When Jeff Forbes and I founded Forbes Tate Partners in 2012, we made a commitment to making a positive impact for our clients, employees, and the communities in which we live and work. Our performance this past quarter – ranking us among the top 10 performing government affairs firms in D.C. – is evidence of our dedication to these long-standing values and the trust our clients place in us to help them during these challenging times.

Each new day seems to bring with it a new wrinkle of uncertainty or long overdue change. Navigating this new normal requires experience and a deep understanding of what Congress and the administration – not to mention governors and state lawmakers across the country – will do next to help the nation recover from the pandemic and beyond. We are proud to partner with companies both large and small, trade associations, non-profit organizations, and many others to advance their priorities and make our communities stronger.

Recently, support for Medicaid expansion has grown dramatically, years after the Affordable Care Act (ACA) put it into motion. This fact was on full display when Oklahoma expanded Medicaid by narrowly passing a ballot measure, which will, in 2021, make at least 200,000 low-income residents eligible for the program within the state.

The politics of Medicaid expansion has been a winning issue as of late despite efforts by the Trump administration to overturn the ACA.

Even in the face of this opposition, 38 states and DC have now adopted Medicaid expansion. This includes six states that have expanded Medicaid since President Trump assumed office (Idaho, Maine, Nebraska, Oklahoma, Utah, and Virginia) through a combination of ballot measures, executive orders, and legislation (Exhibit 1).

Looking ahead, Missouri will be the next state to vote on Medicaid expansion through Amendment 2 on August 4, and the issue will be a top campaign issue in the fall, especially in states like North Carolina, where expansion efforts are politically deadlocked.

As voters prioritize the issue — evidenced by Oklahoma’s recent success — a new poll from the Kaiser Family Foundation found 66 percent of voters in states that have not expanded Medicaid believe it should be.Even without the support of policymakers in some states, it seems voters will continue to make their views on the issue clear.

The massive economic contraction of the pandemic has caused a surge in unemployment that is still shaking out. ADP’s monthly jobs report says over 20 million people lost their jobs in April, and it’s unclear if the first few weeks of May will bring an end to the surge in layoffs. Initial furlough numbers will move towards permanent unemployment figures as businesses struggle to stay afloat. Will it get worse?

The housing sector is one of the most obvious areas of stress in an economic contraction as sharp as this one. Congress is currently taking a close look at what it can do, with Democrats just recently proposing $175 billion in rental and mortgage aid as part of their HEROES Act. There are many intersecting parts to consider when deciding how best to address these concerns – here are just a few key aspects of this issue we’re tracking.

The Knock-On Effects Have Been Muted Thus Far

According to the Mortgage Bankers Association, forbearance rates have climbed north of 7%, although they have begun to level off. Eviction moratoriums, rental assistance, and mortgage forbearance keep people in their homes, but this tends to create a different problem that consumers don’t see. Renters pay landlords, most of whom have mortgages that they in turn must continue to pay whether or not their renters stay current. Mortgages are paid to servicers, many of whom have packaged these loans into mortgage-backed securities (MBS) they themselves owe payments on regardless of how much or little they collect every month. Thus far, we’ve yet to see the widespread defaults from mortgage servicers that many industry experts feared was imminent, but the stress on the system is evident.  

The Risks of a Late Summer Downturn are Real

Despite the massive injection of capital to businesses and direct relief checks to millions of Americans, the late summer poses a significant risk for businesses and workers. Paycheck Protection Program (PPP) grants only cover salaries for eight weeks, and enhanced unemployment benefits expire at the end of July. Cities and states are starting to reopen, but most economists agree that a V-shaped recovery is unlikely. Fed Chairman Jerome Powell has repeatedly encouraged Congress to offer broad fiscal support to businesses which in turn would keep more Americans on the payroll. Nevertheless, the threat of a slow or minimal economic recovery still remains alongside the fear that a second wave of infections could surge through the country and force more social distancing, shelter-in-place, and non-essential business closures into the fall, all of which could lead to a wave of missed rent and mortgage payments.

Eventually the Trickle Up Effect Will Lead to a Bigger Problem

As cities and states begin the process of reopening, there remain significant concerns that a slow recovery will have knock-on effects to the housing sector. If we continue to see businesses fail and people lose their jobs, in turn they will struggle to make their rent or mortgage payments. Property owners and mortgage servicers run the risk of failing themselves, which can set off a cascade of ripple effects similar to what we saw in 2008. Mortgage servicers, banks and mortgage lenders, and construction companies and their suppliers are just some of the sectors likely to be hardest hit in this scenario.

