Construction Legislative Week in Review
www.agc.orgDecember 17, 2009
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On the Inside
HEALTH CARE
Health Care Tightrope—Final Deal Among Democrats Elusive as Deadline Looms
JOBS BILL
House Passes “Jobs” Bill with Infrastructure Funding
HIGHWAY
Highway and Transit Program Extension
ENVIRONMENT
Clean Water Act Jurisdiction Expansion Bill Receives National Attention
U.N. Climate Talks Falter, Agreement Uncertain
Resolutions Introduced to Reverse U.S. EPA’s Endangerment Finding
IMMIGRATION
House Democrats Introduce Immigration Reform Bill
Legislation to Change the H2B Visa Program Introduced
TAX
Congress Set to Adjourn Without Extending Expiring Tax Provisions
Florida Representative Introduces Permanent Depreciation Bill
SURVEY
HEALTH CARE
Health Care Tightrope—Final Deal Among Democrats Elusive as Deadline Looms
 

Despite claims by Senator Harry Reid (D-Nev.) last week, there was no deal among democrats on comprehensive health care reform and there is still no deal in place. Senator Reid needs two things: (1) 60 senators signing a blood oath to support the package, and (2) a review by the Congressional Budget Office (CBO) confirming Sen. Reid’s claims and his cost projections. As of today there is no comprehensive deal that Democrats have coalesced around so there is no way to move to step two—getting CBO to validate the package.

Issues of Concern to AGC

In the Senate proposal the top areas of concern are the failure of the bill to reduce health care costs to employers or the federal government, the employer mandate and its per employee fee placed on firms not offering coverage, the new Medicare payroll tax, new burdensome corporate reporting requirements, the lack of any meaningful mediacl liability reform, the lack of a waiting periods (30 day period with penalties afterward) and a failure of the bill to reduce premiums for employers.

Debate Schedule

The Senate is working on the Defense Appropriations bill today that they will vote on Saturday, and will again turn to Health Care.  The goal of a pre-Christmas deadline appears in jeopardy because prior to final passage there will be three votes that will require 60 votes.  At a minimum, these votes will consume six days, followed by a vote on final passage that requires 51 votes. The first procedural vote scheduled for early Monday morning appears to be the most important at this time. If the Senate is able to pass its bill it will have to be merged with the House bill. If this is successful, Democratic leaders hope to give President Obama a bill to sign by the State of the Union Address in January.  The other possible outcome would be that the House passes the Senate bill without amendment.

Package in Flux

Senate Democrats are having trouble with both moderates and liberals, which resulted in an intervention by President Obama this week to urge action and ignore the nuances of the bill to enable passage.  The outstanding issues that could change up to the last minute to meet the 60 vote threshold include changes to the new taxes, new spending limits, Medicare cuts, the individual mandate and its penalties as well as controversial social issues, which include federal funding for abortions and a public option. At this time the details of the final package remain unknown.

Changes to Public Option Proposal

The Senate bill may include a system of competing national private health insurance plans to be administered by the federal Office of Personnel Management, which currently manages benefits for federal employees.  This is far from the public option that the House included in its bill (H.R. 3962) that narrowly passed in early September and Speaker Pelosi indicated that she may be able to support this alternative. 

Liberals in the Senate such as Sen. Bernie Sanders (I-Vt.) are expressing opposition to any package that does not include a public option and some House liberals say they will insist on a public option in the final bill.  It is clear at this point that even with 60 Democratic Senators there is still not enough support for a public plan and including it in the conference report could endanger the legislation. 

Abortion Issues

Abortion is another area where the Democrats are split and may end up needing something very similar to the House to pass the bill in the Senate. A last minute deal with pro life Democrats allowed the House to pass health care. Speaker Pelosi has expressed opposition to the abortion deal showing up in the final package.

