Government Affairs

State of the Union? Still Unclear: Our Top Takeaways for Mobility

President Trump’s State of the Union Address included numerous themes which have a direct or indirect impact on workforce mobility. The speech itself was quite long, running 82 minutes in total, making it the third longest State of the Union speech ever delivered. During the address President Trump covered a wide variety of issues, so we’ve gone ahead and put together our “Top Takeaways for Mobility” from the 2019 State of the Union.


Strong Economic Growth
President Trump emphasized what he believes is one of his biggest strengths, the U.S. economy, which continues to grow. Trump reminded viewers of the massive tax reform package that was passed last year and touted the many regulations his administration has cut. Tax reform ended the moving expense tax deduction and instituted a $10,000 cap on the State and Local Tax Deduction (SALT). The SALT cap will have a significant impact on transferees moving into high-tax states such as California, New York or New Jersey.

Immigration
President Trump shared familiar rhetoric about illegal immigrants, referencing his previously stated opinions on violence, criminality, drugs, and sex trafficking. He also reiterated his belief that building a wall will make the country safer. While President Trump praised legal immigrants in his address, even offering a welcome to the country, his comments contrast with his administration’s policies for stricter enforcement of H-1B and other worker visas.

Trade
President Trump underscored the new United States-Mexico-Canada Agreement (USMCA) that would replace, in his words, the “historic trade blunder… and catastrophe known as NAFTA.” On trade, President Trump touched upon the ongoing trade war with China. The President spoke highly of Chinese President Xi Jinping and seemed optimistic that the tariffs being imposed would lead to a more equitable trading partnership between the two nations.

China is one of the most important markets for workforce mobility, and the relationship between the U.S. and China has a direct impact on the decisions of companies as to where to operate and locate facilities and offices. We are, therefore, likely to see shifts in business practices, immigration policies and, ultimately, workforce mobility as a result of the negotiations on trade and tariffs.

Infrastructure
President Trump stressed rebuilding the country’s infrastructure as a main priority but did not propose specific policies or investment. Additional investment in roads, bridges, airports, etc. would benefit mobility, making the movement of people, goods, and services easier, and making some underdeveloped regions more attractive to assignees. It’s possible we will see movement in this Congress on an infrastructure bill.

Paid Family Leave
President Trump argued that his upcoming budget would be the first to include a plan for paid family leave. Although it is unclear at this time what that plan will encompass, implementation of a national paid family leave plan would significantly impact the U.S. work place.

President Trump covered an extensive array of legislative priorities in his address, though he did not mention the recent government shutdown, despite the possibility of another looming. Another government shutdown would create obstacles for the mobility industry not unlike the recent one.  Shutdowns are costly and impact federal agencies that are critical to mobility; in cases, slowing the processing of documentation and loans, and bringing uncertainty to some employee deployments.  The President also did not discuss how he plans to lead facing the challenge of a divided Congress. Despite highlighting some issues that would garner bipartisan support, President Trump’s speech was often light on actual legislative details.

With the President’s fiscal year 2020 budget scheduled to be released in the next few weeks, stay tuned for our detailed analysis, as the budget will likely provide further insight into President Trump’s priorities and their impact on workforce mobility.

To read the 2019 State of the Union in its entirety, click here.

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