The first session of the 111th Congress came to end today with a final vote on the Senate's comprehensive health care proposal and an extension of the federal debt limit up to $12.394 trillion (which will get the country through mid February). The U.S. House is scheduled to return on January 12 and the U.S. Senate on the 19, at which time they are expected to work towards finalizing the health care package and send it to the president for his signature.

The first session saw enactment of the stimulus, and a few temporary extensions of the highway program. The House passed climate change and introduced card check legislation. The 1^st session ended with a sometimes bitter and partisan health care debate.

Next year is expected to be an even busier year in Congress as they race to complete action before the November mid-term elections. AGC has identified some of the major issues that are expected to impact the construction industry in 2010.

Health Care - In 2009, the House passed the Affordable Health Care for America Act, a $1 trillion bill that fails to address the root cause of rising costs. It will likely eliminate competition and restrict economic growth with punitive penalties for employers. The debate shifted to the Senate where they passed their version, the Patient Protection and Affordable Care Act. The Ssenate bill fails to make fundamental reforms, contain costs or make coverage more affordable in the future. It also removes the small business exemption for construction contractors. In early 2010 the two chambers will have to merge the versions into one bill before it can be sent to the president.

"Jobs" Bill - The House passed the Jobs for Main Street Act before adjourning for the year.  The $174 billion bill includes $50 billion in funding for infrastructure.  The Act provides $27.5 billion for highways, $8.4 billion for transit, $2 billion for water infrastructure, $815 million for Army Corps and $500 million for airports.  The bill also extends the current highway reauthorization through September 2010.  The Senate has not indicated their support for the House package.  They intend to focus on a "jobs" bill of their own when the Senate returns January 19, 2010.   In addition, the administration is likely to present a specific plan to create jobs to coincide with President Obama's State of the Union address.  AGC continues to work closely with leadership in the House and Senate, as well as the administration, to ensure that any "jobs" bill enacted into law includes a significant increase in infrastructure spending targeted to existing programs that can have an immediate impact in providing the construction industry with a much-needed shot in the arm. 

Surface Transportation Reauthorization - SAFETEA-LU expired on September 30, 2009, and Congress extended the law three times, with the latest deadline being February 28, 2010. While key transportation leaders in the House and Senate talk about the importance of passing a six-year reauthorization, proposals being considered will provide an extension through the end of 2010. How to provide needed revenue to increase investment levels remains the primary stumbling block to a long-term authorization. AGC supports and continues to advocate a six-year highway and transit bill.

Energy and Climate Change - The House passed comprehensive energy and climate change legislation in 2009. The Senate is expected to take on the issue and must decide on whether a market-based system (i.e., "cap-and-trade") is the best way to regulate and reduce U.S. greenhouse gas emissions.  AGC opposed the House passed bill. 

Card Check - The Employee Free Choice Act (EFCA) was introduced in 2009 and proposes major changes in the way union organizing and first-contract settlements take place.  The Senate continues to struggle with getting 60 votes needed to break a filibuster. AGC opposes EFCA and any compromise to EFCA.

Tax Reform - A broad range of tax cuts enacted in 2001 and 2003 are set to expire on December 31, 2010, resulting in significantly higher tax rates for businesses and individuals. Congress will have to consider whether to extend or modify existing tax law in the context of the recovering economy, growing deficits and policy agenda in a mid-term election year.  Congress may consider AGC priorities such as 3 percent withholding, estate tax reform, independent contractors and look back accounting. 

Clean Water Restoration Act - The House may consider this legislation, which would significantly expand federal jurisdiction over waters and wetlands under the Clean Water Act and require all construction activity first to obtain a permit. The Senate is working on a compromise. AGC opposes the legislation as well as the Senate compromise.

Water Infrastructure Funding - The House authorized $39.19 billion over five years for drinking and wastewater infrastructure and other water quality improvements, primarily through the Clean and Drinking Water SRF programs. The Senate is expected to consider it in early 2010. AGC supports this additional funding authorization, as well as a deficit neutral, off-budget and firewalled dedicated revenue source for water infrastructure. AGC also supports eliminating the volume cap for private activity bonds for water and sewage facilities.

