THIS WEEK IN WASHINGTON
March 26, 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 talks about the next items on the Senate’s legislative agenda and the future of the filibuster in “Washington Whispers.” Congressman Erik Paulsen writes about the new challenges being confronted by America’s small businesses. Al Jackson provides a defense update, and Ramona Lessen shares details from a March 17th hearing of the Senate Finance Committee entitled, “Covid-19 in the Nation’s Nursing Homes – a National Tragedy.”
 
As always, Jesse Weathington provides an update on the latest in Georgia with his Gold Dome Report. And, of course, be sure to check out the Infographs for an in-depth look at current hot topics.
 
Also, Total Spectrum Spotlight features an interview with Senator Roy Blunt (R-MO), who has served as a key member of both House and Senate Republican Leadership. He sits on three key committees and is the former chairman of the Senate Appropriations Subcommittee on Labor, Health, Human Services, and Education.
 
Senator Blunt announced that he will not seek reelection to the Senate in 2022, so we asked him to share some of his reflections, views on current issues, and his vision going forward. In this discussion with Congressman Paulsen and Michael DiMaria, you will see why Senator Blunt is getting the recognition and praise he richly deserves as a “legislator’s legislator.”
 
We will be back in two weeks for the next issue of This Week in Washington.

Y’all stay safe, healthy AND sane…

Todd Smith
Chairman, Georgia Group

Jesse Weathington
Director, Georgia Group
Washington Whispers
By Patrick Robertson, Strategic Consultant
 
Congress asks, “What’s next?”
Democrats worked at a breakneck, partisan pace to enact the $1.9 trillion American Rescue Plan and confirm President Biden’s cabinet. Now they face an uncertain legislative landscape for the balance of the 117th Congress.
 
The White House has already begun its pivot to the Build Back Better plan that will cover traditional infrastructure, green energy transitions, tax policy, and other priorities. President Biden, while still working overtime to sell his American Rescue Plan, is looking to cement his first term as the largest federal intervention in his lifetime.
 
It is important to insert one very pleasing and optimistic note. The United States since our last This Week in Washington has vaccinated more than 100 million people and we are steaming toward 200 million. There is hope everywhere that we are turning the corner on this pandemic, but many questions abound on school re-openings, travel, large gatherings, and so many other aspects of normal life. Congress appears to be setting many of these issues aside, allowing the provisions of the American Rescue Plan to take effect and leaving its implementation to the Biden Administration.
 
Meanwhile, the Biden team has begun its push for $3 trillion in new infrastructure spending. Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell remain steadfast in their support of not only the American Rescue Plan but also further infrastructure spending. But some people on Capitol Hill – on both sides of the aisle – are wondering aloud how much is too much to borrow and whether too much federal money in the system will overheat the economy.
 
Debate on this and other issues continues as the legislative landscape for this Congress starts to take shape. The House of Representatives left Washington at the end of last week for an extended district and committee work period. Before they left town, the House Democratic Majority passed many of its priorities, including gun measures, a voting rights bill, immigration reform, and a reauthorization of the Violence Against Women Act.
 
None of these measures, as written, can pass the Senate with 60 votes.
 
Senate Democrats are now at a crossroads. The left wing of the Democratic party is upset that the Democratic-controlled Congress did not figure out a way to include a $15 per hour minimum wage in the American Rescue Plan, which passed the Senate with just 50 votes. These liberal Democrats are agitating to get rid of the filibuster so that they can pass future legislation – for example, the voting rights bill - with a simple majority.

Senate Republican Leader Mitch McConnell has spent the last few days delivering some very public dire warnings to Democrats about how the Republican caucus will bring the Senate to a screeching halt if the filibuster is busted. Moderate Democrats like Senator Kyrsten Sinema (D-AZ) and Senator Joe Manchin (D-WV) have said they do not

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

Partner and
Georgia Group Director

Partner

Partner
Total Spectrum Spotlight
Senator Roy Blunt (R-MO)
Please enjoy this special edition of Total Spectrum Spotlight featuring an in-depth conversation with United States Senator Roy Blunt of Missouri. Congressman Erik Paulsen and Michael DiMaria explore the Senator’s career accomplishments, COVID relief legislation, and broadband deployment.

