THIS WEEK IN WASHINGTON
June 25, 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. 
 
Patrick Robertson writes about the round-and-round (and round) negotiations we’ve seen on infrastructure in this issue’s Washington Whispers. Todd Smith and Blake T. Fulenwider take a closer look at the Supreme Court’s latest defense of the Affordable Care Act, Al Jackson updates us on activities impacting the defense sector, and Ramona Lessen summarizes a Senate Commerce hearing on building resilient networks.
 
Of course, Jesse Weathington gives us 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.
 
Congressman Erik Paulsen has a special and vitally important Total Spectrum Spotlight interview with Jay Timmons, the President and CEO of the National Association of Manufacturers.
 
The Senate and the House will be on their summer recess the week of July 5th. Total Spectrum Spotlight will take July and August off, but will return in September. We will return on July 16th with the next issue of This Week in Washington.
 
Y’all have a wonderful Independence Day Holiday. And, as always….stay safe, healthy AND sane.

Todd Smith
Chairman, Georgia Group

Jesse Weathington
Director, Georgia Group
Washington Whispers
By Patrick Robertson, Strategic Partner
 
The infrastructure debate continues apace, even as the path to spending hundreds of billions of taxpayers’ dollars remains unclear. This week, President Biden’s team agreed on a framework with a bipartisan group of lawmakers – the size of the group remains in flux but is north of 20 – to discuss whether there is a way to move forward with a package that will get more than 60 votes in the U.S. Senate. The alternative, as you have read in this space many times before, is for Democrats to use the budget reconciliation process to pass a bill with 50 Democratic votes in the Senate.
 
At this point, it is beginning to feel a little like the Bill Murray movie Groundhog Day where the main character relives the same day thousands of times over. Since President Trump took office in 2017, the political world has been focused on infrastructure and how to expand the federal government’s role. Now, during the Biden presidency, if you go back to the archives of any newspaper, you will find an article with a headline like, “This week key for infrastructure talks” for every week since mid-January.
 
Those outside of Washington, D.C. wonder if the political chattering class is really the boy who cried wolf and that feels like a very fair metaphor for these talks – as does Groundhog Day. Now that negotiators reached a deal, it is fair to say that history will look back at mid-June as one of the key inflection points in these discussions.
 
Although the bipartisan group of Senators (which apparently does not yet have a catchy gang name) and the White House released some paper on its $1.2 trillion infrastructure deal, the proposal is lacking most details. It does include paying for the proposal with the expansion of the gas tax, which the White House has said both publicly and privately it will oppose. With that being said, this proposal is the result of all of the previous work that we have recapped in this space – partisan ideas, bipartisan negotiations, the American Jobs Plan, and so many others.
 
But bipartisan talks are running out of time. President Biden originally set a deadline of Memorial Day for talks with Senator Shelley Moore Capito, who had the proxy of Senate Minority Leader Mitch McConnell, to reach an agreement. Just before that deadline the two of them broke off talks and in a bipartisan-infrastructure-talks-are-dead-long-live-bipartisan-infrastructure-talks moment, the current bipartisan gang took up the leading mantle of the negotiations. As of last night, Majority Leader McConnell would not commit to supporting the agreement and Democratic leaders put some major caveats on their support.
 
Now, pools are open across the country, COVID restrictions are lifted, school is out, and Memorial Day is in summer’s rearview mirror. If bipartisan talks cannot produce a bill, Democrats want to move to a budget reconciliation process. While there is an agreement at this point, there is a long way to go to produce legislative language and if Democrats are insisting on budget reconciliation moving at the same time, we have a very long way to go.
 
From the outside that sounds simple, but budget reconciliation requires a great deal of work by the majority party. They have to propose and pass a budget in the House and Senate with a vote-a-rama in both the Senate Budget Committee and the full Senate where 50 votes passes any amendment. In addition, the bills the House and the Senate pass must be identical or any differences will need to be resolved.
 
Once all that is done, individual committees will take their reconciliation instructions and revenue targets and mark up bills that will then go to the budget committee to put into one package that will move to the Floor. This has to happen in both the House and the Senate.
 