Immigration - The administration and some Congressional leaders have indicated that they want to try to tackle comprehensive immigration reform in 2010.  AGC is engaged in the discussions on employer responsibilities and duties, as well as the development of a workable future workplace visa. 

Federal Aviation Administration Reauthorization - This program has been operating under short-term extensions since it expired in 2007. It remains unclear if Congress will be able to resolve a number of contentious issues in the legislation in 2010. AGC is pushing for appropriate increases to the aviation user fee structure to meet airport capital investment needs while also providing for air traffic control modernization.

Water Resources Development Act Reauthorization - This is a biennial comprehensive water resources law that authorizes U.S. Army Corps of Engineers projects. It was last authorized in 2007. Congress has begun drafting legislation, and AGC supports timely passage.

Federal Contracting Reform - In 2010 Congress is expected to address several key areas: contract bundling; reauthorization of the Small Business Act; address counting subcontractors at lower tiers; and review of the rules governing the HUBZone program and Alaskan Native Corporations (ANCs). AGC supports reform of the federal procurement process to recognize construction's unique melding of industry sectors while ensuring the government is using the most cost-effective method of procurement

In a rare early morning vote today, the Senate passed the Patient Protection and Affordable Care Act, 60 to 39, along party lines with all Republicans opposing it (Jim Bunning (R-Ky.) did not vote).  The bill fails to lower premiums, increases federal health care spending, imposes $500 billion in new taxes on health care and small businesses and exacerbates the growing federal deficit.  The bill expands Medicaid and shifts millions in costs to the states, adds regulatory burdens that will add to the cost and risk of doing business for employers, and includes a waiting period that lacks flexibility and may result in fewer full-time workers and less hiring overall.

A change made to the legislation just this week singles out the construction industry. The provision, added by Senator Merkley (D-Ore.) singles out small construction firms for harsher treatment than any other industry. Whereas most employers with fewer than 50 workers that do not offer health coverage are exempt from fines and the new regulatory regime that applies to larger employers, under the newly added provision construction firms employing as few as five workers will be subject to health care coverage fines and regulatory requirements.  AGC received an overwhelming response from the call to action of the membership. In 24 hours, over 3,500 letters were generated to the Senate, giving voice to construction employers' displeasure with this amendment. The amendment appears to have been added without full knowledge of a number of senators in both political parties.

The legislation now moves into conference where it will have to be merged with the House. This process will involve the Democratic House and Senate leadership, the president and his aides. The final outcome of the legislation remains uncertain but Democratic leaders are guessing that the final outcome will be a bill similar to the Senate bill, and it will be delivered to the president for his signature in early 2010.

This week, AGC delivered a letter to Congress on the health care bill and the Merkley amendment. It remains important for the construction industry to remain engaged on the issue; although the process has moved into conference we must remain united in opposition to a public option, expansion of employer and individual taxes and excessive spending. It is extremely important to keep the pressure on Congress to remove the language excluding the construction industry from the small employer exemption. You can use the tools of the Legislative Action Center to voice your concerns.

The U.S. House of Representatives Wednesday approved 241-181 a bill to extend certain expiring tax provisions in 2009 through 2010.  Included in the bill, H.R. 4213, the Tax Extenders Act of 2009, are several provisions of benefit to the construction industry.  In particular, the bill extends through 2010, 15-year straight-line cost recovery for qualified leasehold, restaurant, and retail improvements.

Lawmakers are expected to fix a drafting error in the bill that excluded new restaurant construction.  The Senate is not expected to consider H.R. 4213 until the chamber suspends or concludes debate on health care legislation.  Regardless of date of enactment, Congress will likely make the provisions effective on January 1, 2010.  AGC sent a letter in support of H.R. 4213 to all Representatives.

For more information, contact Karen Lapsevic at (202)547-4733 or lapsevick@agc.org.

The U.S. Senate began debate and votes on amendments to the "Patient Protection and Affordable Care Act." The Democratic leadership remains committed to holding a final vote on the legislation prior to Christmas, followed by sending a final bill merged with the House to the President in early January. The major hurdles for passage remain provisions on abortion, cuts to Medicare, the structure of a public option and immigration status issues.

Major employer groups like AGC remain opposed to the legislation because it does not reduce health care costs, will impose new mandates on employers, will likely increase the cost of employer provided health care, and could significantly increase human resource costs.