#TSSpotlight
INFOGRAPHS
Click image to download
What you need to know about
K-12 School Reopenings
What you need to know about
Covid-19 and Air Travel Restrictions
What you need to know about
Tech Antitrust Suits
Vaccine tracker:
25.3% of the U.S. has received first dose
2021 tax filing season extended during the Covid-19 pandemic
U.S. solar regains momentum
Gold Dome Report
by Jesse Weathington, Partner and Georgia Group Director

This week saw the waning days of the 2021 legislative session go by, as the General Assembly works to finish its labors prior to Sine Die on Wednesday, March 31st. Monday will mark the penultimate day of the session, and action is expected to reach a conclusion on both the budget and the elections bills that are currently roiling the Assembly that day, although timetables can always slip (and usually do). Parkinson’s Law says that work expands to fill the time available for its completion, and Day 40 never proves to be an exception to that rule.

Both House and Senate engaged in the usual bout of “strip and replace” that typically occurs around this time, with elections, tax, healthcare, and medical marijuana being the most prominent examples this go around but other topics subject to similar tactics. The Senate passed a version of the FY 22 budget this week, setting up the conference committee process. The differences between the two chambers’ spending proposals are slightly wider than seen in recent years, however the compromise budget should still be finished relatively quickly and ready for adoption by both bodies late Monday or perhaps early in the day on Wednesday. After that it will be a race against time for this or that proposal to beat the midnight buzzer that signals time.

Before the session has even concluded, the 2022 election cycle has begun, with Republican Congressman Jody Hice declaring his intent to run against embattled Secretary of State Brad Raffensperger in the GOP primary next year. This move nudged several other politicos from the East Georgia district to lace up their running shoes; legislators including Reps. Jodi Lott and Houston Gaines and Sen. Bill Cowsert are among those considering bids for the seat.
Washington Whispers (continued)
 
support filibuster elimination. The left wing of the Democratic party has countered by calling the filibuster a relic of the Jim Crow south, a significantly ratcheted-up description of this Senate tradition.
 
The result of this debate is far from determined. The Democratic left is pushing hard and wants to start with voting rights legislation to test the waters while the center is holding. Both sides face difficult tactical decisions about how much to obstruct and how hard to push. The outcome of this debate will have tsunami-like effects on the rest of this Congress and for many years to come.
 
There are a number of questions about the filibuster that have to be answered. Just a few of the many:
  • If the filibuster remains intact, will the Senate minority in this Congress and in the future have an incentive to work closer with the majority?
  • If the filibuster is eliminated, will other minority rights be eroded in the Senate?
  • Will the Senate eliminate the filibuster or just reform it?
  • Would eliminating the filibuster really turn the Senate into the hyper-partisan, majority-rules House or do six-year Senate terms have a moderating effect?
 
One hundred duly elected Senators need to answer these and so many more questions as they navigate what we all hope is the end of the pandemic and an uncertain future with a deeply divided electorate.
Small Business Facing New Challenges
By Congressman Erik Paulsen, Strategic Consultant
 
There are more than 30 million small businesses in the United States, accounting for over 60 percent of the net new jobs in the country. But nearly 164,000 small businesses have closed since the beginning of the pandemic, and about 98,000 of these say they have shut their doors for good. 
 
Thankfully, many small businesses have shown amazing resilience. They weathered the pandemic because of skill, ingenuity, and help from Congressional legislation that was targeted at keeping small businesses operating.
 
The Paycheck Protection Program provides loans to small businesses so that they can keep their employees on the payroll and hire additional people. These loans can be forgiven if 60 percent of the loan is attributable to payroll costs. In addition, the Employee Retention Tax Credit can be used by borrowers who use the Paycheck Protection Program. Together, these programs have provided a significant source of financial relief for many small businesses coping with the financial impact of the pandemic. 
 
The legislation that created and then expanded both programs passed overwhelmingly in 2020 with bipartisan support. President Biden recently unveiled a new set of initiatives aimed at enhancing the Paycheck Protection Program, such as a two-week period where only small businesses with fewer than 20 employees can apply and modified rules for sole proprietors, independent contractors, and self-employed individuals. These steps were also widely applauded.
 
