Quarterly Newsletter
Congress was in full mid-term election mode in 2022 with significant policy initiatives passed via the Inflation Reduction Act that was moved through Congress without a single Republican vote. Similarly, long overdue investment in U.S. infrastructure passed with support from only 21 of 262 Republicans in Congress. The year ended with a post-election budget bill to fund the government that passed Congress with support from only 28 Republicans.
With party differences on full display, the midterm elections provided an unexpected result. The President’s party traditionally suffers significant losses in midterm elections, especially in a sluggish economy with high inflation. The 2022 elections did not follow the usual script, as Republicans picked up just seven House seats for a 222-213 advantage, while Democrats added a seat in the Senate for a 51-49 advantage. With control split between the parties, partisan legislation is not an option, and compromise will be required to get bills through Congress in 2023. SFIA’s policy agenda focuses on bills to advance sports and fitness in America: improve health, supply chains, promote trade, reduce tariffs, and reasonable regulation and enforcement of existing laws. Click here to see the agenda.
Trade-Tariffs, Forced Labor & Supply Chains
Shipping has improved, but popular tariff relief remains lapsed as China tariffs remain in place. Congress enacted legislation to address excessive detention and demurrage charges and facilitate the flow of commerce through U.S. Ports to address the challenges importers faced during the pandemic. Popular tariff relief programs lapsed at the end of 2020. Both the MTB and the GSP enjoy bipartisan support but remain stalled over ideological differences as pressure builds for action. As tensions with China rise due to geo-political issues, the USTR has indicated tariffs will remain in place, and a recent court ruling on tariffs sides with the government.
Long-Standing Tariff Relief Programs Await Congressional Action
The Miscellaneous Tariff Bill (MTB) provides tariff relief on products no longer made in the U.S. The International Trade Administration (ITA) recommended 80 SFIA petitions for inclusion in the MTB, providing up to $40 million in tariff relief on industry products. The Generalized System of Preferences (GSP) offers duty-free entry into the U.S. for products made in eligible countries with developing economies.
Both tariff relief programs expired at end of 2020 and Congress failed to move these traditionally non-controversial bills over the past two years. A Republican House is likely to pass MTB and GSP and send the bill to the Democratic Senate for consideration. Republicans will point to Democrats if the tariff relief bill is not passed to lower prices in an inflationary economy. Click here for more on SFIA’s work on MTB and GSP.
No End in Sight for China Tariffs
Section 301 Tariffs on Chinese-made products and inputs have cost U.S. consumers and companies more than $160 billion since they were initiated. Originally put in place by President Trump, the tariffs remain in place under President Biden, who has given no indication he will rescind them.
With tensions building over China’s Taiwan policy, support for Russia’s war, the intelligence balloon over the U.S., the expansion of presence in the South China Sea, and the failure to meet all the terms of the Phase One trade agreement, the USTR has indicated the tariffs on Chinese imports will remain in place and potentially expand.
A General Accountability Office (GAO) review of the USTR Section 301 Exclusion process found it to be seriously flawed; failing to justify many exclusion denials and not maintaining documentation on their decisions. The GAO urged the USTR to re-open a more transparent Exclusion process, but to date, it has only collected comments on harm caused by (or benefits of) the tariffs. SFIA has joined the business community in pressing for a new exclusion process. SFIA will alert membership to any opportunity to get products off the Section 301 tariff list.
On March 17, the Court of International Trade ruled the Section 301 Tariffs on Chinese consumer goods can remain in place. This is a blow to the efforts to toss out the tariffs as illegal due to USTR failure to follow guidelines set by the U.S. and World Trade Organization. The plaintiffs have announced they plan to appeal the ruling to the U.S. Court of Appeals in Washington, D.C.
CBP Seizes $500 Million in Products Suspected of Forced Labor
The Uyghur Forced Labor Prevention Act (UFLPA) went into effect on June 22, 2022, and Customs & Border Patrol (CBP) began detaining shipments of Chinese goods suspected of using forced labor in production. The CBP seized more than 1,500 shipments, valued at $500 million in the first three months of UFLPA. Importers must provide extensive documentation proving that no forced labor was used in the production of goods, including inputs and raw materials.
Cotton harvested in the Xinjiang region was a major target. Small shipments of cotton products avoided the new law using the ‘de minimus’ shipment exemption. Online orders valued under $800 qualify as ‘de minimus’ shipments and do not require reporting on forced labor. At the end of 2022, this fueled an effort to lower the ‘de minimus’ dollar threshold for international shipments.
