The Senate yesterday passed Majority Leader Reid's version of an initial jobs bill by a vote of 70 to 28.  Earlier in the week, an important cloture vote was approved when five Republican senators joined 57 Democrats to allow consideration of the legislation to move forward.

The Senate bill contains the following provisions:

• Extends highway program authorization through December 31, 2010 at current funding levels.
• Provides additional revenue to keep the Highway Trust Fund solvent through the first quarter of 2011.
• Restores highway spending authority that was cut on September 30, 2009 due to a budget rescission in SAFETEA-LU.
• Allows public bodies to convert tax credit bonds to Build America Bonds.
• Exempts workers hired in 2010 that have been unemployed for at least 60 days from Social Security payroll taxes.
• Extends 2008 and 2009 section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures in 2010 in lieu of depreciating those costs over time.

Action on the bill now moves to the House. The fiscally conservative Blue Dog Democrats have raised concerns that other elements of the bill violate the House statutory PAYGO budget rules which require an offset for any additional spending. In addition, House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) has objected to the formulas used in the Senate bill to distribute the highway funding. While these issues are of concern to the House leadership, there is recognition that highway program authorization expires on Sunday, February 28, and some form of extension is needed. Therefore, they are considering a two to four week stop gap extension of the highway and transit programs packaged with an extension of unemployment insurance and COBRA subsidies.

In addition, the House leadership is concerned that changing the bill will require additional Senate action, which is not assured. After action is completed on this legislation, Majority Leader Reid intends to press for additional jobs related legislation, including additional funding for various infrastructure programs. The original House jobs bill included increased infrastructure funding.

Today's nationally-televised health care summit, as well as upcoming November elections, have renewed the urgency for a health care reform bill, despite problems reconciling the House- and Senate-passed versions. The summit included leaders of both parties and the White House.

In the days leading up to the summit, several Democratic senators explored using the partisan reconciliation process to pass reform that includes a public option against the desire of moderates in their party. While the president did release an outline of his own plan this week, it remains uncertain if Democrats will have an official agreement or if the Republicans will make significant contributions to the process.

The president's proposal attempts to bridge the gap between the House and Senate and the summary released outlines some changes to the employer mandate provisions.  The proposal:

•  Continues to cost about one trillion dollars.
• Requires employers to help defray the cost of coverage for their employees who receive tax subsidies to purchase health coverage on their own.
• Changes the transition to the employer responsibility policy for employers with 50 or more workers by subtracting out the first 30 workers from the payment calculation (e.g., a firm with 51 workers that does not offer coverage will pay an amount equal to 51 minus 30, or 21 times the applicable per employee payment amount).
• Changes the applicable payment for firms that do not offer coverage and have more than 50 employees to $2,000, one-third less than the average House assessment for a typical firm and less than half of the average employer contribution to health insurance in 2009.  (A significant note to the construction industry is the proposal applies the same firm-size threshold across the board to all industries, unlike the Senate version that singled out the construction industry.)
• Fully eliminates the assessment for workers in a waiting period, while maintaining the 90-day limit on the length of any waiting period beginning in 2014.

The Senate is expected to extend unemployment insurance and COBRA benefits later this week.

The House Transportation and Infrastructure Committee has held 14 hearings to date on the progress of the American Recovery and Reinvestment Act (ARRA), and the latest hearing Tuesday dealt with the first full year of the program. According to the Committee, the ARRA has resulted in 10,348 highway, transit and wastewater projects breaking ground, creating or sustaining nearly 300,000 direct jobs and 938,000 indirect jobs, while 5,700 more projects are in the works. Additionally, the Recovery Act is helping improve to 24,000 miles of roads and 1,100 bridges. Finally, 77 percent of the stimulus' formula-based road and transit spending, or $26.4 billion, has been put out to bid by state officials.

The Committee's analysis of the job creation from the ARRA validated that infrastructure investment is a significant job creator. AGC was also encouraged by the Committee's call for further investment in infrastructure as a means for job creation. Other issues from the hearing included the recent TIGER grant awards, small business and minority/women contractor participation in Recovery Act contracts, and implementation of Buy American provisions.

