TAUC Legislative and Regulatory Update, February 2017

February 7 2017

TAUC Legislative & Regulatory Update, February 2017

The 115th Congress and the Trump Administration are off to a fast start on a very ambitious agenda that will have a significant impact on TAUC members and their customers. President Trump has been busy meeting with business and building trade union leaders, as well as signing executive orders to improve the business environment for American manufacturers and energy producers, streamline the regulatory process and speed environmental reviews for infrastructure projects like the Keystone XL and the Dakota Access pipelines. Congress has been working on Obamacare repeal and legislation to overturn Obama administration labor and environmental rules.

Here is an exclusive update from TAUC on issues of vital interest to contractors and the union construction and maintenance industry as a whole.

Repeal of the Affordable Care Act: House and Senate Republican leaders continue to struggle with the best path forward with the repeal and replacement of the Affordable Care Act (aka Obamacare). Both houses have passed resolutions allowing for the consideration of legislation repealing certain aspects of the ACA this spring as part of the budget process. The specifics of what will be included in the fast-track “budget reconciliation” package will be determined by the congressional committees with jurisdiction over aspects of the ACA.

Speaker Ryan has stated that legislation should move by the end of the first quarter of 2017. House Ways and Means Committee Chairman Brady, whose committee has primary jurisdiction over major aspects of the ACA, said his hope is to move a bill out of the committee “by March.”

After years of promising to repeal the ACA, many conservatives are frustrated with the current pace of efforts to dismantle the law. Despite these concerns, leaders would prefer to wait on legislation until there is a consensus and strategy on a replacement plan. Some Republicans in Congress have expressed concerns about the feasibility of repealing and replacing the law, and are now talking about trying to “repair” Obamacare. This reflects that reality that ACA-replacement bills Republicans develop will require assistance from some Senate Democrats, who have largely been unified against any major overhaul of the health law.

As part of this process, there will also be consideration of the tax provisions — including the Cadillac Tax — that provide the revenue streams to pay for ACA. Congressional Republicans are divided on whether to scrap the tax provisions immediately or delay that move until a replacement is ready. Regardless, the replacement plan will require significant revenue to implement, so we anticipate a significant debate of retaining elements of the ACA’s revenue sources.

Action to Block Regulations: Another aspect of the “First 100 Day” agenda is a significant rollback of Obama administration regulations. Congressional Republicans have pledged to use the Congressional Review Act (CRA) to overturn a series of what they view as objectionable regulations issued in the final days of the Obama administration. CRA has not been used successfully in 15 years, but this is expected to change soon with President Trump in the Oval Office. CRA gives Congress 60 legislative days to nullify federal regulations. Once a regulation has been revoked, no new similar rule can be adopted without the explicit approval by Congress.

Among the first rules to be nullified will be an Interior Department rule geared at limiting stream and groundwater pollution from mountaintop coal mining. The resolution blocking this rule passed both the House and Senate in early February. We also anticipate action on a resolution to nullify a rule requiring companies bidding on federal contracts over $500,000 to disclose past labor law violations. Action is also expected soon on a regulation that would restrict methane emissions from oil and gas flaring, venting and leakage on public and tribal lands. Additional CRA resolutions will be considered targeting other Obama environmental and energy-related rules.

President Trump is also trying to lessen the burden of regulations through executive order. One would require federal agencies to repeal two existing rules for each new rule they enact. While this is designed to lessen regulatory burdens, it is unclear how effective this approach will be as eliminating a regulation is itself a regulatory process requiring public notice and comment. He also issued an executive order requiring that the total incremental cost of all new regulations needs to be zero.

Repeal Federal Prevailing Wage Requirements: TAUC and our building trade union and construction trade association allies are working to generate opposition to legislation to undermine Davis-Bacon. The “Transportation Investment Recalibration to Equality (TIRE) Act”, introduced by Senator Flake (R-AZ), would eliminate prevailing wage coverage for any federal highway construction project. If Congress was to successfully enact President Trump’s call for a $1 trillion infrastructure package, this legislation could have a significant impact on the unionized construction market. We expect that this will be the first of many efforts to prevent the application of Davis-Bacon to Federal infrastructure investment.

National Right-to-Work Legislation: National “right to work” legislation has been introduced by Congressmen Steve King (R-IA) and Joe Wilson (R-SC). Currently, twenty-eight states have right-to-work laws. Missouri is expected to adopt the legislation later this month. President Trump endorsed right-to-work laws during the campaign.

Coming Attractions: As congress continues work on its busy agenda, we are still awaiting action on a range of important policy items.

• Infrastructure Investment: While the President has taken steps to speed the review and permitting process for major infrastructure projects, we continue to await further details on the significant infrastructure investment package he proposed during the campaign and mentioned in his inaugural address.

At this point, there are few details of what he will propose. Key Trump advisors developed a policy proposal to leverage private investment in public infrastructure by offering investors tax credits. At her confirmation hearing, Department of Transportation Secretary Chao stated that the infrastructure package would include a mix of direct public funding and private investment. Senate Minority Leader Schumer has laid out a blueprint for $1 trillion in direct public funding for infrastructure programs.

The key question for these proposals remains where the money will come from to pay for the infrastructure investment program. Many have pointed towards comprehensive tax reform as the best opportunity to identify and advance infrastructure funds. We don’t anticipate tax reform or infrastructure to be considered until later this summer.

• Multiemployer Pension Reform: TAUC and our building trades and construction trade association partners continue to push for legislation authorizing hybrid composite pension plans. We are actively working to identify a new champion for the proposal since Congress John Kline retired at the end of the last Congress. We will also have to work to educate the new Administration on the challenges facing multiemployer plans and the need for composite plans.

On a related note, the Iron Workers Local 17 Pension fund in Cleveland became the first multiemployer pension funds to implement a rescue plan under MRPA when its participants and beneficiaries approved the proposed plan earlier this month. The Department of Treasury approved the plan in December. Without the rescue plan, the fund was projected to become insolvent in 2024.