TAUC Legislative & Regulatory Update, September 2020
COVID-19 response package negotiations and the national party-political conventions took center stage in Washington this month.
Negotiations between the White House and Congressional leaders on the package have stalled, with both sides posturing for when Congress returns after Labor Day. In the meantime, the additional $600 a week provided in unemployment benefits provided under the CARES Act has expired, and the Small Business Administration stopped accepting new applications for the Paycheck Protection Program, which provides loans to small businesses to keep workers on the payroll.
With Congress expected to only be in town for three weeks in September due to the upcoming election, it will be a mad sprint to finalize a response package, fund the government to avoid a government shutdown, and extend expiring authorization – like the Federal surface transportation programs.
Here is an exclusive update on policy and regulatory issues of vital interest to TAUC members.
COVID-19 Response Package
As mentioned, negotiations between the Democrats and the White House over coronavirus emergency relief spending have failed to advance to the next emergency spending package.
House Speaker Pelosi (D-CA) and Senate Minority Leader Schumer (D-NY) have stated that they are willing to compromise from the House-passed $3.5 trillion HEROES Act and have offered to negotiate a relief package closer to $2 trillion. They have also stated that they will not agree to the $1 trillion HEALS Act proposed by Senate Majority Leader McConnell (R-KY) primarily because it does not include any funding for replacing revenue lost by state and local governments due to the pandemic.
Given the stalemate, there are some discussions about moving a targeted package in September and then addressing additional funding needs after the election. A bipartisan agreement will be necessary since the HEROES Act will not pass the Senate, and the Senate eRpublican package cannot pass the Senate without Democratic votes. It’s not clear how any of this plays out against the backdrop of the election.
Multiemployer Pension Reform
TAUC and our allies continue to push that the relief package must include multiemployer pension relief and authorize the voluntary use of composite plans. These provisions were included in the House-passed HEROS Act, and we continue to advocate that a version of these provisions be included in the final package.
It has been reported that there was an acknowledgement during negotiations that action is required to address the looming multiemployer pension crisis. But it is not clear if negotiators are willing to include these provisions in the COVID-19 package or if they would prefer it be included in a future legislation vehicle.
We have been working with our allies in the construction industry and the building trades to ensure that any multiemployer pension package authorize composite plans. Opponents of composites have been working very aggressively on Capitol Hill to undermine these efforts and have been successful in getting a number of members of congress to write to Speaker Pelosi urging her to NOT include the GROW Act in future COVID-19 legislation. TAUC and our allies have been working to push back on the misinformation being distributed on the Hill and efforts to undermine legislation authorizing the voluntary use of composite plans.
We urge you to continue communicating with your members of Congress about the importance of provisions authorizing composite plans to the competitiveness of the union construction and maintenance industry.
COBRA Subsidy for Recently Unemployed
Similarly, TAUC continues to work with construction industry allies to include a provision providing a temporary COBRA subsidy for continuation of coverage for health and welfare plan participants who lose employer-provided health care coverage due loss of a job or reduction in hours. As we mentioned last month, we have signed on to letters organized by the NCCMP and American Benefits Council supporting the inclusion of this subsidy in the final package. To date, Congress has yet to include these provisions in its legislative efforts to address COVID-19.
Executive Actions by President Trump
With negotiations stalled, President Trump took executive action by signing a series of memorandums to respond to the economic fallout from the pandemic.
Of particular interest, the President signed a memo to the Secretary of Treasury directing him to defer payroll taxes through the end of the year for individuals making $100,000 a year or less. He also signed a memo directing the Federal Emergency Management Agency to use existing Disaster Relief Fund to provide an additional $400 per week in unemployment benefits (under this proposal, the Federal government would provide $300 per week and states would be required to match up to 25 percent of the funding).
Trump’s executive actions have received bipartisan criticism and are likely to be challenged in court.
There have also been concerns raised in the business community over uncertainty with the payroll tax suspension and the potential for substantial tax liability for employees at the end of the deferral period. The Treasury Department and Internal Revenue Service have yet to issue guidance on the implementing the payroll tax deferral. There are reports that the White House wants employers, and not the employees, to be responsible for paying back the deferred taxes. This has led to calls to fully forgive the payments, which will either significantly increase the deficit or impact revenues available to support Social Security and Medicare.