September 25, 2008
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ECONOMY
Contractors Call For Prompt Action On Financial Rescue Plan
Democrats Consider Adding Infrastructure Funding in Stimulus Package
Today Senate Democrats Unveil Economic Stimulus Plan with Infrastructure Component
Short Term FAA Extension Passes
TAXES
Congress Continues to Spar Over Taxes
APPROPRIATIONS
Continuing Resolution Keeps Federal Programs Afloat

  Contractors Call For Prompt Action On Financial Rescue Plan
Yesterday AGC issued the following statement on the financial industry rescue package.

CONTRACTORS CALL FOR PROMPT ACTION ON FINANCIAL RESCUE PLAN

Washington, D.C. – The Associated General Contractors of America (AGC), the nation’s largest commercial construction association, today called on Congress to take swift and decisive action to pass the financial industry rescue package.

“While there may not be a perfect solution to this complex crisis, a failure to buttress financial markets will lead to a credit freeze that will cause the cancellation of construction projects, bankruptcy of construction firms and unemployment of construction workers,” stated AGC’s Chief Executive Officer Stephen E. Sandherr.  “The availability of credit to finance worthy construction projects is the lifeblood of the commercial construction industry,” Sandherr noted.

The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 33,000 firms, including 7,500 of America’s leading general contractors, and over 12,500 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters.  Visit the AGC Web site at www.agc.org.

The analysis in Washington, D.C. is that the bill is critical to ensuring there is liquidity in the markets that provide financing to construction companies and those who hire construction companies.

Please use this opportunity to contact your Representative and Senators regarding this important legislation.  You can send a letter from AGC’s Legislative Action Center.

For more information, contact Jeff Shoaf at (703) 837-3350 or shoafj@agc.org. [ return to top ]

  Democrats Consider Adding Infrastructure Funding in Stimulus Package
House and Senate Democrats are advocating for a second economic stimulus bill, and infrastructure funding - including highway funding - is being discussed.  AGC met with Hill leaders and has sent a letter to the Hill detailing the job creation benefits that result from infrastructure funding.

The letter also explains that rising construction material prices and inadequate state budgets have resulted in fewer public works projects going out for bid.  In the case of highway projects, AGC pointed out that state transportation departments have responded to an American Association of State Highway and Transportation Officials (AASHTO) survey indicating that over 3,000 highway contracts could go out to bid within 90 days if additional federal funds were made available.

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

  Today Senate Democrats Unveil Economic Stimulus Plan with Infrastructure Component
Senate Majority Leader Harry Reid (D-Nev.) and Appropriations Committee Chairman Robert Byrd (D-W.V.) today unveiled details of a $56.2 billion economic stimulus package.  The package would include about $16 billion in infrastructure investment.  It is uncertain at this time whether the Senate will consider the Democratic proposal.  AGC supports the construction components of the stimulus bill.