All of this is to say that Democrats need time to move something through budget reconciliation – lots of it.
 
In the meantime, the Democrats’ two most outspoken moderates, Senators Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV), have said they would prefer to move infrastructure legislation in a bipartisan manner. Senate Majority Leader Chuck Schumer (D-NY) is working to see if anything can move through the Senate on a bipartisan basis. He is skeptical at best but needs to make the effort for moderates to see if they are willing to take a partisan approach. 
 
If Democrats allow bipartisan talks to continue into the fall, as they did when they ultimately passed the Affordable Care Act through reconciliation, they would jeopardize the ability to do what is needed before the peak of next year’s election season.
 
This is not just another key week for infrastructure. It is the moment when Democratic leaders and the President need to decide how they will move forward and get to work.
 
Republicans are hoping to strike an infrastructure deal to ward off the nearly $6 trillion in spending and tax changes Democrats have discussed. Their theory is if a $1 trillion-plus plan passes, there will be little or no appetite to do another giant reconciliation bill.
 
We will soon find out if Bill Murray’s Phil Connors gets out of his February 2 repeated day in Punxsutawney, Pennsylvania.
Partner and
Georgia Group Chairman

Partner and
Georgia Group Director


Partner

Partner
Total Spectrum Spotlight
On this week’s Total Spectrum Spotlight, Jay Timmons, President and CEO of the National Association of Manufacturers, joins Congressman Erik Paulsen to discuss infrastructure investment, the potential impacts of domestic and global tax reforms being considered, and why the Southwest U.S. is so appealing to businesses. They also touch on future workforce concerns, which the NAM hopes to address through its Creators Wanted campaign, designed to connect emerging and displaced workers with higher paying careers in manufacturing.
INFOGRAPHS
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The expanded
Child Tax Credit
What you need to know about States Opposed to Covid-19 Vaccine Mandates
What you need to know about How Vaccine Distribution is Progressing
Vaccine Tracker:
65.6% of the U.S. has received first dose
What you need to know about Taxes And The Gig Economy
What you need to know about The New Rules for SPACs
What you need to know about Broadband access for students
Gold Dome Report
by Jesse Weathington, Partner and Georgia Group Director

As 2021 nears the halfway mark, the return to normalcy is in full swing. Governor Brian Kemp will terminate the COVID-19 Public Health Emergency July 1, President Joe Biden will host an Independence Day White House barbecue to kick off “A Summer of Freedom,” and Americans are taking back to the skies and roads with a vengeance. If you need proof of this, please check out the Downtown Connector or the TSA queue at Hartsfield-Jackson.
 
ATLiens have been transfixed by the red-hot Hawks (Georgia sports team, don’t get your hopes up) and so may have temporarily forgotten about the red-hot mayoral race that Kasim Reed has now officially jumped into head-first. The former state senator and mayor raised more than half a million dollars in one night to kick-off his (re?) election bid and has come out swinging with tough rhetoric on crime, which is likely to remain the foremost issue in the race, what with Atlanta leading the nation in surging gun violence and murders.
 
Reed’s stance on the issue provides a stark contrast to another contender, City Councilman Antonio Brown, who refused to bring charges against a group of young men who stole his Mercedes while he was at a ribbon-cutting for a Dunkin’/Baskin-Robbins at 11:45 in the morning. Despite being nominally non-partisan, the mayoralty of Atlanta is a strictly Democratic affair, but the small cluster of Republicans in the capital could end up playing kingmaker if the rest of the field splits the Democratic vote evenly. This race will be one to watch for what it says about the Democratic response to the issue of gun violence and crime nationally, which the President highlighted earlier this week as a priority for his administration.
 
Looking outside 285, the legislature has begun the initial stages of the decennial redistricting process for all 236 seats in the General Assembly as well as the state’s 14 congressional districts. The pandemic has delayed the delivery of detailed census results to the states, so the special session to draw the maps themselves likely will not be concluded until November. The potential to move boundaries around for competitive swing districts, especially in Congress, will likely cause many potential candidates to keep their powder dry until they know exactly where they may be running against whom. This is particularly true for the 6th and 7th districts in the north and north-east metro suburbs. There are also going to be many runs for higher office that leave open seats down-ticket. By my unofficial count around 20% of our state senators are gunning for promotions, a number likely to go up.
 