America’s small business community certainly has suffered over the past year, but optimism is starting to return. The National Federation of Independent Business’s (NFIB) Small Business Optimism Index rose to 95.8 in February, a slight rise from January but still below the 47-year average of 98. The NFIB’s recent monthly jobs report showed that there is a slight increase in those small business owners who expect to hire more employees over the next three months.
 
There is little question that talk about a minimum wage boost to $15 per hour dampened the optimism of many small business owners. The recent $1.9 trillion American Rescue Plan did not include a minimum wage increase, but Congress indirectly saddled many businesses with a new challenge when it increased unemployment benefits.
 
Employers who want to hire more people at a starting rate are often competing with the combination of state and federal unemployment benefits. Some small businesses simply will not be able to hire employees at that level even if they need more employees to meet growing demand. As a result, it will likely take longer than usual for the unemployment rate across the nation to drop.
 
Another factor weighing against increased optimism among small business owners is the talk in Washington, D.C. about tax increases. The centerpiece of the pro-small business tax changes in the 2017 Tax Cuts and Jobs Act is the Small Business Deduction. It was designed to reduce the difference between the top corporate tax rate of 21 percent and the top individual tax rate of 37 percent, at which small businesses otherwise would be taxed. This is important because more than 90 percent of small businesses are organized as pass-throughs. Qualifying pass-through businesses can claim up to a 20 percent tax deduction on their share of the business’s income up to $164,900 in tax year 2021, or $329,800 for those filing jointly. That provision reduces the tax rate for a small business owner or partner from 37 percent to around 29.6 percent. According to the NFIB, 81 percent of business owners believe the Small Business Deduction is important to the health of their businesses.
 
President Biden and some in Congress want to repeal the Tax Cuts and Jobs Act, including the 20 percent small tax deduction, while increasing taxes on higher income individuals — many of the owners of small businesses — to just below 40 percent. This would drive up taxes on small businesses and would strongly discourage companies from organizing as a pass-through entity. 
 
President Biden recently said that “[s]mall businesses are the engines of our economic progress. They are the glue and the heart and soul of our communities, but they are getting crushed.” He is correct – but getting rid of the small business tax deduction and adding new tax burdens will not create more optimism among many small business owners, which may slow down the hiring of new employees and discourage other investments in their companies.
Defense Update
By Al Jackson, Strategic Consultant
 
The Biden administration is expected to release its Fiscal Year 2022 defense budget to the public in May. Many defense spending experts are suggesting procurement and research spending could be reduced, as the Fiscal Year 2022 defense budget is expected not to increase over Fiscal Year 2021. It’s expected the overall defense budget to fall to within $704-$708 billion, which is in line with the $705 billion received by the department last year. Because of inflation, this projected budget will be considered a spending reduction. 
 
Republicans on Capitol Hill are advocating a 3-5% growth in the defense budget. The liberal progressive wing of the Democrat party is calling for cuts in the range of at least 10% in favor of more COVID-19 relief and increased funding for domestic programs. It’s estimated only $227 billion will be allocated for procurement and research, development, testing and evaluation (RDT&E) funds. This is a significant cut from Fiscal Year 2021, as the National Defense Authorization Act authorized $247 billion, and the appropriators funded procurement and RDT&E to the tune of $243 billion. As a result of procurement programs growing in size, RDT&E funds may end up even lower. It’s expected Department of Defense plans growth in major weapons systems such as Columbia-class submarines, B-21 Bombers, the Ground-Based Strategic Deterrent, Army modernization programs, and increases in F-35 buys. 
 
It is traditional for a new administration to delay the release of its budget by several months while it reviews the spending priorities of the previous administration. Deputy Secretary of Defense Kathleen Hicks, in a recently “leaked” memo, outlined areas of increased focus, specifically on shipbuilding, nuclear modernization Central Command funding, force posture and building capacity in the Pacific due to escalating tension with China. Expect a shift from the ground wars in the Middle East to China and Russia. 
 
