Washington DC Update - May 2020
Congress Returns to Work, Water Infrastructure in the Mix
The Senate has been back in session since last week, and one of the first things they took up in Committee was the unanimous advancement of a pair of water bills. These were the America’s Water Infrastructure Act and the Drinking Water Infrastructure Act. America’s Water Infrastructure Act of 2020 is the 2020 version of what used to be called the Water Resources Development Act (WRDA) bill, which Congress considers now on a two-year cycle. The bulk of these pieces of legislation are typically water resources project for the US Army Corps of Engineers but the last several cycles have had growing portions focused water/wastewater. The 2018 version of this legislation dealt more on the drinking water side, and during the process of crafting the 2020 bill, congressional staff expressed interest, especially on the Senate side, in keeping the 2020 bill more focused on the wastewater side. In the Senate, a single committee deals with Drinking Water and Wastewater issues whereas in the House it is split between two committees. In the interest of expediting the legislative process, keeping AWIA 2020 just USACE and Wastewater meant only a single committee in the House would be needed to work with the Senate, which is much farther along than the House this cycle. If there was enough support on the Senate side for drinking water legislation, it would move at the same time, but in a separate bill – hence the Drinking Water Infrastructure Act.
My key AWIA Highlights:
- Reauthorizes the Clean Water SRF (first time since authorization expired in early 90’s) and bumps up its authorized funding level.
- Reauthorizes WIFIA through 2024 at level funding.
- New grant programs tackling resilience and several other issues.
- Water workforce grant program returns with more funding and expanded eligibility.
- Considerably more focus on small, medium, and tribal systems than usual.
It should be noted that these are authorizing bills not appropriating bills. Meaning that they authorize the spending of money, set the maximum amount, and create policy changes. What they do not do, is actually spend money on water. That comes later in a different process. Action now is on the House, which is still crafting its version of the legislation. The Senate will likely wait till the House bill is at least ready for markup or out of Committee before going to a vote on the Senate floor.
In the House, Speaker Nancy Pelosi (D-CA) pushed through a vote on a massive new $3 trillion relief package. The bill, among other things, includes an extension through January of the $600 sweetener to weekly unemployment checks, which is set to expire at the end of July, and another round of direct payments. There are also water provisions including a moratorium on shutoffs for any municipality that receives funding, mandatory reconnections, and a prohibition on late fee accrual. There is also funding for low-income ratepayer assistance. This is ultimately a messaging bill as President Trump and Senate Republicans oppose the plan, and say they prefer to assess the effects of the $2 trillion CARES Act and its recent follow up. Republicans will likely use the vote in attack ads against Democrats in the election and have already characterized it as a dramatic overreaction full of nothing but liberal talking points. Democrats however are saying that Republicans will look bad for opposing a huge relief package when so many millions are out of work. They are hoping to cast Republicans as indifferent to the pain and suffering of regular people.
Senate Majority Leader Mitch McConnell (R-KY) has now dug in on some key Democratic priorities, saying he won’t support extending the unemployment enhancements from the CARES Act, big infrastructure packages as COVID relief, and other priorities in the House. But, Republicans have staked out a position on at least one thing they DO want – liability protections against COVID-related suits for businesses and health care providers. This is another wedge issue that Democrats are likely to oppose but some states are already passing this. Unclear right now if this alone is enough to bring McConnell to the table (but I doubt it).
The Republican caucus remains divided over state and local funding, a key Democrat priority. I think if we are going to get utility relief in the next package it will likely be part of a state and local relief section. Some like Sen. Kennedy (R-LA) want to give states more flexibility during the crisis, but others worry that big federal handouts to states would allow them to cover bad pre-crisis budget decisions. While a growing (but still small) number of GOP senators say they should move quickly, deep divisions remain within the caucus on key policy provisions, timing, and even the need for another bill at all. Most agree that they are nowhere close to being in alignment around what comes next and when. Senators like Republican Conference Vice Chair Roy Blunt (R-MO) are saying they want to look at what the country needs in “July, August and September that would be different than what we needed in April and May and June,” adding “I don’t think we know, and I don’t think we should be expected to know right now” which suggests at least of month more of wait and see. Sen. Chuck Grassley (R-IA), the chairman of the powerful Senate Finance Committee, predicted that serious negotiations wouldn’t get underway until the third or fourth week of June, asking “What are we doing right now thinking about what we’re going to do in the next virus bill ... without knowing where we are now?”
McConnell hasn’t said when he will move legislation, but he’s hinted the GOP holding pattern could soon be coming to an end. He told House Republicans during a conference call that they would maintain their current posture for “for a little longer,” and he added during a Fox News interview that there was a “high likelihood” that Congress would pass another bill but that time wasn’t quite ripe. “We're not quite ready to intelligently lay down the next step, but it's not too far off,” he said. I expect Republicans will resist all attempts to get something passed for several more weeks at least – their main talking point now is to see how all the money we’ve spent so far is working, give it time to work, etc. The timeframe I’m hearing most recently is that if there is a next step, it’s about 60-90 days off. Caveat of course that these kinds of things have been known to change very rapidly and if there’s a new wrinkle that comes out all bets are off. The White House hasn’t weighed in on this yet, in terms of what they want to see in the next package or when, so if that changes that would be a gamechanger.
Meanwhile, on the jobs front, the April monthly unemployment rate showed that the 20.5 million folks were out of work in April, which represented a 14.7 percent unemployment rate, the worst since the Great Depression. Experts believe it is likely worse than the numbers show as large numbers of people are misclassifying themselves as employed but absent from work, artificially suppressing the jobless rate by about five percentage points. May saw several consecutive weeks of multi-million filings for unemployment, bringing the ten-week total to 40.8 million at the end of May, suggesting about a quarter of the workforce has lost jobs during the coronavirus pandemic.
Here’s hoping for better news in June!