Report from Washington

Instead we’ll focus on things in Washington, DC that you may not know, but that are relevant to the scrap recycling industry.

A President of the United States may appoint approximately 4,000 people to serve in the White House as well as in the larger Federal Government. For the scrap recycling industry, his appointments to department and agencies such as the U.S. EPA, the Office of Management and Budget (OMB), the U.S. Trade Representative (USTR), the Department of Commerce (DOC), the Department of Transportation (DOT), the Surface Transportation Board (STB), the Internal Revenue Service (IRS) the Government Services Agency (GSA) and the Department of Defense (DOD), among others, will be very important to the issues we will pursue over the next four years.   The new President’s policies will also be clarified over the next few months as his transition team begins vetting the men and women who will serve his administration. 

During the campaign and now into the Transition, candidate Trump’s comments about trade seemed to suggest a protectionist trade policy. At this writing, it appears that the leading candidate for the position of U.S. Trade Representative (an Ambassadorial position), is Dan Dimmico, formerly of Nucor Steel. Mr. Dimmico’s reported position on trade would also seem to reflect a protectionist approach. From campaign to governing may change things. As President-elect Trump has never served in government, he may discover during transition briefings or when he and his staff occupy the White House, that a reality check occurs and some of the things he and his team considered doing, may not be doable at all. It is wait and see for them and for us.

President-elect Trump has made statements that he opposed major trade agreements and would propose new tariffs on imports to protect the U.S. economy and bring jobs back to the United States.  However, it will likely be difficult to actually reopen these agreements all at once.  Instead, a Trump trade agenda could, perhaps, focus on trade enforcement, using the recently passed ENFORCE Act as a tool to provide additional powers to prosecute antidumping cases more quickly.  As a candidate, Mr. Trump excoriated the World Trade Organization (WTO) as weak and ineffective. The head of the WTO, Roberto Azevedo has publicly said he would like to sit down with the President-elect to discuss the WTO and how the United States and the WTO can move forward together.

A Trump administration may want to discuss with Mr. Azevedo a significant problem for the WTO, trade cases often languish for years or even decades before being decided – leaving impacted industries in limbo crippled by uncertainty and inaction.  Another campaign promise that candidate Trump made is to renegotiate the North Atlantic Free Trade Agreement (NAFTA) between the U.S., Canada, and Mexico to get a better deal for America. Canada’s head of state Trudeau said he was willing to sit down with the President-elect to renegotiate NAFTA. However, Mexico has been silent, Candidate Trump aggressively attacked Mexico and Mexicans during the campaign. Its political leadership would have to treat carefully in dealing with the United States after January 20, 2017.

Other issues that are certain to be addressed are tax and regulatory reform. The Trump team has already outlined some changes to marginal tax rates and possible expensing options. Speaker Ryan’s blueprint for the economy contains many of these proposals. Regulatory reform will also be a major initiative for a Trump administration especially in the areas of energy and environment. 

The EPA Administrator has not been selected at the time of this writing. President-elect Trump’s pick for Commerce Secretary is billionaire investor Wilbur Ross, who is a fierce critic of trade deals, including NAFTA. 

The current leading candidate to be EPA Administrator is Myron Ebell. Mr. Ebell is at odds with scientists who believe that climate change is a fact and needs to be addressed now. There is a rumor going around Washington that Mr. Ebell does not want the job. 

ISRI has reached out to the President-elect’s transition team to provide the  list of issues we would like to see addressed – including reforming the definition of solid waste to reflect the value of commodities and recycling and to differentiate them from solid waste. ISRI will make the argument that EPA, instead of managing materials as waste, ought to change its policy regarding recyclables and reused items and manage them as materials, instead. The EPA’s Sustainable Materials Management (SMM) Program already regards recyclables as sustainable materials, but the Agency, as it is today, is not yet ready to put that idea into action. We will pursue these pathways looking for any openings.

Congress

Neither chamber of the Congress changed hands. As of this writing, the Democrats picked up about six seats in the House of Representatives, far short of their anticipated 15-17 seats. The Senate remains in Republican hands, with the likely outcome of 52 Republicans to 48 Democrats (the Louisiana Senate race has to be run off – a run-off election between the two top vote getters, a Republican and a Democrat will occur soon. The Republican is likely to win that race and we have added that seat to the Republican side.

Sen. Mitch McConnell (R-KY) was reelected the Senate Majority Leader and Sen. Chuck Schumer (D-NY) is the new Minority Leader, replacing retiring Leader, Sen. Harry Reid (D-NV). In the House Rep. Paul Ryan (R-WI) will be elected Speaker of the House of Representatives. Nancy Pelosi (D-CA) was reelected as the House Minority Leader.

Next to leadership positions, chairmanships of the committees are quite important. Some changes in Chairman occur as a result of term limits (on the Republican side a Chairman can serve no more than six years), retirements, and internal party elections. In the House, the big race will be for the Energy & Commerce Committee. This committee is where many issues of concern to our industry reside. The election will be between John Shimkus of Illinois, who is also the House Recycling Caucus Co-Chair and Greg Walden of Oregon.  Frank Pallone Democrat of New Jersey is and will be the Ranking Member of the committee. Congressman Pallone is the other Recycling Caucus Co-Chair. 

The House Ways and Means Committee will have plenty of action with tax reform and healthcare on its agenda. Kevin Brady of Texas will remain as chairman with Rep. Sandy Levin of Michigan as Ranking. The Judiciary Committee will also remain the same with Bob Goodlatte of Virginia continuing his chairmanship and John Conyers of Michigan remaining as Ranking. Appropriations will likely be chaired by Rodney Frelinghuysen (NJ) and Nita Lowey (NY) as Ranking. Hal Rogers of Kentucky is termed out.   

Chuck Schumer, as Senate Minority Leader in a Senate with very close margins (51 or 52 Republicans and 48 or 49 Democrats) could be considered one of the most important persons in Washington, as it is nearly impossible to pass anything out of the Senate without the Minority Leader’s support.  

The Chairman and Ranking Democrats of most of the Senate committees most important to the scrap recycling industry will remain the same. Senator Chuck Grassley (R-IA) remains the Chairman. However, Sen. Dianne Feinstein (D-CA) replaces Sen. Pat Leahy (D-VT), who will become the Ranking Democrat on the Appropriations Committee. The Commerce, Science and Transportation Committee Chairman is Sen. John Thune (SD) and Bill Nelson (FL) is the Ranking Democrat.

Sen. Orrin Hatch (R-UT) and Ron Wyden (D-OR) are the Chairman and Ranking Democrat, respectively of the Finance Committee.  The Environment and Public Works Committee will change with Sen. John Barrasso (R-WY) taking over as chairman from Jim Inhofe (R-OK) with Sen. Tom Carper (D-DE) taking over as the Ranking Democrat. Senator Carper is Co-Chairman of the Senate Recycling Caucus. The Appropriations Committee in the Senate is chaired by Sen. Thad Cochran (R-MS). Sen. Patrick Leahy (D-VT) is the Ranking Democrat.