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- Digging Out of the 2020 Elections
Following a historic 2020 election, with record voter turnout and multiple controversies amid a global pandemic, Nossaman Government Relations & Regulation (GRR) Chair Fred Dombo spoke from Washington, DC with Nossaman GRR Partner Amber Maltbie in Los Angeles about the likely policy consequences of the new Congress and the new Administration. Their conversation covers the potential for introduction of a large infrastructure package, as well as trends that they noted in the election outcome and how the results might impact policy decisions going forward.
Digging Out of the 2020 Elections Transcript
0:00:00.2 Amber Maltbie: Today we are going to “dig out” from the 2020 election and examine the likely policy consequences of the new Congress and the new administration, including the potential introduction of a large infrastructure package. We will also discuss some trends that we noted in the election outcome and how the results might impact policy decisions going forward.
0:00:25.2 Speaker 2: Welcome to Digging Into Land Use Law, Nossaman's podcast covering the development of all things in, on, or above the ground.
0:00:42.2 AM: Thank you for joining us on this new episode of Digging Into Land Use Law. Today we will be discussing the 2020 election. My name is Amber Maltbie, and I'm a partner in Nossaman's Government Relations & Regulation Group. My practice focuses on campaign finance and election law. And I provide strategic counsel to individuals, nonprofits, agencies, and organizations engaged in political and lobbying activity. Joining me today is Fred Dombo, who serves as chair of Nossaman's Government Relations & Regulation Group which combines experience as an aide to members of the US House of Representatives, committees on appropriations, and energy and commerce. With more than 20 years of private practice to provide clients with cost-effective advice on the legal and political implications of their government relations activities. It's great to be here with you today, Fred.
0:01:37.3 Fred Dombo: Thanks very much, Amber. I'm glad to join you today to discuss the implications for infrastructure land use and environmental matters.
0:01:44.8 AM: Before we jump into the big picture of what happened at the federal level, we thought it would be fun to take a look at what happened beyond the presidential and those senate races. There was a lot of activity that happened at the state level. And there were also some trends that we noticed in terms of the election outcomes.
0:02:08.6 FD: Yeah, at this point, I think in California, there's a few House seats that still haven't been determined. But more importantly, we saw a lot of changes, an increase in diversity of the new Congress. And as people may know, or may not know, we have a bipartisan practice. For example, you're a Democrat, I'm a Republican, I was proud to see that we're going to have at least 31 Republican Women make their way into Congress come January, surpassing a record set in 2006, according to CNN and the Washington Post.
0:02:40.3 AM: So that was one of the big landmark things that happened in this election is that there was such abuse and Republican women who ran and won at the congressional level that was complimented in 2018 when Democratic women ran and won in unprecedented numbers. And so now Republican women have double the numbers of representation that they had previously. And so overall, we're seeing this trend towards getting women to run and to get elected. And we'll talk a little bit more about why that representation matters when we're talking about the policy implementation later on in our podcast here.
0:03:23.2 FD: The other thing that happened with so much change on the one hand, and I think you're going to go into some details regarding other ways, diversity increased in the congressional level. But interestingly, on the state level, there was some turnover expected in a legislative chambers that just didn't materialize. In fact, only one state had turnover in their legislature. In New Hampshire, Senate and House both moved from Democrat to Republican, which seems counter to the trend across the country. It seems that the trend that was expected didn't actually materialize. Both had gone the other way in 2018. And now they're flipped back according to the National Conference of State legislators.
0:04:02.1 AM: Well, that may be true, but new, New Mexico had something historic happen. It now has a majority of women in its state legislature, making the Mexico only the second state in the country that to be majority women represented. Nevada actually stole that claim in 2018 to become the first but I think too, the other thing to take into consideration is that we are at the tail end of the decade, set the Census count has ended and so redistricting is going to start in earnest in the next year. And so we'll see a lot of jockeying at state... At the state legislative level where the legislatures control the redistricting, or before the redistricting commissions that a number of states have set up to serve as independent bodies to redraw those lines.
