The House Wednesday approved a three-month extension of authorization for the highway and transit programs that expire on September 30, 2009. The vote became embroiled in partisan gamesmanship when the Republican leadership opposed the bill being considered under a parliamentary procedure that required a two-thirds majority for passage but did not allow for amendments. House Transportation and Infrastructure (T&I) Committee ranking republican John Mica (R-Fla.) said during the debate that the Republican leadership wanted the opportunity to offer an amendment to indicate opposition to increasing the federal gas tax as part of the reauthorization effort. The extension was approved 325-85.

House T&I Committee Chairman Jim Oberstar (D-Minn.) continues to champion the effort to enact a six-year reauthorization measure with significantly increased funding. He favors limiting the length of an extension to three months so that Congress will continue to make progress on passage of a long-term bill. The Obama Administration and key members of the Senate are pushing for an eighteen-month extension to delay debate on the legislation and determine finding the necessary revenue until 2011. The Senate is expected to consider its version of the extension later this week or early next week.

House and Senate conferees have drafted a Continuing Resolution to fund all government agencies that are not covered by an approved appropriations bill for the first 30 days of fiscal year 2010, which begins on October 1, 2009. Included in the CR is a provision to extend highway/transit authorization for one month should the separate extension effort not be passed in a timely fashion.

The House passed a three-month extension of authority for the Federal Aviation Administration (FAA) program authorization to allow funding to continue past September 30 when the latest extension expires. The FAA authorization expired in September 2008, but Congress has been unable to agree on a funding structure for the aviation programs and therefore short-term extensions have been necessary to keep these programs operating.

The Senate has not yet considered an extension. To ensure that there is no gap in spending authorization, Congressional conferees on the Continuing Resolution included a 30-day FAA extension.

The Transportation Construction Coalition (TCC), a partnership of 28 national associations and construction unions, co-chaired by AGC and the American Road & Transportation Builders Association, placed advertisements this week in Capitol Hill publications calling for a six-year surface transportation bill now.

After months of attempting to find common ground on a comprehensive health care reform bill, the Senate Finance Committee began their markup of the America's Healthy Future Act this week without any initial Republican support.  The goal of Democratic leaders was to finish the markup by the end of the week and begin the process of merging the bill with the version from the Senate Health, Education, Labor and Pensions Committee. However, senators have over 500 amendments to wade through and delays in receiving a final cost estimate from the non-partisan Congressional Budget Office appears to be a major hurdle in wrapping up the markup this week.

Democratic leaders remain committed to passing legislation later this fall and have threatened to pass the bill without Republican support if necessary. While three House committees passed their versions of the legislation out of committee in July, Democratic leaders appear to be waiting to see how the Senate progresses on reform. AGC opposes the House version of reform.

Details of the nearly $850 billion Senate Finance Committee draft are still being negotiated, but would impact many employers. The current draft would be financed by a 35 percent tax on premium plans (costing more than $8,00 for individuals, $21,000 for families), cuts to Medicare and Medicaid, and penalties on employers for employees that receive government subsidies for coverage. The legislation requires all individuals to be covered either through employers, individual plans or through a government plan. The current draft does not require employers to offer coverage, but companies with more than 50 full-time workers would have to pay fees for each employee that is eligible and receives government subsidies. The subsidies are only available to low-income individuals.

The legislation also contains tax credits for small employers to go toward purchasing health insurance. The credits are similar to other bills in that they provide a limited value and too few employers will qualify. However, the threshold for the tax credits may be raised through the amendment process.

Aspects of the bill that remain troubling to AGC are the failure of the legislation to address malpractice reform and the overly burdensome tax compliance changes that are unnecessary and will overwhelm many businesses.

On September 17, 2009, the House passed H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009, which authorizes more than $4 billion for elementary and secondary school facility projects over the next two fiscal years, and ensures that school districts will receive funds for school modernization, renovation and repairs that create healthier, safer and more energy-efficient teaching and learning climates. The bill allocates the same percentage of funds to school districts that they receive under Part A of Title I of the Elementary and Secondary Education Act, except that it guarantees each such district a minimum of $5,000. The bill also provides grants to states to help community colleges finance new construction, modernization, renovation and repair projects.

While AGC supports the overall bill, it includes the same Buy American language as was included in the American Recovery and Reinvestment Act of 2009 (the Recovery Act).

AGC has long-advocated for additional investment in school construction, as there is substantial opportunity for investment in upgrading and improving the unmet need for school construction and renovation, which is estimated to be $3.7 billion. The average age of a public school building is estimated to be over 40 years old, the same age that schools have been documented to deteriorate.

The bill now moves to the Senate for consideration. AGC will urge Senators to support the bill without the onerous Buy American restrictions.

Massachusetts Governor Deval Patrick appointed Paul Kirk as the late Sen. Ted Kennedy's interim replacement. The appointment will last only until January 19, 2010, at which time a special election will be held in Massachusetts to fill the seat for the remainder of Kennedy's term. Kirk, a long-time friend of Kennedy and former Democratic National Committee chairman, is not expected to run for election during the special election.