Below are the highlights:
• Corps of Engineers.  The second stimulus includes $500 million, of which $200 million is directed for the rehabilitation of Corps’ hydropower plants nearing the end of their design life.  $100 million in funding is included for dredging of channels and to partially address the backlog of construction work at Corps of Engineers, flood control, environmental restoration, and navigation projects nationwide.  An additional $200 million for the Corps will be used to fund work that can be immediately awarded to provide jobs in the construction industry across the country.
• Bureau of Reclamation Energy Stimulus Work.  $50 million for the rehabilitation of some Bureau of Reclamation hydropower plants that are nearing the end of their design life. 
• The bill includes $600 million for the Environmental Protection Agency's (EPA) Clean Water State Revolving Fund, which provides funding to States for low-cost loans to make local sewer projects affordable.
• Rural Utilities & Community Facilities. The stimulus includes $792 million in loans and grants for essential rural community facilities, including hospitals, health clinics, health and safety vehicles and equipment, public buildings, and child and elder care facilities.  The bill includes $200 million in budget authority that will support over $500 million in loans and grants for needed water and waste disposal facilities in remote rural areas. 
• Additional Highway Funding. The Committee bill includes $8 billion for highway investments.  Funding from the general fund would be sent by formula to every State in order to improve deficient roads and bridges. 
• Public Transportation. The bill includes $2 billion for transit agencies to address capital and operating needs.
• Investing in Amtrak. The bill includes $350 million to fund capital projects along Amtrak’s corridors, including funding to rehabilitate inactive rolling stock. 
• Airport Investments.  The Committee bill includes $400 million for capital improvements to airports across the country.  These funds would support projects that are ready to begin construction immediately.
• Funding for Small Shipyards.  The bill includes $44 million for grants to assist small shipyards across the country and make the capital improvements necessary to fortify the competitiveness of our domestic shipbuilding industry by improving its efficiency, cost effectiveness, and the quality of domestic ship construction for commercial and Federal Government use.   
• Economic Development Administration (EDA) Economic Adjustment Assistance.  The bill includes $50 million for EDA economic adjustment grants to assist communities to recover from sudden and severe economic dislocation and massive job losses due to corporate restructuring. 
• School Repair and Renovation.  The stimulus includes $2 billion for an emergency public school renovation and repair program.
• Customs and Border Protection (CBP). The bill provides $100 million to U.S. Customs and Border Protection for construction at CBP-owned inspection facilities at land border ports of entry.
• General Services Administration. The stimulus also includes $201 million for construction and repair/alteration of border stations (land ports of entry) to help address the backlog of these facilities.
• Consolidating Department of Homeland Security (DHS) Headquarters. The stimulus includes $466 million for DHS to begin construction of a consolidated headquarters in Washington, D.C. 

For more information, contact Karen Bachman at (202) 547-4733 or bachmank@agc.org. [ return to top ]

  Short Term FAA Extension Passes
Both the House and Senate took action Tuesday approving legislation extending for six months authority for Federal Aviation Administration (FAA) programs and the aviation taxes to pay for them.  The President is expected to sign the bill. 

This action was necessary because Congress has been unable to pass an FAA reauthorization bill that has been under discussion for the past year.  The 111th Congress must now take up FAA reauthorization next year.  Both House and Senate committees of jurisdiction expressed the desire to complete action on the FAA bill before turning to the highway and transit reauthorization bill next year.

For more information, contact Karen Bachman at (202) 547-4733 or bachmank@agc.org. [ return to top ]

  Congress Continues to Spar Over Taxes
The two sides of the Capitol continued to argue this week about taxes, including extending the alternative minimum tax relief for one more year, and extending a variety of business and individual tax breaks for one or two years.  While the Senate was able to overwhelmingly pass comprehensive legislation to provide relief for these and disaster relief in one bill, the House has continued to disagree about how much of the legislation must be “paid for” by other tax increases. 

The House separated the issues into several bills, and passed AMT and disaster relief which are similar to the Senate proposal.  However, the House today passed out a package of business extenders which will be opposed in the Senate. This ping-ponging of legislation leaves the fate of all tax provisions unclear, particularly due to the few days remaining of this Congress.

For more information, contact Heidi Blumenthal at (202) 547-8892 or blumenthalh@agc.org. [ return to top ]

  Continuing Resolution Keeps Federal Programs Afloat
By a vote of 372-56, the House of Representatives Wednesday passed a continuing resolution (CR) to provide partial funds for fiscal year 2009 for those federal programs for which a free standing appropriations bill had not been passed, including the Department of Transportation. The bill is part of a package that also includes three of the 12 annual appropriations measures Congress was able to complete prior to the end of the fiscal year, including Military Construction and Veterans Affairs, Defense, and Homeland Security Appropriations Acts for fiscal year 2009, as well as a disaster relief package. Fiscal Year 2009 begins on October 1, 2008 and the CR provides funds from October 1 through March 6, 2009.  Under the terms of the CR, programs will be funded at their FY 2008 level.  The Senate is expected to pass the measure by the end of the week. 