A former mentor of several Total Spectrum Georgia partners once said: “the [General Assembly] session is like having a knife-fight in a phone booth in the dark.” He was referring to a regular session. Redistricting is more like a knife-fight in a phone booth in the dark but there are about 250 friends and enemies in the booth with you.
 
Finally, we would be remiss if we did not call attention to a key public-private initiative to help combat the pandemic: Anheuser-Busch has announced that they will be giving away free beer to all Americans once the vaccination rate hits 70%. Cheers!
SCOTUS Strikes Again - Now What?
By Todd Smith, Partner and Georgia Group Chairman and
Blake T. Fulenwider, Partner and Chief Health Policy Advisor
 
In case you have been on vacation (good for you), on a news media blackout (also, good for you), or just under a rock (who could blame you), then we have a health care news flash for you - the Supreme Court has ruled that states don’t have standing to challenge the individual mandate included in the Affordable Care Act (ACA). This marks the third time a Supreme Court ruling has defended the controversial law. 
 
So, now what? Where do things go from here? Well, it depends upon your perspective. Democrats are rejoicing, believing repeal efforts to now be dead and buried, and leaving the ACA open to expansion with provisions such as a public option. They also believe this latest Supreme Court ruling will compel governors in holdout states to finally expand Medicaid as the ACA originally contemplated.
 
As loath as they may be to admit it, Democrats agree with Republicans in that the ACA does have its problems, such as large deductibles and high premiums. In the Democrats’ COVID relief package from earlier this year, ACA subsidies were temporarily increased. Efforts have already begun to make these increases permanent. Overall, the number of Americans who have health insurance – whether through Medicaid or marketplace plans – is at the highest level it has been since ACA was passed. Generally, once the government giveth, it becomes demonstrably more difficult to taketh away. That is, unless you are talking about your income tax returns.
 
Expect Democrats to push for Medicare-negotiated drug prices, the lowering of the age eligibility for Medicare, as well as an expansion of benefits like vision, dental and hearing. Oh, and don’t forget that thing called “Medicare For All.” 
 
“Closing the Medicaid Gap” in states that have not expanded Medicaid is also a phrase that will be thrown around. Democrats consider the expansion to be a key part of the ACA. However, a 2012 Supreme Court decision ruled that states could not be forced to expand Medicaid, thus making it optional. To date, 12 states have not done so.
 
Democrats and the Biden Administration have already tried to prod states into expanding Medicaid by including renewed financial incentives in the stimulus package passed earlier this year; however, no state has used these incentives thus far. You can be sure that the White House and Democrats in Congress aren’t giving up on this key priority of the ACA. Both are currently working on approaches toward getting Medicaid expansion across the finish line. One approach includes circumventing state opposition by allowing counties and other local governments to expand Medicaid. Whatever approach is taken, you can be sure it will follow the President’s early pledge to “build upon the ACA.”
 
Now, the Democrats are not all in lockstep on the policies or how to proceed. Even the White House appears to have softened its approach for varied reasons on various fronts. Aside from health care, there are other policy decisions in play such as infrastructure. Both seem to be driven by legislative procedural decisions and the desire to get everything they want now no matter the cost. (This begs the question of what falls under the umbrella of “infrastructure.” For both the White House and Congressional Democrats, this definition seemingly goes well beyond the roads, bridges, railways, and broadband that come to mind.)
 
As for Republicans, Justices Alito and Gorsuch, in their dissent, give hope to those who might still see life in legal action. This, of course, remains to be seen. Regardless, Republicans remain steadfast in their belief that the expansion of government isn’t the solution to a health care system which should be transparent, cost-effective, patient-centered and offer choice. 
 
