THIS WEEK IN WASHINGTON
April 9, 2021
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.  
 
The cherry blossoms are out and tourists are slowly beginning to return to Washington. Congress is on recess, so we thought that we would take a deep look at the Administration’s infrastructure proposal, the American Jobs Plan.
 
Steve Veverka is one of the newest members of the Total Spectrum team. He currently divides his time between Mesa, Arizona and Minneapolis, Minnesota. In his article, Steve top-lines many of the provisions of the infrastructure proposal. Heard on the Hill looks at the plan from the Administration’s perspective and that of Senate Republicans and suggests some things to watch as this bill works its way through Congress.
 
Congressman Erik Paulsen is a former member of the House Ways and Means Committee and was Chairman of the Joint Economic Committee. He had prepared for today’s edition an article about the tax provisions that are part of President Biden’s infrastructure bill, but Wednesday morning the Treasury Department released a detailed proposal on the tax proposal, which is called the Made in America Plan. Congressman Paulsen will review this plan and we will include his report in a special future edition of This Week in Washington.
 
An upcoming interview for Total Spectrum Spotlight will be with Senator Shelley Moore Capito (R-WV). Senator Capito is the ranking member of the Senate Environment and Public Works Committee, and serves on the Committees on Appropriations; Commerce, Science, and Transportation; and Rules and Administration. Look for more from her in our next edition.
 
Jesse Weathington provides an update on the latest in Georgia with his Gold Dome Report. Be sure to check out the Infographs for an in-depth look at current hot topics.

Y’all stay safe, healthy AND sane…

Todd Smith
Chairman, Georgia Group

Jesse Weathington
Director, Georgia Group
Heard on the Hill
By Todd Smith, Partner and Georgia Group Chairman; and
Steve Gordon, Managing Director
 
Congress is on a state and district work period, but conversation has not quieted about the Administration’s infrastructure bill called the American Jobs Plan.
 
Everyone agrees that it is not an infrastructure bill as most of us would define it. It is a massive -- $2.3 trillion – piece of legislation. It expands the use of infrastructure far beyond roads, bridges, and broadband to include support for schools, federal buildings, power stations for electric vehicles, home care workers, and job training.
 
The plan has four parts:
  • How we move: investments in roads, bridges, rail – both passenger and freight – and other parts of the transportation infrastructure.
  • How we live: investments in broadband, water, power, housing, and buildings.
  • How we care for one another: investments in home and community-based care for older Americans and those with disabilities.
  • How we make things: investments in manufacturing, research and development, the development of a high-quality work force, and supply chains.

...Continued after the Gold Dome Report
Partner and
Georgia Group Chairman

Partner and
Georgia Group Director

Partner

Partner
INFOGRAPHS
Click image to download
Breaking down Biden's $2.3 trillion infrastructure plan
March unemployment falls, but remains above
prepandemic levels
Vaccine tracker:
32.6% of the U.S. has received first dose
What you need to know about
Biden's Plans For Climate Finance
Firearm background checks surge in the pandemic
Gold Dome Report
by Jesse Weathington, Partner and Georgia Group Director

As is typical for the Peach State this time of year, all eyes in the sporting world are on Georgia, just not for the usual reasons. Master’s Week has seen the ugly marriage of sports and politics spoil what is typically one of the sleepiest phases on the political calendar, coming as it does right after the cacophonous conclusion of the legislative session.
 
Why do Georgians still find themselves trapped in no-man’s land at the center of the nation’s grinding political trench warfare? This time the agony is over SB 202, the Election Integrity Act. One could be forgiven for not understanding what the bill does and does not do, given the level of hyperbole and misleading press coverage related to it. In any case, our great national pastime of viscerally disliking those who disagree with us is in rude health, even if at the expense of more traditional pursuits like baseball and golf. Apple pie and Mama are rumored to be next…
 
Much like a traveler searching for a missing bag, Gold Dome denizens were left scratching their heads in befuddlement at the timing of Delta CEO Ed Bastian’s statement on SB 202. A day late and a dollar short, all it succeeded in doing was alienating proponents of the bill (while they still had time to retaliate) while being too late to appease SB 202’s opponents. That was before Major League Baseball’s decision to pull the 2021 All-Star Game from Truist Park in Cobb County set off a national political firestorm.
 
