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TAUC Legislative & Regulatory Update, May 2017
As the Trump Administration moves past the 100th Day mark, Congress continues to struggle to pass major legislation. President Trump and Congressional leaders are still seeking a path forward on repeal of Obamacare as they begin to focus on comprehensive tax reform. Meanwhile, there does not appear to be much focus on advancing the President’s call for a major infrastructure package. Much of the action to date has been through Presidential Executive Orders to instruct agencies to begin to unwind Obama era regulations.
Here is an exclusive update from TAUC on issues of vital interest to contractors and the union construction and maintenance industry.
U.S. Secretary of Labor Confirmed: The Senate has confirmed Alexander Acosta as Secretary of Labor by a 60-38 vote. Acosta previously served on the National Labor Relations Board under President George W. Bush. He also led the Justice Department’s Civil Rights Division during the Bush administration and was U.S. attorney for the Southern District of Florida.
Buy America: President Trump signed an E.O. initiating a Cabinet-wide investigation into government procurement practices as part of an ongoing effort to limit the purchase of goods manufactured abroad. The E.O. directs federal agencies to prioritize American firms when awarding federal contracts. It also instructs federal agencies to re-examine how they grant waivers to award federal contractors to low-bidding foreign manufacturers.
On Capitol Hill, Representative Dan Lipinski has introduced a bill to strengthen Buy America protections, and to make the issuance of waiver more transparent. The bill (H.R. 904) extends coverage to several federal grant-making programs that don’t currently have domestic content requirements, and would require that any waivers be published in the Federal Register. Similar legislation has been introduced in the Senate by Senators Tammy Baldwin and Sherrod Brown.
Steel Imports: President Trump has also issued a memorandum instructing the Secretary of Commerce to launch a special investigation under section 232 of the 1962 Trade Expansion Act as to whether unfair trade practices by foreign steel and aluminum producers constitute a threat to national security. If such a threat is found, emergency trade sanctions can be imposed on “national security” grounds.
Infrastructure: While we await a proposal from the President on his $1 trillion infrastructure investment package, TAUC has joined with 34 other national business, labor and transportation industry groups urging action to address a projected shortfall in the Highway Trust Fund (HTF). The letter called on congressional budget writers to instruct the relevant tax and authorizing committees to develop legislation to permanently address the HTF’s structural revenue deficit as part of the fiscal 2018 budget resolution. The HTF – which is the source of federal highway and public transportation capital investments – is projected to have a nearly $20 billion average annual shortfall between existing revenue and the amount needed to prevent cuts in highway and public transportation investment once the current surface authorization law — the FAST Act — expires in 2020.
Comprehensive Tax Reform: The Trump administration has released an outline of its proposed tax reform plan. President Trump’s plan cuts the number of individual income tax bracket to three – 10%, 25%, and 35% — reduces the corporate tax rate to 15%, and doubles the standard deduction. It repeals the estate tax, the alternative minimum tax, the 3.8% Obamacare tax, and most itemized tax deductions (though it leaves deductions for mortgage interest and charitable contributions in place). This raises concerns about the possibility of eliminating or capping the exclusion for employer provided health care, as well as taxation of other employer provided fringe benefit programs negotiated through collective bargaining.
While the plan does not include the border adjustment tax some House Republicans have been pushing for, it includes a one-time tax to encourage companies to repatriate money they are holding overseas. The plan does not address infrastructure. The White House had previously indicated it might link tax reform and infrastructure, and White House National Economic Council Director Gary Cohn said just last week that the plan could use some tax revenue from foreign earnings to fund infrastructure.
Congressional Republicans are expected to try to push the tax overhaul through under the reconciliation process, which only requires a majority vote instead of the usual 60 needed to pass legislation in the Senate. However, the reconciliation process will require the tax plan not increase budget deficits beyond ten years. As of now it’s unclear whether President Trump’s proposal would meet that standard.
Environmental Regulation: EPA administrator Scott Pruitt issued a “back-to-basics” agenda for the agency. He describes the agenda as “protecting the environment by engaging with state, local, and tribal partners to create sensible regulations that enhance economic growth.” The agenda includes reviews, and possible revision or rescission of major, economically significant, burdensome rules issued by the Obama Administration, including the Clean Power Plan and the Waters of the United States rule.