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BPAA Federal Policy Update - November 28, 2020

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Election & Transition Update

  • AP reports: Former House Republican flips central California seat Republicans have picked up their 11th seat overall in the U.S. House and the third seat in California, as Republican David Valadao reclaimed the seat he lost in the farm belt two years ago. The former congressman defeated Democratic Rep. TJ Cox, who ousted Valadao in the 21st Congressional District two years ago by 862 votes. Valadao endorsed President Donald Trump after withholding his backing in 2016 — a risk in a swing district the president lost by 15 points four years ago. Read more here.

 

  • GOP candidate clings to 8-vote lead in US House race in Iowa A Republican candidate saw her vote lead dwindle to single digits Wednesday in Iowa’s 2nd Congressional District as a dramatic recount moved toward a conclusion in a race that will help determine the size of Democrats’ majority in the House of Representatives. Republican Mariannette Miller-Meeks held a lead of eight votes over Democrat Rita Hart out of more than 394,400 cast, with recount boards in all but one of the district’s 24 counties reporting their results. Miller-Meeks is trying to flip a second congressional seat in Iowa for Republicans this cycle. Read more at AP.

 

  • NJ-07: State Senate Minority Leader Tom Kean, Jr. (R) conceded to Rep. Tom Malinowski (D) on Thursday. “The race eventually narrowed to 4,327 last Friday evening, but that seemed to be the floor for Malinowski.” Kean is expected to “seek a rematch with Malinowski in 2022, when the congressman will presumably seek a third term.” (New Jersey Globe) The AP called the race shortly after Election Day, but it tightened significantly as more votes were counted.

 

  • Pennsylvania Judge Backs Trump Claim in Case Over Mail Voting A Pennsylvania judge who on Nov. 25 blocked the state from going forward with additional steps that might be required to certify the state’s presidential vote said in a written opinion that changes to the Pennsylvania’s mail-in balloting procedures were likely illegal. The order is delayed while the Pennsylvania Supreme Court considers the case, filed by Pennsylvania Republicans, on an expedited basis. Last night’s opinion simply provides the judge’s reasoning for ordering a temporary delay. It’s unclear exactly what further steps in the process can be delayed, but the plaintiffs suggested there were several, including the assembly of electors. The Electoral College vote to certify the Nov. 3 election results doesn’t take place until Dec. 14. By Bloomberg Government.

 

  • Joe Biden Names Picks For Secretary Of State, Homeland Security Chief, Director Of National Intelligence President-elect Joe Biden announced his intended nominees for top national security positions Monday, assembling a team of experienced institutionalists to fill his incoming Cabinet. In addition to his previously reported plan to nominate Antony Blinken to be his secretary of State and Jake Sullivan to be national security advisor, Biden also announced he will nominate Alejandro Mayorkas to lead the Department of Homeland Security and Avril Haines to be the director of national intelligence. Linda Thomas-Greenfield, a career officer in the U.S. Foreign Service, will be nominated to serve as the United Nations Ambassador, a post which will be elevated to Cabinet-level in the Biden administration. Biden also announced he will name former secretary of State John Kerry as special presidential envoy for climate and place the post within the National Security Council, the first time a high level envoy for climate has been formally part of the NSC. Read More at CNBC
    • President-elect Joe Biden will unveil his economic team next week, and his transition staff said it’s now getting “extraordinary cooperation” from civil servants in the Trump administration.
       
  • Janet Yellen Is Biden’s Pick for Treasury Secretary President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen, an economist at the forefront of policy-making for three decades, to become the next Treasury secretary, according to people familiar with the decision. If confirmed by the Senate, Ms. Yellen would become the first woman to hold the job. Mr. Biden’s selection positions the 74-year-old labor economist to lead his administration’s efforts to drive the recovery from the destruction caused by the coronavirus pandemic. Ms. Yellen, who was the first woman to lead the Fed, would become the first person to have headed the Treasury, the central bank and the White House Council of Economic Advisers. Ms. Yellen declined to comment by phone on Monday. Read More at Wall Street Journal
     
  • Michigan Certifies Biden Win After Trump Bid to Toss Result Michigan’s Board of State Canvassers voted to certify the election’s results, practically ensuring former Vice President Joe Biden’s victory over Donald Trump in the state. The vote means that only a possible Republican request for a recount stands in the way of assuring that Biden will win the Wolverine State and its 16 electoral votes. The board didn’t ask for a recount after certifying the results. One of the board’s two Republican canvassers, Aaron Van Langevelde, sided with Democrats to certify the vote 3-0, while Norm Shinkle, the other Republican member, abstained and called on the Michigan legislature to conduct a full audit. By Bloomberg Government.
     