Key Targets for Passage

The Senate Democrats who might help republicans block passage include: Lieberman (Conn.), Nelson (Neb.), Lincoln (Ark.), Webb (Va.), and Landrieau (La.). The only Republican Senator who signaled support for the bill during any portion of the debate is Snowe (Maine).  

Public Support for Bill Wanes

Meanwhile the more that the bill is debated the more unpopular it gets. A new WSJ/NBC News poll shows 44 percent of Americans say status quo is better than passing current proposal compared with 41 percent of Americans who said it's better to pass the plan. In early October, 45 percent of respondents preferred passing a bill, while 39 percent preferred passing no bill. Uninsured people were among those who've grown less supportive of the plan. Also, 32 percent think the President’s plan is a good idea vs. 47 percent that think it’s a bad idea. A new poll by Rasmussen shows 58 percent of Floridians opposed to current reform proposal. The Democrats are even losing their base. The politically powerful Service Employees International Union backed out of a Wednesday news conference at which it and other groups -- including the AARP -- planned to promote the bill.

For more information, contact Jim Young at (202) 547-0133 or youngj@agc.org. Return to Top

JOBS BILL
House Passes “Jobs” Bill with Infrastructure Funding
 

By a vote of 217-212 the House this week passed H.R. 2847, “Jobs for Main Street Act of 2010,” legislation intended to stimulate job growth. Included in the bill are funds for various infrastructure investments.

Funding includes:

  • $27.5 billion for highways (freight and passenger rail and port projects also eligible);
  • $8.4 billion for transit;
  • $500 million for Airport Improvement Program grants;
  • $800 million for Amtrak fleet modernization;
  • $1 billion for clean water state revolving funds;
  • $1 billion for drinking water grants;
  • $2 billion for school and public housing rehabilitation;
  • $715 million for navigation and flood control projects by the Army Corps of Engineers; and
  • $100 million in water supply projects by the Bureau of Reclamation.

The highway funds will be distributed to states by the same formula that was used to distribute stimulus funds previously provided in the American Recovery and Reinvestment Act (ARRA). States are not required to provide any matching dollars to be eligible to receive the highway funds. States would be required to have fifty percent of the funds under contract within 90 days or lose the remaining funds (to be redistributed to states that have met this requirement). The second fifty percent must be under contract within one year or be lost to other successful states. This is a far more stringent requirement than ARRA, which required funds to be “obligated” rather than under contract. These funds are provided on top of funding that comes through the traditional program. Additional Buy American requirements would be applied to highway and transit projects.

Projects funded with the clean water and drinking water grants must be under contract in eight months. All of the infrastructure spending is subject to the same Buy American requirements included in the ARRA, which AGC opposed, as well as other reporting requirements.

Although this bill is not expected to be taken up in the Senate until after the first of the year, AGC will continue to press for additional investments in infrastructure during the 111th Congress.

For more information, contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org. Return to Top

HIGHWAY
Highway and Transit Program Extension
 

The House-passed “Jobs” bill includes an extension of highway and transit program authorization through September 30, 2010, at current levels with additional Highway Trust Fund revenue to fund these programs. However, the Senate will only pass a shorter extension in the Defense Appropriations bill that will carry the program only until February 18 before adjourning for the year.

Since SAFETEA-LU expired on September 30, 2009, these programs have been extended on a short-term basis at a funding level that is significantly below the FY 2009 authorized level.  H.R. 2847 will increase funding by $10.7 billion, nearly to the FY 2009 authorized level. The bill also includes provisions to stabilize the Highway Trust Fund.  It restores $19.5 billion in interest payments foregone on the HTF’s previous cash balances, and restores authority for HTF balances to receive interest payments in the future.  A change in the way long-standing fuel tax exemptions provided to state and local governments are accounted for is projected to increase HTF balances by about $1.7 billion annually, for a total of $9.8 billion over six years. In addition, as with the stimulus dollars, the legislation waives the requirement that states provide matching revenue to receive these funds.

