Senators Release Draft Hiring Incentives to Restore Employment (HIRE) Act
Senate Finance Committee Chairman Max Baucus (D-Mont.)
and Ranking Member Chuck Grassley (R-Iowa) today released a draft bill to
address current economic conditions. 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
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
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
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 firstname.lastname@example.org.
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Legislative Agenda Hit by Blizzard
Unfinished business will need to be addressed when
legislators return to Capitol Hill after the Presidents Day recess, following a
week of record snowfall in Washington, D.C.
The Senate held votes on Tuesday, but failed to move
forward on the controversial nominee, Craig Becker, to the National Labor
Relations Board. AGC had opposed this nomination due to his support of the
so-called Employee Free Choice Act. Prior to the snowfall, Senate leaders had
proposed an outline of a “jobs” bill that is based on tax incentives to
stimulate additional economic growth. However, the week of inaction has put the
tax package and infrastructure component of a jobs bill in peril.
Additionally, Congress must take action on spending bills
and extending the highway program before the end of February. AGC is advocating
crediting the Highway Trust Fund with interest owed to the program prior to
1998. Congress is also considering addressing immigration reform and
comprehensive financial regulatory reform legislation, which could impact the
availability and cost of credit to contractors and owners.
For more information, contact Jeff Shoaf at email@example.com.
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Action Needed to Fund Highway Programs
Senate leadership released a draft “jobs” bill this
week (see Senators Release Draft Hiring
Incentives to Restore Employment (HIRE) Act) that would, among other
things, help to keep highway and transit programs operating at current funding
levels through December 31, 2010, and transfers funds to keep the Highway Trust
Fund (HTF) solvent. The intent was to pass the legislation before the Senate
adjourned for the President’s Day recess next week, but due to extreme snow
conditions in Washington the Senate will have no further votes until after the
The current extension of highway and transit program
authorization expires on February 28, and because of federal budget rules it
is important that the extension and transfer of funds happen before that
deadline. Meeting this deadline will be difficult because the Senate jobs
bill, including the trust fund fix, differs in several important ways from the
House-passed bill. In addition, Senate Budget Committee Ranking Republican Judd
Gregg (N.H.) opposes the highway program extension on budgetary grounds and
will attempt to prevent the bill from moving forward.
here to view the impact by state if an extension is not adopted. If you have not yet done so, please contact
your senators, particularly Republican senators, and tell them to support an
extension of the highway and transit program with additional revenue through
the end of the year. Inform them that failure to pass the extension and the
additional program revenue will have a direct impact on FHWA’s ability to reimburse
your state DOT for ongoing construction projects and could cause your DOT to
cancel scheduled lettings. You can send a message by calling the Capitol
Hill switch board at 1-800-828-0498 and ask for your Senators’ offices, or by
following this link to AGC’s
Legislative Action Center.
The Senate “jobs” legislation has a number of
provisions that impact the highway program as follows:
- Extends authorization for the highway and transit
programs at FY 2009 funding levels though December 31, 2010;
- Provides $19.5 billion in revenue to the Highway Trust
Fund to keep the program solvent into 2011. This transfer would reimburse the
HTF for $19.5 billion in lost interest payments since 1998;
- Shifts the cost of motor fuel tax exemptions for state
and local governments from the HTF to the general fund. This would
provide ongoing HTF revenue of approximately $1.5 billion each year;
- Restores spending authority lost from an $8.7 billion
rescission of contract authority contained SAFETEA-LU.
In addition, the draft legislation extends the Build
America Bond program, which was created in the American Reinvestment and
Recovery Act (ARRA) and has successfully channeled funding to highway, transit
and other infrastructure investment.
For more information, contact Brian Deery firstname.lastname@example.org.
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Vote to Approve Pro-Card Check Nominee to NLRB Fails, AGC Members Take Action
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
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
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 email@example.com.
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New Survey Shows Possible Upswing in 2011
The results of the Blue
Chip Economic Indicators survey of private economists showed U.S.
economic growth will accelerate this quarter from the prior three months as
business investment rises and tax refunds spur consumer spending, reported Bloomberg.
This improvement in the
outlook for 2010 should help nonresidential investment in 2011, according to
AGC’s chief economist Ken Simonson. Most
survey respondents expect investment in structures to contract again this year,
BNA reported, while fixed investment will grow due to spending on equipment and
last week that federal employment figures showed that, excluding
construction job losses, nonfarm payroll employment rose for the second time in
three months. Construction, on the other hand, lost 75,000 jobs in January 2010.
The survey respondents
expect the economy to grow at 3 percent this year, as many changed their
predictions for personal income, consumer spending, business investment and
pre-tax corporate profits, BNA reported.
For more information, contact Ken Simonson
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