May 10, 2024

Thought of the Week:

I try to watch Jeopardy every chance I get. My strengths are typically categories like Sports, U.S. Politics, and American History; my weaknesses are definitely The Bible, Opera, and trick categories like Before and After (I’d never be able to buzz in quick enough). So, here’s an answer: A winning Mega Millions lottery ticket, a hole-in-one on the car hole at a charity golf tournament, a clean bill of health after a dentist appointment, absolute candor from a Washington politician. And the question: What are things I hope for, maybe even pray for, but are most unlikely to receive? That is, until…no, it’s not the lottery ticket, I’ll still be writing this blog for the foreseeable future; not the dentist appointment either, the days of putting off that implant look numbered; but absolute candor from a congressman answering constituent questions, it happened this week at the National Association of Manufacturers (NAM) Energy and Environment Committee meeting. Although still a freshman, Congressman John James (R-MI-10) was just appointed as the newest member of the House Energy and Commerce Committee, where he serves on the Subcommittee on Environment, Manufacturing, and Critical Minerals. An Army Ranger and Apache helicopter pilot, Rep. James graduated from West Point, and served as President of James Group International (JGI), which had a business relationship with SCOA in the early 2000s, prior to starting his political career. This past week was the third time I’ve had the pleasure of meeting Congressman James, and while I’ve always considered him a “straight shooter,” he answered every committee member’s question directly, candidly, and without the least bit of practiced evasion. Among some of the Congressman’s answers were the following:

  • The U.S. industrial base has been hollowed out; the situation is akin to the 1930s. We need the business community engaged, but we need government to get out of the way first.
  • The only reason the U.S. is a military power is because we are an economic power. That power is being eroded.
  • There is no appetite in this administration or among Democrats in general for permitting reform. They are beholden to activists who are not tethered to reality.
  • We all want clean air and clean water, but it is insane that the U.S. isn’t harvesting the energy resources it has. No where in the world is energy produced more safely, cleanly, or humanely than in the U.S. People would be appalled by how energy is produced elsewhere if they actually cared to know.
  • The U.S. will not gain energy independence under this administration; the progressive aim is to gain government control of industry through greater regulation.
  • The energy/infrastructure policies of the last three years are insane and self-defeating. For them to work in practice would require massive deregulation. Instead, the opposite has been put in place. The monetary penalties for failing to adhere to policy are intentional and intended to go to the general fund.
  • The next war will be won with production capacity and AI. What worries U.S. enemies like China and Russia is not rhetoric, but American innovation.
  • Following FAA reauthorization, and possibly some appropriations and an NDAA, Washington will shift completely into campaign mode.

When asked how companies could make an impact in Washington, Congressman James was clear, “we need to hear more from companies and industry. Beyond lobbyists and Washington representatives, truth needs to be spoken to power.” The congressman recommended corporate fly-ins where employees are encouraged to be vocal, not political. If interested, the Washington office can assist your office or department in arranging a Washington fly-in.  

Thought Leadership from our Consultants, Think Tanks, and Trade Associations

 Bloomberg Government Outlines Congressional Democrats’ Competing Priorities on Immigration.  Competing groups are clamoring to influence the White House as it weighs executive action on an issue that ranks highly on voters’ minds ahead of the November elections. Dozens of Latino and progressive lawmakers have urged the Biden administration to establish deportation protections for undocumented family members of U.S. citizens. This comes after a different group of moderate Democrats called for Biden to use “all tools at your disposal” to tighten security at the border while ensuring legal immigration pathways. Although the differing priorities aren’t mutually exclusive, President Biden could do both, they illustrate how Democrats are split on border and immigration messaging in an election year. Some lean in on longstanding calls to offer legal protection to the undocumented community while others highlight border enforcement.

Inside U.S. Trade Reports on Democrats’ Praise for White House LNG Export Approval Pause. According to 74 Democratic lawmakers, the Biden administration was right to pause approvals of new liquefied natural gas (LNG) export facilities while it undertakes an examination of whether the projects are in the public interest. In a letter to President Biden and Energy Secretary Granholm, the lawmakers thanked the administration for the temporary freeze on new LNG export approvals for projects serving countries without a U.S. free trade agreement and argued that it should ensure greenhouse gas emissions from LNG supply chains are compatible with U.S. and international climate targets. The lawmakers, who included Sens. Whitehouse (D-RI), Warren (D-MA), Merkley (D-OR), Reed (D-RI), and Markey (D-MA) and House members Sánchez (D-CA), Chu (D-CA), Gomez (D-CA), Blumenauer (D-OR), Huffman (D-CA), Grijalva (D-AZ), Barragán (D-CA), McClellan (D-VA), and Espaillat (D-NY), said they believed the facts are clear that LNG exports harm U.S. households and industrial consumers. The lawmakers contend that LNG export growth could raise energy prices for domestic consumers. The Biden administration announced its export approval pause in January, arguing it was necessary for the administration to revisit economic and environmental analyses to determine if projects are in the public interest. Republicans have criticized the move in a series of letters to officials and in congressional hearings; a group of Republican-led states also has challenged the move in federal court.

