1. D D Leading People. Leading Organizations. HR PUBLIC POLICY / WASHINGTON OUTLOOK 113 TH CONGRESS & OBAMA ADMINISTRATION Government Affairs CLA Webinar Michael P. Aitken, Vice President, SHRM Government Affairs October 9, 2013

2. HR Public Policy / Washington Outlook Leading People. Leading Organizations. Environment Americans See Current Shutdown as More Serious Than in 1995 October 4, 2013 2

3. HR Public Policy / Washington Outlook Leading People. Leading Organizations. Presidency 3 President Obama Job Approval

4. HR Public Policy / Washington Outlook Leading People. Leading Organizations. Congress 4 Congress’ Job Approval Falls to 11% Amid Government Shutdown October 7, 2013

5. HR Public Policy / Washington Outlook Leading People. Leading Organizations. 5 Shutdowns (Mostly) Shortened After Legal Interpretation Changed Source: Clinton T. Brass, “Shutdown of the Federal Government: Causes, Processes, and Effects,” Congressional Research Service, Aug. 6, 2013; Pete Williams, “This would be 18 th government shutdown in U.S. History,” NBC News, April 8, 2011. Analysis Between 1976 and 1979, the government shut down 6 times for an average of 11 days each time A 1980 ruling by then-Attorney General Benjamin Civiletti provided a more strict interpretation of the Antideficiency Act as it relates to shutdowns, raising the stakes; between 1981-1990, shutdowns were still frequent, but shorter, averaging 3 days in length A showdown between President Bill Clinton and Republican Speaker of the House Newt Gingrich led to a 5-day shutdown in Nov. 1995 and a 21-day shutdown between Dec. 1995 and Jan. 1996, with an estimated $1.4 billion price tag; since then, the government has tried to avoid another costly, politically perilous shutdown. Length, in Days, of Government Shutdowns Since 1976

6. HR Public Policy / Washington Outlook Leading People. Leading Organizations.  Tax and Benefits  Fiscal Train Wreck: Federal Government shut down on October 1. Better than anticipated deficit outlook but debt ceiling will be reached in the next few weeks (Mid October to October, 31). Sequestration for 2014 will trigger $109 billion worth of cuts this year in both discretionary and mandatory spending.  Possible Outcomes: Short-term deal that leads to a “Grand Bargain” or federal budget/debt deal Long-term deal that includes a “Grand Bargain” or federal budget/debt deal No Deal = Default and financial chaos 2013 Fall Public Policy Agenda Overview 6

7. HR Public Policy / Washington Outlook Leading People. Leading Organizations. 7 The Debt Ceiling Crisis, as the Titanic Takeaway The 2013 debt ceiling crisis puts hundreds of federal programs and benefits in danger of delayed or discontinued funding, and puts the U.S. at risk of a credit downgrade. Treasury Defaults Unprecedented default could cause value of dollar to drop and freeze credit markets Debt Ceiling Extraordinary Measures Fail Between October 18 and November 5, Treasury predicts it will have exhausted extraordinary measures Treasury Federal Programs Rely on Limited Cash and Daily Revenue to Survive Treasury not prepared to fund all programs with these reserves, but no “women and children first” protocol is in place Sources: Congressional Research Service, 2013; Annie Lowrey, “Shutdown vs. Default: The Relative Impact,” The New York Times, September 23, 2013; Jake Sherman, “Jack Lew: Debt Limit No Later Than Oct. 17,” Politico, September 25, 2013. Treasury Able to Fund Federal Programs Earlier this year Treasury had sufficient funds to keep federal programs and benefits afloat U.S. Hits Debt Ceiling The U.S. hit its $16.7 billion debt ceiling in May, but Treasury has been able to stay the course by relying — temporarily — on “extraordinary measures” $

8. HR Public Policy / Washington Outlook Leading People. Leading Organizations. Budget Primer: Spending Tax and Benefit Issues 8

9. HR Public Policy / Washington Outlook Leading People. Leading Organizations.  Long Term Deal Might Include: Tax Reform Entitlement Reform Delay in PPACA Extension of the debt limit Federal budget funding for 2014 2013 Fall Public Policy Agenda Overview 9

10. HR Public Policy / Washington Outlook Leading People. Leading Organizations. Passing New Immigration Law is Important to Americans July 11, 2013 Overview 10

11. HR Public Policy / Washington Outlook Leading People. Leading Organizations.  Immigration Reform  President named “Comprehensive Immigration Reform” as one of his top five priorities.  Current environment still presents the best chance of comprehensive immigration reform in over 30 years however; other domestic/international issues will likely push final resolution to next year.  Senate passed the comprehensive Border Security, Economic Opportunity and Immigration Modernization Act in June.  Slim hope for a Bipartisan “Group of 5” in the House to move a comprehensive bill but House more likely to consider a series of “focused” bills late fall.  The SHRM/ACIP partnership is part of the dialogue and advocacy effort. 2013 Fall Public Policy Agenda Overview 11

12. HR Public Policy / Washington Outlook Leading People. Leading Organizations.  Labor and Employment  Obama and Congressional Democrats have advocated for increasing the minimum wage and passing the Paycheck Fairness Act although major labor-management legislation unlikely to move through Congress.  However, agency activity has increased at DOL and we anticipate activity from EEOC. Regulatory activity in 2013 includes: Final Affirmative Action Regulations – 503/ Veterans DOL proposed a survey on worker misclassification Proposed Persuader Regulation Implementation of SEP by EEOC  Full NLRB Board will mean increased regulatory activity: Quickie Election Rule ??? / Specialty Health Care / D.R. Horton 2013 Fall Public Policy Agenda 12 Overview

13. HR Public Policy / Washington Outlook Leading People. Leading Organizations. 2013 Fall Public Policy Agenda  Workplace Flexibility  Advocates continue to push expansion of FMLA/paid sick leave at state and local level but enactment at federal level impossible.  Obama Administration’s focus on workflex will continue.  Successful efforts on “comp time” in the House unlikely to translate to the Senate. 13 Overview

14. HR Public Policy / Washington Outlook Leading People. Leading Organizations. 2013 Fall Public Policy Agenda  Health Care Reform  Efforts to delay regulatory or amend PPACA legislatively in 2013 may be more possible.  Congressional oversight and regulatory guidance continues.  Tax-deferred status of health care benefits could become a target in tax reform.  Focus on implementation on individual enrollment that began on October 1. 14 Overview

15. HR Public Policy / Washington Outlook Leading People. Leading Organizations. 15 Health Care Reform Issues

16. HR Public Policy / Washington Outlook Leading People. Leading Organizations. 16 Two in Three Uninsured Americans Plan to Buy Insurance Health Care Reform Issues

17. 17 HR Public Policy / Washington Outlook Leading People. Leading Organizations. Michael P. Aitken Vice President, Government Affairs mike.aitken@shrm.org +1-703-535-6027 1800 Duke Street Alexandria, VA 22314 17