economic woe without unprecedented spending.
 
Tax Proposals
In order to pay for some of the spending outlined above, which is necessary even if a Biden Administration is willing to increase the debt, the Biden campaign has proposed the following tax changes:
  • Repeal the Tax Cuts and Jobs Act (TCJA) tax cuts for those making more than $400,000 a year
  • Tax capital gains as ordinary income for those making more than $1 million
  • Raise the corporate rate from 21% to 28% (it was 35% before TCJA)
  • Double the Global Intangible Low Tax Income (GILTI) rate from 10.5% to 21%
  • Impose the 12.4% Social Security payroll tax on wage and self-employment income over $400,000
  • Enact a carbon capture and sequestration tax credit
  • Increase the child tax credit
  • Increase green tax provisions, like the electric vehicle credit and a credit for residential energy efficiency
  • Expand the Earned Income Tax Credit
 
You can read more about these proposals from the Biden campaign and the Tax Foundation.
 
Environmental Policy
On the campaign trail, former Vice President Biden has promised net-zero emissions economy wide by 2050. One way he plans to meet that goal is through $2 trillion in investments in the green economy. Certainly, some of those will be double counted from the infrastructure spending mentioned above. His campaign planks include zero-emission transit for any city with more than 100,000 people and carbon emission-free American power by 2035. You can read more about his environmental policy here.
 
Conclusion
There are two more key points for consideration. First, a Biden Administration, or a Trump Administration for that matter, cannot accomplish the vast majority of these goals without a majority in the House and a super-majority in the Senate. This raises the key question of whether Democrats will win the Senate if Joe Biden is elected President and if they do whether they will consider eliminating the 60-vote threshold of the filibuster for legislation. Democrats eliminated it for some nominees in the Obama Administration and Republicans expanded it to all judicial nominees in the early days of President Trump’s current term. With the race for the Senate a tossup, the one thing that is all but certain is a Democratic majority in the House.
 
In addition, there are a number of other enormously important items that are not mentioned above. Much like the Obama Administration put health care before cap and trade and the Trump Administration put tax policy above health care and immigration, a potential Biden Administration would need to prioritize a number of these issues plus immigration, health care, and a slew of others, assuming the events of the world do not supersede their ability to focus on the Biden priorities.
 
In summary, a Biden Administration would hew to its leader’s longtime moderate bent on issues like infrastructure and taxes, while also working to satisfy the left wing of the party that coalesced around him to ensure he was the Democratic nominee. When you look at personnel, it will likely look like a cross between a third Obama term, a cavalcade of institutionalists that have been around Joe Biden over his decades in Washington, and the government in exile Democrats have been using to push back on the Trump Administration.
 
Finally, all of this discussion is completely moot if the President is reelected, but as we approach an election with two choices, it is important to think about what each result could mean.
Opinion: New U.S.-U.K. Trade Agreement Must Prioritize American Intellectual Property
by Former Congressman Erik Paulsen (2009-2019), Total Spectrum Strategic Consultant
 
It looks increasingly unlikely that American and British negotiators will finalize a U.S.-U.K. trade agreement this year. When asked whether a deal could be struck by the end of 2020, one U.K. official recently responded, "Basically, no."
 
No one likes to wait. But if holding out for another year leads to a better deal, then that's certainly the right approach. Our two countries have the potential to strike a top-notch agreement that sets the standard for future international trade pacts and puts the rest of the world on notice. Negotiators would be wise to use this extra time to secure state-of-the-art intellectual property and market access protections for American innovators.
 
The United States and the United Kingdom are two of the largest economies in the world, and the lifeblood of the international trade ecosystem. In 2019, the United States traded nearly $6 trillion U.S. dollar (USD) worth of goods and services with foreign nations, while the U.K. exchanged more than $1.8 trillion USD worth of the same wares. Given their dominance on the global economic stage, they can deliver the most ambitious bilateral trade deal in modern history.
 
The robust trade relationship between the United States and the United Kingdom certainly reinforces the prospect of that. In 2018, the latest year for which data is available, U.S. goods and services trade with the U.K. eclipsed $261 billion. America is the single largest investor in the U.K. And fittingly, our British allies are also the largest investor in the United States.
 
American workers, businesses, and consumers benefit tremendously from U.S.-U.K. trade. Consider that British companies operating in the United States employ over 1.25 million Americans in high-paying sectors like manufacturing, technology, pharmaceuticals and more. And U.S. goods and services exports to the U.K. support more than 665,000 American jobs.
 
Still, this relationship has room to grow—especially when it comes to intellectual property protections.
 
Take the U.S. biopharmaceutical sector, which employs over four million Americans. Our innovation ecosystem produces more than half of the entire world's new medicines, helping people across the globe live longer and healthier lives.
 
But it's no simple feat. Bringing just one new drug through the development pipeline to patients typically costs billions of dollars and takes more than a decade. Even when biopharmaceutical companies commit to this investment, less than 12 percent of the medicines that enter clinical trials secure FDA approval.

The United Kingdom unfairly punishes U.S. drug companies with price controls on these expensive, cutting-edge medicines. This makes it even harder for American innovators to recoup R&D costs, which discourages them from future drug investments.
 
Especially now, in the new reality ushered in by the coronavirus, we cannot afford any disincentives against biomedical innovation. That's why U.S. trade negotiators must do all they can to ensure that the U.S.-U.K. trade deal prioritizes American scientists and medicine manufacturers.
 
