Behind the scandal-of-the-day news, the White House really is changing American policy. A new series from The Agenda explains how.
All eyes were on Washington this week as the Trump administration hosted a series of events to promote its infrastructure policy—highlighting the president’s proposals to cut red tape, reform air traffic control and rebuild America’s roads and bridges. The president held a signing ceremony Monday, took his message to the American people in Ohio on Tuesday and invited governors to the White House on Thursday. “Infrastructure week” dominated the news.
Just kidding. It’s true—he really did do all those things—but you’d be forgiven for having no idea they happened. The eyes on Washington were all glued to the drama around former FBI Director James Comey.
Infrastructure Week didn’t contain any new actual policy proposals, despite an exultant tweet from Vice President Mike Pence calling it a “banner week for infrastructure,” and Trump didn’t sign a bill. Instead, he signed a purely symbolic document in support of Rep. Bill Shuster’s plan to create a nonprofit to oversee air traffic control, and released a vague list of infrastructure principles that had already been released in his budget.
But behind all the theater, stuff really is happening in Washington. Trump’s political appointees are—slowly—getting settled into their new jobs, reviewing Obama-era policies and leaving their fingerprints on the bureaucracy. These changes don’t make national headlines, and they probably won’t be mentioned in a tweet from the commander-in-chief—but they could affect the lives of everyday Americans.
So you don’t miss these changes, The Agenda is launching a weekly series highlighting five important policy changes that took place in the past week. It will track how Trump’s agenda is being implemented across the government, even as the White House remains politically bogged down by the Russia investigation and struggles to work with Congress. And what better week to begin than this one when Washington was fixated on one Senate hearing room, while Trump’s appointees continued to roll back Obama’s agenda and sweep in a new era of conservative policy.
1. A boost for Uber and McDonald’s.
It’s the most controversial question in the labor world these days: When is a worker an employee, and when is he or she an independent contractor? That question has been especially controversial for “gig economy” companies like Uber and Postmates. But increasingly, regular businesses are also opting to classify their workers as independent contractors, which can cut their labor costs sharply by not obliging them to offer benefits like health insurance or pay employer payroll taxes. According to one recent study, the percentage of workers employed as contractors grew by almost 30 percent from 2005 to 2015.
In 2015, the Obama Administration gave workers a win on this one: It issued a guidance document explaining how the Department of Labor would interpret the law, outlining the economic tests it employed in determining whether an employer was misclassifying its workers. The Department of Labor had already been using that policy in enforcing the law, but putting it in writing sent a clear message to employers across the country that the Obama administration was serious about cracking down on worker misclassification.
On Wednesday, the Trump administration withdrew the guidance document. This was a win for business owners in any number of sectors—not just Uber, but industries such as farming and construction, which increasingly use independent contractors. The withdrawal of the document doesn’t change the underlying law, the Fair Labor Standards Act, or the DOL’s current interpretation of it but sends a strong signal to employers that Labor Secretary Alexander Acosta plans to interpret it differently than his predecessor. “The big story is not that, for whatever reason, they pulled down guidance,” said David Weil, who issued the document under Obama. “The real question is what else comes with this.”
Acosta also withdrew another Obama-era guidance document on how the department will determine whether a parent company, like McDonald’s or Subway, is jointly responsible for its franchises’ labor violations. As with worker misclassification, the Obama-era DOL interpreted the joint employment standard favorably for workers; its withdrawal is a victory for businesses.
2. A trade war with Mexico averted—for now.
Trump has stormed on about the North American Free Trade Agreement, calling it a “trading disaster” and vowing to rip it up, suggesting that a trade war with Mexico may be on the horizon. But on Tuesday, the United States and Mexico went the other direction and actually came to a deal, averting a potential trade crisis when they ended a dispute on Mexican sugar exports. The showdown was seen as a first test for the two countries as they, along with Canada, seek to preserve and update NAFTA later this year.
The sugar deal is a quintessentially in-the-weeds trade agreement: it raises the minimum prices for raw and refined sugar and cuts the percentage of Mexico’s sugar exports that are refined from 53 to 30 percent, while also redefining the purity level for refined sugar. The U.S. sugar industry objected to the deal, arguing that it did not address loopholes that give Mexican producers an unfair advantage in the U.S. market. It wasn’t the win that industry wanted, but many experts were encouraged that the Trump administration’s first big dispute with a major trading partner had an amicable ending.
3. The end of a DOJ “slush fund.”
Three years ago, when the Department of Justice settled a $17 billion settlement with Bank of America over its mortgage lending practices, it came with a requirement: the bank had to pay $100 million to various legal and community groups, a sum intended to help homeowners hurt by Bank of America’s wrongdoing. Many other DOJ settlements with financial institutions during the Obama administration required similar payouts to outside groups.
Conservatives have long objected to this practice, which was used by Obama and, before him, George W. Bush: they see it as a way for a president to direct money to his favored organizations, illegally sidestepping the congressional appropriations process. The Obama administration argued that so-called “third-party settlements” were simply another tool for reparations: The money, they said, didn’t go to random organizations but instead to groups that could help repair the damage caused by financial misdeeds. Opponents called it a “slush fund.”
That ended Wednesday when Attorney General Jeff Sessions issued a memo prohibiting U.S. attorneys from including such third-party payouts in any settlements. When the Department of Justice settles a case from now on, third party groups won’t get a dime.
4. A win for nursing homes.
Last October, the Obama administration banned any nursing home that receives federal funding—which is most of them—from requiring that prospective tenants sign an arbitration agreement as a condition to be admitted, a common practice in the industry. Such agreements prevent residents from taking the facility to court, and instead require them to appeal to an arbitration tribunal. Nursing homes prefer arbitration because it’s usually cheaper than getting sued; critics say it’s unfair to residents, who often have no idea they signed away their right to sue in court until they actually try to sue, at which point the nursing home shows them the fine print.
The nursing home industry fought the rule, suing the Department of Health and Human Services. In November, it won a temporary injunction against the regulation, so it never actually took effect. And now it may be dead. On Tuesday, the Trump administration signaled its view on arbitration agreements: HHS issued a new proposed regulation that rolled back the Obama rule. Because it’s not final, the new rule doesn’t immediately overturn the ban on arbitration agreements; it has to go through the same process as any other rule. But it sends a strong signal for where the administration will ultimately land.
5. Get THAAD out of here.
Not every major policy change affecting America originates in Washington. On Wednesday, South Korean President Moon Jae-in blocked the deployment of an American missile defense system intended to block missile attacks from North Korea.
The Pentagon’s Terminal High Altitude Area Defense (THAAD) system became a hot-button issue in Asia: China sees the North Korea angle as a cover story for a system that’s really intended to block Chinese missiles, an incursion on its sovereignty. (The Pentagon disputes that argument.) It was already a delicate issue in South Korea; Beijing had been successfully using state media to convince Chinese consumers to boycott South Korean stores and cancel vacation plans, which has hurt many Korean businesses. Then Trump rattled relations with its ally by insisting in April that South Korea foot the $1 billion bill for the system, an idea later walked back by his national-security team.
Moon—a left-leaning leader who supports a more open dialogue with North Korea than his scandal-plagued predecessor—was already reluctant to host THAAD at all, but allowed its continued deployment until he discovered last week, to his surprise, that the Pentagon had sent four more launchers into the country. On Wednesday, he stopped any further deployment of the system—just a day before North Korea conducted its tenth missile test of the year.