0:05:00.8 FD: Yeah, that was kind of an untold storyline in a lot of the media, we saw around the 2020 elections. For example, in the Arizona House, a lot of money was dumped into there to try to change it. It's been Republican since 1966. It appears as though it's going to have that same partisan makeup as it has had. In the last session, 31 Republicans and 29 Democrats, despite speculation that it might change and despite a lot of effort to flip it, and despite the whole state, really going from red to blue. So it's just a lot of interesting different facts and stats, we need to unpack from the selection and see what that means. But right now, we can tell you some high-level definitely impacts that's going to have on the policy agenda.
0:05:45.7 AM: One thing that you mentioned there, Fred, that is interesting is that the difference between how voters are voting at one level but then voting differently at another level. So for example, you mentioned Arizona, the legislature did not flip. However, it appears Arizona turned blue for the presidential election. And so there's some disconnect there. One of the mechanisms for influencing policy change that a lot of our clients actually utilize is the ballot measure process. And this is a way when the legislature is not going the way perhaps people really wanted to go in terms of policy, individuals, special interest groups, they can go directly to the voters with the policy proposal through the initiative process. And this is...
0:06:38.3 AM: Not allowed in every state, it's a process allowed in about 25 states. Another trend that we saw this year was the voters adopting policies when the legislature refused to act, and this is something we saw earlier in the year in red states like Missouri and Oklahoma, passing Medicaid expansion at the ballot, when the legislatures have refused to adopt those proposals. And then on the general election, you had red states like South Dakota and Montana, voters adopted cannabis legalization recreational use for adults, 21 and older, when the legislatures had not been friendly to those policies.
0:07:26.0 AM: I think that may be akin, and Fred, this something where I'd really like to dig in with you, is we're looking at potentially having a Democratic administration, but a Republican-controlled senate. And you mentioned there's a number of big policy proposals being pushed through the federal government, and I just talked about how at the state level we see different competing legislative policies being dealt with. How do we anticipate that occurring at the federal level?
0:08:03.0 FD: Yeah, I think you're going to see that definitely in the form of an infrastructure package. The big piece of legislation that everyone's been waiting on and now very much expecting at the outset of a Biden administration is going to be a large infrastructure package that's also going to serve as a vehicle for stimulating jobs and helping the recovery from the pandemic.
0:08:24.4 FD: Before we get there though, the Congress has some unfinished business to attend to, the current Congress, and that includes the fiscal year 2021 appropriations, the most passed spending bills the senate released, 12 of them. And at the time of this recording, the vice chairman there, the Democrat Patrick Leahy from Vermont, said negotiations between the Democrats and Republicans are going well, and that they're probably going to be able to have a product out to cover the rest of fiscal year 2021 before too long.
0:08:57.4 FD: A little more complicated is the coronavirus stimulus package, the next version of that that everyone's been talking about. Not a lot has changed there since before the election. Some speculated that after the election, it would be easier to get that done, there would be less pressure on Majority Leader McConnell to hold a lot on spending. Well, recently he came out with a statement, once again, advocating for a smaller bill, a lower dollar amount spent in the bill because unemployment is down once again, and Eli Lilly has an antibody therapy that's been touted and granted emergency use authorization by the Food and Drug Administration.
0:09:42.2 FD: And of course, big recent news is Pfizer's COVID-19 vaccine, 90% effective. So his point is, this thing might be ending sooner than expected, and therefore, we shouldn't spend as much money. I think a lot of policymakers are going to disagree on the House side with that, so that could be a more approach of battle in the current Congress.
0:10:04.9 FD: Also of interest to our listeners is the Water Resources Development Act, WRDA. That conference report is in the House after it passed the House in July and was reported to the Senate, which back in May, Ian had handled it. The product that will be forthcoming and that's a very significant piece of legislation as listeners know. Another one is the National Defense Authorization Act.
0:10:32.5 FD: The situation with the infrastructure packages that Highway Trust Fund, which actually provides the funding for the programs, is headed for insolvency. It's derived from fuel taxes, they haven't been increased since 1993, and the authorization for these programs is up as well. So that's due in September 2021, we have less than a year to get that taken care of.
0:10:58.8 FD: House Ways and Means Committee will provide the funding mechanisms for that. They definitely want to put forth a bill... Their portion of the bill and help upgrade the country's roads and bridges and waterways, but they're also positioning it as an opportunity to create good jobs for folks who were out of work and that'll re-energize the economy.