Highlights affecting AGC members are detailed below.

Highway
The FY 2008 funding level for the federal-aid highway program is $41.216 billion and includes $1 billion above the SAFETEA-LU authorized level for a bridge repair initiative.  It is anticipated that the additional $1 billion will not be included in this CR's partial funding, and therefore, the highway program will receive a prorated share of $40.2 billion through March 6.

Disaster Assistance
• Disaster Relief Fund: $7.9 billion, to ensure that the Federal Emergency Management Agency can continue helping communities recover from recent disasters and ensure that they have the resources necessary to respond to future disasters.
• Community Development Block Grants: $6.5 billion, providing communities with flexible grants for efforts to help them recover from disasters, including providing temporary housing, repairing and replacing damaged homes and public infrastructure, and for economic development activities.
• Social Services Block Grants: $600 million, to provide states with flexible sources of funding to address emerging needs in the wake of disasters ranging from food assistance to urgent healthcare needs.
• Emergency Highway Relief: $850 million, to the Federal Highway Administration to help states repair roads and bridges damaged by disasters.
• New Orleans Levees: $1.5 billion, to allow the greater New Orleans area to pay the local cost share of hurricane and storm damage reduction projects over a 30-year period and ensure work is done by 2011.
• Army Corps of Engineers: $1.3 billion, to repair damage to infrastructure caused by disasters including the Midwest floods and hurricanes, protecting citizens across the country.

FY 2009 Defense Appropriations
The bill makes critical investments into the health, well-being and readiness of our forces. These recommendations address issues raised by troops, their families and Department of Defense officials in testimony before the Congress, and discovered through visits to military bases across the United States and overseas.
Bill Total Discretionary
• 2008 Enacted: $459.3 billion
• President’s Request: $491.7 billion
• Final Bill: $487.7 billion

Highlights:
• Barracks and Military Hospitals: $3 billion, $734 million above the President’s request to improve army barracks, military hospitals, and other facilities.

FY 2009 Military Construction/VA Appropriations
The Military Construction and Veterans Affairs bill addresses the critical needs facing veterans’ medical care as soldiers return from Iraq and Afghanistan.
Bill Total
• 2008 Enacted: $63.9 billion
• President’s Request: $69.3 billion
• Final Bill: $72.9 billion

Highlights:
MILITARY CONSTRUCTION: $25 billion, $649 million above the President’s request and $4.4 billion above 2008. The large increase is mostly due to the costs of implementing Base Realignment and Closure (BRAC) and plans to increase the size of the Army and Marine Corps, including:
• Quality of Life Initiative: $233 million, not requested by the President, to continue a quality of life initiative for troops and their families started in the 2008 supplemental, including: $122 million for three new trainee and recruit housing facilities for the Army and Marine Corps to improve the barracks soldiers and marines live in when they train; and $111 million for medical military construction and planning activities to upgrade substandard medical treatment facilities. For years, service members and their families have said that quality of life issues are their top priority, but they have been neglected by this Administration.
• 2005 Base Realignment and Closure (BRAC) and Re-stationing: $8.8 billion, $667 million above 2008, to implement base closures and realignments, and support the re-stationing of 70,000 troops and their families from overseas to the United States. The bill also funds planning for the eventual relocation of 8,000 marines and 9,000 dependents from Okinawa to Guam.
• Growing the Force: $5.5 billion in military construction and family housing, to support the Administration’s program to increase the size of the Army by 65,000, the Marine Corps by 27,000, and the Guard and Reserve by 9,200 personnel.
• BRAC 1990: $458 million, $163 million above 2008 and $65 million above the President’s request, to address an estimated $3.5 billion backlog in needed environmental cleanup for bases that were closed during the four previous BRAC rounds as identified in the most recent Defense Environmental Programs Annual Report.
• Military Housing: $3.2 billion, $292 million above 2008, to further eliminate inadequate military housing.