  • Republican John James concedes in Michigan Senate race Michigan Republican John James conceded the Wolverine State’s Senate race to Sen. Gary Peters (D) after state officials certified the results of the presidential and Senate contests. James, who had refused for weeks to concede after the race was called for Peters on Nov. 4, recognized that the GOP-led state Board of Canvassers certified the results of the election and offered his congratulations to his opponent. Read more at The Hill.

 

COVID-19 Relief & Budget Update

  • Mnuchin Plans to Put $455 Billion Beyond Yellen’s Easy Reach Treasury Secretary Steven Mnuchin will put $455 billion in unspent Cares Act funding into an account that his presumed successor, former Federal Reserve Chair Janet Yellen, will soon need authorization from Congress to use. The money will be placed in the agency’s General Fund, a Treasury Department spokesperson said Tuesday. Most of it had gone to support Federal Reserve emergency-lending facilities, and Mnuchin’s clawback would make it impossible for Yellen as Treasury secretary to restore for that purpose without lawmakers’ blessing. Democrats swiftly criticized the move, with Bharat Ramamurti, a member of the congressionally appointed watchdog panel overseeing Fed and Treasury Covid-19 relief funds, saying “the good news is that it’s illegal and can be reversed next year.”
    • A Treasury spokesperson rejected that analysis, saying Mnuchin’s move was legal under the Cares Act stimulus law that originally provided the funding. Republicans and Democrats similarly clashed on Friday over whether the outgoing Treasury chief’s reading of the law required the phasing out of a welter of Fed facilities at year’s end.
    • McConnell backed Mnuchin’s proposal to use $580 billion that was allocated for Federal Reserve loan guarantees, small business aid and other virus relief programs that is unspent. “Congress should repurpose this money toward the kinds of urgent, important, and targeted relief measures that Republicans have been trying to pass for months, but which Democrats have repeatedly blocked with all-or-nothing demands,” McConnell said in a statement.
    • President-elect Joe Biden has selected Yellen as his nominee for Treasury secretary. His transition team last week called Mnuchin’s demand for the return of funds from the Fed “deeply irresponsible,” but Mnuchin has denied that he was attempting to limit Biden’s options for reviving the economy. Bloomberg Government reports.
       
  • Democrats Face Increasing Pressure To Back Smaller COVID-19 Stimulus Democratic leaders on Capitol Hill are facing increasing pressure — both internal and external — to accept a smaller coronavirus aid package for the sake of securing another round of emergency relief before year’s end. House Speaker Nancy Pelosi (D-Calif.) and Senate Democratic Leader Charles Schumer (N.Y.) have insisted for weeks that the House-passed $2.2 trillion bill is their starting point for any negotiations as they’ve sought to nudge Senate Majority Leader Mitch McConnell (R-Ky.) closer to their position from the $500 billion he’s championed. But the Democratic strategy is running into roadblocks as President-elect Joe Biden signals he wants an agreement this year and more and more Democratic lawmakers are opening the door to going below the top leaders’ $2.2 trillion red line. Sen. Chris Coons (D-Del.), a close Biden ally, said that he would support something below $2.2 trillion, but, like most Democrats, believes the offer from McConnell is inadequate as cases climb across the country and some cities and states are reimposing restrictions aimed at slowing the spread. Read More at The Hill

 

  • Neal Eyes Massive Coronavirus Relief, Climate And Infrastructure Package House Ways and Means Chairman Richard E. Neal’s attitude toward legislating under a Democratic-led White House might aptly be described as “never let a crisis go to waste.” The Massachusetts Democrat wants to take a page from his party’s 2009 playbook, when the Obama administration took office amid the wreckage of the financial crisis and enacted a nearly $800 billion stimulus that went as far afield as clean energy and infrastructure spending. President-elect Joe Biden oversaw that effort as vice president, and Neal sees potential to reprise something like it on a grander scale. “I do think with a President Biden that stimulus linked to climate change and linked to infrastructure go hand in hand,” Neal said in an interview. “Why don't we wrap them into one big bill, and given the Fed’s determination to keep interest rates low, we can do some borrowing.” Read More at Roll Call
     