Her document lays out “clear priorities” within the defense budget, stating that they “will assess the appropriate structure, capabilities, and sizing of the force, and, working with the Congress, shift our emphasis from unneeded legacy platforms and weapons systems to free up resources for investments in the cutting-edge technologies and capabilities that will determine our military and national security advantage in the future. We will streamline the processes for developing, testing, acquiring, deploying, and securing these technologies.”
 
Hicks writes further in the memo that “due to the limited amount of time available before the Department must submit its Fiscal Year 22 President’s Budget request, the process to re-evaluate existing decisions will focus on a very small number of issues with direct impact on Fiscal Year 2022 and of critical importance to the President and the Secretary.”
 
The Office of the Director of Cost Assessment and Program Evaluation (CAPE) was directed to review a handful of critical acquisition efforts:
  • Shipbuilding: current Fiscal Year 2022 shipbuilding additions 
  • Nuclear Enterprise/Nuclear Command, Control, and Communications (NC3): lower-yield weapons and select NC3 topics 
  • Long Range Fires: current Fiscal Year 2022 long range fires additions
  • Aircraft: F-35, Air Force tanker aircraft, and MQ-9 
  • Climate: initial options for investment and set groundwork for additional investments during the Fiscal Year 2023 to Fiscal Year 2027 review cycle 
  • Build Back Better: extant Fiscal Year 2022 investments and Fiscal Year 2023 opportunities 
 
The Trump Administration regularly removed any mention of climate change from government documents. The inclusion of a renewed effort to plan for global warming is unique to the Biden administration.
 
Both Defense Secretary Lloyd Austin and Deputy Secretary of Defense Hicks pledged during their confirmation hearings to reassess former Defense Secretary Mark Esper’s shipbuilding plans. Those plans called for a $27 billion shipbuilding budget in Fiscal Year 2022, a significant increase from the $19 billion requested in Fiscal Year 2021, and to build 82 new ships by 2026, a significant increase from the Navy’s plan to build 44 new ships during that time.
 
Likewise, both officials signaled support for nuclear modernization, but stopped short of pledging to uphold all aspects of the current program. Kathleen Hicks will likely run the process on most nuclear and missile defense programs, given that Lloyd Austin has recused himself from taking part in any decisions involving Raytheon, a company whose board he served on.
 
This will give Ms. Hicks the responsibility of deciding on the replacement program for the aging stock of intercontinental ballistic missiles known as the Ground Based Strategic Deterrent and the Long-Range Standoff Weapon, a nuclear cruise missile.
 
The priority given to long-range fires reflects growing concern over China’s long-range precision weapons programs, which give Beijing the ability to threaten the presence of both U.S. and allied forces in the Pacific. The Pentagon has dedicated the past several years to a number of longer-range weapons that can be launched from significant stand-off distances, work that the memo suggests could accelerate. 
 
Early in April, the Army will host a live-fire experiment using artificial intelligence to share data between Marine F-35s, Air Force A-10s, HIMARS rocket launchers, and commercial satellites.
Hearing Report
By Ramona Lessen, Executive Director
 
Senate Finance Committee virtual hearing on COVID-19 in the Nation’s Nursing Homes – A National Tragedy
Wednesday, March 17, 2021; 10:00 a.m.
 
To view a livestream of the hearing please click here.
 
Senator Ron Wyden (D-OR), Chairman
 
Senator Mike Crapo (R-ID), Ranking Member
 
Witnesses:
Adelina Ramos
Certified Nursing Assistant
SEIU District 1199 New England
Greenville, RI
 
Denise Bottcher
State Director
AARP Louisiana
Baton Rouge, LA
 
Quiteka Moten, MPH, CDP
State Long-Term Care Ombudsman
State of Tennessee
Nashville, TN
 
R. Tamara Konetzka, Ph.D.
Louis Block Professor Of Public Health Sciences, Department Of Public Health Sciences
The University of Chicago
Chicago, IL
 
John Dicken
Director, Health Care
United States Government Accountability Office
Washington, D.C.
 
David Gifford, MD, MPH
Chief Medical Officer
American Health Care Association
Washington, D.C.
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.