Democrats Seek to Pass “Build Back Better” – Supply Chain Security Issues Included
This month, House and Senate Democrats will look to pass their versions of the $3.5 Trillion “Build Back Better” legislation that President Biden has been touting since his campaign. Several committees are working on the legislation, including those that deal with supply chain security matters.
As part of its bill, the House Energy and Commerce Committee approved $10 billion to support “the resilience, diversity, security, and strength of critical manufacturing supply chains affecting interstate commerce.” The funding would be used for “facilitating and establishing voluntary standards, guidelines, and best practices to reduce risks to the resiliency, diversity, security, and strength of critical manufacturing supply chains” and “identifying, accelerating, promoting, and demonstrating technological advances for critical manufacturing supply chains.” The bill also provides grants and other financial assistance to support supply chain resiliency.
In addition, the House Homeland Security Committee approved legislation that includes $865 million to expand the Cyber and Infrastructure Security Agency’s (CISA) cyber capabilities, a clear reaction to an increase in cyber and ransomware attacks this year. The measure also includes $400 million to help CISA implement the Biden administration’s cybersecurity executive order from May and $100 million to educate and train a larger cybersecurity workforce.
Technically known as “reconciliation” legislation, the various House and Senate committee bills will be packaged together into a comprehensive “Build Back Better” measure later this month. Some media outlets also refer to this legislation as the President’s “human infrastructure” package. In addition to supply chain security provisions, the massive bill will contain Democrats’ vision for a range of policies on climate change, immigration, social welfare, the economy and taxes.
Much attention has been given to the $2.9 trillion in tax hikes that Democrats have proposed to fund the bill. A summary from the Ways and Means Committee includes 18 pages of new and increased taxes, including a hefty increase in the top individual income tax rate, higher corporate rates and increases in capital gains taxes.
Since no Republicans are expected to vote to approve the measure, Democratic leadership will be looking for ways to garner enough votes among its own members to pass it. Dueling complaints from both progressive and moderate Democrats are making this a challenge for House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY). As a result, changes are expected before a final vote is cast. We expect that the overall size of the bill will be pared back. President Biden will probably sign whatever version of this package reaches his desk — even a slimmed down version, since it would give him an important political win that he could describe as a ‘step’ towards his broader vision.
Continuing Resolution Needed To Keep Government Operating
Democratic leadership, along with the House and Senate Appropriations Committees, are working to draft a continuing resolution (CR) to keep the government funded beyond the end of the fiscal year, which ends September 30th. The bill is also expected to carry additional funding for disaster aid for western wildfires, coastal flooding, and hurricane recovery, as well as assistance for the U.S. withdrawal from Afghanistan.
A CR is necessary since none of the 12 regular appropriations bills have been enacted into law. It is expected that the CR will run through December 10th, allowing further time for negotiations between Democrats, Republicans and the White House to develop an “omnibus” spending bill for the balance of FY 2022 (which officially begins October 1, 2021.) That bill will contain funding for the Departments of Homeland Security, Transportation, Justice, Commerce and others that have responsibility for policies that impact supply chains.
Debt Ceiling Extension Needed to Prevent Default
The Continuing Resolution may also serve as a vehicle for an extension of the federal “debt ceiling.” An extension is needed by October to prevent the federal government from going into default. Republican leadership has balked at supporting efforts to increase the debt ceiling under current circumstances, saying it would be tantamount to providing Democrats with borrowing authority to deficit-fund their massive $3.5 Trillion “Build Back Better” plan. Still, Democratic leadership may look to pass the debt extension as part of the CR, since the legislation will also provide funding for general government operations as well as disaster relief, which many Republicans may feel they need to support.
White House Covid Plan to Mandate Private Sector Vaccines, Paid Time Off
On September 9th, President Biden announced new initiatives to address rising COVID-19 delta variant cases. Saying that the new variant was hurting efforts to reopen and grow the economy, the president laid out a plan that includes a mandate on businesses with 100 or more employees to ensure their workforces are fully vaccinated. If any portion of the workforce can’t be vaccinated, employers would be responsible for certifying that these workers test negative for the virus weekly. The plan also directs these companies to provide paid time off for workers to get vaccinated, and to recover from side effects. According to reports, employers who break the rules could face fines of $14,000 per violation. The Occupational Safety and Health Administration (OSHA) will be responsible for issuing new rules to implement these mandates.
Draft Legislation Requires Companies to Report Cyber-Attacks
Legislation being drafted in the House and Senate Homeland Security Committees would require large companies to report to the federal government cyber incidents. The bills also direct CISA to issue rules defining which entities are covered and how the companies will report these incidents. In one notable difference, the Senate version of the bill also requires companies to report any payments made due to ransomware attacks. A draft version of the House bill can be found here.