Navigating partisan polarization has become akin to Ulysses sailing between Scylla and Charybdis for national corporations – disaster lurks on either side. Coca-Cola found itself in similar dire straits. With boycotts called for by both sides against those who have the temerity to speak out, seemingly the thing to do would be to stay quiet. That does not seem to be an option since some have forgotten that not speaking out is also a First Amendment right, as is the right to speak.
 
The reality is it benefits both sides of the divide to engulf everything in partisan controversy and rile people up. When negative partisanship rules the day, we define ourselves not by what we are for, but what (or whom) we are against. Eventually, we forget why, and it becomes reflexive. We just don’t like them, and if they want it, it must be bad. 
 
Unfortunately, ordinary people are caught up in this ridiculous tit-for-tat. One by one, the American Iconoclasm will claim more of our cherished traditions, and with nothing left shared, will leave a bitter taste in all our mouths. It will take more than a Woke-a-Cola and a pack of (non-GMO) peanuts to wash it out.
Heard on the Hill (continued)
 
The bill pays for these investments by proposing to increase corporate income tax rates, increase rates for individuals (or couples—it’s not yet clear) with income over $400,000 per year, and changing small business rates and provisions for pass-throughs like LLCs.

Democrats maintain that even with the outstanding jobs report for March, more than 9.5 million Americans remain out of work, one in three families are struggling, and millions of small businesses are just hanging on. The Biden Administration in its talking points memo for their infrastructure bill maintained that “this is a once in a generation chance to create a new economy by increasing public investment to where it was in the 1960s.” They want to create “good paying jobs by ensuring a free and fair chance to organize and join a union.”
 
Republicans counter that the Administration threw the proverbial kitchen sink in their bill. There appears to be broad Republican support for a true infrastructure bill, but it would probably be in the $600-$800 billion range. Republicans point out that the economy was really humming and we were at full employment prior to the pandemic – progress that was the result of the tax changes in the 2017 Tax Cuts and Jobs Act. They say that raising the taxes on American big business will make us less competitive in a global economy, and that the worst way to fund this bill is to tax small business, which is the engine of our economy.
 
President Clinton famously said that the “era of big government is over.” President Biden’s Administration says that these investments must be made to keep America competitive in the global economy, and that these public investments will ensure that all sectors of our population will not be left behind.

Republicans counter that the marketplace is the best way to create growth and opportunity, and that taxpayers cannot afford to keep spending as if there is no tomorrow. They point out that the federal government spent $4.4 trillion in all of 2019, and that President Biden proposes to match that in six months.
 
Republicans add that this is more a tax bill than it is an infrastructure bill. They point out that at least $900 billion of the $2.3 trillion American Jobs Plan pays for things that are a long way from infrastructure, and add that the proposed program delivers benefits for eight years yet requires higher taxes for 15 years.
 
Some Democrats agree. Senator Joe Manchin (D-WV) says he will not let this bill get to the Senate floor in its current state. Former Senator Heidi Heitkamp (D-ND) said “it is an Oprah Winfrey style of legislating. You get a road, and you get a hospital.”
 
Two things to watch:
 
Paying for infrastructure. This is like the old Irish saying that “everybody wants to go to heaven, but nobody wants to die.” Everybody wants new roads, more broadband, new airport terminals and a million other things, but no one is prepared to pay for them. A perfect example: we have not raised the gas tax since the 1970s and it has not even been indexed to inflation. We really do have to pay for the things we want and need, the question is who gets taxed and what is the impact.
 
Senator John Barrasso (R-WY) was Chairman of the Senate Environment and Public Works Committee in the last Congress. His committee passed in 2019 a one-year extension of the highway bill, which Senator Barrasso hoped would give Congress more time to work out a long term bipartisan solution. His bill unfortunately never got a vote on the floor of the Senate because Republicans could not agree on how to fund it.
 
