TAUC Legislative and Regulatory Update, January 2017

January 11 2017

TAUC Legislative & Regulatory Update, January 2017

While Washington awaits the swearing in of President-elect Trump, the 115th Congress is already off and running. Members have been sworn in and are moving forward with a very ambitious agenda in the hopes that early action will set the table for the new Commander in Chief. Despite the unpredictable nature of the incoming political and legislative environment, we anticipate significant activity on policy issues important to TAUC members and their customers.

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

While President-elect Trump and the Republican majority in Congress have made repeal and replacement of the Affordable Care Act (aka Obamacare) their top priority, there are significant disagreements on the timing of repealing the law and what should replace it. Some Senate Republicans are concerned that repealing the law without a plan for what comes next would have significant impacts on the health care market, as well as political fallout, and have asked leaders to slow down these efforts until there is consensus on a replacement plan.

The Senate is considering a budget resolution that lays out a process for 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 later this month. Since the package will be limited to provisions with budget impacts, the resolution will allow Congress to begin dismantling the law by eliminating funding for the expansion of Medicaid and subsidies for individuals who purchase insurance through the state-run insurance and insurance exchanges.

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. Conservatives are pushing for immediate repeal of the entire ACA, including tax-revenue streams. But leaders working on a replacement plan are concerned that repealing the tax provisions now could make it politically impossible to pay for a replacement plan.

While there will be a repeal and a significant reshaping of Obamacare, there is a lot of uncertainty about the timing of the effort and the specifics of the proposal and reforms. The process could play out over a number of years.

Action to Block Regulations

Another aspect of the Trump administration’s “First 100 Day” agenda is a significant rollback of Obama administration regulations. It is unclear what procedural form these efforts will take, but Republicans in Congress will take steps to put in place more congressional involvement and control over the regulatory process.

One of the first items of business for the House was passage of legislation that would allow a massive cancellation of regulations issued by the Obama Administration in the last half of 2016. This legislation would amend the Congressional Review Act (CRA) to allow a “resolution of disapproval” for a regulation under the CRA to overturn multiple regulations with a single resolution instead of the current system of “one resolution, one regulation repealed.” The CRA allows an incoming Administration and Congress to overturn rules issued at the end of the preceding Administration. CRA resolutions cannot be filibustered in the Senate, which lowers the number of votes necessary for passage in the Senate from 60 votes to 51 votes. While this legislation has cleared the House, it is likely to be blocked by the Senate. This will require separate resolutions for each regulation Congress wants to overturn. Members are still determining which regulations to try and block through this process.

Congress can also block regulations one year at a time by the addition of amendments (riders) through the annual appropriations bills limiting funding for implementation and enforcement of these regulations. Unlike recent efforts to utilize this process, bills with these “riders” will be signed by President Trump.

Infrastructure Package

Given the focus on ACA repeal and blocking the Obama agenda, as well as the need to complete the FY 2017 appropriations process, it appears that President-elect Trump’s call for a significant increase in infrastructure investment will not be considered until the “Second 100 Day” agenda. The details of the package are still being developed by the Trump transition team in coordination with congressional leaders. It is expected to be linked to efforts to enact comprehensive tax reform.

At this point, it appears that the initial proposal will not provide direct funding for infrastructure investment. Rather, we expect it will expand the use of P3s and low-cost financing options for infrastructure projects; provide federal funding incentives for states and localities to increase local taxes and user fees to pay for infrastructure projects; and identify and expedite nationally critical infrastructure projects by waiving or streamlining the federal or judicial review process.

Congress is unlikely to take up an infrastructure proposal until later this spring or summer at the earliest.

Multiemployer Pension Reform

TAUC and our building trades and construction trade association partners are renewing our push to secure passage of legislation authorizing hybrid composite plans. One of our first priorities will be to identify a new champion for the proposal since the lead sponsor, Rep. 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.

One potential legislative vehicle we have been tracking is a bill to address the pending insolvency of the United Mine Workers of America pension and health benefits programs. In the four-month continuing resolution passed during the lame duck session late last year, Congress included funds to provide a temporary fix to ensure that retired mineworkers did not lose health care benefits, which would have occurred without an infusion of funds into the plan. The mineworkers’ plan faces another deadline when the current Continuing Resolution expires at the end of April. Sen. Joe Manchin (D-WV) has vowed to continue to find a permanent fix for the mineworkers’ fund. He spoke with President-elect Trump and said Trump assured him that he would help find a solution.

During the lame duck session, there were efforts to pair a permanent fix for the mineworkers’ fund with legislation authorizing composite plans. Unfortunately, those efforts were unsuccessful, but the looming deadline for the Mineworkers’ plan provides another potential opportunity to advance composite plans. Comprehensive tax reform is also another potential vehicle.