Beginning in 2013, the legislation would eliminate lifetime limits and rescissions, and extend dependent coverage to age 26. A year later, plans could no longer price policies based on preexisting conditions. The legislation includes an individual mandate with subsidies for low-income workers, and employer mandates that penalize some employers if employees receive government subsidies. The tax credits for small employers offer limited values. The bill expands Medicaid eligibility and reduces the growth in Medicare payments. It also places an excise tax on insurance plans with high premiums, as well as fees on insurance and manufactures of certain medical devices.

The construction industry is unique due to its fragmentation, relatively short duration of individual projects and the use of transient workers, making it susceptible to several provisions of the legislation. The failure of the legislation to define full-time, part-time and seasonal workers is a concern for many employers, and the use of other industries' definitions on the construction industry could contrast with our diverse work force needs. The short waiting period in the proposed legislation is particularly troubling due to the high turnover of employees in the industry. The capping of contributions to FSA accounts will remove today's health care options rather than increase them. Other concerns include the administrative burdens on employers to deliver increased paperwork to the government, how to handle credits, and partial payments as well as changes to COBRA benefits.

AGC remains concerned that the Senate bill shifts rather than contains costs and fails to offer more affordable choices to individuals and employers alike.  AGC is currently working on identifying ways to improve the legislation. AGC encourages members to use the Legislative Action Center to urge their senators to expand health care opportunities and innovation and not impose billions in taxes to fund the expansion of existing health care programs that should instead be reformed.

For more information, contact Jim Young at (202) 547-0133 or youngj@agc.org.

President Obama convened a White House Summit  on Thursday to discuss actions that can be taken to create jobs. Leaders from business, labor and state and local government were invited to participate, including former AGC president Doug Pitcock, who served as AGC's representative.

Following opening session comments by President Obama and Vice President Biden, the participants separated into breakout groups to discuss specific recommendations. At the breakout session titled "Creating Jobs through the Rebuilding of America's Infrastructure," Pitcock made the point that construction projects have the dual benefit of creating jobs in the short term and providing long-term economic benefits by producing assets that will be here for future generations.

Pitcock also said the project approval process needs to be streamlined so that projects can go to construction quicker. President Obama responded that he is an advocate for investing in infrastructure and understood the approval process needs improvement. He said he is pushing legislation to create a National Infrastructure Bank because he believes that major infrastructure investment needs financial support beyond the annual appropriations process. He also views the bank as a way to leverage private sector funds in support of infrastructure.

The White House intends to use the recommendations from the Summit to craft a legislative proposal to address unemployment.

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org.

AGC CEO Steve Sandherr met with Governor Ed Rendell (D-Pa.) and members of the House and Senate to discuss the drafting of legislation to address the dire unemployment situation and the importance of a significant infrastructure component in any jobs bill.

Sandherr promoted investing in all types of infrastructure as well as the need to fully fund a multi-year highway reauthorization bill. During the meeting, the need to address and find long-term financing options, such as a National Infrastructure Bank, was discussed. AGC believes an infrastructure bank would best be included in the long-term bill rather than a short-term jobs bill.  Sandherr discussed the meeting with D.C.'s Streetsblog.

Rendell has been a national leader on infrastructure and is the co-chairman of Building America's Future, a bipartisan coalition of elected officials dedicated to bringing about a new era of U.S. investment in infrastructure that enhances the nation's prosperity and quality of life.  Rendell is expected to hold a press conference on Monday in Washington. 

For more information, contact Jeff Shoaf at (202) 547-3350 or shoafj@agc.org.

As the White House holds their jobs summit, House and Senate Democrats have begun the process of drafting legislation to address the dire unemployment situation facing the country.  The timing on when such a bill would pass is not clear.  The Senate will likely take up a "jobs" bill in January, while the House's intent is to pass a jobs package by the end of the year, though Democratic leaders have acknowledged the short congressional schedule may mean waiting until early next year.

AGC has been working closely with leadership in the House and Senate to ensure that any "jobs" bill includes a significant increase in infrastructure spending and that the spending must be targeted to existing programs that can have an immediate impact in providing the construction industry with a much needed shot in the arm.  At various high level meetings, AGC has encouraged House and Senate leaders to build on the successes of the stimulus and include a significant increase in funding for transportation and water infrastructure programs.

