The endgame for the Senate "jobs bill" is still uncertain.  AGC has learned that the Senate is considering breaking up a jobs package into two or more separate bills.  The first piece likely to be considered will extend SAFETEA-LU through December 31, 2010 and provide a $20 billion infusion for the Highway Trust Fund to maintain its solvency through that extension.  Other provisions being considered include extension of Build America Bonds, new jobs tax credits, and various small business incentives.

The second piece of legislation will address other infrastructure investment programs.  AGC continues to communicate with the Senate the urgent need to provide a significant investment in infrastructure in order to meet the early spring construction season. The authors of the infrastructure portion of the Jobs bill, Senators Dick Durbin (D-Ill.) and Byron Dorgan (D-N.D.), have signaled that additional funding for highways, transit, airport improvements, high speed rail and school construction will be included in the final package.  However, the level at which those programs will be funded is yet to be determined. AGC and other industry partners have strongly urged the Senate to provide at least the level of funding that was provided in the House passed "Jobs for Main Street Act" ($27.5 billion for highways, $8.4 for transit).

In terms of funding for water infrastructure, AGC is working with Senators Ben Cardin (D-Md.) and Sheldon Whitehouse (D-R.I.) in circulating a letter to Senate leadership that seeks inclusion of $3 billion for Clean Water State Revolving Funds and $3 billion for Drinking Water State Revolving Funds in the infrastructure piece of the jobs package.

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

Republican Scott Brown's win in the Massachusetts special election is reverberating through Congress. It appears the House lacks enough votes to pass the Senate version of the legislation, which means the Senate and House leaders must continue to work on a compromise of their two differing approaches.

Democratic leaders appear unsure of the next move on reform, and are evaluating all of their options, which include passing a pared down bill using the partisan and controversial procedural motion known as reconciliation. AGC continues to monitor the developments and advocate for reform that is affordable and increases choice and competition in the marketplace. The current legislative proposals fail to do so.

The provision causing the most consternation for the industry is the language in the Senate bill that explicitly targets the construction industry. The provision places mandates on the smallest of construction companies to provide coverage or pay penalties if they have more than five employees and a payroll that exceeds $250,000. This provision is unique to the construction industry, as companies in other industries with less than 50 employees are exempt from the mandate. AGC continues to meet with members of Congress and congressional staff to educate them on the impact of this provision, which has resulted in members on both sides of the aisle writing the Democratic leadership on removing this language from the final package.

AGC's opposes the provision because: 1) few Senators were aware of it and it was never open to debate; 2) it was pushed by a small employer group representing less than 3 percent of construction companies; 3) it differs from other employee and payroll thresholds elsewhere in the bill, as well as other labor laws and regulations; and 4) the construction industry is currently experiencing the highest unemployment of any other industry, double the national rate.

In addition to AGC's direct lobbying, AGC members have heeded the call by sending thousands of letters and making phone calls to their elected officials, and AGC has joined with other trade associations to advocate on removing the provision.

Yesterday, President Obama issued a presidential memorandum that directs federal agencies to block government contractors delinquent in their taxes from receiving new contracts.  In addition, the memorandum would require the Commissioner of Internal Revenue to conduct a review of the accuracy of certifications of non-delinquency in taxes that companies bidding for federal contracts are required to submit.  The President's goal is to ensure that tax delinquent contractors are not awarded further federal contracts.

The President is also calling on Congress to ensure that tax dollars are not used to boost the profits of companies who refuse to pay their taxes. The presidential memorandum is part of a larger strategy of streamlining the federal contracting process which includes evaluating contract type feasibility, eliminating no-bid and sole source contracts where possible, scrutinizing payments and strengthening the federal workforce.

The text of the memorandum is available here.
The text of President Obama's prepared remarks is available here.
The text of a White House press release on the subject is available here.

Yesterday a broad coalition of members of Congress, industry experts, and stakeholders called on Congress and the Obama Administration to create a National Infrastructure Bank to help fund infrastructure projects of regional and national importance.  AGC attended the event and stressed that the infrastructure bank concept must be part of a larger comprehensive approach to tackling infrastructure investment, including robust multi-year funding and significant regulatory reforms. It must also be created separate and apart from jobs legislation currently being drafted in the Senate.

The proposed National Infrastructure Bank would be designed to help improve the nation's roads and highways, bridges, ports, rail (freight and passenger), drinking and waste water treatment plants, smart grid, broadband and schools. AGC believes that an infrastructure bank should be capitalized with general fund revenue to assist individual or groups of states with financing, particularly for mega projects. Infrastructure bank financing should be available as low interest loans to help states finance projects or to assist in leveraging private funds.

The White House announced this week that President Obama will deliver his State of the Union address on January 27 and release his FY 2011 budget February 1.  It is widely believed that the State of the Union and the president’s budget will focus on cutting the federal deficit and may downplay other new domestic programs beyond jobs programs.  In order for the administration to achieve the goal of deficit reduction, the FY2011 budget may contain a discretionary spending freeze at some federal agencies.  At the same time the president wants to ensure policies are in place that will lead to the creation of jobs.  Deficit reduction and job creation will be a difficult balancing act for the administration to achieve. 

