October 9, 2008
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Congress Adjourns—No Stimulus Package
Preparing for SAFETEA-LU Reauthorization; Educating Candidates and Elected Officials
President Signs Economic Recovery Package
E-Verify Program Extended Until March
Election Preview (25 Days Remaining)

  Congress Adjourns—No Stimulus Package

Despite AGC's success in getting the House and Senate to finally draft stimulus bills with infrastructure investment, the 110th Congress adjourned on October 3 without passing stimulus legislation.   AGC worked over the past year to convince Congress and the White House to include construction investment programs in any economic stimulus proposals by meeting with congressional leaders, writing a strong message to both the House and Senate and signing onto letters from transportation related coalitions.  Senate leadership left open the possibility of returning for a "lame duck" session following the elections, but the House did not. Depending on the economy, Speaker Pelosi has suggested that the House may return following the elections to try again to enact a stimulus bill.

In late September, the House passed an economic stimulus bill (264-158) which included approximately $34 billion for infrastructure investment, including $12.8 billion for the federal-aid highway program; $3.6 billion for transit; $600 million for airport capital improvement projects; $7.5 billion for water infrastructure; $5 billion for the U.S. Army Corps of Engineers; $3 billion for public school reconstruction; $500 million for Amtrak; and $1 billion for public housing construction.

The Senate also took up an economic stimulus bill which would have provided about $25 billion in infrastructure spending. Proposed spending items included $8 billion for the highway program; $2 billion for transit; $400 million for airport capital improvement projects; $500 million for the U.S. Army Corps of Engineers; $600 million for wastewater infrastructure; $800 million for rural facilities construction; $350 million for Amtrak; $2 billion for public school reconstruction; and $770 million for federal building and facilities construction. The Senate bill failed on a procedural vote (52-42).

Congress also failed to enact an appropriations bill to fund the Department of Transportation and other major federal construction programs for FY 2009. Therefore, DOT and other programs were included in a continuing resolution (CR), which provides funding at the 2008 level through March 6, 2009. The CR, which was signed into law on September 30, included three of the 12 annual appropriations measures Congress was able to complete prior to the end of the FY, including Military Construction and Veterans Affairs, Defense and Homeland Security Appropriations Acts, as well as a disaster relief package. Congress will need to take additional action before March 6 to fund federal construction programs for the remainder of FY 2009.

For more information, please contact Karen Bachman at (202) 547-4733 or bachmank@agc.org.

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  Preparing for SAFETEA-LU Reauthorization; Educating Candidates and Elected Officials

One of the major issues the 111th Congress will face in January 2009 is the reauthorization of the federal surface transportation programs. SAFETEA-LU expires on September 30, 2009 which leaves the new Congress and the new Administration only nine months in which to draft and approve legislation to carry these programs into the future. A key issue to be addressed will be how to fund highway and transit projects. With the Highway Trust Fund's balance essentially at zero, new revenue will be necessary to provide the amount of funding necessary to address current and future demands.

There will be many new members of Congress next year who will not be familiar with the Highway Trust Fund, the federal-aid Highway program, transportation infrastructure needs and the impact of transportation on America's quality of life. In order to educate Congress on the issues related to highway and transit funding, AGC worked in support of the American Highway Users Alliance to create a publication entitled “The Road to Congress.”

Copies of “The Road to Congress” have been provided to AGC Chapters and the grass roots network to share with candidates running for office and their staffs. This publication will also be useful during visits with members of Congress before the election and in the months prior to considering of the reauthorization legislation. Copies are available upon request.

For more information or to request a copy of the “Road to Congress,” contact Brian Deery at (703) 837-5319 or deeryb@agc.org. [ return to top ]

  President Signs Economic Recovery Package
On October 3, the President signed the Emergency Economic Stabilization Act (EESA) of 2008. Members led the charge and AGC was one of the first business groups to become engaged in the debate. AGC greatly appreciates its members' 4,000 letters and unknown number of phone calls in support of this legislation. To view how your legislator voted, enter your zip code here.

The package includes financial-market rescue provisions, an increase in FDIC insurance coverage, an extension of numerous expiring business and energy tax provisions, alternative minimum tax relief and disaster assistance.