Since the “jobs” legislation will not be considered in the Senate until next year, another short-term extension of transportation program authorization is necessary to ensure that program funding is not cut off, and, therefore, the House also passed a sixty-day authorization and attached it to the Defense Department appropriation bill the Senate must now approve. (A separate five-day extension was also necessary to allow the Senate time to act on the sixty-day measure).

For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org. Return to Top

ENVIRONMENT
Clean Water Act Jurisdiction Expansion Bill Receives National Attention
 

Legislation that would expand the jurisdictional scope of the federal Clean Water Act beyond “navigable waters” to include all “waters of the United States”—the so-called Clean Water Restoration Act—recently has received national media attention from talk show host Glenn Beck and in a recent editorial in The Washington Times. 

AGC has been working with the Waters Advocacy Coalition (WAC) in opposition to the legislation, approved by the Senate Environment and Public Works Committee in June, because it would make all waters, regardless of size or location, subject to federal jurisdiction and require contractors to obtain Clean Water Act discharge permits (e.g., Section 404 permits).  No similar legislation has yet been introduced in the House, although the bill’s proponent, Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) is reportedly working on redrafting the bill and will seek to move the legislation next year.

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org. Return to Top

U.N. Climate Talks Falter, Agreement Uncertain
 

President Obama heads for Copenhagen, Denmark today to join other heads of state at the U.N. Climate Change Conference. Negotiators had hoped to reach a political agreement that would lead towards a legally binding agreement in 2010 to cut worldwide greenhouse gas emissions.  However, industrialized and developing countries are deadlocked over the scope of those cuts and the amount of aid industrialized nations are prepared to provide developing countries to adapt to climate change and curb their own emissions. 

U.S. Secretary of State Hillary Rodham Clinton today pledged the United States to help secure $100 billion in annual financing by 2020 to help poor countries cope with climate change in exchange for an international accord that includes emission reduction commitments from both developed and major developing countries.  Negotiators must also agree on how emission cuts made by all countries would be verified with both China and India hesitant to agree to third-party verification. 

The U.S. has proposed greenhouse gas emission cuts of about 17 percent from 2005 levels by 2020, or 3 percent below 1990 levels, and the U.S. House of Representatives passed the bill in June.  The Senate is not expected to act on the legislation until the second quarter of 2010. 

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org. Return to Top

Resolutions Introduced to Reverse U.S. EPA’s Endangerment Finding
 

Senate Energy and Natural Resources Committee ranking member Lisa Murkowski (R-Alaska) and House Energy and Commerce Committee ranking member Joe Barton (R-Texas) this week filed resolutions under the Congressional Review Act that, if passed by Congress and signed by the President, would nullify the U.S. Environmental Protection Agency’s December 7 finding that greenhouse gas emissions endanger public health and welfare.

In a floor speech Monday, Sen. Murkowski said that the endangerment finding “opens the doors to a sweeping and convoluted process” under which EPA would be required to issue economy-wide command and control regulations to control greenhouse gas emissions under the Clean Air Act.  EPA is “obligated and compelled” to regulate emissions, Murkowski said, adding that regulation under one part of the Act compels regulation under other parts of the Act.  As a result, Murkowski said that businesses would be forced to cut jobs, domestic energy production would be restricted, and housing and consumer goods would become more expensive. 

AGC issued a statement last week expressing concern about EPA’s endangerment finding on the construction industry.

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org. Return to Top

IMMIGRATION
House Democrats Introduce Immigration Reform Bill
 

On December 15, the U.S. House of Representatives introduced the first comprehensive immigration bill of this Congress. Among AGC’s concerns are the onerous employer provisions for enforcement and penalties that include debarment for federal contractors and vicarious liability for subcontractors’ hiring practices.   In addition, the bill does not provide a program to supply the U.S. economy with the workers it needs as the country begins to recover from the downturn and grow in the years ahead. 