The new U.S.-U.K. deal must also include 21st-century protections for America's creative industries. Rampant online piracy in the United Kingdom robs American recording artists, producers and film and television creators of hard-earned compensation.
 
In 2018 alone, the United Kingdom saw nearly six billion visits to pirated websites. And just this spring—during the coronavirus-induced quarantine—traffic to pirated film sites increased by nearly 60 percent compared to visits earlier in the winter. A robust U.S.-U.K. trade deal must include provisions that address this blatant disregard for American innovation.
 
Consider also America's software industry. This sector, which supports more than 10 million jobs across all U.S. states, relies on cross-border data transfers—the digital transfer of information between servers in different countries.
 
Since the majority of the world's population lives outside the United States, our national competitiveness will depend on strong safeguards for cross-border data transfers. It's imperative for the United States and the U.K. to put robust protections in place to remove costly barriers for digital businesses overseas.
 
Amid the coronavirus pandemic, a U.S.-U.K. agreement replete with strong intellectual property protections would provide our nation some much-needed economic security.
 
Forty-five million Americans' livelihoods depend on IP-intensive sectors—from tech to manufacturing, music to movies and even agriculture to chemical production. In total, America's IP is worth at least $6.6 trillion.
 
It's disappointing that the U.S. and U.K. officials have yet to reach a comprehensive trade agreement. But if we have to wait, let's use that time to hammer out the best deal possible—one that serves as a gold standard for all future trade agreements.
 
This article originally appeared in Newsweek magazine on August 19, 2020. The views expressed in this article are the writer's own.
Hearing Report:
Senate Homeland Security & Governmental Affairs Committee hearing
"Examining the Finances and Operations of the USPS During COVID-19 and Upcoming Elections"
Friday, August 21, 2020
Reported by Ramona Lessen, Executive Director, Total Spectrum

We strive to provide vital and current information on key subjects. I covered the August 21 hearing before the Senate Homeland Security & Governmental Affairs Committee examining the operations and finances of the U.S. Postal Service. This report is not intended to be a transcript, but rather my notes trimmed to fit available space. Click here to download the full report including the hearing’s lengthy but important Question and Answer session.
 
Witness:
Louis DeJoy, Postmaster General, U.S. Postal Service
 
Members:
Ron Johnson (R-WI) – Chair
Rob Portman (R-OH)
Rand Paul (R-KY)
James Lankford (R-OK)
Mitt Romney (R-UT)
Rick Scott (R-FL)
Mike Enzi (R-WY)
Josh Hawley (R-MO)

Gary Peters (D-MI) – Ranking Member
Tom Carper (D-DE)
Maggie Hassan (D-NH)
Kamala Harris (D-CA) - did not participate
Kyrsten Sinema (D-AZ)
Jacky Rosen (D-NV)

 
Opening Statements

Postmaster General DeJoy (testimony)
 
Senator Ron Johnson (R-WI) (opening statement): I thank Postmaster General DeJoy for being with us. Unfortunately, he has found out that it is a thankless task and has been subjected to character assassination. I hope we can stick to the facts today. The Postmaster General is not appointed by President Trump. A bipartisan Board of Governors engaged a professional search firm; the bipartisan board unanimously approved Mr. DeJoy. He reports to the board, not the President. The postal service has $15.1 billion cash on hand following a better performance during the pandemic. Due to a surge in package delivery, it is $1.5 billion higher this year than last. Long-term for the postal system is bleak and has been for years. First class mail volume has declined dramatically. It does not have the flexibility to make dramatic reductions. Pension fund and health care liabilities of $120 billion are now unfunded. Taxpayer bailout has been proposed in the past. For years, GAO inspector general reform fixes have not been implemented. One highlighted is the out of control use of overtime. $4 million in overtime costs - those costs represent 85% of the USPS losses. USPS has more than enough capability to process votes.
 
Senator Gary Peters (D-MI) (opening statement): We have a lot of questions for you. We have had a health and economic crisis. Now we are facing a mail crisis. For many communities, the postal service is a lifeline, especially in communities where they don’t deliver. Mr. DeJoy, you have not delivered. For two centuries, we have been able to rely on the USPS. This has not been the case during your two months as the head of the organization. Your new implementations have caused delays. In July, I started hearing reports about how your changes were slowing down the mail. Despite multiple requests which took more than a month to respond directly. You have brushed off these delays. Let me tell you about the people who bear the brunt of your decisions. (Cited individual constituent issues). I have received more than 7500 reports of delays in just 2 weeks. Mr. Chairman, I enter into the record what my investigation has found. Mr. DeJoy, your decisions have cost Americans - you owe them an apology and some clear answers today. Can the damages you have done already be reversed?
 
Report shortened to fit space allotted. You may download Ramona’s full report, including the hearing’s lengthy but important Question and Answer session.
This e-newsletter is produced by Total Spectrum/SGA and Total Spectrum Georgia. The views expressed herein may include subjective commentary and analysis that are the views of the editors and authors alone. Information in this e-newsletter is obtained from sources believed to be reliable, but that cannot be guaranteed as independently investigated or verified. Information in this e-newsletter is not an endorsement, advertisement, recommendation, or any type of advice, political, legal, financial, or otherwise. With questions about the content of this e-newsletter, please contact Total Spectrum Georgia.