Tuesday, December 6, 2022: The Six Major Takeaways and What the Split Congress Means for The Federal Agencies and Employers
First, let’s review the facts of where we are and then see what it might mean to federal employment agencies, private employers, and federal contractors.
- State Governorships: Republicans 28……Democrats 22
- U.S. Senate: Republicans 49……Democrats 48……Independents 3 (all who caucus with the Democrats)
- U.S. House of Representatives Republicans 220…..Democrats 213
Second, what can the federal agencies, employers, and federal contractors now expect?
1. No Congressional CRA “veto” available for the next two years: The Republican loss of control of the U.S. Senate, come January 3, 2023 (when all U.S. Senators and House Members, including those newly elected during the November 2022 election, will assemble to commence the 118th Congress) will mean that Republicans will NOT be able to invoke the Congressional Review Act (CRA) to stop federal agency Rulemakings with which they disagree. The CRA requires BOTH houses of the United States Congress (the Senate and the House of Representatives) to disapprove of new federal agency Rulemakings to vacate and dismiss them. We wrote about this issue most recently when news first broke that Republicans had crossed the 218 Republican seats threshold to control the U.S. House of Representatives.
2. Federal Executive Branch Agencies Will Now Be The President’s Policy “Hammer”: With the House of Representatives in Republican hands, President Biden’s ability to pass legislation into law is severely compromised, beyond that of the first two years of his Presidency. That political reality will now require the President to attempt to drive even more of the President’s political agenda and policies through the federal Executive Branch agencies he controls to the great discomfort of employers than was true in his first two years—and that policy channel was plenty active already.
Compare Congressional statutory activity during the last two years of the Trump Presidency (the 116th Congress) with the first two years of the Biden Presidency (the 117th Congress which will adjourn before Christmas):
- 116th Congress……344 public laws passed
- 117th Congress……213 public laws passed, thus far—down 38% from the prior Congress (95% with bi-partisan support)
The alternative will be that the President move to the political middle to achieve the bi-partisan support he will need to move any legislation out of Congress to his desk.
- Consider, too, that:
- U.S. Senator Joe Manchin (D-WV) voted 50.4% of the time with President Trump
- U.S. Senator Kyrsten Sinema (I-AZ) voted 50.4% of the time with President Trump, even before she last week left the Democrat party and converted to an Independent caucusing with the Democrats and vowing to continue to vote the way she has always voted
- U.S. Senator Angus King (I-ME) voted 37% of the time with President Trump, while nonetheless caucusing with the Democrats
3. President Biden Will Now Be Able To Move Nominations for Federal Judgeships and Political Appointments to Executive Branch Agencies With Relative Ease: The effect of all three Independents now in the U.S. Senate choosing to “caucus” with the Democrats means that the three Independents get added to the 48 Democrats elected to the U.S. Senate to total 51 Senators under Democrat control in the U.S. Senate. (Those who “caucus” with a party are counted with that party and Senate Committee assignments are subject to that party’s decision-making.) For example, Senator Sinema’s announcement last Thursday that she was leaving the Democrat party to become an Independent—the largest political party in Arizona—but caucus with the Democrats in the U.S. Senate, means that she will keep all the U.S. Senate Committee appointments Senate Majority Leader Chuck Schumer (D-NY) has given her in the 117th Congress.
- The effect of Democrat control of the U.S. Senate means that as of January 3, 2022, all Committees in the U.S. Senate will now change from being 50-50 (as they have been in the 117th Congress given its 50-50 Democrat-Republican split) to being 8 Democrats and 7 Republicans. If Democrats can “hold the party line” in Committee, the President’s nominees will now quickly sail through Committee and go forward for a full Floor Vote in the U.S. Senate, rather than being delayed “in (deadlocked) committees.”
- The other implication for Presidential nominees is that Senate Majority Leader Schumer now has a little more breathing room to get 51 votes in the Senate needed to confirm one of the President’s nominees. Senator Schumer can now tolerate the loss of one Democrat/Independent in his caucus (thus leaving him with only 50 “Yeah” votes on any given nomination confirmation vote). A 50-50 tie will still allow Vice President Kamala Harris—as President of the U.S. Senate -to cast a “tie-breaker” vote.