The impact of the FY 2011 budget on spending for federal construction programs remains to be seen.  AGC will continue to work with relevant federal agencies and the Congress to ensure adequate funding is provided for these programs.  A detailed chart tracking budget requests and final appropriated dollars for these programs can be found here FY 2010 Budget | AGC - The Associated General Contractors of America.  Thanks in part to AGC’s advocacy, the final appropriated dollars for federal construction programs in FY 2010 was 2.4 percent greater than requested in the president’s budget and 1.7 percent greater than what was appropriated in FY 2009.

AGC showed the need for increased investment in infrastructure during a media conference call yesterday, which included results from a construction outlook survey completed by AGC members. The news was covered by Reuters,Seattle Times, Miami Herald and Omaha World Herald, among others. Meanwhile, Ken Simonson urged owners to move on projects quickly.

The U.S. Senate defeated an amendment by a vote of 53-45 to legislation that would have increased the federal debt ceiling and prevented any new financial commitments for the Troubled Asset Relief Program (TARP).  The amendment was particularly troublesome because it would have invalidated the key provision used to pay for the $75 billion of new appropriations in the House-passed Main Street for Jobs Act and would have likely prevented the Senate from moving forward on their jobs bill because they too are likely to use TARP funds to offset the cost of their bill.

AGC, as co-chair of the Transportation Construction Coalition (TCC), sent a letter to the Senate opposing any effort to redirect the TARP funds to deficit reduction.

On Tuesday, Scott Brown (R) defeated Martha Coakley (D) in the Massachusetts special election to fill the seat vacated by the late Senator Ted Kennedy.  Brown's victory is already impacting Senate proceedings by removing the Democrat's super majority of 60 votes.  

Once Brown is officially seated, Democrats will have 59 votes and will be unable to overcome Republican attempts to filibuster controversial pieces of legislation, such as health care reform.  It appears changes to the health care proposal that passed the Senate late last year will have to be significant to gain any bipartisan support. The direction of health care reform remains uncertain, as Democratic leaders are plotting the next course of action in the wake of the election.

The Senate still faces an uphill battle on many of AGC's priorities. The challenge of finding additional votes on funding infrastructure investment remains a hurdle in the Senate, as does passing a jobs bill without a source of funding. AGC commented on this issue this week in Engineering News-Record.

The race to merge the House and Senate health care proposals continues, and once completed, the revised bill will be sent to the Congressional Budget Office to determine its cost. Despite the Democratic leadership's goal of presenting a bill to the president before the State of the Union Address, the negotiations remain fluid and the timeline continues to shift.

Democratic leaders are skirting the traditional conference procedures to merge the bills and have resorted to closed-door meetings to finalize the differences in the bill. These negotiations have centered around increasing the threshold for the "Cadillac" tax, a national health insurance exchange vs. a state-based one and the size of federal subsidies for low income individuals. Additional sticking points include the creation of a commission to recommend Medicare cuts and costs of Medicaid expansion.

The employer mandate, which would have a major impact on construction industry employers, is another issue that remains unresolved, as well as the small-business exemption associated with it and the penalty for not following the mandate. AGC remains concerned that the Senate singled out the industry most negatively impacted by the economic downturn, construction, with the Merkley amendment (named after the Oregon Senator who sought the provision, Jeff Merkley). AGC believes the amendment, which lowers the threshold for employer mandates from 50 employees to five, was astoundingly poorly-timed. Few senators knew the amendment was in the bill, and the unions and construction associations who endorsed the amendment represent less than 15 percent of total construction employees and less than 3 percent of America's construction companies. The Merkley amendment's five employee and $250,000-threshold is out of line with the House and Senate bills passed by committees. It is also out of line with other Human Resource laws and raises concerns about the impact of government regulations on small businesses.

AGC believes the provision is a direct attack on small businesses in the industry most battered by the recession. AGC remains committed to removing the provision during the conference negotiations and encourages all AGC members to utilize the Legislative Action Center to voice their opposition to the provision to their elected officials.

Senate Democrats are in the process of assembling a "jobs bill" that will likely be ready for consideration after they finish health care reform.

Senators Dick Durbin (D-Ill.) and Byron Dorgan (D-N.D.) are writing the jobs bill after receiving over 100 job creation ideas from their colleagues and various Senate committees. Similar to the House-passed jobs bill, which included over $40 billion for infrastructure, infrastructure spending will likely be a major component of the Senate package. AGC continues to meet with Senate leaders to ensure that any infrastructure spending included in the final package is targeted to existing programs that can have an immediate impact in the construction industry.

Senate Majority Leader Harry Reid (D-Nev.) and President Obama have both indicated that they want to pursue comprehensive immigration reform in 2010. Senator Charles Schumer (D-N.Y.) and Senator Lindsey Graham (R-S.C.) are trying to craft a bipartisan measure that could be introduced in the Senate.

AGC remains very active in the early negotiations on such a bill and continues to meet with congressional staff to highlight the main interests and concerns for our industry. As a steering committee member of the Essential Worker Immigration Coalition (EWIC), AGC continues to talk with Congress about the need for workable immigration reform that includes reasonable employer enforcement, as well as a new future flow visa program that would be determined by the needs of the market instead of a random number chosen by an unelected commission.