Arizona U.S. Senators Kyrsten Sinema and Mark Kelly updated the business community on legislation important to industry and commerce Wednesday during the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry’s annual 2021 Update from Capitol Hill.

The two senators detailed measures in the recent federal relief package that will benefit businesses in Arizona and priorities for the rest of 2021. They also fielded questions about top business concerns including corporate tax rates, preservation of the filibuster, and the feared Pro Act, which has been labeled “the worst bill in Congress” by many in the business community.  

Neil Bradley, executive vice president and chief policy officer of the U.S. Â鶹´«Ă˝Ół»­ in Washington, D.C., also offered an insider view into the goings on in the nation’s capital as far as business is concerned. More than 500 attended the virtual event, which was sponsored by Salt River Project and the Arizona Indian Gaming Association. 

How businesses are benefiting from recent federal relief bill 

Senator Sinema (D) talked about measures she has successfully supported and lobbied for in the federal relief packages including the most recent $1.9 trillion .

Sinema emphasized her record of working across the aisle despite criticism from party loyalists at times. For her, ensuring that Arizona employers and employees weather the pandemic is her first priority, not party politics, she said.

“Over the past year, employers have had to make tough choices, adapt, and contend with bureaucratic obstacles that delayed relief,” Sinema said. “That’s why as a member of the Senate bipartisan group on Covid relief, I listened closely to Arizona leaders and worked to ensure that the new relief law addresses Arizona’s urgent needs.” 

Among the measures Sinema helped to pass are:

Restaurant relief fund: Sinema and Sen. Roger Wicker, R-Miss., introduced and helped pass a restaurant relief fund of $28.6 billion to help small and mid-sized restaurants, bars, caterers, food trucks, breweries and other food service providers in need of assistance with rent and operational expenses. It provides grants of up to $10 million per entity with a maximum of $5 million per location based on the difference between 2020 and 2019 revenue. 

Save our Stages Act This legislation created a $15 million fund to provide relief to the entertainment industry like nightclubs, theaters and concert halls. 

Employee Retention Tax Credit This is a refundable against certain employment taxes equal to 50 percent of the qualified wages an eligible employer paid to employees after March 12, 2020, and before January 1, 2021. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. Also, if the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS.

CHIPS for America Act Another bipartisan effort led by Sinema resulted in the CHIPS Act being adopted in December. The CHIPS Act — Creating Helpful Incentives to Produce Semiconductors — established federal grants to enable advanced research and development, secure the supply chain and ensure long-term national security and economic competitiveness. 

Soon after Congress passed the act, announced a $20 billion expansion of its manufacturing operation with two new factories in Arizona, Sinema said. The project is expected to create more than 3,000 permanent, high-wage jobs and more than 3,000 construction jobs, beginning this year. 

Relief for border communities The measure provides $110 million to help border cities and towns overwhelmed trying to provide humanitarian aid to asylum seekers flooding across the border. 

Looking ahead: immigration, infrastructure, broadband

Sen. Kelly, who stepped into public office in December, said he spent his first five months doing a “lot of listening” to ascertain what is the most effective use of federal dollars in Arizona. Protecting public health while encouraging economic development are top priorities. 

“There’s a lot of work ahead to beat this virus and rebuild our economy. That’s been my focus,” said Kelly, who also spoke about his commitment to working in a bipartisan manner. 

In the coming months, Kelly said he is focused on a number of packages with business in mind including:

Infrastructure Congress has failed to pass a major infrastructure bill in the past but there could be enough momentum to get it done this year. The bill would include funding for not only roads and bridges but water and wastewater facilities and the expansion of broadband to shrink the digital divide between the haves and the have nots.

Immigration reform Another top priority is to finally pass immigration reform to secure a future workforce for the state and provide a pathway to citizenship for longtime immigrant employees as well as Dreamers, young adults who were brought here as children by their undcoumented relatives.

Upgrades to ports of entry Keeping the border secure and expanding trade in Arizona will require investing in new technology and infrastructure at ports of entry, another key goal, Kelly said.

“The federal government is failing our state when it comes to border security,” Kelly said. “We need a secure, orderly and safe process at the border.”

Business worries: corporate taxes, filibuster, the PRO Act 

U.S. Â鶹´«Ă˝Ół»­ executive Bradley rounded out the event by touching on a number of concerns to businesses. 

One is the growing national debt from three massive Covid relief packages, topping $5 trillion. In order to accomplish an infrastructure package and other important projects, federal relief in the last round should have been more focused and targeted to real need, he said.

“When you think of last spring, we knew Congress had to provide broad based support. But what we’ve seen is not every family, every industry and every state needs relief,” Bradley said. 

Bradley also talked about President Biden’s proposal to raise the corporate tax rate from 21 to 28 percent. He does not believe the measure has enough support to succeed, but if it does, it will risk the progress Arizona and the nation have made in becoming more globally competitive, he said. 

