Senate Unveils $1 Trillion Bipartisan Infrastructure Bill
WASHINGTON UPDATE
Infrastructure Package
On Sunday, August 1, Senate Democrats and Republicans unveiled a long-awaited $1 trillion bipartisan infrastructure package. The Infrastructure Investment and Jobs Act is the first phase of President Biden’s infrastructure plan and calls for $550 billion in new spending over five years above projected federal levels. Senate Majority Leader Chuck Schumer has said he is prepared to keep lawmakers in Washington for as long as it takes to complete votes on both the bipartisan infrastructure plan and a budget blueprint that would allow the Senate to begin work later this year on a massive $3.5 trillion social, health and environmental bill.
Major new investments in the bill include $110 billion for roads and bridges, $39 billion for public transit, $66 billion for rail, $55 billion for water and wastewater infrastructure, as well as billions for airports, ports, broadband internet, and electric vehicle charging stations. It would also require workers to be paid the prevailing local wage on projects funded by the plan and includes several provisions designed to bolster employment in the energy industry, particularly renewables.
The agreement would include $10 million in grants for FY 2022 for classroom instruction and on-the-job training to help workers obtain industry certifications for installing energy efficiency technology in buildings. Another $40 million in competitive grants for states, covering fiscal years 2022-26, would go toward training people “to conduct energy audits or surveys of commercial and residential buildings.” The plan would also create a 21st Century Energy Workforce Advisory Board “to support and develop a skilled energy workforce” and an Energy Jobs Council to survey employers in the industry and analyze its demographics.
Both parties have said they have covered the full cost of their new spending - one of the most contentious roadblocks negotiators had to overcome. Democrats initially wanted to fund new investments through tax increases on corporations and wealthy individuals, but GOP lawmakers adamantly opposed that idea - instead preferring to raise some of the money through new fees on those who use infrastructure, which was rejected by Democrats. The bipartisan compromise omits both new taxes as well as user fees and instead recovers its costs through financing mechanisms such as reclaiming past coronavirus aid funds and clawing back fraudulently paid-out or unused federal unemployment benefits to collecting unpaid taxes on cryptocurrencies. Both parties are still concerned if that will be enough. Senate negotiators are hopeful that the proposal could pass the Upper Chamber this week.
The package will use the House-passed surface transportation bill (HR 3684 (117)) as a vehicle. Democrats have been vocal about any new bipartisan deal on public-works spending being moved in tandem with the second $3.5 trillion social spending proposal - a far more partisan bill, which many Republicans oppose. Democrats intend to advance that package through reconciliation.
Click here to access the full bill.
Appropriations
On Thursday, July 29, in a vote of 219-208, the House passed a seven-bill “minibus” (HR 4520 (117)) that would increase budgets for the Departments of Labor, Education, Health and Human Services, Agriculture, Transportation and more. On Wednesday, the House also passed two bills that would provide $67 billion for the State Department, foreign aid programs and the Legislative Branch, mostly along party lines. Under the $600 billion spending package, the Labor-HHS-Education measure eliminates a ban on federal funding for abortions – something that almost certainly won’t pass the Senate. On Monday, the House accepted 229 amendments for the package and many earmarks in the bill would direct billions of dollars toward education and training programs, higher education, medical facilities and more. Congressman David Scott (GA) presented an amendment that would increase apprenticeship opportunities for Black Americans and an amendment from Congresswoman Cindy Axne (IA) would appropriate $5 million for community colleges that train dislocated workers.
The spending package would also fund the Departments of Energy, Interior, Veterans Affairs, Treasury, and Housing and Urban Development, as well as the EPA, military construction projects, the FDA, water infrastructure and the IRS. Despite House passage of the minibus package, Congress is no closer to a bipartisan deal that would avoid a government shutdown after the September 30 deadline. Many lawmakers are confident Congress will fall back on a continuing resolution to temporarily extend current funding and prevent a government shutdown come October 1. This week, Senate appropriators plan to mark up their first three spending bills – starting with the Departments of Agriculture, Energy and Veterans Affairs - and officially start the appropriations process.
Click here to read the press release on the package.
Second Chance Pell
On Friday, July 30, the U.S. Department of Education announced it will expand the Second Chance Pell program for the 2022-2023 award year. The Second Chance Pell Experimental Sites Initiative, launched under President Obama in 2015, provides need-based Pell grants to people in state and federal prisons through partnerships with colleges. The expansion will allow up to 200 colleges and universities to offer their prison education programs with support from the Pell Grant program, up from the 131 currently participating. According to the Department of Education press release, to date, students have earned over 7,000 credentials, building new skills and improving their odds of success. Expansion of the experiment is part of the Department’s efforts to expand access and equity in higher education. Providing education in prisons is proven to reduce recidivism rates and is associated with higher employment rates, which will improve public safety and allow individuals to return home to their communities and contribute to society.
The Department intends to implement the legislative changes to allow eligible students in college-in-prison programs to access federal Pell Grants beginning on July 1, 2023. The Department has also announced plans to publish regulations on the program prior to its implementation and it held public hearings in June of 2021. Institutions interested in applying to participate in the new cohort of Second Chance Pell may submit an application to the Department. Applications will be open from July 30, 2021 for institutions to be accepted for the 2022-23 award year.
Click here to access the applications.
Department of Labor “Joint Employer” Rule
On Thursday, July 29, the U.S. Department of Labor (DOL) rescinded the Trump administration’s “joint employer” rule, which the Biden Administration felt was too business-friendly and that doing away with it would protect more workers under federal wage-and-hour law. The final rule released by the department withdraws the Trump standard that took effect in March 2020, which used a four-part test to determine whether a business is jointly liable with its franchisee or contractor for minimum wage and overtime violations. The DOL said in a statement that abandoning the Trump rule was necessary because it "included a description of joint employment contrary to statutory language and Congressional intent" and "failed to take into account the department’s prior joint employment guidance." Under the Obama administration, DOL said a business with indirect control over employees could be held jointly liable, a broader standard that classified more companies as joint employers.
Last September, a federal judge invalidated part of the Trump joint employer, finding that the agency's interpretation of who counts as a joint employer conflicted with the 1938 Fair Labor Standards Act. Republicans and business groups had praised the Trump administration's rule change, arguing it set a clear standard for businesses to follow. The rule will go into effect September 28.
Click here to read the Department of Labor’s press release.
Initial Jobless Claims
In the week ending July 24, the advance figure for seasonally adjusted initial claims was 400,000, a decrease of 24,000 from the previous week's revised level. The previous week's level was revised up by 5,000 from 419,000 to 424,000. The 4-week moving average was 394,500, an increase of 8,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 385,250 to 386,500. The advance seasonally adjusted insured unemployment rate was 2.4 percent for the week ending July 17, unchanged from the previous week's unrevised rate.
Click here to access the full report.