Highlights of the rescue package:
• Stabilizing the Economy: EESA provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets affecting the balance sheets of financial institutions and making it difficult for families and businesses to access credit.  EESA also establishes a program that would allow companies to insure their troubled assets.
• Homeownership Preservation: EESA requires the Treasury to modify troubled loans wherever possible to help families keep their homes.  It also directs other federal agencies to modify loans that they own or control, and improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.
• Taxpayer Protection: EESA requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth in these companies as a result of participation in this program.  The bill also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program from financial institutions.
• Mark-to-Market Accounting: Mark-to-market accounting requires financial institutions to value securities on their books at current market prices. A provision gives the Securities and Exchange Commission (SEC) the authority to suspend mark-to-market accounting for any type of security, but doesn't require the agency to act.
• No Windfall for Executives: In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay.  In addition, the bill limits "golden parachutes" and requires that unearned bonuses be returned. 
• Strong Oversight: Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, and then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional approval). The Treasury must report on the use of funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner.  It also establishes a special inspector general to protect against waste, fraud and abuse.
• Temporary Increase in Deposit and Credit Union Share Insurance Coverage: The provision increases the maximum amount of FDIC deposit insurance coverage from $100,000 to $250,000 per account, and provides the same increase for credit union deposits. The changes are effective upon enhancement and expire on December 31, 2009.

Highlights of the tax provisions:
• 15-year Depreciation on Qualified Leasehold, Restaurant, and Retail Improvements: The proposal would extend the provision to the end of 2009 and allows retail owners and new restaurants to receive the shortened recovery period for 2009 only. The extension is effective for property placed in service after December 31, 2007. The allowance of the 15-year depreciation to retail and new restaurants is effective for property placed in service after December 31, 2008.
• Production Tax Credit for Alternative Energy Investments: The bill extends the placed-in-service date for the Section 45 credit through December 31, 2009 in the case of wind and refined coal, and through December 31, 2010 in the case of other sources. The bill expands the types of facilities qualifying for the credit to new biomass facilities and to those that generate electricity from marine renewables (e.g., waves and tides). The bill extends and expands credits and depreciation deductions for biodiesel production, refineries and energy-efficient buildings.
• Targeted Relief for Investments in Real and Personal Property: The bill extends and adds provisions for investments in brownfields, disaster areas, and other designated locations.

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

  E-Verify Program Extended Until March
A continuing resolution signed into law September 30 funds the federal government through March 6, 2009 and includes a provision that extends the Department of Homeland Security’s E-Verify program. The E-Verify program offers employers an online tool to verify the legal status of workers and remains voluntary for new hires. AGC supported a 5-year extension of E-Verify, but is concerned about the accuracy and reliability of the program.  The extension prevents the program from expiring.

The extension passed as a stand alone bill in the House only to fail to receive consideration in the Senate. Congress will need to address the short-tem extension early next year and it will likely become the launch pad for additional immigration reform debates.

States may address the short-term extension by passing mandatory employment verification laws early next year. States that pass separate verification laws will negatively impact employers working in multiple states. AGC continues to advocate for comprehensive immigration reform, which would include federal preemption of immigration laws. Immigration is a federal issue and federal legislation must preempt the patchwork of conflicting and onerous state and local ordinances that have been and may be enacted.

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

  Election Preview (25 Days Remaining)
Regarding the presidential race, pundits are pretty clear about the uphill battle McCain faces.  Charlie Cook, publisher of the Cook Report summed it up as follows: “Since early September this race has shifted rather dramatically in Obama's favor. As long as the focus is almost exclusively on the economy, this race is almost unwinnable for McCain. It would take a major external event, the proverbial October Surprise, to shift the spotlight to national security or some other subject that would allow McCain to highlight his strengths.”  As of October 8, all major national polls on average show Obama up 5.6%.

This proverbial Obama bounce is giving the Democrats confidence down ticket as well, to the point they are now targeting several once-safe Republican Senators.  Democratic challengers are beginning to make up ground in Georgia, North Carolina and Kentucky.  The survival of Republican incumbents might just depend on how the economy reacts over the coming 3 ½ weeks. In the House, the big national indicators such as voter anger and the economy make it all the more possible for Democrats to take 20 seats or more.

AGC member contractors are encoruaged to vote to help elect pro-construction candidates.  Ensure voter registration is complete, request an absentee ballot and confirm polling locations. For all the necessary voting and registration deadline details visit www.agc.org/vote

For more information, contact Elisa Brewer Pratt at (202) 547-5013 or brewere@agc.org. [ return to top ]