You can expect Republicans to work with Democrats where they can and oppose them on certain aspects when they cannot. Unfortunately, the political environment surrounding health coverage has not softened much since the debate of the ACA over a decade ago. There will be plenty to argue about. Let’s just hope this time Congress doesn’t have to pass it before they know what’s in it.
Defense Update
By Al Jackson, Total Spectrum Strategic Consultant
 
The Defense Department is making cuts to legacy ships and aircraft across the Navy and Air Force and reducing end strength across the force as part of its Fiscal Year 2022 budget, the department announced on Friday, May 28. The administration is proposing a total of $715 billion for the Defense Department in 2022. That is $11.3 billion, or 1.6%, more than was enacted for FY2021, however, the increase is less than the anticipated rate of inflation, meaning the budget would slightly decline in inflation-adjusted dollars.
 
The divestiture of these legacy programs is being made to focus funding toward innovative technologies including artificial intelligence, hypersonic technology, and cyber capabilities. “The budget shifts resources away from older platforms and systems that are ill-suited to the current and future threat environments,” said Anne McAndrew, the Pentagon’s acting comptroller. Hence, a major increase in funding for research, development test and evaluation (RDT&E) accounts was proposed to the tune of $112 billion, which represents a $5.5 billion or 5% increase over levels enacted in FY2021. This increase is the largest RDT&E request in the history of the department. Meanwhile, the fiscal blueprint would slash military procurement by $8 billion, or nearly 6%, to $133.6 billion.
 
The $715 billion proposed budget cuts $2.8 billion in equipment, with most coming from Navy and Air Force assets. Seven Ticonderoga-class guided-missile cruisers, four littoral combat ships, an amphibious warship, the remaining legacy F/A-18s and a dozen Mark VI patrol boats will be part of $1.2 billion coming from the Navy. These cuts also include the decommissioning of seven cruiser warships. According to Navy leadership, the savings from cutting legacy programs would be folded into the next set of budget planning included in the Future Years Defense Program (FYDP).
 
The Army was not spared in cuts, as their budget request of $173 billion for FY2022 represents a $5 billion reduction compared to last year’s request of $178 billion. Congress enacted $176.6 billion for FY2021.
 
The Air Force is cutting 201 aircraft, including 42 A-10 Thunderbolt II attack aircraft, 48 F-15C/D Eagle strike fighters and 47 F-16 Falcons for a savings of $1.37 billion. The Marine Corps has already been on an aggressive divestment drive to reshape the force for its new Pacific region focused strategy, as they move away from the Group III RQ-21 unmanned aerial systems (UAS) in order to procure more Group V UAS such as the MQ-9, which provides greater range, per their new strategy.
 
The Pentagon issued the new budget without the traditional FYDP five-year outlook that lays out a course for major programs. The request comes as the Pentagon and the White House are conducting high-level global force posture reviews that could change the worldwide laydown of U.S. forces. Pentagon leaders have said they are working on an update to the 2018 National Defense Strategy that put the department on a path to “great power competition” with China and Russia, while drawing down the low-intensity ground conflicts in the Middle East. The shift in focus goes from the Middle East to the Pacific region.
 
The department plans to spend over $66 billion on efforts related to the Indo-Pacific region, including the Pacific Deterrence Initiative, also known as PDI. That includes $5.1 billion in targeted investments aimed at developing and procuring capabilities in support of “joint force lethality,” including precision strike and stand-off systems such as advanced munitions. From the Pentagon supporting document, “[m]odernizing our military requires successful research, technology maturation, prototyping systems integration, and test capability to turn innovative and disruptive technology into fielded and sustainable military systems.”
 
The budget calls for across-the-board troop reductions from the Navy, Marine Corps, Army and Air Force of a few thousand each. Only the newly created Space Force will see a personnel increase, growing from 6,434 to 8,400. As it relates to the Navy, total sailor end strength including the Navy Reserve will drop to 404,800 from 407,329, which is largely based on the crew reductions from the ships that will leave the inventory.
 
Meanwhile, for the most expensive acquisition program in Pentagon history, the F-35 joint strike fighter, the administration wants to spend $12 billion for 85 planes, down from $12.9 billion enacted in 2021 for 96 of the jets. The Air Force, Marine Corps and Navy are buying A, B and C variants of the aircraft, respectively. Meanwhile, about $3.8 billion would go toward hypersonic weapons. The Army, Navy, and Air Force are pursuing ground-launched, sea-launched and air-launched versions, respectively.
 