NAM Releases New AI Report with Policy Recommendations. The National Association of Manufacturers (NAM) released a new report, Working Smarter: How Manufacturers Are Using Artificial Intelligence, detailing how Artificial Intelligence (AI) is being used by manufacturers to develop more effective clinical trials, improve workplace safety, strengthen supply chain resiliency, and support workforce training. While the report features AI-powered technologies at manufacturers such as Johnson & Johnson, Schneider Electric, and Hitachi, it also emphasizes that the technology requires the establishment of a proper policy framework. NAM is calling on both the Biden administration and Congress to support manufacturers’ adoption of AI by drafting AI-related legislation and policy prescriptions. Among NAM’s immediately implementable policy recommendations for lawmakers are:

  • Invest in research and development and career technical education institutions to train the modern manufacturing workforce.
  • Pass federal privacy legislation to advance individuals’ privacy protections and give legal clarity to support continued innovation by manufacturers.
  • Use a risk-based approach to new AI regulations that tailors any future laws to specific use cases and minimizes the burden of compliance.
  • Ensure that AI regulation is aligned globally.

“Inside Baseball”

According to Politico, there is one story that is a must-read for those who work in policy, think about politics, or are interested in understanding how power works. It’s about President Biden’s race to secure a New Deal-sized legacy before former president Trump potentially returns to power—and brings a wrecking ball to legislation signed into law by the Biden administration. To finish his task, Biden needs to dole out hundreds of billions of dollars approved by Congress, but not spent yet. If Trump wins in November and the money hasn’t left government coffers, he’ll aim to cancel most of it. Four laws form the Biden agenda:(1) the American Rescue Plan; (2) the bipartisan infrastructure law; (3) the CHIPS and Science Act; and (4) the Inflation Reduction Act. Between them is $1.6 trillion meant to green the economy, revive manufacturing, repair roads and bridges, and challenge Chinese technology. Of the $1.1 trillion the four provide for investments in climate, energy, and infrastructure, less than 17% has been spent; of the $884 billion provided by the infrastructure law and the American Rescue Plan, only $125 billion has been spent, and another $300 billion won’t be available until the next two fiscal years; and of the $54 billion available by way of the CHIPS and Science Act, less than $700 millionhas been awarded. While former president Trump has said he should have the power to refuse to spend congressionally appropriated money he considers wasteful, at the very least, if Trump wins, he would probably halt pending grant approvals and applications until his administration could scrutinize them. In short, if Biden wants to Trump-proof his legacy, he’s got a long way to go before November.

In Other Words

“I think that I signaled to you and to the prosecution that we were going into way too much detail,” Judge Juan Merchan commenting on porn star Stormy Daniels’ testimony against former President Trump.

“It’s times like this you need a bar in this place,” Rep. Joyce (R-OH) after yesterday’s motion to vacate.

Did You Know

his week, Jennifer Pace won the Republican primary election for Indiana’s seventh district seat in the U.S. House of Representatives even though she has been dead since March.  

 Graph of the Week

Melting Arctic Ice Heats Up Geopolitical Competition. According to the Eurasia Group, warmer temperatures are transforming the Arctic into a competitive geopolitical setting, with significant security and economic implications for regional stakeholders and new investment opportunities for businesses. Energy, logistics, and telecommunications firms stand to gain most in the near term, with longer-term opportunities in mining, critical minerals, shipping, and defense. Melting ice is introducing new sea lanes that could reduce transit times by 14-20 days from China to Europe, circumventing conventional shipping routes through geographic chokepoints such as the Suez Canal. This is potentially to Russia’s nearer-term advantage, given its efforts to maintain control over the Northern Sea Route. Canada will also see an increase in transit through the Northwest Passage as more ice melts, but Ottawa faces pushback from Washington and others on its claim that the passage is Canadian internal waters. The Arctic also holds vast natural resources—perhaps 30% of the world’s undiscovered natural gas and 13% of its undiscovered oil—and critical minerals needed to support the energy transition.  Governments are reassessing how to work together while still protecting their national interests; the Arctic is unlikely to erupt as a new conflict zone, but it has become a space for state competition and commercial opportunities. 

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