View from Washington By Tyson Redpath, The Russell Group
New Vaccine Requirements for Private Employers
The order comes more than four months
after vaccines for COVID-19 were made
readily available to all eligible persons
in the United States over the age of 12
and during a virus case surge attributed
to the more virulent Delta variant.
United States (US) President Joe Biden has ordered
the Department of Labor’s Occupational Safety and Health
Administration (OSHA) to issue an Emergency Temporary
Standard (ETS) requiring private-sector businesses with at
least 100 employees to mandate that workers either be
vaccinated for COVID-19 or undergo weekly testing for the
virus. The Occupational Safety and Health Act provides OSHA
the authority to issue an ETS for employee safety upon a
determination by the agency that workers are, according to
the act, in grave danger due to exposure to toxic substances,
or agents determined to be toxic or physically harmful, or to
new hazards necessitating the action. The act generally gives
OSHA the ability to issue an ETS that would remain in effect
for up to six months without going through the normal review
and comment process of rulemaking. Such a standard could
remain in effect for six months from the date published in the
Federal Register.
The order comes more than four months after vaccines for
COVID-19 were made readily available to all eligible persons
in the United States over the age of 12 and during a virus case
surge attributed to the more virulent Delta variant. To date,
more than 63 percent of the eligible population has received
at least one vaccine dose. Meanwhile, fissures have surfaced
within the Biden administration’s COVID task force over vaccine
durability and whether the administration’s plan to widely
distribute booster shots should proceed. In mid-August, a joint
statement issued by the Department of Health and Human
Services that includes officials from the Centers for Disease
Control, Food and Drug Administration (FDA), and National
Institutes of Health, states, “We are prepared to offer booster
shots for all Americans beginning the week of September 20
and starting eight months after an individual’s second dose. At
that time, the individuals who were fully vaccinated earliest in
the vaccination rollout, including many healthcare providers,
nursing home residents, and other seniors, will likely be eligible
for a booster.” Subsequent reports indicate disagreement over
whether data exists clearly demonstrating a need for boosters
pitting several officials, including two vaccine experts at FDA
who have resigned, at odds with administration officials
pushing forward with the booster effort.
The private-employer mandate will affect 133,000
businesses and 80 million employees. The president’s order
also requires federal employees and federal contractors to be
vaccinated within 75 days, removing any option to undergo
weekly testing. Healthcare workers and providers receiving
Medicare or Medicaid payments will also be covered under
the mandate. In total, the new requirements will cover 100
million workers, equaling two-thirds of the entire workforce.
Numerous legal challenges over the first-ever vaccine
mandate on private employers are expected. Several questions
have arisen over OSHA’s ability to enforce these far-reaching
orders. Additionally, employers are asking how they will be
expected to gather and store vaccine information as well as
testing results. The administration is expected to continue
leaning on nationwide pharmacy chains to provide free
testing, but accessibility to those outlets in rural areas remains
a significant concern. Still, for many employers who have
hesitated to implant a mandate, the president’s directive
could provide justification for more aggressive vaccination
rules even as they balance a tight labor market. Some studies
suggest nearly 30 percent of employees will not get the COVID
vaccine even if it costs them their job.
Congressional Budget Reconciliation a Balancing Act
Financing Biden’s “Build Back Better” social infrastructure
initiative will consume much of the US Congressional agenda
for the remainder of 2021 as the House and Senate also
grapple with increasing the nation’s borrowing limit and fund
government appropriations into the new fiscal year that began
October 1. Short of a 60-vote majority needed in the Senate
to end filibustering, Democratic leadership in both chambers
have opted for a procedure known as budget reconciliation
that requires only a 51-vote majority to move the president’s
spending plans. Those ambitious plans total $3.5 trillion in
spending for a bevy of new and expanded government programs
ranging from universal prekindergarten, to vision and dental
benefits for Medicare, to more free meals for school children.
If approved, the $3.5 trillion would mean that total new
spending since the beginning of the pandemic will reach
$10 trillion. This comes at a time when the Federal Reserve,
mindful of strong inflationary signals, has indicated it will taper
a portion of this grand fiscal policy experiment by revisiting
its bond purchase program at year’s end. One indication of
these heightened fiscal stimulus levels was published last fall
when the Federal Reserve reported its stock of money printed
increased 18 percent in 2020, meaning one out of every five
currency bills was printed last year.
Hungry for new revenues, Congress is considering a host
of tax changes largely altering the Republican tax reform
passed as the Tax Cuts and Jobs Act of 2017. Within legislation
approved by the House Ways and Means Committee in mid-
September, both individual and corporate tax rates will go
up. The top corporate rate will rise from 21 percent to 26.5
percent for firms making more than $5 million. Businesses
that earn between that benchmark and $400,000 will
continue paying the 21 percent rate, and those with less
than $400,000 in revenue will realize a lower tax rate of 18
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