The U.S. Department of Transportation announced $1.5 billion in Transportation Investment Generating Economic Recovery (TIGER) discretionary grants to 51 projects across the country. The TIGER grants program was created in the American Recovery and Reinvestment Act (ARRA), which was signed into law one year ago yesterday.

When DOT solicited applications for TIGER grants, more than 1,400 applications seeking in excess of $57 billion in funding were submitted. While ARRA did not specify the criteria to be used in selecting individual projects, it did set out some broad parameters. ARRA specified that these discretionary grants were to be awarded to state and local governments or transit agencies on a competitive basis for a variety of transportation projects that will have a significant impact on the nation, a metropolitan area or a region. Rail-related projects are the biggest winner, with $789 million of the available funds awarded to these projects. The funds remain available until September 30, 2011. The DOT 2010 appropriations bill included an additional $600 million in funds for the TIGER grant program, which have not yet been awarded.

According to the U.S. Environmental Protection Agency, most states were on target to meet Wednesdays' Recovery Act deadline for projects receiving federal assistance through the State Revolving Fund (SRF) programs.  Considering the significant lag time due to new "Buy American" requirements and other administrative issues, this is a significant accomplishment. In fact, many states have leveraged EPA dollars with additional SRF funds by a factor of 57 percent.

AGC estimates that EPA Recovery Act dollars ultimately will be leveraged nationally almost 2 to 1, yielding at least $12 billion in projects from the $6 billion allocated to the SRF's under the Recovery Act. States that have not met the February 17 deadline will ultimately lose funds not under contract.

President Obama announced $8.3 billion in federal loan guarantees to support the construction of a planned two-reactor nuclear power plant in Georgia, which would be the first new U.S. nuclear plants in more than three decades. The plant is expected to cost $14.5 billion to build and projected to be completed in 2017. Administration officials promised that more assistance is on the way. The administration has $18.5 billion available in loan guarantees for nuclear plants and the administration's FY 2011 budget request asks Congress to add an additional $36 billion to the nuclear loan guarantee program.

AGC has long supported increased domestic energy production, including nuclear energy, fossil fuels, and renewable and alternative energy sources. President Obama intends to incorporate nuclear electricity generation into his greater energy and climate change policy. He cited international competition and jobs as primary reasons for this new policy initiative.

Click here to view the full remarks by the president.

The political establishment received another surprise with Senator Evan Bayh's (D-Ind.) announcement that he would not seek reelection in November. Bayh served in the Senate for two terms and is a former governor of Indiana. Often considered a moderate and swing vote, he supported repeal of the death tax crossed the party line on other issues as well. Bayh was facing a challenge by former Senator Dan Coats (R-Ind.) in the fall election.

In addition, Representative Patrick Kennedy (D-R.I.), son of the late Senator Ted Kennedy (D-Mass.), announced that he would not seek reelection. With 257 days until the election, more retirements are expected.

On Tuesday, the Senate defeated a motion to continue debating the nomination of Craig Becker, the Associate General Counsel of the SEIU and the AFL-CIO, to a five-year term on the National Labor Relations Board (NLRB), effectively blocking his confirmation. The vote fell eight votes short of the 60 required to move the nomination to the next step. Two Democrats opposed the motion, Blanche Lincoln (D-Ark.) and Ben Nelson (D-Neb.). The newly-elected Senator from Massachusetts, Scott Brown (R) joined his Republican colleagues in opposing Becker.

AGC has opposed Becker's nomination because he has been a strong advocate of the so-called Employee Free Choice Act and is certain to push the Board to effect changes to employee rights like those attempted by the bill, even in the absence of statutory enactment. Mr. Becker has made it clear that he believes that national labor policy can and should be changed through Board decisions and he does not intend to wait for action by Congress.

The Democratic leadership and President Obama must decide how to move forward. One controversial possibility is a recess appointment, but Becker could only serve on the Board for a limited time without unanimous Senate support.

AGC members across the country responded to the call to action. AGC will update the membership on future developments.

For more information, contact Kelly Knott atknottk@agc.org.

Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) released a draft bill to address current economic conditions on February 11.  The draft Hiring Incentives to Restore Employment (HIRE) Act includes tax, pension, unemployment insurance and health care provisions. Hours later, Senate Majority Leader Harry Reid (D-Nev.) offered a scaled-down version on the Senate floor the Senate will consider on February 22, following the week-long President's Day recess.