Reconciliation Really Rules. Young Republican Senators often chaffed about the need to keep the filibuster when Republicans were in control, but Leader McConnell reminded them that someday they would be in the minority and would look at the issue differently. Progressive Democrats are now pushing to get rid of the filibuster, but Senators Kyrsten Sinema, Joe Manchin, Jon Tester (D-MT), and Dianne Feinstein (D-CA) are mostly opposed.
 
Majority Leader Chuck Schumer has made the case that Democrats can use reconciliation – which requires only a simple majority – twice more this year, and it appears that the Senate Parliamentarian agrees in principle. The details need to be worked out, but it looks like Democrats will have the opportunity to pass both the American Jobs Plan and one more piece of major legislation this year through the Senate using reconciliation, as long as the items in the bill pertain to budget matters.
President Biden’s American Jobs Plan: Infrastructure and More
By Steve Veverka, Strategic Partner
 
Last Thursday morning, the Biden Administration released details of its American Jobs Plan, the first wave of the Administration’s two-part American Rescue Plan.
 
The American Jobs Plan proposes to spend more than $2 trillion. The focus is on physical infrastructure – roads, bridges, water and sewer projects, and broadband – and also on providers and employees of home and community-based care. While there is less certainty on what leadership in the House and Senate will prioritize as they move forward or how much they will try to spend, the signal from the White House is a massive focus on transportation and housing.
 
The proposal by the numbers:
  • $621 billion to repair roads and bridges, modernize public transit, invest in passenger and freight rail service, create jobs in the electric vehicle market, and improve ports, waterways, and airports;
  • $50 billion to safeguard critical infrastructure in vulnerable communities that are susceptible to or have been impacted by natural disasters;
  • $111 billion to replace lead pipes and to upgrade and modernize drinking water, wastewater, and stormwater systems while supporting water infrastructure in rural areas;
  • $100 billion to build broadband infrastructure that reaches 100% coverage;
  • $100 billion to upgrade and modernize the electric grid while creating jobs in the industry, plugging orphan oil and gas wells and create a “Civilian Climate Corps”;
  • $213 billion for affordable housing;
  • $137 billion to modernize public schools, invest in community colleges, and upgrade and build child care facilities in areas that need it most;
  • $10 billion to upgrade VA hospitals and federal buildings;
  • $400 billion to expand access to long-term home and community-based care services under Medicaid for the elderly and disabled, and increasing pay of in-home care workers;
  • $180 billion to research and development in new technologies and climate science and to eliminate gender and racial inequities in STEM (science, technology, engineering, and math);
  • $300 billion to strengthen manufacturing supply chains, protect Americans from future pandemics, build regional innovation hubs, increase access to capital for domestic manufacturers, and partner with rural and tribal communities on economic development initiatives;
  • $100 billion to invest in workforce development, including job training, apprenticeships, and career services;
  • $10 billion to create union jobs and beef up labor union efforts to protect workers; and
  • Ten-year extension/phase down of tax credits for solar development.
 
The Administration wants to raise $2 trillion to pay for this plan, largely via changes to the corporate tax code. Their plan would increase the corporate tax rate from 21% to 28%, crack down on corporate inversions to tax havens, end tax breaks for the fossil fuel industry, and increase IRS enforcement of corporations.
 
Shortly after the plan was released, Speaker Pelosi told her caucus that her goal is to get an infrastructure bill through the House by July 4. House Republicans have already been messaging their opposition to the plan, and in some cases, tying it to the Green New Deal. Some House Democrats hope to make some changes in the committee process and have talked about addressing the $10,000 taxpayer limit on state and local taxes (SALT) that the Trump Administration implemented in its 2017 tax bill.
 
There is some hope that Republicans and Democrats could find a bipartisan way to pass portions of the bill on which they can agree. However, the more likely outcome is that Senate Majority Leader Chuck Schumer will use reconciliation again to avoid the filibuster. President Biden’s approval rating is at 52%, so he is probably going to forgo passing on compromising with Republicans and instead continue to focus on pleasing Democrat, Independent, and maybe even a few Republican voters.
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.