In addition to infrastructure spending, Congress is considering extending unemployment insurance, renewing a program that offers the unemployed a 65 percent subsidy for health insurance premiums under COBRA, providing tax credits to employers who hire new employees, and increasing the amount of loans offered through the Small Business Administration.

As this process evolves, how these investments and policies are paid for will need to be addressed.  House and Senate Democrats have advocated for the use of the uncommitted or repaid money (about $210 billion) from the Troubled Assets Relief Program (TARP).  Republicans oppose using TARP funds to pay for a "jobs' bill, and instead favor using unspent stimulus funds.

For more information, contact Sean O'Neill at (202) 547-8892 or oneills@agc.org.

The AGC co-chaired Transportation Construction Coalition (TCC) today launched a new ad campaign and issued a press release to coincide with the White House Jobs Summit, calling on Congress and the Obama Administration to create jobs now by passing a highway and transit bill.

AGC also announced today that federal highway and transit funding are likely to drop by over $15 billion in 2010 without an increase in surface transportation funding. The nearly 20 percent decline in construction spending will cost over 430,000 jobs next year for the construction industry and other fields.

Check out the TCC radio, print and video ads here, and the press release here.  

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org.

In its ongoing effort to keep the pressure on Congress to enact a six-year transportation reauthorization bill with significantly increased funding levels, the Transportation Construction Coalition (TCC) has scheduled December 10 as "Phone-In to Congress" Day.

While Congress is embroiled in other high profile issues, senators and representatives must be reminded about the need to address the expired highway and transit program authorization. In our visits on Capitol Hill, legislative leaders report they are not hearing from people at home. They need to hear from you.

TCC would like to bombard Congressional offices with calls from constituents. To do this, the following toll free number has been set up to allow you to call directly to the offices of your senators and representative: 1-888-448-2782. While email and letters are helpful, phone calls require an individual to answer and to make note of why you are calling.

Please plan to call on December 10 and ask your employees to call as well and make the following points: 

• (Our state) has huge transportation needs that are not being met including deficient bridges, deteriorating pavements, congested roads and safety hazards.
• The construction industry has an unemployment rate of over 18 percent.
• Without the certainty of a long-term authorization bill, with increased funding levels, construction companies and material suppliers in our state will be forced to lay off additional workers.
• Businesses will not invest in new equipment when there is so much uncertainty about the on- going and future construction market.
• Congress must do its job and delay no longer. Pass a six-year transportation authorization bill now and provide the revenue necessary to increase funding to address (our state's) short-term need for jobs and long-term economic growth.

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org.

The U.S. House of Representatives Thursday passed 225 to 200 votes H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Smalls Businesses Act of 2009, which would make permanent the 2009 estate tax rate of 45 percent and tax exemption levels of $3.5 million for singles and $7 million for couples.  Without Congressional action, the estate tax is scheduled to drop to zero in 2010, only to be reinstated at a higher 55 percent tax rate and $1 million exemption in 2011. 

AGC has focused on full permanent repeal of the estate tax as the best option to ensure that construction companies are able to stay in business after the death of an owner.  At the same time, AGC has also advocated for reasonable, permanent reform at the lowest possible rate and highest possible exemption levels.  In addition, AGC has advocated for indexing of the exemption levels for inflation, as well as reinstating the step-up in basis repealed for estates in 2010.  H.R. 4154 would only address two of AGC's five objectives for estate tax reform: permanency and step-up in basis, so AGC will continue to work to have those issues addressed in the Senate.

The bill now moves to the Senate where lawmakers there are in the midst of what is expected to be several weeks of debate on health care reform.  It is uncertain whether the Senate will be able to take a break from health care to take up estate tax by the end of the year.  An amendment is expected to be offered in the Senate that would reduce the top estate tax rate to 35 percent and increase the exemption levels to $5 million for singles and $10 million for couples.  The amendment would also index the exemption levels for inflation and reinstate step-up in basis.  The Senate passed a similar amendment AGC supported during consideration of the Senate's non-binding budget resolution earlier this year.  Sponsors of the amendment are considering how to offset the greater cost of the additional estate tax relief, and are weighing whether they will need to phase in the rates over a 10-year period. 

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org.