TAUC Legislative and Regulatory Update, July 2018

July 10 2018

TAUC Legislative & Regulatory Update, July 2018

Congress has been focused on trying move Fiscal Year 2019 appropriations bills through a series of multi-bill packages to avoid yet another year of continuing resolutions and a massive end-of-year omnibus appropriations bill. Despite these efforts, the same fights over funding levels for specific bills and various policy riders that have slowed the appropriations process in previous years have once again complicated the path to completing this process prior to the mid-term elections. The Congressional agenda has also been made more complicated by what is expected to be a brutal fight over Senate consideration and confirmation of Brett Kavanaugh, the White House’s choice to replace Supreme Court justice Anthony Kennedy, before this fall’s mid-term elections.

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

Multiemployer Pensions

The Joint Select Committee on the Solvency of Multiemployer Pension Plans continues to work on recommendations and legislation to address multiemployer pension plans and the PBGC. The committee is designed to address failing plans like the Central States Teamster plan and the United Mine Workers pension fund. The committee is charged with the difficult task of developing bipartisan legislative recommendations by Nov. 30th of this year to address this crisis that is threatening the retirement security of plan participants and the financial viability of contributing employers.

The Joint Select Committee held a hearing this month with business representatives to provide their perspectives on issues with the realities employers face participating in the multiemployer system. Represented by witnesses at the hearing were: UPS, the U.S. Chamber of Commerce, a large regional retail grocer, and a small steel fabrication firm. The witness from the U.S. Chamber highlighted the need to authorize hybrid composite plans that bridge the gap between current existing options so that healthy multi-employer plans can remain that way.

TAUC and our union construction industry partners in the Construction Employers of America have been meeting regularly with staff for members of the Joint Committee to ensure that the perspectives and needs of contributing employers are reflected in the deliberations. We also continue to advocate for legislation introduced by Congressman Phil Roe (R-TN) and Congressman Donald Norcross (D-NJ) – both members of the joint committee – to modernize and strengthen multiemployer pension plans by providing local joint labor-management trustees a voluntary tool to ensure the long-term viability of their funds by authorizing more choices in retirement plan models. H.R. 4997, the “Giving Retirement Options to Workers Plan” (GROW Act) would authorize the use of hybrid composite plans and would have no cost to the federal government or pension plan participants.

One issue that has been suggested by some members of the Joint Committee as a possible means to reduce the risk associated with multiemployer plans would be to force plans to use and adhere to more conservative and stricter funding standards. TAUC, CEA, NCCMP, and others have been communicating our concerns to the Joint Committee members that a policy change to require a lower discount rate is addressing an issue that does not exist and would require a significant increase in employer contributions to a level that would not be sustainable. Such a change would lead to a much greater pension crisis than the one that already exists.

The Joint Select Committee is accepting comments from the general public online at: https://www.pensions.senate.gov/. This provides an opportunity for TAUC members to communicate with the Committee over the realities they face as contributing employers to multiemployer pension plans. We encourage TAUC members to submit comments to tell your story and the impact that failure to act would have on your businesses and employees.

Trade and Trade Sanctions

The President has made restoring balance in U.S. trade policy a major focus of his Administration. There has been a lot of activity in this area. While it remains to be seen how this ultimately plays out, many view the President as using tariffs as a means of gaining leverage to negotiate agreements with trading partners.

Steel and Aluminum: President Trump announced that the United States plans to charge a 25 percent tariff on most imported steel and a 10 percent tariff on imported aluminum. The tariffs took full effect on June 1. At a Senate Finance Committee hearing examining the tariffs, Commerce Secretary Ross stated that the Administration expected the tariffs to reduce import levels so that the steel and aluminum industries can achieve long-term viability, allowing the industries to reopen closed mills, sustain a skilled workforce and invest in research and development. At the hearing, Secretary Ross also informed the committee that the Department of Commerce had received over 20,000 requests for exclusions from the tariffs. The Department has only competed a review of a small number of these requests and has granted exclusions to 42 types of imports and denied 56 requests.

Autos and Trucks: The President has also directed the Department of Commerce to initiate a Section 232 review of the national security impacts of imports of automobiles, trucks, and automotive parts. The Trade Expansion Act of 1962 gives the White House broad flexibility to impose and adjust tariffs based on national security concerns, and provides the President wide latitude in defining a threat to national security. At the Senate Finance Committee hearing, Senator Hatch (R-UT) pointed out that the auto and truck tariffs would impact $200 billion worth of trade, making it four times larger than the steel and aluminum tariffs combined.

Legislation in Response to the President’s Use of 232 Authority: Senator Corker (R-TN) has introduced legislation in response to the President’s use of Section 232 authority to implement tariffs that would give Congress the authority to review any 232 action taken. The legislation would be retroactive, and would cover the steel and aluminum tariffs and the auto tariffs. Similar legislation has been introduced by Senator Bennet (D-CO) that would limit applications of Congressional authority to tariffs affecting allies.

China: The United States imposed an additional 25 percent tariff on some $34 billion worth of Chinese goods, targeting many types of plastics, other intermediate goods used in manufacturing and some capital goods. China responded with retaliatory action on soybeans, seafood and other food and agricultural products, and automobiles. President Trump said China’s response would compel him to impose another round of duties on Chinese products of up to $500 billion. The impact of the escalating trade war with China remains uncertain. The U.S. currently has a $375 billion trade deficit with China, which is the world’s largest manufacturing hub. These tariffs can affect a much larger share of products and a greater percentage of companies that rely on global supply chains. The President has stated that he wants to use the tariffs as leverage to get China to end what he views as a pattern of unfair trade practices and theft of U.S. intellectual property.

Opioid Crisis

Congress is continuing to work on developing a comprehensive approach towards fighting the opioid crisis. As part of this effort, the House of Representatives passed H.R. 6, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act. The bipartisan legislative package bundles together over fifty bills related to the opioid crisis. The bill includes reforms to Medicaid, Medicare, and public health programs to address the opioid crisis and builds on other Congressional efforts to address the problem including the $4 billion included in the FY18 Omnibus legislation. The package will provide funding to provide treatment and recovery centers; improve data collection on drug prescriptions; protect communities through grants, resources, and education to fight distribution of opioids; and address foreign shipments of illegal drugs.

The House also recently passed H.R. 5892, which calls for establishing an advisory committee to address opioid use disorder in the workplace. Both bills now head to the Senate, where four committees are working on their own package of bills. Aides have told reporters they expect a final, conferenced bill to reach the President’s desk by the end of the year.

Efforts to Preserve Base-Load Power Generating Facilities

The Administration appears to be ready to use executive powers to prevent the closure of ailing coal and nuclear power plants. While the final plan has not been announced, it had been reported that the President has ordered Energy Secretary Rick Perry to prevent the premature retirements of fuel-secure generation capacity under emergency authority provided in the Federal Power Act and the Defense Production Act. TAUC sent a letter to the President urging action to improve the long-term security, reliability, and resiliency of the nation’s energy grid by providing assistance to prevent the closure of baseload power generators.