• August 16, 2022

There’s Work Ahead, Even After the Inflation Reduction Act

Landmark legislation often creates more work for government affairs teams, who must jump into action pushing measures left out, altering provisions left in and managing regulatory changes brought about by the bill. It underlines a larger truth: advocacy is now an “always-on” activity.

Most of Washington has been tracking the passage of the Inflation Reduction Act, the landmark bill that will make huge changes across industries and has become a centerpiece of the Biden administration’s economic agenda.

As most government affairs professionals know, the bill allows Medicare to negotiate prescription drug prices for the first time ever; authorizes the largest single expenditure ever by the federal government to fight global warming; and ushers in major corporate tax changes. The bill was the target of fierce lobbying and grassroots advocacy in recent months as organizations fought to shape the provisions it contains.

And that fight is far from over. Though the House and the Senate have passed the bill, and President Joe Biden is expected to sign it this week, there are organizations across the country that have work ahead because the Inflation Reduction Act was approved.

Some teams are pushing measures left out. Some will work to alter the provisions that made it into the legislation. And some will have regulatory battles ahead to manage the changes brought about by the bill. All know the truth about landmark legislation: it often creates more work for government affairs teams.

‘The Fight is So Far From Over’

One good example is the e-bike tax credit, which would make it more affordable to purchase an electric bicycle. Electric bikes, which can be used for business or recreation, cost from $1,000 to $8,000. Groups representing the bicycle industry and their allies in Congress have been pushing the E-BIKE Act (Electric Bicycle Incentive Kickstart for the Environment), an environmental solution that would offer a refundable tax credit to encourage e-bike use and reduce car rides.

The language passed in the House once and was part of the Inflation Reduction Act at one point, but was later dropped from the bill. Noa Banayan, director of federal affairs at PeopleForBikes, an association that represents more than 300 companies in the bicycle industry, said it was disappointing to see text of the bill released without their provision included. But she also said that advocacy would not stop.

“When you work in federal policy, you’re very used to things moving slowly,” she said. “And then there’s being a bike advocate, which is always an uphill battle … it’s never been easy to do these things. But that’s not why we do them. We do them because they’re important.”

Banayan said her organization and their allies are already looking for opportunities to get their legislation approved, perhaps by having it attached to must-pass bills coming between now and the end of the year. The National Defense Authorization Act, which funds the military each year, is a prospect, as is any year-end tax extender package that gets introduced.

“We’ve lost this round,” she said, “but the fight is so far from over.”

‘Always On’ Advocacy Mitigates Risk

Indeed, there are many industries that have work ahead. The bill contained tax incentives to promote electric vehicles, but many manufacturers say rules surrounding these incentives are too restrictive. The bill allows Medicare to negotiate prices on a small list of medications, but strong objections by the pharmaceutical industry are likely to continue. The bill introduced new corporate taxes on large companies, so many will be working on tax policy and strategy.

The wave of policy work ahead underlines a larger truth for government affairs teams: advocacy is now an “always-on” activity. Just as most politicians are now locked in a perpetual campaign, companies, associations and nonprofits must now protect their interests on a full-time basis. While some might play offense, trying to get favorable provisions approved, almost all must play defense as part of sound business strategy. To mitigate risk in today’s environment, organizations must have an early-warning system in place and a professional advocacy program capable of mobilizing a group of advocates on command.

As Biden signs the bill this week, and the White House plans a celebration of its passage Sept. 6., scores of organizations will be projecting applause or criticism, and planning how to protect their interests moving forward. And this is hardly the only issue on the radar. Many organizations are busy working on the midterm election. Many more are looking ahead to state legislative sessions early next year, when tens of thousands of bills will be considered across a broad range of issues.

There will certainly be work in Washington, too. While it is tempting to say that Congress rarely takes up major bills, that is not necessarily the case. While it is true that legislation may slow as we approach the midterm election, and will almost certainly do so if that election results in a divided Congress, lawmakers have passed a great deal in the last five years, despite the polarized climate. The 2017 tax bill was the largest change to the tax code in three decades. Multiple pandemic relief bills in 2020 and 2021 allocated trillions of dollars in spending. Last year’s infrastructure bill allocated $1.2 trillion. Now, the Inflation Reduction Act has made landmark changes to health care and environmental policy. Congress is gridlocked—until it’s not.