Changing the corporate tax rate would likely reverse the successes that followed passage of the Tax Cuts and Jobs Act of 2017, he said. Prior to the Act, the nation had one of the highest corporate tax rates in the world. American companies were looking abroad for growth and new investment. 

“Tax changes would give a leg up for competitors abroad. Why would we want to do that?” he said.

When asked about efforts by many Democrats in Congress to remove the filibuster, Bradley said that would likely hurt the nation, too. With strong division between the right and the left, the filibuster ensures that that congressional members have to work to find common ground, he said.

Another concern is the proposed PRO Act of 2021, which also does not appear to have strong support in Congress, Bradley said. The Act would force employees to pay union dues regardless of whether they support a union, threaten private ballots in union elections, and strip workers of their independent contractor classification.

It’s an issue that is extremely worrisome to Arizona businesses, said Garrick Taylor, interim president and CEO of the Arizona Â鶹´«Ă˝Ół»­. 

“This proposal is a litany of almost every failed idea from the past three decades of labor policy,” Taylor said. “It would undermine workers rights, most likely trap employers in a maze of labor disputes and force individuals to pay union dues regardless of their wishes.”

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Two political strategists who have a bird’s eye view of Capitol Hill updated the Arizona business community Wednesday on the latest federal relief package and what lies ahead in 2021 for  Congress and the Biden administration. 

At the top of the list is the $1.9 trillion proposed federal stimulus package that was approved by the House on Saturday. While some moderates and conservatives are voicing concerns about the cost of a third massive Covid relief package, the Senate is expected to rush passage with a few changes, said Erik Paulsen, a former U.S. congressman who now is a consultant with , which is headquartered in Washington, D.C.  

“There are some who are a little more skeptical about whether we need to spend all of these dollars,” said Paulsen, a former Congressman from Minnesota who was a leading member on the chief tax writing House Ways and Means Committee. 

Much of the nation is seeing a resurgence in economic recovery already with added stimulus and many Americans are worried about the growing federal debt, said Paulsen, who spoke during a virtual event, the 2021 Outlook from Capitol Hill, hosted by the . 

The proposed package comes on the heels of the $2 trillion Covid relief plan passed last March during widespread shutdowns of the economy followed by the end-of-the year $900 billion package. 

Patrick Robertson, a principal of Total Spectrum who has spent almost 20 years in Washington advising clients on public policy issues also spoke at the event.

The two laid out details of the proposed relief plan and discussed other upcoming issues that are important to business. 

What’s in the proposed stimulus package

Most of the package, called the , is expected to be approved by the Senate, they said. Any changes will have to go back to the House for final approval before being sent to President Joe Biden. 

Highlights of the proposed package include:

Extended unemployment benefits Unemployment insurance benefits would be extended and increased for the third time. The bill calls for an additional $400 per week in benefits for the unemployed.  

Expanded child tax credits Child tax credits would be increased from $2,000 to $3,600 per child.

Direct stimulus payments Another round of stimulus checks would include $1,400 direct payments to adults and children. The House proposal calls for the payments to go to individuals earning up to $75,000 and couples making up to $150,000. Thus, a family of four would receive $5,600.

A host of other measures also are included: $25 billion to aid small and mid-sized restaurants still struggling from the pandemic, $15 billion for grants to businesses in low-income communities, $1.25 billion for shuttered venue operators, payments to help Americans continue to pay health care premiums, aid for local governments, and more.  

Minimum wage hike likely will not survive this legislation  

One item in the package that appears to be on the chopping block is a provision to raise the minimum wage to $15 an hour over the next four years. 

The Senate parliamentarian, a neutral arbiter of the chamber’s rules, issued guidance saying the wage increase didn’t meet the guidelines for a budget reconciliation package. Under reconciliation, bills can pass with a simple majority, rather than the 60 votes required to invoke cloture, which ends a filibuster on a bill.

Looking ahead: corporate tax rate and infrastructure 

Paulsen and Robertson also spoke about whether Congress will be able to overcome division between the two parties to finally pass a long awaited infrastructure bill, a top priority for the business community. 

President Biden has made infrastructure a priority and they said Congress could succeed this year and pass a comprehensive package to update the nation’s highways, bridges, water facilities, transportation systems, and other infrastructure. Projects for the modern age will be included — green and renewable energy, expansion of broadband as well as development tax credits and workforce investment. 

A new funding mechanism for such a plan will be needed, however, which could be a challenge considering the president has vowed not to increase taxes during the pandemic, Robertson said. 

Attempts to raise the gas tax to fund projects through the Highway Trust Fund have failed year after year. The tax is also becoming less sufficient as a funding source as electric vehicles move to the forefront of society, he said. 

“The current Highway Trust Fund doesn’t pay for itself,” Robertson said. “Now, we have Teslas and Priuses and people using different amounts of gasoline. Gasoline isn’t the only marker for how much you’re using our roads.” 