Contributions to this blog were made by Trey Webster and Max Mandich.

The Senate returned to Capitol Hill this week and resumed in-person legislative activities, although social distancing measures ensure it will not be business-as-usual anytime soon. Senators face plenty of challenges as they establish oversight for the nearly $3 trillion in federal coronavirus aid that has gone out while determining future federal aid packages. Not to be overlooked, Congress must still address the myriad policy items put on the backburner over the past couple months, all while the November election begins to absorb national attention.

What do new safety protocols mean for this session? The Senate is likely to mirror the precautions taken by the House when it returned to vote on the fourth COVID-19 package just over a week ago – including wearing face masks or coverings, encouraging lawmakers to keep distance from each other, and modifying hearing or voting procedures to prevent congregating and allow more time for Senators to come and go. Ultimately, this could mean a slower pace of activity while the Senate is back in session.

Despite potentially slower Senate activity, it is clear that Congress intends to prioritize the single largest federal stimulus program in U.S. history. It will be worth noting how the Senate manages the newfound oversight structure throughout the federal government. In addition to the oversight responsibilities which various congressional committees hold, oversight power will extend to the Government Accountability Office (GAO), internal Inspectors General, three new oversight mechanisms created under the CARES Act, and the House’s new select committee.

Lastly, it remains somewhat unknown how legislative priorities will continue to advance through 2020. The exact procedure, timing, and balance between further COVID-19 relief measures and inclusion of long-awaited economic “recovery” measures is up for debate. The divide over the timing and composition of a recovery bill largely breaks down along partisan lines, with Republicans raising concerns about mounting deficit spending and arguing that legislation should remain strictly focused on pandemic response. Democrats are advocating for an expansive view that includes increased relief for state and local governments and infrastructure spending with significant investments directed to roads, bridges, broadband, and more to help stimulate the economy. Even as Congress contemplates a larger recovery bill, however, work on “interim” measures designed to provide individuals, businesses, and health providers with immediate relief will continue.

Non-coronavirus priorities are now expected to receive renewed interest, including federal judicial nominations and must-pass items like Fiscal Year (FY) 2021 appropriations and the annual National Defense Authorization Act (NDAA). Further, the narrow legislative window increases the likelihood that must-pass bills will be more narrowly tailored than in previous years, despite advocacy groups and rank-and-file members trying to attach many extraneous policy priorities.

FTP will continue to monitor and provide updates on the current situation as these and other items become clearer in the coming weeks.

Contributions to this blog were made by Jeff Sadosky, Lauren Crawford Shaver, Sabrina Siddiqui, Jeanne Moran, Kate Jahries, Erin Van Gessel, Britton Burdick, and Kahla Haber-Brown.

The bipartisan “Coronavirus Aid, Relief, and Economic Security (CARES) Act” was signed into law on March 27, delivering more than $2 trillion in economic relief to Americans. The package utilizes several new and existing government entities to “spend the money, watch the money, and watch the spenders.” The infographic here walks through who exactly will be overseeing and implementing the “CARES Act” for years to come.

Contributions to this blog were made by Jeff Sadosky, Lauren Crawford Shaver, Sabrina Siddiqui, Jeanne Moran, Kate Jahries, Erin Van Gessel, and Elizabeth Kapolka

Today, the U.S. Department of Labor estimated the U.S. unemployment rate will hit 18 percent by the end of the third quarter and just yesterday, it was announced GDP has dropped 4.8 percent in the first quarter, all due to economic fall-out from COVID-19. In many ways, those who battled through the financial crisis of 2008 or the response to 9/11 are familiar with this feeling of chaos, hopelessness, and the knowledge that tomorrow we will wake up to unprecedented news. Unfortunately, the economic effects of COVID-19 look to be beyond the scope of both of those events, and even World War II. As each day goes by, it is becoming increasingly clear our economic recovery is going to take every single policy lever available to get us out of this recession.

As Congress deliberates on the next phase of stimulus, many industries are still advocating for continued financial support. For those seeking federal aid, companies must be meticulous in upholding their reputation, constantly monitoring press coverage for threats and opportunities. Correcting the record and responding to bad press is essential. Bad headlines today can follow a company or industry around for years to come. News coverage is crowded now, and companies must look for every opportunity to tell their story and break through the noise.