0:11:21.8 FD: The House Transportation and Infrastructure Committee has the structure of that bill, it's a $500 billion authorized bill that doesn't actually have the funding mechanism in it, and that's... Had already passed Congress earlier, this current Congress, and would establish, potentially, a national vehicle-miles traveled pilot program, to see if that's a viable way to fund our infrastructure around the country.
0:11:49.7 FD: That has set the stage for Mr. Biden's proposal, that that is a full... In the campaign, has available, publicly available plan that would cost about $2.6 trillion. It would include not just highways, roads and bridges, rail, transit, but also housing, schools, electric vehicles, trains, water resources, and broadband.
0:12:20.5 FD: The scope of it, very broad, very aspirational. The goal is to create a modern sustainable infrastructure that will actually foster job creation and improve the equity in our infrastructure system and deliver a clean energy future. So there's going to be... The Republican Senate's going to have a lot to say about that. We might see that funded through a temporary gas tax increase that's been phased out as we phase in a vehicle miles travel tax. As part of that, you may have a carbon tax that would also include a dividend or a tax credit hooked into carbon equity. The concept of...
0:13:06.6 FD: Having these systems paid for in a progressive fashion that's going to put... Shift the burden off of people that's able to pay. So Biden has been a supporter of bonds for infrastructure, so we expect to see that. In 2009, he supported the Build America Bonds program, as well as public-private partnerships, which I know are of interest to a lot of our listeners. There's been bipartisan supporting Congress for Private Activity Bonds and the TIFIA program. Not only will Biden emphasize them, but also maybe use them or TIFIA in particular, as a model to help fund airports and also to help develop broadband programs. The infrastructure package is going to be the subject of a lot of debate and there's a lot of work to do on it, even though in the last Congress, they were thoroughly developed proposals. That's the biggest, perhaps, aspect of the Biden Administration of interest to our listeners, but also there's... In the environmental land use area generally, there are going to be some changes.
0:14:14.0 FD: One of the more noteworthy ones that came up in the election is he's going to rejoin... Have the United States rejoin the Paris Accords. And the other thing that may be of more practical everyday concern for our listeners is that a Biden Justice Department is going to be emphasizing enforcement in the environment area. So as listeners probably know, the US, as part of the Paris Accord, we voluntarily commit to cutting its carbon dioxide emissions by 26% or 28% by the year 2025. And also, the US would contribute funding heavily to Green Climate Fund that helps poor nations invest in renewable energy. As I mentioned though, the DOJ's Environment and Natural Resources division will quickly undo some of the Trump directives that constrained settlements in environmental enforcement cases, and also are going to increase enforcement activity and emphasize environmental and climate justice in the process.
0:15:21.0 FD: There's going to be an increasing willingness to litigate regarding pollution and wildlife, particularly with respect to public lands and tribes and any federal property. That's something that I know listeners would be interested in just generally. Biden had pledged to reverse the Trump tax cuts. The Senate may have something to say about that, the Republican-controlled Senate. House Ways and Means Chairman, who'll be very involved in the infrastructure package, also wants to make some changes to the 2017 Republican tax cuts, including removing the $10,000 cap on state and local tax deductions, the ability to deduct the taxes you pay to the state and local governments from your federal taxes. Increasing the corporate income tax to 28% from 21%, and then increasing taxes on those making more than $400,000 a year. So those are some of the big ticket items on the agenda.
0:16:22.3 AM: So, Fred, for our listeners that may not know, when you're talking about this infrastructure package, it sounds like it has a lot in it that could really benefit local economies. You mentioned jobs, I think you mentioned housing, roads, that is a lot. So from the... Two questions, one, How do states go about partaking in the projects? How do they get in on that, for a lack of a better phrase. Again, this is your arena, not mine... The second part of my question... Well, I guess it's a three-part question. The second part of my question is, Does the new composition of the Congress, the House and the Senate, and the fact that we really do have a more diverse Congress than we've had before, is that going to shape what the application processes look like? And then my... And we'll get to my third question. I'll let you answer my first two. [laughter]
0:17:26.8 FD: Sure. So the funding is going to come down through existing programs. We mentioned the TIFIA and Private Activity Bonds, and we... It's also going to come potentially through projects that get written directly into the bill. This alludes to a separate debate that's been going on mostly among appropriators, which is whether or not to return to congressionally directed spending, otherwise known as earmarks, that these bills, these large infrastructure spending bills that come by every five years or so, often have both a funding mechanism as well as an authorization mechanism. So that is not the ways Federal spending usually gets approved by Congress. Appropriations are separate from the authorization, typically, and when you authorize on appropriations, then we're starting to get what you call earmarks. And how much the Democrats have been talking about doing that more if the Biden Administration wants to put particular spending lines into the package at some point, and the House agrees to that, you may not get resistance from the Senate.