Biden has also proposed hiking the corporate tax rate from 21 to 28 percent, which would put the U.S. at a disadvantage, Paulsen said. That would spur industry and jobs to start relocating  outside of the country again.

“That would move us to the highest of all (Organization for Economic Cooperation and Development) countries in the world, so we would be uncompetitive again,” he said.  

Centrists will play important role

With narrow majorities in both houses, moderation will be needed to temper the far left and far right, both said. 

Lawmakers like Arizona’s Senator Kyrsten Sinema (D) have shown that they can place their constituents above politics. Arizona’s newest Senator, Mark Kelly (D), could follow her lead, Robertson said. 

“It appears that Senator Kyrsten Sinema does a pretty good job of listening and representing the interests of Arizona and I think Senator Kelly could learn a lot from that, advocating for Arizona instead of Democrats,” he said.

Paulsen agreed.

“Senator Kelly has mentioned he’s been spending time getting to know colleagues on both sides. If you want to be an effective legislator, you need to build relationships and he’s doing that with Republicans, which is what the country is looking for and certainly those in Arizona are looking for to make progress on the legislative front,” he said.

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Members of Arizona’s congressional delegation updated the business community on legislation important to industry and commerce last week at the annual Update from Capitol Hill presented by the Arizona Â鶹´«Ă˝Ół»­ of Commerce and Industry and Salt River Project. 

The most discussed topic was the proposed fourth round of federal COVID-19 relief funding that has stalled in Congress.

Senators Kyrsten Sinema (D) and Martha McSally (R) both expressed their frustration with the process and vowed to continue to fight to break the deadlock. 

But it may not happen before the election, leaving those most in need behind. 

“This isn’t a game to me, because all across our state and across my neighborhood, people are struggling and still need relief,” McSally said. 

Sinema said she was disappointed that the White House and Congress are unable to compromise “when so many Arizonans are in need.”

“Partisan bills that won’t pass won’t move us any closer,” Sinema said. 

COVID-19, tourism, immigration, climate change among top concerns 

The two senators and seven of the state’s nine representatives “zoomed” in to give updates and answer questions virtually at the event. 

About 450 participants tuned in to hear what Arizona’s federal lawmakers are championing in Congress.

Representatives who also spoke at the event were RaĂşl Grijalva (D), David Schweikert (R), Paul Gosar (R), Tom O’Halleran (D), Andy Biggs (R), Debbie Lesko (R), and Greg Stanton (D). 

They detailed current and upcoming legislation and proposals for issues important to Arizona: immigration and trade, military and veterans, forest health and climate change, new interstate highways, modernization of ports of entry, broader access for Mexican tourists to visit Arizona, and the national deficit.

They also discussed the status of the CARES Act and a new round of funding for those who are still struggling from COVID-19 shutdowns. 

Standoff over another round of relief 

As intended, the CARES Act that was passed in March, has helped citizens, businesses, schools and governments in Arizona survive the financial shutdowns.  

The Act has saved over 85,000 businesses and over 1 million jobs here, McSally said. 

Now, another, more targeted round is needed to help those who are starting to be left behind, she said.  

But unlike the first three rounds of relief funding, the divide between the two houses is stalling progress.

Wide divide between “skinny” and “fat” pandemic relief bills

Currently, there’s a huge gap when it comes to funding a package.  

Two weeks ago, Democrats blocked a Republican-backed “skinny” $300-billion package that targets those most in need while taking into account the nation’s soaring debt, now over $27 trillion. 

Democrats are expected to present a $2.2 trillion package to the White House this week. 

President Donald Trump, meanwhile, has indicated he would be comfortable with a $1.3 trillion package, according to by Reuters on Friday. 

If a compromise can be reached, a new CAREs package most likely would include:

• Renewed Paycheck Protection Program funding for industries hardest hit by COVID-19 including restaurants, tourism and travel. 
• Expanded unemployment benefits. 
• A new round of direct checks to Americans. 
• Personal Protective Equipment for schools, nonprofits, healthcare providers and others.
• COVID-19 testing and research.
• Funding for education, low-income students and rural broadband access. 
• Liability protection from frivolous COVID-19 lawsuits against businesses.
• Rent, mortgage and utility relief.

Arizona’s delegation champions for residents and businesses 

In closing, Â鶹´«Ă˝Ół»­ President and CEO Glenn Hamer thanked Arizona’s entire delegation for working across the aisle in the best interests of the state. 

While their political differences can be stark, he said, they have come together repeatedly to pass historic legislation like the Colorado River Basin Drought Contingency Plan to protect Arizona water supplies and the United States-Mexico-Canada Agreement that allows a border state like Arizona to tap into the largest free trade bloc in the world.

“We really appreciate how our very diverse political delegation works well together. I think it gives great hope to not only the state but the country,” he said. 

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