Supply Chains Improve but Remain Fragile
Shipping has improved over the past year with fewer back-ups at ports and fewer COVID disruptions in Asia. The Ocean Shipping Reform Act (OSRA) has helped reign in excessive detention and demurrage charges and lowered the number of empty or partial containers leaving U.S. ports to facilitate U.S. exports.
President Biden urged Congress to pass the Railway Labor Act (RLA) to avoid a nationwide rail strike late last year. Congress passed the RLA to force the four holdout unions to accept the terms of the deal, negotiated with the help of Labor Secretary Walsh, to avert a nationwide rail strike that would have crippled U.S. supply chains.
West Coast Port Labor Unions have been working without a new contract since last July as labor talks drag on. The International Longshoreman and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) recently issued a joint press release that they have a tentative agreement on health benefits and other elements of an agreement, but issues remain to be resolved. The ILWU has kept port workers on the job during the talks, but recent “meal breaks” have led to slowdowns at the Port Of Los Angeles. SFIA has asked President Biden to ensure west coast ports remain open in a March 24 letter signed by more than 200 business interests.
Activity Matters – Lowering Cost Barriers, Improving Access & Active Lifestyle Economy
Alcohol and substance abuse spiked during the pandemic as lives were disrupted, highlighting the mental health benefits of active lifestyles. The new appreciation for activity has led to increased attention on policies to address the cost and access barriers to active lifestyles.
Activity Cost Barrier Grows Post-Pandemic
The Aspen Institute reports it costs $883/year for a child to participate in a youth sport. Schools have adopted pay-to-play policies and out-of-school sports programs come with costs. Sports programs suffered during the national shutdown and the industry contracted. Likewise, gyms closed due to legislative & regulatory actions during the pandemic and did not re-open. Simply put – supply does not meet demand post-pandemic and activity prices have increased.
The Personal Health Investment Today (PHIT) Act, would lower consumer costs by allowing the use of pre-tax dollars to pay for activity expenses. PHIT was under consideration for the year-end Omnibus bill, but unfortunately was cut at the 11th hour. PHIT enjoyed broad bi-partisan support from more than 90 members of Congress in 2022 and was re-introduced in the House and Senate in March 2023. With a new appreciation for activities’ role in mental health, PHIT was re-introduced in the House and Senate on March 14 with bipartisan support. SFIA continues to lead the effort to pass PHIT to lower the cost barrier to active, healthy lifestyles. Click here to learn more about PHIT.
Youth Sports Grants
The American Rescue Plan included youth sports grants for local communities and organizations. Grants can be used for equipment and staffing but targeted to fund free and/or affordable youth sports opportunities. St. Paul, MN used ARP grants to remove all sports fees for kids 10 and under for three years and youth sports registrations jumped 40 percent. For-profit organizations or leagues are not eligible for ARP grants.
Congressman Colin Allred (D-TX) introduced the PLAYS in Youth Sports Act to create a $75 million grant program for community youth sports programs. CDC grants would focus on national organizations offering sports in underserved communities. The Department of Health & Human Services may establish a companion grant program for municipalities, counties, and states to increase youth sports participation.
PLAYS Grants would be used for coaching certification, training in youth development, retaining coaches and volunteers, emphasizing participation over outcome, and including background checks for coaches. The bill also authorizes the CDC and National Institutes of Health to conduct research to prevent sports injuries and advance youth sports safety. The PLAYS Act had five Democratic co-sponsors in the House last Congress and will be re-introduced.
Gaming Revenue Funding Youth Sports
New York became the first state to tap into gaming revenue to help support youth sports programs. The New York mobile sports betting law dedicates a portion of the gaming tax revenue to youth sports programming. Grants were distributed to every county using a population formula, with New York City receiving $299,000. Grant preference is given to programs in underserved communities. Ohio, Massachusetts, and Minnesota have passed similar measures and other states are expected to follow suit.
The federal government collects a .25 percent excise tax on gaming revenues, generating $25 million from sports betting and $100 million overall. As more states turn to sports betting revenue for youth sports, there will be increased interest in tapping federal gaming revenue to support youth programs.
Invest in “Activity Deserts”
America reduced ‘Food Deserts’ during the “Let’s Move” campaign, but learned during COVID the dangers of inactivity to mental health and the shortage of places to play. With the new focus on mental health, investment in parks and recreation facilities is part of the solution. The government is making an investment and providing grants to local communities for infrastructure development and improvements.