4. Component 2 “Hours Worked” and “Pay Data” EEO-1 Reporting Is Coming And Now Cannot Be Stopped. Senator Raphael Warnock’s (D-GA) Senate victory last Tuesday, even as close as it was, was critical to Democrat control of U.S. Senate Committees and full Senate floor votes. Counting today (the day of publication of this WIR=Monday December 12, 2022) there are nine (9) Senate Legislative left in this 117th Session of Congress before it adjourns for the year and the session ends. It is still potentially possible, but unlikely at this late date, that President Biden’s controversial and troubled nomination of Kalpana Kotagal to be the third Democrat Commissioner of the U.S. Equal Employment Opportunity Commission (EEOC) will proceed to a U.S. Senate floor vote before the 117th Congress adjourns. If not, the President’s nomination of Ms. Kotagal will “time out” and die with the end of the 117th A third Democrat EEOC Commissioner is critical to Democrat control of the EEOC Which is authorized to five Commissioners. The current 2-2 Democrat/Republican split has stalemated the Commission and stymied anything other than bi-partisan policy making.
If that were to occur (as seems likely), the President will have another chance, of course, to nominate a fifth Commissioner to the EEOC in the next 118th Congress commencing January 3, 2023, if her current nomination times out. The President could again nominate Ms. Kotagal, but at least one sitting Democrat Senator (and all Republicans) have firmly opposed her nomination thus far. So, unless Senator Schumer can accomplish some political “log-rolling” in the next Congress with the Democrat hold-out(s), or drive around the Democrat roadblock to win 51 votes on the U.S. Senate Floor for her nomination, the President will have to nominate another candidate.
Regardless, the next Commission nominee, whether Ms. Kotagal or a new Nominee, will have to start the nomination process all over “from scratch”. The President must first formally nominate a candidate and send him/her to the Senate Health, Education, Labor, and Pensions (HELP) Committee for a formal “Confirmation hearing”. That process would usually take 2 months unless Senator Schumer chose to expedite it. Once the Committee finished its hearing and later took a majority vote to advance the Nominee to the Senate for a full Senate floor vote, Senate Majority Leader Schumer would then use his considerable political judgment and acumen to determine whether he had a path to 51 votes on the Senate floor. Once assured of that path to success, Senator Schumer would then decide, at his discretion, where in the legislative “flight pattern” to feed the nomination to the full Senate for a confirmation vote. That could be as quickly as three days after the HELP Committee advanced the nominee’s name to the full Senate, or it could linger while other nominations and legislative debate occurred during the Senate’s preciously few “Legislative Days” (when they are in session and voting on the floor of the Senate).
But, it is just a question of when, not whether, the President will eventually be successful to seat the fifth EEOC Commissioner (and the critical third Democrat Commissioner to give the Democrat Commissioners a 3-2 Commission majority). Once the third Democrat Commissioner is sworn in, it will not take long for EEOC Chair Burrows (D-Biden appointee) to call an EEOC Commissioner meeting to order and vote to go forward to the Office of Management and Budget with a proposed new EEO-1 Component 2 “Hours Worked” and “Pay Data Reporting” obligation for employers subject to Title VII of the 1964 Civil Rights Act and with 100 or more employees. That proposal is already written and awaiting the arrival of the third Democrat Commissioner.
Note: There is a complex legal issue regarding whether the Commission must tender any such proposed new EEO-1 reporting to formal Rulemaking procedures pursuant to the Paperwork Reduction Act (PRA), which OMB administers, AND ALSO separately pursuant to the separate and different Administrative Procedure Act (APA).
So, get ready. It appears that the first EEO-1 Report which could require Component 2 Hours Worked and Pay Data reporting would be the report for 2023 (not 2022) due to be filed in the Spring of 2024 (since the Commission would have to give employers a year’s notice to start saving data in whatever reporting format the Commission may prescribe for an eventual later EEO-1 filing).