So, how does a company do that? Our team has found that building a rapid response operation and developing corporate messaging on two topics drives press attention (good or bad) for companies and industries at large: transparency and corporate social responsibility. The strongest communications strategies will be pushing positive storylines and proactively sharing corporate actions as part of larger recovery conversations. Political leaders, the media, and the public want to know what company executives are doing to internally support their employees and externally support the community at large.

The last time major companies received federal assistance many were eviscerated in the press. There are huge differences and caveats between now and then, but a refresher of some of the worst headlines is a good reminder of pitfalls to avoid.

2008 Financial Crisis

2020 COVID-19 Crisis

So far we’re seeing companies sharing that their leaders are taking aggressive actions to prevent layoffs and temporarily lowering or eliminating C-suite salaries. But more tough decisions will need to be made and companies that take stimulus funds now are inevitably going to have to make tough choices.

Remember: this isn’t planning for just the next year or two. Media, Congress, and regulators will be looking into actions taken now for years to come. To that end, weathering the long-term means lining up a narrative now (lean into corporate social responsibility), showing supportive documentation (transparency), and articulating why actions are being taken in a clear, compelling way.

The economic storm caused by the COVID-19 pandemic has plagued workers and businesses of all stripes. Yet, amid the current state of uncertainty, people all over the world are stepping up to help those in need by donating to charitable organizations, caring for elderly neighbors, and volunteering their time at local food banks.

In the DMV, the fight to stop the spread of COVID-19 is being led by frontline health care workers, first responders, and those completing essential work across industries and in government. By serving the most vulnerable in our community and working to care for those suffering from the virus, our local hospital personnel continue to put their own lives at risk.

To show our support, Forbes Tate Partners (FTP) is sponsoring two community efforts aimed at feeding our frontline workers: Feed the Fight and a local hospital meal sponsorship initiative benefiting George Washington University Hospital.

The hospital meal sponsorship initiative will feed hospital staff over the next three weeks. DC based organizations will pay for weekly food deliveries, providing approximately 50 to 75 meals for hospital staff from local restaurants.

Feed the Fight crowdsources donations to fund food deliveries from local restaurants to nearby health care workers and first responders. This effort began with an email out to friends to deliver meals and show support for local health care workers by organizer Elena Tomkins.

At a time when coming together is more important than ever, and despite the call for us all to be physically distant, we are grateful for the opportunity to support our local businesses and physicians who are working tirelessly through this unprecedented crisis. It is with this spirit that we ask you to join us in helping our community.

We hope our neighbors and friends will consider donating what they can to support our local frontline workers. If you’re interested in joining us and donating to these worthy causes, please email Katie McCracken at kmccracken@forbes-tate.com for more information on the various ways to donate.

Over the last six weeks, employers have experienced unprecedented challenges as they shift their businesses to a virtual environment, direct employees to work remotely, and adhere to social distancing recommendations.

In late February, as the Centers for Disease Control issued a warning regarding the novel coronavirus (COVID-19) and urged the American public to begin working from home and reduce in-person contact, it became clear employers were in unchartered territory. While some companies introduced telework policies long before the pandemic surfaced in the United States, others were forced to quickly adapt to the reality — a new experience for some — of working remotely. According to the Modern Workplace 2019 report conducted by Condeco Software, 41% of employers offer some form of remote work, and this trend will likely increase to limit the spread of the virus. During this time, employers must step up and adjust their day-to-day operations to ensure the safety of their employees, limit the interruption of business operations, and develop systems to accommodate their workforce. Like many employers, we find ourselves reexamining our own internal operations and leaning on best practices during this time. Here are six tips for businesses and employees as they navigate working from home.

