The 2020 Election: The Name of the Game Is Flexibility

While there’s a great deal of political uncertainty with the upcoming 2020 elections, AED members and their customers are prepared to adapt to whatever the results may be. Control in Washington changes every few years, and the business community must remain flexible. The construction sector is no different.

Regardless of the outcome, equipment distributors and their customers understand that whether Democrats or Republicans control Congress and the White House, business will continue beyond 2020, and the industry must deal with the results, one way or the other.

AED interviewed members of its executive committee and government affairs professionals from construction industry organizations to gain insights into how equipment dealers and allied industry trade associations are evaluating the 2020 elections and their impact.

Ron Barlet, AED’s 2020 Chairman & President and CEO of Bejac Corp.

I think, regardless of who wins the election, the impact on our industry is not that significant in the short run. Both parties have been supporting an infrastructure bill, so we should enjoy some benefit regardless of the administration.

A Biden win could fuel even more spending. The negative impacts of Democratic control would likely be increases in regulations, taxes, and liability exposure for employers. This could result in tempered growth, both in jobs and liquidity, necessary for our industry to reinvest. 

In the alternative, Republican control should result in greater business reinvestment in the United States, continued relaxation of regulations and taxation, and continued manufacturing growth. Most distributors had three good years leading up to the pandemic, which resulted from tax incentives that allowed our customers to buy new equipment, grow their businesses and hire people. With historically low unemployment and reliable results for most distributors, I believe most of the industry is confident that our companies will fully recover under a Trump White House if he is reelected as we return to normal. 

Michael Vazquez, AED’s Vice President of Membership and Vice President of MECO Miami

Regardless of the outcome, infrastructure is likely to be a focus. The question is, how do we fund it? We need solutions. Florida, a red state, recently passed a $2 billion roadwork bill. It can be done regardless of the political party.

No matter who wins, people in our industry will be busy. Construction is an essential industry, so it has not been affected as severely by the virus. Everything will work out. We must adapt to the situation. We [equipment distributors] work for contractors. We must help them to be successful. We all need to be united. Our responsibilities are to go to work, do the best job possible, vote and stay engaged with the association.

Jeffrey Scott, The AED Foundation Chairman and President of Scott Machinery/Intermountain Bobcat 

In a Democratic administration, we should see the normalization of trade, particularly with our allies. We rely on supplies from overseas. If Trump wins, I’d expect more tariffs and continued trade volatility.

I think we’ll also see an improved workforce, focusing on technical education and retraining of people in the workforce. That will benefit our industry and have a positive effect. On the other hand, we could see changes to the tax code. While it would mean more government revenue for education and health care, our tax burden could increase. I anticipate that if Republicans control Washington, we’ll have status quo on the tax front. But, as administrations change, we always go through this.

Michael Brennan, AED’s Immediate Past Chairman and President & CEO of Brandeis Machinery & Supply Co.

If Joe Biden wins, I would expect to see increased spending by the federal government on infrastructure. This could be in the form of a more robust long-term highway bill or a separate infrastructure program. The Democrats certainly want to increase spending on infrastructure of all types, including roads, bridges, rail, waterway, broadband, etc. This increased spending on infrastructure would be very beneficial for the construction equipment industry.

With a Trump win, uncertainty regarding a long-term highway bill and more infrastructure spending would continue. This continued uncertainty regarding the federal government’s infrastructure investment would be a concern for the equipment industry. 

A Biden administration’s energy policy would lessen the country’s reliance on fossil fuels (coal, oil, natural gas), with a more significant push toward renewables. This would be detrimental to the equipment industry due to the large amount of equipment used in the oil, gas and coal industries. However, this emphasis on renewables would create some level of equipment demand, depending on the energy source.

I would also expect an increase in regulations from many governmental agencies, including the EPA, the DOL, and OSHA/MSHA. These increased regulations would likely be detrimental to the equipment industry. Also, if Democrats control the House, Senate and administration, I would expect taxes of all types – corporate, personal, payroll, capital gains – to increase. This would be detrimental to our industry and our customers. 

If Trump wins, I would expect more of the same for the next four years: reduced regulations continued low tax rates and an EPA favorable toward fossil fuels. In general, a continued favorable business climate for our industry.
Nate Smith, Vice President of Government Relations, American Traffic Safety Services Association

Regardless of whether the president is reelected or Biden is elected in November, infrastructure will likely be an early focal point for the administration. One of the positive aspects of the roadway safety issue is that it truly is a bipartisan concept. Policymakers from both sides of the aisle understand the implications and benefits of investing in roadway safety infrastructure projects. The Trump administration’s efforts to streamline project delivery helps our industry deliver lifesaving countermeasures quickly.

The big question comes down to whether we have a divided government or not. Either party having control over the House, Senate and White House makes enacting legislation into law easier. Assuming there is an extension of the FAST Act this fall rather than a multiyear reauthorization, our industry, alongside our partners like AED, will be pounding on the doors of Congress and the administration to enact a long-term highway bill ASAP in 2021.

Lauren Schapker, Vice President of Legislative Affairs, American Road & Transportation Builders Association 

The outcomeof the presidential race won’t change ARTBA’s mission and, more importantly, it won’t change the nation’s vast and growing infrastructure needs. We will adjust our tactics as warranted by the external environment, but we will continue to advocate for strong investment in America’s surface transportation network and to reduce the impacts of burdensome regulations.

Regardless of who controls the Senate or the House, ARTBA and its public and private sector members will press Congress to pass a long-term bill that features a permanent revenue solution for the Highway Trust Fund and significant increases in highway, bridge and public transit investment. Such legislation should be a top domestic priority for Congress in early 2021. Since increased infrastructure investment is one of the few top priorities for both parties, it is incumbent on our industry to hold whoever is elected in November accountable for delivering on their pledges to upgrade the nation’s transportation and other infrastructure networks.
Michele Stanley, Vice President of Government and Regulatory Affairs, National Stone, Sand and Gravel Association

There were numerous regulatory changes under Trump that would be in jeopardy if Biden were to win, including WOTUS, NEPA reform and multisector permitting. The industry would have to work diligently with the new administration to ensure any changes wouldn’t be harmful to our member companies. Though Biden has been a long-time supporter of infrastructure and we would welcome any new funds going into infrastructure investment, he previously has supported more transit and public transportation projects than highways, and that could impact our members.

Keeping the status quo provides the industry with a lot of certainties. That kind of certainty helps with capital investments to be able to purchase equipment from AED members. Trump has been a big supporter of infrastructure investment and we hope that with four more years of this administration, a large package could materialize. The aggregates industry has seen multiple wins in the regulatory arena under this administration and we would hope to see more.

 In a scenario where Democrats gain a majority in the Senate and Biden wins, we see significant changes coming to the industry. This would leave the door open for labor and other MSHA reform, as well as TSCA and various environmental changes that could hurt our industry. We also see an opportunity for them to roll back some of the tax reforms and all of our members, big and small, would suffer. I would like to believe that if Democrats ran all of Washington, infrastructure would be their first priority; however, that didn’t happen 12 years ago, so it’s hard to believe that would happen in 2021.
We are here to work with leaders on both sides of the aisle. Rocks are neither Democrat nor Republican – nor are the buildings, roads, ports, or runways we build. In order for the aggregates industry to be thriving, the nation needs to be successful, so we will continue to work to help ensure that happens.

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