Whether the OFCCP would participate in any EEOC Component 2 reporting requirement is a separate political question. (The OFCCP in the Obama Administration sat out the EEOC’s (eventually successful) pursuit of a Component 2 filing.) There is no legal question that any OFCCP attempt to impose an EEO-1 Component 2 Hours Worked and Pay Data reporting requirement would have to be subjected to both APA and PRA Rulemakings.
But make no mistake, with Senator Warnock’s Senate victory last week, the EEOC and OFCCP leaderships are now giddy with excitement at the prospect of an EEO-1 Component 2 Hours Worked and Pay Data reporting requirement they now know is coming even though they do not know when.
5. Coming Federal Agency Employment Agency Budgets will Be Hard Hit With Cost-Cutting Crews Already Sharpening their Scissors in The House and Senate. While the President “proposes” budgets for the federal Executive Branch agencies subject to his control, Congress “disposes of” them. The House and Senate thus have the last and final say in the President’s budget. The “best case” for the federal executive agencies is that Democrats force a stalemate and extension of prior approved budgets via “Continuing Resolutions” (CRs). As we have previously written many times, however, CRs merely fix the budget at the prior year’s budget level. Doing so forces agency cost-cutting, often including Reductions in Force as agency operating budgets naturally increase year-over-year. Payroll, pension, and (often) leasehold expenses increase – even before you add the 8.7 percent cost-of-living increase in supplier costs in calendar 2022 alone.
Both the Senate and the House are also very mindful that they just passed highly controversial record-breaking bi-partisan budget bills which created record-setting multi-trillion-dollar debt adding to the building inflation, weakening the stock market, and even as the country eyes a possible nearing recession. So, there is a building sense that budget-cutting is the watchword of the day.
The NLRB is already worried and on November 18, 2022, declared a “budget crisis” and launched a pre-emptive strike pleading with Congress for more budget to avoid lay-offs under the current budget.
And, it is not a good time for budget discussions at the EEOC and OFCCP if the Budget Committee question remains “What have you done for me lately”? Both the EEOC and OFCCP have turned in falling and disappointing performance statistics, with the OFCCP hitting the bottom of every important enforcement and workplace productivity metric and the EEOC ending a decade-long stair-step up increase in performance and increasing efficiency during Republican and Democrat presidencies. OFCCP has also long disappointed budget writers which have responded by steadily cutting OFCCP’s budget in stair-step fashion since 2011 during the Obama, Trump, and Biden administrations.
It seems like a bloody budget year is shaping up, despite the current attempts of some Republicans and many Democrats trying to head off a budget bloodletting over a further extension of the national debt-ceiling. Federal budget regulators predict that the United States will again exceed its debt ceiling (now set at $31.4 Trillion) sometime in early 2023. (Remember the hand-wringing in 1981 which accompanied the country’s attainment of a $1 Trillion U.S. debt…and President Trump’s exasperation concerning exceeding $20 Trillion in debt in September 2017 – a mere five years ago!)
If you thought 2022 was fractious on Capitol Hill, be prepared for more of the same, except louder and more bitter. Time to order Advil before that supply chain runs dry….
6. The States Are On the Move and More Active in Employment Matters Than Ever Before.
Even before the SCOTUS’ Dobbs v. Jackson Women’s Health Organization (overturning Roe v. Wade’s federal abortion protection based on the notion that the states have responsibility for abortion laws which protections are not found in the U.S. Constitution), the states were realizing their latent powers to regulate employment law issues in the workplace. And one of the remarkable developments in the law in the last decade has been the rise of state Attorneys General for the states banding together in “red” and “blue” states to sue the federal government as to workplace issues. So, you saw 26 Republican AGs successfully file and win lawsuits to stop changed immigration rules and COVID-19-mandated vaccinations.
With more Republican state Governors, employers may expect more state activity in the employment law arena adding to the existing challenge of multi-state employers to become aware of, staff for, and implement new state laws from ban-the-box to three different kinds of pay reporting laws to background checks, etc.
Employers should think about more budget and staffing to keep up, synthesize and implement the many coming new state-level employment law policies. It is no longer just about the federal government. We are now playing two-dimensional chess in the employment law world.