Senators Baucus and Grassley announced the Hiring Incentives to Restore Employment (HIRE) Act on Thursday, which includes a variety of tax, pension, unemployment insurance and health care provisions aimed to create economic activity.  However, the downsized version Senator Reid put forth would only include four elements of the HIRE Act: (1) the Highway Trust Fund extension; (2) the Build America Bonds extension; (3) The Schumer-Hatch payroll tax exemption; and (4) the section 179 expensing extension.  The Reid proposal would not include the collection of expired tax provisions, pension funding relief, unemployment insurance, or heath care provisions, although Senator Reid said that these provisions may be moved at a later date.

Provisions in the Reid proposal taken from HIRE Act include the following:

Highway Trust Fund.  The provision would extend highway and transit programs through calendar year 2010, and transfers from the General Fund to the Highway Trust Fund $19.5 billion in interest foregone since 1998. Read more on the implications to the Highway Trust Fund in Action Needed to Fund Highway Programs.

Election to Convert Tax Credit Bonds to Build America Bonds.  Under current law, Congress provided tax credit bonds to qualifying issuers for certain school and energy projects.  Tax credit bonds provide the bond holder a federal tax credit in lieu of interest.  Build America Bonds provide qualifying issuers a direct payment from the Treasury for a portion of the interest paid on the bond for government works projects.  The provision would allow qualifying issuers of tax credit bonds the option of issuing tax credits bonds under current law, or utilizing the direct subsidy Build America Bond structure for bonds issued after the date of enactment.  The federal subsidy would equal 45 percent of the borrowing cost (65 percent for qualifying small issuers).

Schumer-Hatch Jobs Payroll Tax Exemption.  The provision would offer an exemption from Social Security payroll taxes for every worker hired in 2010 that has been unemployed for at least 60 days.  The maximum value would be equal to 6.2 percent of wages up to the FICA wage cap ($106,800).  There would also be an additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer's 2011 income tax return.

Extension of Section 179 Expensing.  The provision would extend 2008 and 2009 section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures (subject to a phase-out once expenditures exceed $800,000) in 2010 in lieu of depreciating those costs over time.

HIRE Act provisions not included in the pending Reid proposal are as follows:

Expiring Tax Provisions.  The draft HIRE Act would extend several tax provisions that expired at the end of 2009.  Included in these provisions is the 15-year shortened recovery period for leasehold, restaurant and retail improvements, and new restaurant construction.

Pension Funding Relief.  The provision would provide funding relief for single- and multi-employer pension plans that experienced significant losses in asset value due to the market declines beginning in 2008.  For multi-employer pension plans, the provision would allow plans to amortize 2008 loses over a 30-year period.

For more information, contact Karen Lapsevic at lapsevick@agc.org.

On February 1, President Obama unveiled his $3.8 trillion budget for fiscal year 2011. The budget projects a deficit of $1.27 trillion while placing a total freeze on non-security domestic spending.  That freeze has resulted in cutbacks in most of the key federal construction accounts.  According to AGC's analysis,  the Administration's proposed total of $112.4 billion for construction projects represents a nearly $9 billion, or 7.5 percent, decrease from the $121.5 billion appropriated for construction projects in FY 2010 (this does not include ARRA funds).

While the budget recommends a mix of increases and reductions in programs across market areas, it does recommend boosting a few construction programs (albeit very modestly) including 1 percent increases for both the highway and transit programs.  In addition, the Administration is calling for the creation of a $4 billion National Infrastructure Bank for transportation projects of regional or national significance.

In contrast, the proposed budget cuts the construction budget for the Army Corps of Engineers' Civil-Works Program from $2 billion in 2010 to $1.7 billion, a 17% decrease.  The Environmental Protection Agency budget would cut the Clean-Water State Revolving Funds by 5% to $2 billion and the Drinking Water State Revolving Funds by 7% to $1.2 billion.

The President's budget is simply a request of the Administration's priorities for the next fiscal year and the first step in the federal budget process.  AGC will continue to advocate for the increased federal investment in the nation's infrastructure and public facilities through the nearly 100 construction programs at the federal level.

A cover-page story from Engineering News Record about President Obama's 2011 budget request, quotes AGC's CEO, Steve Sandherr, talking about how the budget has a mixed outlook for construction, the positives being the President continues to see investing in infrastructure as a good way to boost the economy.  The negatives include significant cuts to the Army Corps of Engineers budget.

For a chart compiled by AGC that compares the Administration's FY 2011 budget request, click here.

For more information contact Sean O'Neill at neills@agc.org or 202-547-8892.