  • Democrats Face Increasing Pressure To Back Smaller COVID-19 Stimulus Democratic leaders on Capitol Hill are facing increasing pressure — both internal and external — to accept a smaller coronavirus aid package for the sake of securing another round of emergency relief before year’s end. House Speaker Nancy Pelosi (D-Calif.) and Senate Democratic Leader Charles Schumer (N.Y.) have insisted for weeks that the House-passed $2.2 trillion bill is their starting point for any negotiations as they’ve sought to nudge Senate Majority Leader Mitch McConnell (R-Ky.) closer to their position from the $500 billion he’s championed. But the Democratic strategy is running into roadblocks as President-elect Joe Biden signals he wants an agreement this year and more and more Democratic lawmakers are opening the door to going below the top leaders’ $2.2 trillion red line. Sen. Chris Coons (D-Del.), a close Biden ally, said that he would support something below $2.2 trillion, but, like most Democrats, believes the offer from McConnell is inadequate as cases climb across the country and some cities and states are reimposing restrictions aimed at slowing the spread. Read More at The Hill
     
  • Americans Could See A Vaccine By Mid-December, Says Operation Warp Speed Adviser Moncef Slaoui, the chief scientific adviser for Operation Warp Speed, says that some Americans could start receiving a COVID-19 vaccine by the second week of December. Slaoui's comments follow the announcement on Friday that Pfizer and its partner, BioNTech, have asked the Food and Drug Administration to grant an emergency use authorization for its COVID-19 vaccine — which has been found to be 95% effective. A second vaccine from the biotech company Moderna is expected to be submitted for emergency authorization soon as well. "Our plan is to be able to ship vaccines to the immunization sites within 24 hours from the approval, so I would expect maybe on day two after approval on the 11th or the 12th of December," Slaoui told CNN on Sunday. Read more here

     

Tax Policy Update

  • Congress Blasts IRS for Limits on Forgiven PPP Loan Tax Breaks The top Republican and Democrat on the Senate Finance Committee said the Treasury Department “missed the mark” in new guidance that limits tax breaks for businesses that get their Paycheck Protection Program loans forgiven. In a joint statement Thursday, Senate Finance Chairman Chuck Grassley and Democrat Ron Wyden said the Treasury is depriving some small businesses of much-needed economic relief by forcing them to choose between getting their PPP loans forgiven or claiming write-offs on expenses they covered with the loan money. The IRS published guidance on the issue Wednesday. “Regrettably, Treasury has now doubled down on its position in new guidance that increases the tax burden on small businesses by accelerating their tax liability, all at a time when many businesses continue to struggle and some are again beginning to close,” Grassley and Wyden said. The congressional reaction to the guidance puts additional pressure on the Treasury and Internal Revenue Service to allow taxpayers to claim the expense deductions. Grassley and Wyden encouraged the IRS to reverse its position. The lawmakers said they are working to include language in year-end legislation clarifying that taxpayers qualify for expense deductions even if their loans are forgiven. That could be included in government spending legislation that Congress must pass by Dec. 11 before federal funding runs out. By Bloomberg Government.
  • Gaming Out PPP Deductibility: It probably shouldn’t have surprised anyone that Treasury Secretary Steven Mnuchin and the IRS just doubled down on their earlier finding that companies who received forgiven loans through the Paycheck Protection Program can’t write off normal business deductions paid for by those loans. But the timing is interesting, right? President-elect Joe Biden is set to take office in less than two months, and the prevailing view among lawmakers is that Congress intended to allow the double-dipping on the PPP loans and the normal business deductions. So is there a chance that a Biden administration could reverse Mnuchin on this? Or that Congress will throw its weight around to make it clear that businesses can have both? Let’s check this out from several different perspectives. Read More at Politico
     
  • Biden and Tax Regulations There's a lot of good reasons President-elect Joe Biden might use the regulatory process to move tax policy to the left. Here’s a big one: Biden could easily be the first president in more than three decades to enter the White House without his party also controlling both chambers of Congress, depending on the results of January’s Senate runoffs in Georgia. So let’s look at some ways that a President Biden could try to use the regulatory state to his advantage on taxes.
    • First up: Taking aim at the 2017 tax law, H.R. 1 (115). Big business groups like the U.S. Chamber of Commerce are already gearing up for a regulatory fight over preserving the Tax Cuts and Jobs Act, as The Washington Examiner’s Jay Heflin reported. (Worth noting: Chamber officials aren’t yet willing to predict which parts of the tax law will most be in need of defending.) Read more at Politico.

