This Week In Washington

Latest news from Washington, D.C. produced by Total Spectrum/SGA exclusively for members of the Arizona Chamber of Commerce & Industry

More Info: Michael DiMaria | Partner and SW Regional Director | 602-717-3891 | [email protected]

Thanks for your interest in Washington, D.C., and thanks for reading This Week in Washington.

Heard on the Hill covers three big items in Washington – Senator Roy Blunt’s announcement that he will not run for re-election; the passing of the American Rescue Plan, the latest COVID emergency legislation; and the possible return of legislative earmarks.  Total Spectrum Partner and Southwest Regional Director Michael DiMaria provides some thoughts on data privacy.  Congressman Erik Paulsen writes about why tax hikes are the wrong medicine for a struggling economy in his article originally printed last week by the Washington Examiner and reprinted by Real Clear PoliticsRamona Lessen summarizes a hearing held this week by the Senate Banking, Housing, and Urban Affairs Committee entitled ‘Who Won on Wall Street – GameStop, Robinhood, and the State of Retail Investing.”

Our Total Spectrum Spotlight this week is a replay of the webinar hosted last week by the Arizona Chamber featuring Total Spectrum’s Strategic Consultants Erik Paulsen and Patrick Robertson.

Speaking of Patrick, hats off and congratulations to him for his work on behalf of the Independent Restaurant Coalition and 500,000 local restaurants and bars – and the 11 million people they employ. Restaurants will be receiving $28.6 billion as part of the American Rescue Plan to help rebuild their sector. We will cover how restaurants and bars can apply for this program in the next issue of This Week.

Stay well.

Steve Gordon, Managing Partner

Heard on the Hill

By Steve Gordon, Managing Partner, Total Spectrum

Senator Roy Blunt – A Legislator’s Legislator

I first got involved in Missouri politics in 1986 when I became a consultant to former Governor Christopher (Kit) Bond and his campaign for the U.S. Senate. Roy Blunt, a former teacher who became Missouri’s first Republican Secretary of State in more than 50 years, was elected seven times by the people of southwest Missouri to represent them in Congress, where he served as the Majority Whip. Senator Bond announced his retirement from the U.S. Senate in January 2009, and Congressman Blunt announced his candidacy for the U.S. Senate the next month.

Jon Kyl was the Assistant Majority Leader in 2009 and 2010, and I was his political consultant. Senator Kyl’s political goal was to elect as many Republican candidates that cycle as possible, but he wanted me to especially help Congressman Blunt become a U.S. Senator. “Watch Roy Blunt and help him all we can,” Senator Kyl told me. “He is going to be the Senate Majority Leader someday.”

Senator Blunt’s second term in the Senate is concluding in 2022, and almost everyone – including me – expected him to officially announce that he would be a candidate for reelection next November. Everyone – including me – expected him to prevail. But Senator Blunt surprised almost everyone Monday by announcing that he would retire from the Senate at the end of 2022. “Twenty-six years in Congress is enough for anyone,” Senator Blunt said on a call yesterday morning. “But we have a lot of work to do, and we are going to get it done.”

Senator Blunt serves in the Senate Republican Leadership as Chairman of the Republican Policy Committee. He is currently the Ranking Member of the Senate Rules Committee, and serves on a the Senate Appropriations Committee; the Senate Commerce, Science, and Transportation Committee; and the Senate Select Committee on Intelligence.

He is also the Ranking Member of the Appropriations Subcommittee on Labor, Health, Human Services, and Education. Senator Blunt previously was chairman of this subcommittee, and he used it to massively expand research funding for Alzheimer’s disease, cancer, and mental health.  He, along with former Senator Lamar Alexander, developed and funded Operation Warp Speed, which produced COVID-19 vaccines in record time.

Roy Blunt will not be the next Senate Majority Leader, but he is getting the recognition he deserves as a legislator’s legislator – as participants in the Arizona Chamber’s 2019 fly-in saw firsthand when we met with him.

I am very pleased to announce that Senator Blunt has agreed to participate in an upcoming Total Spectrum Spotlight interview. 

Emergency COVID Legislation

Democrats passed the American Rescue Plan using the budget reconciliation process, which requires a simple majority rather than a filibuster-proof majority in the Senate. It passed in the Senate 50 to 49, with Senator Sullivan of Alaska called home on a family emergency. The House of Representatives passed it today, and President Biden will have a signing ceremony on Friday.

Republican Senators were willing to do anywhere from $600 to $900 billion, and a few were willing to go a little higher.  The final price tag is $1.88 trillion.  Senate Democrats published this title-by-title summary of the bill.