The Senate is expected to release an outline of a comprehensive immigration reform bill in early 2010.  Unlike the House, the Senate has been engaged with the business community, especially the construction industry, during the drafting process. 

AGC supports a workable immigration reform, including reasonable employer enforcement, as well as a new future flow visa program that would be determined by the needs of the market instead of providing an arbitrary number of visas chosen by an unelected commission. 

For more information, contact Kelly Knott at (202) 547-4685 or knottk@agc.org. Return to Top

Legislation to Change the H2B Visa Program Introduced
 

This week, Congressman George Miller (D-Ga.) and Congresswoman Zoe Lofgren (D-Calif.) introduced legislation to change the H2B Visa program. Only 66,000 H2B visas, shared among numerous industries, are allowed each year, and it is currently the only visa available to the construction industry to bring in workers from outside the United States.  Although the need for the visas has diminished with the current economic climate in the construction industry, the program needs relief from the statutory cap to meet the industry’s needs when it recovers.

Previous drafts of the bill would complicate the ability of the construction industry to qualify for H2B visas by: forcing companies to register with the Department of Labor and employees to prove the seasonal nature of the job they are seeking; basing participation on 12 month unemployment numbers; requiring written certification from labor unions that there are not sufficient U.S. workers available; limiting participation to the subcontractor; and, a myriad of new labor requirements. 

AGC hopes the legislation can be amended and will continue to advocate for expansion the H2B visa program for construction companies.

For more information, contact Kelly Knott at (202) 547-4685 or knottk@agc.org. Return to Top

TAX
Congress Set to Adjourn Without Extending Expiring Tax Provisions
 

Congress is set to adjourn the first session of the 111th Congress without enacting legislation to extend several expiring tax provisions through 2010, including the estate tax.  To prevent the tax from expiring, Senate Democratic leaders this week sought add a two-month extension of the current 2009 estate tax law to the must-pass Department of Defense spending bill until lawmakers can address the issue, but the plan was rejected by senators on both sides of the aisle.

Without Congressional action, the estate tax is scheduled to drop to zero in 2010, only to be reinstated at a higher 55 percent tax rate and $1 million exemption in 2011.  On December 3, the U.S. House of Representatives passed a bill that would make permanent the 2009 estate tax rate of 45 percent and tax exemption levels of $3.5 million for singles and $7 million for couples.  AGC supports a permanent solution to the estate tax at the lowest possible tax rate and highest possible exemption levels.

Congress will also adjourn for the year without having enacted a bill, passed by the House on December 9, that would extend expiring tax provisions, including several provisions that would benefit the construction industry. 

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org. Return to Top

Florida Representative Introduces Permanent Depreciation Bill
 

Representative Kendrick Meek (D-Fla.) Monday introduced H.R. 4306 to permanently extend the 15-year recovery period for qualified leasehold improvement, restaurant and retail improvement property.  Tax provisions shortening the cost recovery period for these improvements from 39 to 15 years is set to expire at the end of 2009. 

On December 9, the U.S. House of Representatives passed H.R. 4213, the Tax Extenders Act of 2009, which would extend the shortened recovery period through 2010.  However, the Senate is not expected to take up the measure until 2010.  Regardless of date of enactment, Congress will likely make the provisions effective on January 1, 2010. 

AGC called on Congress to enact a permanent extension of the 15-year recovery period in its Build Now for the Future: A Blueprint for Economic Growth.  AGC is working with a coalition of restaurant, retail and development stakeholders in support of this issue. 

For more information, contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org. Return to Top

SURVEY

 

AGC is conducting a survey on construction hiring and business plans for 2010. Please click here to take the survey, which asks about hiring, business and purchasing experiences from this year and expectations for next year.

In January, AGC will release the results of the survey in a 2010 Construction Hiring and Business Forecast, and will make the results available to all AGC members and Chapters.

For more information, contact Brian Turmail at (703) 837-5310 or turmailb@agc.org. Return to Top

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