Sharp criticism from both parties was leveled at the Obama Administration's plans to cut the budget for the U.S. Army Corps of Engineers in a hearing yesterday before the House Energy and Water Appropriations Subcommittee. The Army Corps would receive $4.9 billion under the president's fiscal 2011 budget request, down from the $5.4 billion appropriated for the agency in the current fiscal year.

The budget request slashes the investigation account, which funds project studies, from $162 million this year to $104 million in 2011. The proposal also cuts $39 million in funds for operating and maintaining existing projects, suggesting $2.4 billion for the account next year. In addition, the construction budget would drop to $1.7 billion, compared with $2 billion awarded by Congress for this fiscal year.

Rep. Ed Pastor (D-Ariz.), Energy and Water Development Subcommittee Chairman, said his staff estimated those cuts would result in the loss of more than 350 ongoing studies or projects. Rep. Zach Wamp (R-Tenn.) also expressed concern that the cuts to the construction and operations and maintenance accounts could result in shutdowns of key waterways like the Tennessee River. Lt. Gen. Robert Van Antwerp, the Corps' Chief of Engineers, said that many of the nation's locks are old — the average is 58 years of service — and that the Corps recognizes that the key to keeping them operating is good maintenance.

AGC believes that in order to complete ongoing infrastructure projects in a timely and efficient manner and to save future costly repairs by adequately addressing the existing backlog of critical deferred maintenance, funding for the Corps of Engineers Civil Works budget must increase to at least $7.0 billion for FY 2011.

U.S. Senators Ron Wyden (D-Ore.) and Judd Gregg (R-N.H.) this week introduced the "Bipartisan Tax Fairness and Simplification Act of 2010" in an effort to reduce the tax burden on middle-class families and American businesses, while eliminating "many of the tax expenditures that benefit narrow special interests."  The Wyden-Gregg proposal would eliminate the Alternative Minimum Tax and reduce the number of individual tax brackets from six to three: 15 percent, 25 percent, and 35 percent. 

The standard tax deduction would be tripled for low- and middle-class taxpayers, and taxpayers would be able to file a simplified one-page 1040 form.  For business, the Wyden-Gregg proposal would reduce the top corporate tax rate and replace the existing six corporate rates and eight brackets with a single flat rate of 24 percent.  The proposal would also allow small businesses with gross annual receipts of up to $1 million to be able to expense permanently all equipment and inventory costs in a single year. 

The 2001 and 2003 Bush-era tax cuts are set to expire at the end of 2010.  The Obama administration has generally proposed extending the tax cuts for low- and middle-income tax payers.

Senate Majority Leader Harry Reid (D-Nev.) Wednesday proposed legislative language for a new package of tax extenders and long-term extensions of expiring laws as part of the Senate Democratic leadership's jobs creation agenda.  The "American Workers, State, and Business Relief Act" would extend nearly $30 billion in expired tax provisions through 2010, including several that could benefit the construction industry, such as the 15-year shortened cost recovery period for leasehold, retail, and restaurant improvements and restaurant new construction.  The measure would also include long sought after funding relief for multiemployer pension plans that would allow plans a longer 30-year amortization of investment losses incurred in 2008 and/or 2009. 

Senator Reid plans to take up the bill as early as next week.

Despite the urging of the White House, the U.S. Congress is still struggling to pass a comprehensive climate and energy bill.  The House of Representatives passed a bill by a narrow vote in the summer of 2009; however, the Senate, unable to find backing for specific draft bills, has moved full debate on climate and energy to early spring 2010.  Work continues on a Senate bill, and Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) are said to be close to unveiling another draft bill. As Congress works, the U.S. Environmental Protection Agency (EPA) is pushing forward with its own regulation of greenhouse gas emissions from mobile and stationary sources under the Clean Air Act.  This is prompting sharp criticism from legislators in search of more time to debate the most appropriate course of action.  In both houses of Congress, movements that seek to stop or delay EPA action are gaining support. 