Park & Recreation Grants
The Great American Outdoors Act (GAOA) provides funding for park maintenance and guarantees funding for the Land & Water Conservation Fund (LWCF) to create and upgrade park space. GAOA includes the Legacy Restoration Fund (LRF) to provide almost $2 billion annually to help alleviate the backlog of maintenance and repair projects on public lands. LRF is funded through energy development revenues from oil, coal, gas, and renewable energy development on federal lands.
The LWCF received $900 million from offshore oil leases for competitive grants to fund park creation and upgrades. LWCF funds parks nationwide and includes the Outdoor Recreation Legacy Partnership specifically for park and recreation development in underserved urban areas. Local communities and county governments are eligible for LWCF grants to improve existing and create new recreational spaces.
Increased Access to Parks & Recreation
The Bi-partisan Infrastructure bill passed in 2022 and includes $1.4 billion in funding for the Transportation Alternatives Program (TAP) for on and off-road pedestrian and bike facilities, bike lanes, recreational trails, and safe routes to school projects. TAP funds are limited to non-motorized transportation projects to increase access to recreational spaces; recreation and park facilities, playgrounds, and sports fields are not eligible to use of the funds.
The Recreation Economy for Rural Communities (RERC) provides assistance for small and rural communities to grow their outdoor recreation economies. RERC projects build trail systems and bike lanes, repurpose abandoned structures, and create new park and recreation amenities with the goal of increasing access by connecting communities to recreational spaces. RERC is a competitive grant program for rural local governments.
Investment in Sports & Recreation Spaces
Senator John Ossoff (D-GA) drafted legislation to fund the development of youth sports infrastructure. The “Youth Sports Facilities Act” would provide Department of Education grants for the development and improvement of youth sports infrastructure in and outside of schools. The bill has not been introduced as the Senator searches for a Republican partner. SFIA has worked with the Senator to appeal more to Republicans in rural areas. A companion bill is expected in the House after its introduction in the Senate.
The U.S. Department of Agriculture’s “Community Facilities Direct Loan and Grant Program” offers loans and grants for essential community facilities in rural areas. Funds may be used to purchase, construct, enlarge, or improve facilities. Grants and loans are limited to municipalities, counties, communities with populations under 20,000, and nonprofit organizations serving these areas. Lower-income areas are given priority. The program currently does not cover recreational facilities. SFIA supports the expansion of the program to cover recreation.
SFIA Supports Improved Protocols for Student-Athlete Head Injuries
There is growing concern with sports injuries, especially concussions and other head injuries. SFIA supports Senator Dick Durbin’s (D-IL) “Protecting Student Athletes from Concussions Act” to improve diagnosis, treatment, and return-to-play/classroom protocols for improved student health after sustaining a head injury. Congress has not pursued sports concussion legislation in previous Congresses.
States Propose Bans on Youth Tackle Football
New York, Illinois, California, New Jersey, Massachusetts, and Maryland all have seen bills to ban youth tackle football introduced over the past five years. None of the bans on youth football bills have progressed far in state legislatures, but the head injury issue continues to fuel the debate.
In 2023, bills to ban tackle football for children under 12 have been reintroduced in California and New York. The threat to the game posed by these bills is real, but past efforts have failed due to opposition from coaches and families of youth football players
Congress United on Need for National NIL Standard
In response to concerns over the negative impact a patchwork of state Name, Image & Likeness (NIL) laws will have on college sports, Congress is ready to step in with a national standard to level the playing field and better serve student-athletes.
Economic Impact of Sports, Fitness & Recreation
The active lifestyle industry is present in every community across the country. Youth Sports, Adult Fitness and Outdoor Recreation make up this diverse industry and contribute to local economies. Understanding the size of the active lifestyle industry and its economic impact in states and on the national level will elevate the importance of the industry beyond health and wellness benefits.
Securing funding for a Bureau of Economic Analysis report on the economic impact of these industries is an SFIA priority in the upcoming Congress.
Congress Returns to Sports
After a year off due to COVID protocols, Congressional Sports returned strong in 2022. More than 120 members of Congress participated in at least one sport, with many playing on multiple teams. SFIA members support Congressional Sports with equipment donations to enhance the player experience in these charity games. The Congressional baseball, football, hockey, basketball, soccer, and golf matches raised more than $2 million for charity in 2022.