  1. Communication is key. One of the most critical services employers can provide during this time is transparent and consistent communication to their employees. Increasing internal communications can enhance trust, ease anxiety, and minimize fears among employees. A recent survey found employees trust their employers more than government or news outlets when it comes to information about COVID-19. Companies committed to sharing relevant information — including ways the company is keeping employees safe and transitioning the business during this time — will create better workplaces. Employees seek transparency during a crisis and want to hear from their managers and leadership. Employers should be honest about what they know and what they don’t and “navigate conversations with care.” Establishing weekly company-wide calls with internal updates, hearing from leadership, and giving employees an opportunity to ask questions keeps the connection personal and engaging.
  2. Technology is your best friend. As traditional office settings are temporarily replaced with kitchen counters and home offices, our reliance on technology and collaboration tools will be put to the test. This means supporting employees with different needs and providing them with the right tools and technology to continue being a successful contributor in the workplace. Employees should address their technology needs (e.g., training, tools, equipment) in real-time with their managers. Employers with flexible and creative solutions to technology barriers will help alleviate frustrations among employees and support productivity and performance. Instead of scheduling a regular conference call, consider using video conference software such as Microsoft Teams or Zoom for face-to-face contact and to keep teams connected.
  3. Keep the culture alive and fun. Transitioning to remote work can significantly impact the culture of a company, especially if remote work was previously limited or non-existent. Company-wide engagement activities keep employees connected to colleagues, boost morale, and offer a much-needed sense of stability during this time. Activities can include creating a company-wide “work from home playlist,” implementing virtual lunches or happy hours, or sharing pictures of “new coworkers” (kids or pets). Although a virtual activity cannot truly replace the in-person human connection, it provides employees with an opportunity to socialize and keep each other engaged while having some fun.
  1. Adjust your mindset. Many employees are dealing with stressful everyday challenges on top of managing their workload: teaching kids at home, taking care of elderly parents, sharing spaces and resources (e.g., Internet), checking in virtually with family and friends, and dealing with a variety of anxieties related to finances and staying healthy. Navigating this new work backdrop will require employers and employees to adjust their mindset and expectations around capacity and productivity. The well-being of employees should be an employer’s biggest priority. In fact, having empathy for an employee’s situation is likely to increase that employee’s productivity, as work-related stress decreases. Also, setting clear boundaries is crucial to balancing work and home responsibilities; one of the biggest struggles employees have with working remotely is unplugging after work. Employers should encourage their staff to take breaks as they would normally do during the workday and make time in their daily schedule to go for a walk and get some exercise.
  2. Attitude speaks volumes. As author Nancy F. Koehn wrote, leaders are made and forged in crisis. Employees are leaning on their leaders, who must project confidence and strength to encourage positivity without dismissing or downplaying the reality of the situation. The best bosses lead by example — those focused on keeping spirits high and conversations upbeat and thoughtful will have the same impact on others. Commit to embracing change, maintain a positive attitude, and recognize the contributions made to the company by other employees. Celebrate the wins, no matter how big or small, and thank members of your team individually.
  3. Reevaluate, check in, repeat. Given that it may not be business as usual for some time, employers should be willing to reevaluate decisions, policies, and business priorities to align with the evolving environment. Check in with employees regularly, gather feedback, and work closely together to find the appropriate solutions for remote practices. Employees should also use this time to check in with their managers and colleagues to be transparent about their work needs, challenges, and goals. Remember, this is a crisis we are all facing together. 

So, throughout the remainder of this health crisis, try to take advantage of this unique opportunity to strengthen your work family. The way you choose to conduct yourself during this time will impact what kind of leader and colleague you want to be once the pandemic is over. For now, embrace this era of change as best as you can, and remember the U.S. business community is resilient — we will come out of this challenge stronger than ever.

With every state now simultaneously under a declared state of emergency for the first time in history and 43 states under stay-at-home orders, legislatures across the country are being forced to square their constitutional obligations with compliance with strict social distancing measures. Add to that significant changes to expected tax receipts due to an economic shutdown, strain on existing budgets as states lean into COVID-19 response, and balanced budget requirements, and governors and state legislatures are scrambling. Many of those legislatures are taking unique approaches to session schedules in this time of uncertainty. These differences reflect the multitude of constitutional and legal requirements under which each state legislature operates in any given year.

As of April 16th, state legislatures are broken down as:

There is also the potential that, regardless of what legislative actions states have already taken or will take in the coming months, legislatures will be forced to reconvene in special sessions later in the year to take care of unaddressed but constitutionally mandated items. Many legislative leaders and governors have openly discussed this possibility, though such discussions are often caveated with an acknowledgement that future action at the federal level may help obviate the need for any special sessions. 

States in Session [i]

For many state legislatures, the balance between addressing the COVID-19 pandemic and adhering to strict social distancing guidelines is butting up against legislative sessions with end dates prescribed by law and impending statewide elections. In this context, it is no surprise that 13 states and the District of Columbia are either currently in session or have made no announcements regarding changes. Even so, these states have all accounted for the reality of the danger posed by the outbreak and have taken steps to preserve legislators’ health through meeting online and passing rules on remote voting.

For most states in session, in-person meetings have been curtailed significantly and legislators are moving rapidly to complete required business. In Arkansas, for example, legislators are hoping to wrap up remaining fiscal business as quickly as possible in order to conclude on Saturday (April 18th), nearly three weeks ahead of schedule. In Michigan and Minnesota, meanwhile, the legislatures have made plans to meet only as needed.