The appointment comes on the heels of the Massachusetts legislature changing state law to allow for an interim senator. Kirk's appointment is an important development because it gives the Democrats their 60^th vote, the threshold needed to overcome filibusters on controversial legislation.  AGC is concerned that this additional vote will bring Democrats closer to passing the Employee Free Choice Act (EFCA) and possibly partisan health care reform legislation.  While it appears Kirk will support EFCA as Sen. Kennedy did, there are at least two Senate Democrats who remain opposed to supporting cloture on the EFCA bill.

On September 23, AGC submitted supplemental comments to a July 14, 2009 Federal Acquisition Regulation (FAR) Council notice of proposed rulemaking, which implemented President Obama's Executive Order 13502 to create new FAR contract clauses to be included in federal contracts should an agency choose to require a Project Labor Agreement (PLA) on a particular federal construction project.

AGC originally submitted comments on the proposed rule that encourages (not requires) agencies to consider (not necessarily adopt) a PLA requirement on large-scale construction projects (defined as projects with a total cost to the federal government of $25 million or more) on a project-by-project basis where certain criteria are met.

AGC's supplemental comments focused on concerns that a requirement for a PLA might be placed after contract award. AGC opposes this ex post facto imposition as it directly interferes with the relationship between a prime contractor and the subcontractors, and causes massive disruption of the procurement process. AGC strongly urged the FAR Councils to clarify in the Final Rule that agencies, contracting officers and their representatives are forbidden from pursuing such course of action.

Read more about AGC's Comments and the Proposed Rule here.

With SAFETEA-LU authorization scheduled to expire on September 30, action is necessary to keep the highway and transit programs operating. House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) announced his intention to move a 3-month extension this week out of Committee with floor consideration next week.

Chairman Oberstar opposes a longer extension because he believes it will undermine efforts to enact a six-year reauthorization bill. The Senate is preparing to bring to the floor legislation to extend the programs for 18 months until March 2011. Senate committees have already passed the needed legislation, including the Finance Committee, which included a $20 billion transfer from the general fund to keep the Highway Trust Fund solvent for the eighteen month extension. The Senate is supporting the administration's request to hold off on a multi-year extension until 2011.

This afternoon the Senate passed their FY 2010 Department of Transportation Appropriations legislation by a vote of 73-25.  The $67.7 billion bill funds the Department of Housing and Urban Development and provides $42.5 billion for the federal-aid highway program, an increase of over $1.5 billion from the FY 2009 level, and includes $11.1 billion for transit investments, $480 million above the President's request. The bill also provides $3.5 billion for the Airport Improvement Program, the same amount appropriated for the past two years.

The House bill, which was passed in July, provides slightly less funding for highways, transit and high-speed rail improvements. House and Senate negotiators will now begin to conference their respective bills to address the differences in funding levels.

After months of negotiations, the Chairman of the Senate Finance Committee, Max Baucus (D-Mont.), unveiled the "America's Healthy Future Act" this week. The bill was unveiled without any Republican support and may fail to receive the 60 votes necessary to overcome a filibuster. This bill marks the final major health care reform bill to be released this year. Although three committees in the House passed H.R. 3200, "America's Affordable Health Choices Act" in July, the bills have not yet been meshed together and floor time has not been reserved for a vote by the full House. Meanwhile, the Senate HELP committee passed the "Affordable Health Choices Act," which will ultimately have to be merged with the Finance Committee's bill.  The president hopes to have a final bill to sign into law before the end of the year.

The three main bills contain key differences and to date AGC has only opposed the House's "America's Affordable Health Choices Act." The House bill fails to address the root cause of rising costs, will likely eliminate competition and restricts economic growth with punitive penalties for employers. The Finance Committee's bill appears to be the best effort yet to lower health care costs, increase coverage and improve the quality of care. However, the bill includes significant cuts to doctors under Medicare and new tax on employer-provided health care benefits, and it fails to properly address medical malpractice insurance.  AGC hopes that Congress can find a bipartisan bill for health care reform.

Comparing the bills

Senate Finance Committee: creates co-ops to purchase health care that operate at the regional, state and national level. Insurers cannot reject applicants based on pre-existing conditions or renewals. All individuals are required to have health insurance and it can be purchased through exchanges. The mandate comes with subsides for low income individuals and tax penalties for individuals who fail to purchase coverage. There is no employer mandate. Employers with over 50 employees that do not offer coverage must reimburse the government for each employee receiving health care subsidies.

Senate HELP Committee: creates a public plan option to compete with private insurance. Insurers cannot reject applicants based on pre-existing conditions or renewals. All individuals are required to have health insurance and can purchase coverage through exchanges. The bill includes subsides for low income individuals and tax penalties for individuals who fail to purchase coverage. The HELP Committee's plan contains an employer mandate for employers with over 25 employees, and failure to provide adequate coverage results in a $750 penalty for each uninsured full time worker each year. The plan makes tax credits available for small employers to purchase insurance.

Tri-Committee (House Bill): creates a public plan to compete with private insurance. Insurers cannot reject applicants based on pre-existing conditions or renewals. All individuals are required to have "acceptable health coverage" that can be purchased through new exchanges and subsides are made available for low income individuals, while tax penalties exist for individuals who fail to purchase coverage. The House bill includes an employer mandate for employers with payrolls exceeding $500,000 and includes a payroll tax penalty ranging from 2 to 8 percent. The plan includes some tax credits for the smallest of employers.