Almost everyone agreed that some items are both good and necessary. Those items included more money for vaccines, schools (K-12), colleges, and preschool programs, as well as some additional targeted direct payments, continuation of the federally enhanced unemployment program, assistance for small businesses, restaurants, broadband for schools, and funds for airlines and airports.

Many Republicans objected to funds directed to states and local governments and the huge increase of the child tax credit.  Almost all Republicans objected to items that they considered way outside the bounds of a COVID relief package, especially after the emergency funds that were passed by Congress in 2020. Examples of questioned items in this bill are funds for museums, libraries, the National Endowment for the Arts, and Amtrak.

All Senate Republicans objected to the size of this bill. Yes, $1.88 trillion is a mind-boggling number. But it means that the total cost of all six emergency COVID relief bills will be$5.5 trillion. I have been told that more than $450 billion dollars of previously appropriated funds from COVID legislation has not even been spent, and that the entire cost of World War II to our government was $4 trillion (in 2020 dollars).

Democrats argue that Federal Reserve Chairman Jerome Powell encouraged the federal government to spend big, and that there is no cost to government spending when interest rates are near zero. They believe that the pandemic has hit lower and middle-class Americans the hardest, and that these funds will help those who need it the most.

Republicans argue that putting this on the ‘credit card’ just adds to our growing national debt and when rates go up – as they surely will eventually – the cost of servicing the debt will squeeze out other programs. They say that we added 379,000 jobs in February and that almost everyone predicts that our economy will take off like a rocket through the balance of 2021. Many economists fear that this stimulus bill may make the economy too hot and create inflation.

The Washington Post’s longtime economic columnist Steven Pearlstein published an article on March 3rd entitled ‘In Democrat’s progressive paradise, borrowing is free, spending pays for itself, and interest rates never rise.’

Both political parties know that the voters will have the last say next November.

Democrats point to a new Pew Research poll that shows:

  • 70% of adults favor the bill; 28% say they oppose it.
  • 41% of Republicans and GOP-leaning independents favor the bill.
  • 75% of women favor the bill.
  • 91% of Blacks favor the bill.
  • 80% of Hispanics favor the bill.

Republicans admit that sending out money is popular, but they point out that free money is rarely free. They suspect that the total cost of the legislation – and where some of the money was spent – will be remembered after the checks they received have been cashed.

The Debate over Earmarks

Earmarks are spending that is made by Congress to a specific location or project, usually in a Senator’s home state or a Congressman’s home district.  Earmarks became synonymous with wasteful spending, and Republicans and Democrats in Congress stopped using them in 2011. But that allowed agencies of the federal government to end up disbursing most of the same funds.

Opponents of earmarks say that they are an inappropriate and irresponsible way to spend federal money. Legislators who are opposed to earmarks can point to any number of legitimate cases where earmarked money was wasted, and they are pleased that earmarks are no longer part of the legislative process.

Supporters of earmarks say that the money is going to be spent, and if Congress will not spend the funds the administration will, and that legislators best know the needs of their district or state. Supporters contend that Congress stopped getting things done for the American public about the same time Congress stopped using earmarks.  

Senate Appropriations Chairman Patrick Leahy is all in to restore earmarks this year. Senator Richard Shelby, Ranking Member of the Senate Appropriations Committee, is widely expected to agree to an understanding with the Chairman on how to use earmarks.

House Majority Leader Steny Hoyer has been saying for several months that earmarks will be revived, and he thinks there will be bipartisan support for them. Congressman Peter DeFazio, who is the Chairman of the House Transportation and Infrastructure Committee, sent out a press release last week on “how Members of Congress can submit requests for highway and transit project designations.”

Chairman DeFazio has said that there will be guardrails to ensure that past scandals are not repeated, to include:

  • Each House Member can submit no more than 10 requests.
  • Members must prove there is community support for the project.
  • Members must certify that they have no financial interest in the project.
  • The total amount of earmark funded projects will be limited to one percent of all discretionary spending.
  • For-profit institutions will not be eligible for funding.
  • The relatives of Members cannot have connections to projects.

The House Republican caucus has a rule against earmarks, and there are a significant number of Members who would like to run against the past excesses of earmarks. But it is hard to imagine how Republican members can stand on principle when Democratic members sit down to appropriate funds for their districts.

We will watch this issue and keep you advised.

Spotlight: 2021 Outlook from Capitol Hill

Join us for a look at significant legislation being discussed this week and in the next few months with Total Spectrum Strategic Consultants Erik Paulsen and Patrick Robertson. This episode was hosted by the Arizona Chamber of Commerce and Industry.