Senator Lisa Murkowski (R-Ala.) intends to introduce for vote in mid-March a resolution to overturn EPA's December 2009 endangerment finding that opened the door for regulation under the Clean Air Act.  Senator Jay Rockefeller (D-W.Va.) is writing a bill that would delay EPA action for a few years and Rep. Earl Pomeroy (D-N.D.) has introduced a bill in the House of Representatives to remove EPA's authority to regulate greenhouse gases.  Three more representatives (Collin Peterson (D-Minn.), Ike Skelton (D-Missouri) and Jo Ann Emerson (R-Missouri)) also introduced a bill to block EPA.  In addition, states and interest groups are choosing sides in support of or to challenge the EPA endangerment finding in the courts. AGC supports recent congressional initiatives to halt regulation under the Clean Air Act.  Congress requires time and data to ensure that any efforts to reduce greenhouse gas emissions also work to strengthen the economy through: 1) increasing the energy efficiency of our infrastructure; and 2) increasing the nation's energy security by building diversified and lower-emitting sources.

Despite problems thus far to deliver a health care reform bill to the president, Congressional Democrats remain committed to reconciling differences between the House- and Senate-passed versions, and may have an agreement soon. With a nationally-televised health care summit scheduled next week and November elections approaching, discussions and urgency has been renewed. The summit will include leaders of both parties and the White House.

As leaders prepare for the summit, several Democratic senators are exploring using the partisan reconciliation process to pass reform that includes a public option, against the desire of moderates in their party. It remains uncertain if Democrats will have an official agreement next week, if the president will present his own plan for reform, or if the Republicans will make significant contributions to the process.  Other issues that must be addressed include extension of unemployment insurance and COBRA benefits.

Next Monday, the Senate will hold a cloture vote on whether to allow debate to proceed on the Reid substitute for the so-called "jobs" legislation. Senate Majority Leader Harry Reid (D-Nev.) decided to abandon a bipartisan "jobs" package negotiated by Senators Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa).

Instead, Reid has put forward a scaled back version that would:

• Extend highway program authorization through December 31, 2010 at current funding levels.
• Provide additional revenue to keep the Highway Trust Fund solvent through the first quarter of 2011.
• Restore highway spending authority that was cut on September 30, 2009, due to a budget rescission in SAFETEA-LU.
• Exempt workers hired in 2010 that have been unemployed for at least 60 days from Social Security payroll taxes.
• Allow public bodies to convert tax credit bonds to Build America Bonds.
• Extend 2008 and 2009 section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures in 2010 in lieu of depreciating those costs over time.

Unlike the House "jobs" legislation, neither Senate versions contain additional infrastructure funding, although there have been discussions about moving additional "Jobs" legislation in the future.   AGC has been visiting Senate offices urging support for cloture and for final passage of the bill. If you have not yet done so, please call your Senators and tell them the following:

• Please vote for cloture to allow consideration of the "jobs" bill to proceed and vote in favor of final passage of the bill.
• Failure to approve this legislation by February 28 could result in our state losing millions in highway funding, undermine our state's ability to reimburse contractors for ongoing contracts, stall future contract lettings and undermine the outlook for reauthorization of the federal aid highway program.
• Build America Bonds have allowed states and local governments to pay for vital infrastructure like schools, water projects, port expansions  and transportation projects that also create jobs.
• With the unemployment rate in the construction industry at nearly 25 percent, a disruption in highway and other infrastructure funding and will make this situation worse. This legislation is necessary to save construction jobs and will lead to more hiring.

On Wednesday, AGC pushed for infrastructure funding during a media call with Senator Barbara Boxer (D-Calif.).  Read more here.

President Obama marked the one year anniversary of the signing of the American Recovery and Reinvestment Act on Wednesday with AGC member Chuck Niederriter (Golden Triangle Construction, Imperial, Pa.) by his side. Thanks to the stimulus, Golden Triangle is hiring more than 100 employees this spring and will order new equipment, creating more jobs.

The administration came to AGC for a construction contractor who has benefited from the stimulus to be a part of today's White House event. During his remarks, President Obama announced, "If you don't think the stimulus is working, talk to Chuck."

Watch part of the event here, or read Bloomberg's coverage. Obama and Biden's remarks are available here.

Niederriter, president of Constructors Association of Western Pennsylvania, participated in AGC's media conference call to announce anew analysis of stimulus data that shows the program is delivering more jobs than initially estimated.