 

Labor & OSHA Update

  • DOL Tips Rule Nears Release in Latest Eleventh-Hour Deregulation The restaurant industry’s years-long push for eased regulations on paying tipped workers for time spent on side work that doesn’t generate gratuities is closer to reality just as the Trump administration is about to exit.The U.S. Labor Department has submitted a long-anticipated final rule to the White House Office of Information and Regulatory Affairs in a notice appearing on the agency’s website Thursday. This is typically the final major step before the rule can be released to the public. If finalized as proposed, the regulation would allow employers to pay tipped employees the lower minimum wage of $2.13 per hour regardless of the amount of time they spent on non-tipped duties, such as rolling silverware or cleaning their work stations. This would withdraw the department’s previous interpretation that workers, such as servers and bartenders, must be paid the full federal hourly minimum of $7.25 when spending at least 20% of their workweek on tasks that don’t yield gratuities from customers, rather than the base pay of $2.13 for tipped occupations.
    • Completing this rule before President Donald Trump leaves office Jan. 20 would represent a victory for the hospitality industry and management attorneys by shielding them from an increasingly common form of litigation in which workers allege they’re owed back pay for hours working on non-tipped duties when they didn’t earn at least $7.25. By Bloomberg Government.

 

  • Businesses Brace For Mandatory Workplace Safety Rules Under Biden President-elect Joe Biden has vowed to issue mandatory workplace safety rules that employers must follow to protect workers from coronavirus exposure. It's likely to be one of his first big fights with American business and a test of how far he can go to create a national strategy to slow a pandemic that is still raging out of control. Senate Majority Leader Mitch McConnell and other Republicans are demanding a robust liability shield for businesses and schools as a condition for a new aid package — a provision that former OSHA officials say would strip Biden of the ability to enforce Covid-19 workplace protections. As part of his plan to combat the coronavirus, Biden says he will direct his administration to issue the so-called emergency temporary standard, which would lay out specific precautions that employers must take to protect their workers from exposure to the virus. The standard isn't likely to fully take shape until the new administration assumes control of the government, but a former OSHA official predicted it would at least mandate the Centers for Disease Control's guidelines, which broadly suggest allowing for social distancing, frequently disinfecting the workplace and providing protective equipment like gloves, goggles or face masks. Read more at Politico

 

  • Department of Labor & Industry Warns Of New Unemployment Benefits Scam Secretary Jerry Oleksiak of the Department of Labor & Industry (L&I) announced today the emergence of nationwide scams involving fraudsters offering cash rewards to access state unemployment benefits and reminds people to be vigilant. “As we continue to work with our state and federal law enforcement partners to prevent frauds and scams, please note the Pennsylvania Department of Labor & Industry will never contact you and ask for your personal, private information,” said Secretary Oleksiak. “If you receive a call, email, text, social media message, or other communication seeking information such as your username, password, or full Social Security number, do not provide it. We will never ask you for this information." Read More at Fox 43

 

  • Weekly Jobless Claims Higher Than Expected As Labor Market Takes Hit From Rising Covid Cases The pace of first-time filings for jobless claims picked up last week, with the jobs market showing increasing vulnerability to the coronavirus spread. Claims totaled 778,000 for the week ended Nov. 21, ahead of the 733,000 expectation from economists surveyed by Dow Jones and up from 742,000 the previous week, the Labor Department reported Wednesday. Continuing claims for those collecting benefits for at least two weeks maintained their decline, falling to 6.07 million, a drop of 299,000. The news comes amid an ongoing rise in coronavirus cases and worries that the national health system is becoming stressed. New daily cases have averaged 174,225 over the past week, and health officials worry that Thanksgiving could send that level higher as families across the country travel to celebrate the holiday. Though weekly claims have been below 800,000 for the past six weeks, they are still well above the pre-pandemic record as governments impose restrictions on activity. The hospitality industry has been particularly hard-hit with restrictions on capacity and the likelihood that many will have to go back to take-out only operations or close completely as winter settles in and cases continue to increase. Read More at CNBC
     
  • Democrats Face Increasing Pressure To Back Smaller COVID-19 Stimulus Democratic leaders on Capitol Hill are facing increasing pressure — both internal and external — to accept a smaller coronavirus aid package for the sake of securing another round of emergency relief before year’s end. House Speaker Nancy Pelosi (D-Calif.) and Senate Democratic Leader Charles Schumer (N.Y.) have insisted for weeks that the House-passed $2.2 trillion bill is their starting point for any negotiations as they’ve sought to nudge Senate Majority Leader Mitch McConnell (R-Ky.) closer to their position from the $500 billion he’s championed. But the Democratic strategy is running into roadblocks as President-elect Joe Biden signals he wants an agreement this year and more and more Democratic lawmakers are opening the door to going below the top leaders’ $2.2 trillion red line. Sen. Chris Coons (D-Del.), a close Biden ally, said that he would support something below $2.2 trillion, but, like most Democrats, believes the offer from McConnell is inadequate as cases climb across the country and some cities and states are reimposing restrictions aimed at slowing the spread. Read More at The Hill
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