Consistency Required for Data Privacy

By Michael DiMaria, Total Spectrum Partner and Southwestern Regional Director

In the early 2000s customer privacy was becoming an important issue for policy makers.  Rules and regulations were passed to ensure telecommunication network providers keep personally identifiable information private.  Like most policies in the tech world, regulation has a hard time keeping pace with the marketplace. There’s a complex mosaic of laws and regulations that address different business sectors, including financial institutions, marketing data, telecommunications, as well as health and credit information.  There are also different rules for application providers vs. network providers.  This is becoming a larger problem for the business community as more than 25 U.S. state attorneys general oversee data privacy laws governing the collection, storage, safeguarding, disposal, and use of personal data collected from their residents.  Many of the laws have different applications on how to deal with notifications of data breaches and the release or hacking of personally-identifiable information. In addition, one must consider the General Data Protection Regulation, which is a data protection and privacy regulation in the European Union and the European Economic Area. Among other issues, it addresses the transfer of personal data outside the EU and EEA areas.  

To provide perspective on the size and scope of customer privacy, Pew Research recently reported that “roughly six-in-ten U.S. adults say they do not think it is possible to go through daily life without having data collected about them by companies or the government.” 

The Federal Trade Commission Act (15 USC § 41 et seq.) has broad jurisdiction over commercial entities under its authority to prevent unfair or “deceptive trade practices.” While the FTC does not explicitly regulate what information should be included in website privacy policies, it uses its authority to issue regulations, enforce privacy laws, and take enforcement actions to protect consumers.  At some point in the near future, it will be important for federal policy makers to have a consistent set of rules and regulations that will provide direction for multi-state companies instead of a different set of rules for every individual state.  The United States Senate began discussions a few years ago on a comprehensive bill to deal with privacy concerns but have yet to finish the legislation.  Stay tuned for future articles in This Week in Washington for updates on this crucial legislative effort.

Opinion: Tax increases are the wrong medicine for our struggling economy

By Congressman Erik Paulsen, Total Spectrum Strategic Consultant

America’s economy was in high gear prior to the pandemic. Our country’s gross domestic product grew 4.1% in 2019 after increasing 5.4% in 2018. Unemployment reached a 50-year low of 3.5%, and 6 million new jobs created historically low unemployment levels across all demographic groups. Business optimism was at record highs, and workers saw their wages increase by their highest levels in 10 years.

These impressive numbers were no accident. The 2017 Tax Cuts and Jobs Act created prosperity and opportunity and made our economy boom again.

One of the most significant provisions of this pro-growth policy was lowering the U.S. corporate tax rate from 35% to 21% to make America more internationally competitive. Previously, America’s unfair and uncompetitive tax code made foreign countries more attractive for investment.

With increasing frequency, U.S. companies were moving their headquarters to other countries, and good-paying jobs and manufacturing were shipped overseas. These transactions, where an American company acquires a foreign company for the purpose of relocating its headquarters to another country with a lower tax rate, are called inversions.

Losing a U.S. headquarters to another country isn’t just a news headline. It means losing investment, innovation, and jobs. Lowering the corporate rate to 21%, closer to the average rate of our trading partners, was a central component of our national commitment to bring back jobs and manufacturing to the United States. It allows American businesses to make smart decisions based on factors other than tax avoidance and discourages them from shifting profits to lower tax jurisdictions.

News reports of inversions have largely disappeared from the financial pages, but that could easily change. President Biden and some in Congress are proposing to raise the corporate rate to 28%.

This would be a major mistake and discourage investment in domestic manufacturing, technology, and production. It would widen our competitive disadvantage with our major trading partners. Competition is fierce, and the rest of the world isn’t standing still. Just last year, nine countries lowered their corporate tax rate, and others are sure to follow.

Treasury Secretary Janet Yellen was asked during her Senate confirmation hearings if the proposed 28% would hurt the competitiveness of American corporations. She dodged the question but said that “the administration could reach an agreement with our trading partners to stop a destructive global race to the bottom on corporate taxation.” This is, at best, wishful thinking.

Analysts at Bank of America Securities have estimated that Biden’s tax plan could cut the S&P 500 earnings by 7%, and companies in the technology, healthcare, and communications industries would be the hardest hit.

Yellen pledged in her testimony that Biden would not move to raise the top corporate tax rate until the pandemic is over. If it is true that it makes no sense to diminish the attractiveness of the U.S. to locate a business, invest in new equipment, and hire new workers during the pandemic, then it is equally true that it would be just as controversial in good economic times.

Instead of tax hikes, I hope that a bipartisan consensus develops in Washington on ways to keep America economically competitive and strong. Otherwise, senior corporate executives may start asking their tax advisers to dust off their inversion plans and begin to move their companies and jobs to countries where the tax and regulatory environment is more friendly.