Other states with the flexibility to do so have moved their business online. The D.C. Council, for example, met online for the first time in history on April 7th to pass legislation responding to the pandemic. The New Jersey and Vermont legislatures have also been meeting remotely, while chambers in the Oklahoma and Pennsylvania legislatures recently passed rules to permit remote voting.

Finally, when in-person meetings are required, legislatures are going to extreme ends to avoid close contact. For example, during a special session to pass a “COVID-19 Rainy Day Fund,” the Arkansas House met at the University of Arkansas at Little Rock’s Jack Stephens Center to hold votes in a location that offered more space to spread out. Michigan legislators, meanwhile, avoided gathering by waiting in their cars until it was their time to vote and undergoing a minimal health screening before entering the building.

States with Suspended Sessions [ii]

As it stands now, 20 state legislatures that would otherwise be holding sessions have suspended work due to the COVID-19 pandemic. In some cases, legislatures have pegged a specific date to return, but with an understanding that the date may not hold. Other legislatures have simply said they would revisit the issue at a future time as the pandemic develops. Still others have pegged a specific date but have already had to push that date back at least once.

Though these legislatures are in recess, they retain, and they have used in some instances, flexibility to return to address one-off issues as necessary. Moreover, a number of states worked quickly before going on recess to address some outstanding issues. For example, in Arizona the legislature approved $50 million for COVID-19 relief before adjourning, while in Georgia legislators met in time to send bills to the other chamber by the required “Cross Over Day.” In Nebraska, legislators met to authorize emergency funding, and in New York, legislators met to pass a state budget.

State Sessions that have Adjourned [iii]

Thirteen states have adjourned their sessions sine die, most in line with previously scheduled adjournment dates but some quite a bit earlier, and one later, than originally projected.

Among the nine legislatures which adjourned largely as scheduled, session end dates primarily fell towards the end of February/beginning of March before significant social distancing measures were in place. Idaho and South Dakota were the only two states in this category with session end dates towards the end of March, but both took actions to limit exposure where possible; Idaho adjourned five days early in a move that handed the governor the ability to veto legislation passed in the final days without recourse by the legislature, while South Dakota took a two week recess before returning a final day for a veto session and to pass a handful of emergency measures.

Three additional legislatures—Kansas, Maine, and Maryland—adjourned mid-March nearly a month earlier than they had previously planned. Of the three, Kansas legislators hope to return in the next month or so for a veto session. Florida, meanwhile, adjourned a few days past its previously scheduled adjournment date in order to pass a budget.

No Regular Sessions in 2020 [iv]

Finally, four states—Montana, Nevada, North Dakota, and Texas—are not scheduled to meet this year. While these states hold interim committee meetings in such “off” years, many of those meetings have been canceled or postponed because of the pandemic.

 _______________________________________________________________________________________

[i] Arkansas, District of Columbia, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, Ohio, Oklahoma, Pennsylvania, Utah, Vermont, and Wisconsin.

[ii] Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Iowa, Louisiana, Mississippi, Nebraska, New Hampshire, New York, North Carolina, Rhode Island, South Carolina, and Tennessee.

[iii] Florida, Idaho, Indiana, Kansas, Maine, Maryland, New Mexico, Oregon, South Dakota, Virginia, Washington, West Virginia, and Wyoming.

[iv] Montana, Nevada, North Dakota, and Texas.

Contributions to this blog were made by Jeff Sadosky, Lauren Crawford Shaver, Sabrina Siddiqui, Jeanne Moran, Kate Jahries, Erin Van Gessel, and Britton Burdick

In a recent FTP note, we looked at the parallels between the 2008 financial crisis and today’s COVID-19 pandemic – both in terms of the massive government recovery efforts and the corresponding crisis messaging. Not only are there parallels, there are key learnings that communicators and corporate leaders need to consider as they work their way through the pandemic.  

However, the landscape of 2008 is not the world of 2020. There have been significant changes over the last 12 years between the financial crisis and today, including how the American people access information, from whom they get that news, and advertising practices. For example:

There are many additional, foundational differences between now and the 2008 financial crisis. No one should dust off the same playbook from 2008, though there are lessons to be learned, with many of the same regulators and policymakers jumping back into the fray to fight this fire. The massive shift in information consumption and means of communications, though, should help formulate any advocacy or crisis communications planning moving forward.

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