AGC CEO Steve Sandherr Memo: Aftermath of the 2016 Elections

Source: AGC of America

November 18, 2016



After a proper burial of conventional wisdom following last week’s election, we found ourselves optimistically adapting to the prospects of a Republican President and a Republican Congress.  On balance, we have reason to be pleased with the outcome as it presents us the opportunity to move from defense to offense on a number of our priority issues.  Of particular importance is the fact that the continuation of the regulatory onslaught that we expected in a Clinton Administration has been derailed.  Having said that, there are a lot of unknowns of how the new Administration will position itself on many issues and what conflicts may arise with the GOP majority in Congress.

It is, however, apparent that there are some “knowns” that bolster our optimism.  They are a call for infrastructure investment from a Republican President and we will have a President who can, perhaps like Reagan, communicate directly and successfully to the public.

One reason for our uncertainty about where the new Administration will go is that, unlike recent (last 20 years) Presidential campaigns, there was virtually no outreach from the Trump campaign to the Washington trade association community.  In prior elections, the GOP campaign had a liaison to the trade association community that encouraged fundraising, served as a conduit to accept policy recommendations, and provided immediate entrée to the new Administration if the nominee were successful.  Obviously, this method only worked in its entirety in the 2000 and 2004 George W. Bush campaigns.  Following both of those elections, AGC had influence on policy development as well as some Presidential appointments.  We were poised to be in the same position in the 2008 and 2012 elections had the GOP candidate won.

In the current environment, we are seeing some receptivity, despite the lack of contact and relationship building during the campaign, to our input.  We know some folks who are involved in the transition team and they are collecting our policy recommendations, particularly on the infrastructure agenda.  We have made, for now, one recommendation for a Presidential appointment: the attorney who wrote our Davis Bacon handbook to be Wage and Hour Administrator at the Department of Labor.  We will be looking for additional opportunities to send letters of support for qualified candidates for other Administration positions.

One note of caution as the new Administration takes shape.  Trump did not run as a conservative, he ran as a populist.  He positioned himself as the champion of the working man and working woman.  You may recall that he advocated for six weeks of paid maternity leave.  He also favored an increase in the minimum wage to $10 an hour.  These positions suggest that he may not seek any modifications to the new overtime rules that are effective December 1 or the paid sick leave requirements for federal contractors.  He may also look favorably at additional “worker friendly” rules or legislation that will add costs to business.

It was heartening to hear the President-elect mention infrastructure investment as his first policy objective in his acceptance speech.  Prior to the election, AGC led a coalition to bring focus to both Presidential campaigns on offering our assistance in bringing both of their ambitious infrastructure proposals to a successful outcome. We have been communicating with one of the principals on his transition team who was a senior appointee in the Bush Department of Transportation.  Our message is that the proposed ten year horizon for infrastructure improvements not only demonstrates a major effort to reduce the infrastructure deficit but it also provides a higher degree of certainty for agencies to plan, construction firms to predict the market and for construction recruits and workers to have more confidence that there will still be a job when the project they are working is completed.

While there has generally been positive reaction to the concept of increased infrastructure investment from GOP Congressional leaders, we remain less than sanguine that conservative Republicans will be prepared to finance a larger program with borrowed money and they will remain consistent in their opposition to user fee increases.  We continue to make our funding recommendations available and we are counseling the Trump team that this cannot look like Obama’s stimulus plan or it will be dead on arrival.

On the regulatory front, we are blessed with multiple options to attempt to scale back or discard a number of agency rules and executive actions.  The Congressional Review Act permits Congress to effectively veto federal regulations that were finalized in the last months of an Administration.  We have already sent a letter to Congressional leaders reminding them of this authority and suggesting that they act quickly in January to repeal the OSHA e-reporting rule, the “Fair Pay and Safe Workplaces” (blacklisting) rule, the paid sick leave for federal contractors rule, and the requirement that employers provide additional pay information as it relates to race and gender in the EEO-1 form.  Additionally, we will be petitioning the new Administration to reopen other new regulations including the OSHA silica rule and EPA’s “waters of the U.S.” rule.

I may be alone in this respect but I believe Trump’s victory may provide an opportunity for favorable immigration reform. Trump’s “build the wall” campaign rhetoric provides him with significant credibility with immigration hardliners.  Unlike past immigration proposals supported by AGC in the past two Administrations that, among other things, called for border security, hardliners were skeptical that enhanced border security would actually occur while millions of illegal aliens would be provided amnesty.  Now we have a President who will require border security to be the primary objective of immigration reform.  Proposals that focus only on the “wall” while ignoring the significant question of what we do with the millions that are working and obeying the law may be considered incomplete.  This presents the business community with an opportunity to push for legal status in the form of temporary but renewable work permits for illegals who have a job, pay taxes, who have no criminal record and pay a fine for falsifying documents.

As a final note, we should expect the unexpected.  The victorious nontraditional Republican candidate my very well have voted for the first time for a Republican for President.  He threw out the playbook on modern campaign strategy by raising relatively little money, not investing in campaign staff or field operations, and offering an extremely thin and vague policy agenda.  He won his way.  What does that suggest for how he will attempt to govern?

Prior to your January meeting, we will be compiling our list of policy priorities for the 115th Congress.  You will be getting a briefing on those issues as well as our ongoing activities with regard to the new Administration.  Please contact me if I can provide additional information.