Erik Paulsen is a strategic consultant with Total Spectrum. He represented Minnesota in the U.S. House of Representatives from 2009-2019 and was chairman of the Joint Economic Committee.

This op/ed originally appeared in the Washington Examiner on March 5, 2021. The views expressed in this article are the writer’s own.

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Hearing Report

By Ramona Lessen, Executive Director, Total Spectrum

Senate Banking, Housing and Urban Affairs Committee Hearing

“Who Wins on Wall Street?  GameStop, Robinhood, and the State of Retail Investing.”

Tuesday, March 9, 2021; 10:00 a.m.

To view a livestream of the hearing please click here.

Senator Sherrod Brown (D-OH), Chairman

Majority Statement

Senator Pat Toomey (R-PA), Ranking Member

Minority Statement


Professor Gina-Gail S. Fletcher

Professor Of Law

Duke University School of Law


Ms. Rachel J. Robasciotti

Founder & CEO

Adasina Social Capital


Dr. Teresa Ghilarducci

Bernard L. And Irene Schwartz Professor Of Economics

The New School


The Honorable Michael S. Piwowar

Executive Director

Milken Institute Center for Financial Markets


Mr. Andrew N. Vollmer

Senior Affiliated Scholar

Mercatus Center

George Mason University


Congressional Calendar

Monday, March 8 |

  • 10:30 a.m. House Rules Committee virtual business meeting on two gun background check bills — H.R. 8 and H.R. 1446 — and H.R. 842.

Tuesday, March 9

  • 9:30 a.m. Senate Armed Services Committee hearing on the U.S. Indo-Pacific Commands.
  •  9:30 a.m. Senate Judiciary Committee hearing on the nominations of Lisa Monaco for deputy attorney general and Vanita Gupta for associate attorney general.
  • 10 a.m. Senate Health, Education, Labor and Pensions hearing on the Covid-19 response.
  • 10 a.m. Senate Banking, Housing, and Urban Affairs Committee virtual hearing GameStop, Robinhood and retail investing.

Wednesday, March 10

  • 9:45 a.m. Senate Foreign Relations Committee business meeting to consider pending nominations.
  • 9:45 a.m. Senate Homeland Security Committee business meeting to consider the nomination of Shalanda Young to be deputy director of the Office of Management and Budget.
  • 10 a.m. House Financial Services Committee virtual hearing on promoting racial equity through fair access to housing and financial services.
  • 10 a.m. House Small Business Committee hearing on the next steps for the Paycheck Protection Program.
  • 10 a.m. Senate Foreign Relations Committee hearing to examine the state of democracy around the world.
  • 10 a.m. Senate Environment and Public Works Committee hearing to examine climate change and the electricity sector.
  • 10 a.m. Senate Commerce, Science and Transportation Committee hearing to examine the nomination of Don Graves to be deputy secretary of Commerce.
  • 11 a.m. House Armed Services Committee virtual hearing on national security and U.S. military activities in the Indo-Pacific.
  • 1:30 p.m. House Foreign Affairs Committee hybrid hearing on the Biden administration’s priorities for U.S. foreign policy. Secretary of State Antony Blinken testifies.
  • 2:30 p.m. Senate Indian Affairs Committee business meeting to consider nine bills.
  • 3 p.m. Senate Veterans Affairs Committee hearing to examine military-related toxic exposures.

Thursday, March 11

  • 9 a.m. House Agriculture Committee virtual hearing on food insecurity.
  • 9:30 a.m. Senate Foreign Relations Committee business meeting to consider pending nominations.
  • 9:30 a.m. Senate Armed Services Committee hearing to examine a report from the National Commission on Military, National, and Public Service.
  • 10 a.m. Senate Energy and Natural Resources Committee hearing on electricity service in the U.S. amid extreme weather events.
  • 10 a.m.  House Foreign Affairs Subcommittee on Middle East, North Africa and Global Counterterrorism hearing on The Crisis in Yemen:  Part 1.

Friday, March 12

  • 11 a.m. House Science, Space, and Technology virtual hearing on the science behind climate change and its effects.
  • Noon House Administration Committee virtual hearing on funding for the 117th Congress.

This e-newsletter is produced by Total Spectrum/Steve Gordon and Associates and the Arizona Chamber of Commerce and Industry. The views expressed herein may include subjective commentary and analysis that are the views of the editors and authors alone. Information in this e-newsletter is obtained from sources believed to be reliable, but that cannot be guaranteed as independently investigated or verified. Information in this e-newsletter is not an endorsement, advertisement, recommendation, or any type of advice; political, legal, financial or otherwise. For questions about the content of this e-newsletter, please contact the Arizona Chamber of Commerce and Industry.

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