Among the services, the Department of the Air Force, which includes the Space Force, fared best in the budget request in terms of top-line funding. It would receive a total of $212.8 billion in 2022, about $8.8 billion more than was appropriated for 2021. 
 
The ship and aircraft cuts will likely face scrutiny on Capitol Hill among lawmakers, who traditionally have resisted taking military inventory out early due to the impact on jobs in their respective districts. Pentagon leadership, however, indicated they will continue to advocate for divestiture of legacy platforms that “overburden” readiness accounts. The threat from China and its military advancements has influenced the Pentagon’s FY2022 strategy to acquire next-generation capabilities while cutting back on buying some of the older technologies that were better suited for conflicts in the Middle East.
 
The department is also requesting $2.3 billion in FY2022 for microelectronics efforts, which are critical components for the Pentagon’s weapons platforms. Plans to address the problem include investments in domestic design, fabrication, and packaging capabilities and capacity to improve access to trusted, state-of-the-art microelectronics; increasing options for access to radiation-hardened parts; procuring sufficient quantities of legacy microchips; and expanding coordination across the U.S. government to ensure effective transition of advanced capability microchips into current and next-generation weapons systems. Lessening U.S. dependence on China for microchips is a priority for the military.
 
The Pentagon’s next-generation nuclear systems would receive a slight bump in FY2022 of $200 million, for a total of $15.1 billion. Efforts include the Ground-Based Strategic Deterrent ($2.6 billion); Long-Range Stand-Off cruise missile ($600 million); Columbia-class ballistic missile submarine ($5 billion); Trident II missile mods ($1.6 billion); B-21 bomber ($3 billion); F-35 dual-capable aircraft systems ($40 million); B61 tail kit ($3 million); and nuclear command, control, and communications ($2.9 billion). Additionally, initiatives for missile defense and defeat would receive a total of $20.4 billion to bolster regional and strategic missile defense capabilities and “left-of-launch activities.” 
 
Improving space and cyberspace capabilities are both high priorities for the administration.  The budget request would invest $20.6 billion to enhance U.S. capabilities to deter conflict in space and prevail in a “global all-domain fight,” as China and Russia are challenging U.S. advantage in space by fielding/developing weapons to deny or destroy our space capabilities using lasers, electronic warfare, grappling systems and direct-action projectiles. 
 
Defense-wide accounts, which include organizations that aren’t nestled under the services such as the Missile Defense Agency and Special Operations Command, would get a total of $117.8 billion, nearly $600 million less than in 2021.
 
As customary, the Army, Navy, Air Force, and Marine Corps have sent Congress unfunded priorities lists totaling $17 billion. The wish lists follow the Pentagon's submission of a flat, $715 billion budget request for FY2022 and are likely to be featured in Congress' upcoming debate on defense spending. The Navy has identified $5.5 billion in unfunded priorities, the Air Force $4.2 billion, the Army $4.4 billion, and the Marine Corps nearly $3 billion.
 
It remains to be seen what Congress will eventually fund, as they’re in the process of preparing for markups of the National Defense Authorization Act and FY2022 appropriations. Experts believe Congress will eventually appropriate a number slightly higher than the administration’s $715 billion request. Since the budget submittal was revealed later than normal, expect Congress to pass continuing resolutions to keep the U.S. government operating at FY2021 levels until final appropriations bills are passed, likely after FY2022 has begun (October 1, 2021). 
Hearing Report
By Ramona Lessen, Executive Director
 
Senate Commerce Communications, Media and Broadband Subcommittee hearing on Building Resilient Networks
Tuesday, June 22, 2021; 2:30 p.m.
 
To view a live stream of the hearing please click here.
 
Opening Statements
Senator Ben Ray Lujan (D-NM), Chairman
 
Senator John Thune (R-SD), Ranking Member
 
Witnesses
Mr. Denny Law
General Manager and Chief Executive Officer
Golden West Telecommunications
 
Mr. Jonathan Adelstein
President and Chief Executive Officer
Wireless Infrastructure Association
 
Mr. Jeff Johnson
Chief Executive
Western Fire Chiefs Association
 
Mr. Harold Feld
Senior Vice President
Public Knowledge
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.