0:18:40.4 FD: So we could see that. Funding could come that way, but most likely, and I think probably the best way to stimulate job growth is going to be through the existing programs that the Department of Transportation and others have for this funding to find its way to worthy projects and into worthy rail and transit systems. Whether or not the diversity of the Congress is going to help change the way those programs work, I don't know that it's going to have an impact that quickly. I think this bill is going to happen pretty fast. I tend to believe that one of the benefits of diversity is that you had different perspectives to a process that may have been going on for some time, and I think there's potential for that to happen here. I just don't see it right off the bat.
0:19:34.0 AM: My final question, my third question, again is a process of state versus federal process question. And to give you... The framework that I'm thinking of as an example, is Medicaid expansion. As you know, it is a product of ObamaCare and state legislatures can opt into Medicaid expansion through the federal government, and if they don't, the voters can go to the ballot box themselves to pass Medicaid expansion. And I'm just wondering if there is any scenario, with the infrastructure project or anything else that you've been talking about, where we would need the voters or interest groups to have to circumvent the legislature to take advantage of what the federal government is doing.
0:20:28.9 FD: That's a very interesting question, and interestingly, to the ballot process. Some of these infrastructure programs require a local spend, a certain amount of local and state investment in the projects. If the legislature doesn't approve that on the state level, then it would be possible, I suppose, for voters to create a project, especially in California, by a valid initiative to improve funding for a project that would provide the local match or the state match for accessing and unlocking a large amount of federal infrastructure dollars.
0:21:12.9 AM: We've covered a lot of topics today, but why don't we close out with you telling us what you think will be most top of mind for our listeners.
0:21:22.1 FD: ESG's rule-making on increasing disclosure, environmental, social and governance issues, publicly traded companies need to do, so. That could... The Biden administration will probably support redoing rule-makings or new SEC rule-makings that allow for greater disclosure of ESG risks, and then also ease up the thresholds for a shareholder to just submit proposals for a vote by board shareholder proximates. A lot of times those are aimed at lobbying and campaign finance disclosures, making the companies disclose on their websites their association spending as well as their peer corporate political contributions. And then, of course, as we've been talking to our clients, it's not first on everyone's list, it's not first on most people's list, but it's on everyone's list, privacy. Determining on a federal level what personal information is, quote-unquote, personal information.
0:22:21.7 FD: That's something that businesses and other entities are increasingly calling congress. They need some federal standard for it. California leads the way on that for the United States with regimen pretty tough on par with in Europe, and for... Outside of the healthcare context, HIPAA, we don't really have a federal definition other than out of what personal information is, and so it would be helpful to businesses, the federal government to actually make a determination regarding that. So those are just some of the other smaller issues that are big to some of our clients like for our listeners, I wanted to touch on those too.
0:23:03.8 AM: Well, thank you very much, Fred. I really enjoyed our discussion today, and thank you to our listeners for joining us for Digging Into Land Use Law. For additional information on this topic or other environment and land use issues, please visit our website at nossaman.com. And don't forget to subscribe to Digging Into Land Use Lawwherever you're listening to podcasts, so that you don't miss any of our upcoming episodes. Until next time.
0:23:34.5 S2: Digging Into Land Use Law is presented by Nossaman LLP, and cannot be copied or re-broadcast without consent. Content reflects the personal views and opinions of the participants. The information provided in this podcast is for informational purposes only. It's not intended as legal advice and does not create an attorney-client relationship. Listeners should not act solely upon this information without seeking professional legal counsel.