DEPARMENT OF VETERANS AFFAIRS: $47.6 billion, $4.5 billion above 2008 and $2.8 billion over the President’s request, for veterans’ medical care, claims processors, and facility improvements.
• Medical Facilities: $5 billion, $368 million above the President’s request and $769 million above 2008, including a $300 million increase for on-going maintenance and renovations of existing facilities to address identified shortfalls and to ensure the Department’s facilities remain capable of delivering world class medicine. The Department currently estimates a maintenance backlog of over $5 billion.
• Major and Minor Construction: $1.7 billion, $754 million above the President’s request, to fund recommendations made by the Capitol Asset Realignment for Enhanced Services (CARES) Commission, which was established to look at facilities and determine their construction needs. The increase in minor construction will enable the Department to complete over 100 projects in 2009.
• Extended Care Facilities: $175 million, rejecting the President’s $80 million cut and $10 million above 2008, for grants to states for construction and renovation of extended care facilities.

FY 2009 Homeland Security Appropriations
The Homeland Security Appropriations bill addresses our nation’s more pressing security needs, including implementation of the 9/11 Act and our need to prepare for disasters of every kind. This bill rejects the President’s proposal to cut $2 billion from the homeland security grant programs that keep Americans safe, including assistance for State and local law enforcement and other emergency responders to prevent, prepare for, and respond to natural disasters, terrorist attacks, and other emergencies.
Bill Total
• 2008 Enacted: $37.67 billion
• President’s Request: $37.62 billion
• Final Bill $39.98 billion

Highlights:
• First Responder and Port Security Grant Programs: $4.2 billion, $2 billion above the President’s request and $24 million above 2008. These grants were funded at $4.8 billion in 2004, but the President succeeded in cutting them from 2005-2007, even after the 9/11 Commission Report recommended they be increased and local communities continued to see security costs rise.
• Customs and Border Protection: $9.82 billion, $334 million above the President’s request and $398 million above 2008, including:

• Border Security Fencing, Infrastructure, and Technology: $775 million, as requested by the President, including $30 million to address problems with communications interoperability at the border.
• Container Security: $404 million within CBP, which is $29 million above the request, for programs including the Secure Freight Initiative pilots and overseas container inspection programs, and $514 million for Domestic Nuclear Detection efforts.

Maritime Security, Safety and Environmental Protection
• Port Security Grants: $400 million, rejecting the President’s $190 million cut and the same as 2008, for grants to protect critical port facilities and infrastructure, as authorized in the Safe Ports Act.
• Coast Guard: $9.36 billion, $290 million above the President’s request and $729 million above 2008, including an additional: $23.5 million for additional watchstanders, marine inspection staff and environmental response; $10 million to address aviation hour and maintenance backlogs; and $97.6 million to start work on the new Coast Guard headquarters at St. Elizabeth’s.
• REAL ID: $100 million, $50 million above 2008, to help states to comply with REAL ID, which requires state licenses to meet new standards in order to be used for federal identification purposes. This includes $50 million for DHS to develop a data "hub" that links state DMVs to other record-keeping agencies to allow State governments to verify applicants' identity documents when they apply for new driver’s licenses.
• Flood Map Modernization: $220 million, $70 million above the President’s request, to update, review, and maintain flood maps used to determine rates for the National Flood Insurance Program.

Other Highlights
Offshore Drilling Ban: expires on September 30th; the White House rejected any language to provide for a responsible expansion of drilling in the OCS. All other laws and regulations concerning offshore leasing and development remain in place.
Auto Efficiency Loans: $7.5 billion to support $25 billion in loans to help American automakers to update their factories in order to build more fuel efficient cars and trucks.

For more information, please contact Marco Giamberardino at (703) 837-5325 or giamberardinom@agc.org, or Karen Bachman at (202) 547-4733 or bachmank@agc.org. [ return to top ]