Construction Legislative Week in Review November 11, 2010
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On the Inside
Deficit Panel Proposes AGC-Recommended 15 Cent Gas Tax Increase
Congress Begins Lame Duck Session Next Week
AGC Continues to Monitor Mid-term Election Results
Senator Proposes Bill to Reform Alaska Native Contracting
Deficit Panel Proposes AGC-Recommended 15 Cent Gas Tax Increase

On November 9, the co-chairs of the National Commission on Fiscal Responsibility and Reform laid out a preliminary proposal to cut the federal deficit by hundreds of billions of dollars.  The sweeping proposal – which has garnered opposition from liberals, labor unions and conservatives, including most members of the commission itself – includes several items related to the construction industry, including the AGC-endorsed recommendation to increase the federal gas tax.  The co-chairs and members of the commission made it clear that the proposal was just a starting point endorsed by only the co-chairs. The commission report will be official only if supported by 14 of 18 commission members.

In addition to joining other transportation stakeholders in sending a letter to the commission in support of a proposal by Senators Tom Carper (D-Del.) and George Voinovich (R-Ohio) to increase the gas tax by 25 cents, AGC sent a detailed letter to the commission recommending a 25 cent gas tax increase to be divided between deficit reduction and the Highway Trust Fund.  AGC has and will continue to meet with the members of the commission in advocating for the increase to be included in the commission’s final report, due December 1.

The draft proposal also calls for cutting billions of dollars in domestic and military spending and remaking the tax code.   Spending cuts of note to the construction industry are:  the termination of low-priority Army Corps of Engineers construction projects (beach erosion and rural water treatment program run by the Corps); cuts to the U.S. Embassy construction budget (largely in security reduction);  elimination of runway expansion and capital investment grants to large and medium-sized hub airports through the FAA’s Airport Improvement Program; and an increase in the Inland Waterways Trust Fund fuel tax to cover all costs of construction and maintenance.  The plan would also ban Congressional earmarks.

On the tax code front, the plan would end or cap a wide range of tax breaks including the deduction for home mortgage interest and dependent children.  The plan calls for a higher tax rate on capital gains and dividends while offsetting that increase by lowering individual rates.  The plan would also lower the top corporate tax rate of 35 percent to as low as 26 percent.

In an attempt to tackle the problems with Social Security, the plan calls for a gradual increase in the retirement age to 68 by 2050 and 69 by 2075, a reduction of Cost of Living Adjustments, and cutting benefits by changing the current benefit formula.  The plan also seeks to address the Medicare “Doc Fix” through various payment reforms, cost-sharing and malpractice reform.

For more information, contact Sean O’Neill at (202) 547-8892 or Return to Top

Congress Begins Lame Duck Session Next Week

Congress begins its lame duck session next week, and it will be the last chance for Democrats to push climate change, card check and immigration.  The week will include leadership elections in the House and Senate, and Congress will reassemble after Thanksgiving to finish the session. 

Legislation likely to be considered will be the Paycheck Fairness Act (which makes it easier to sue employers for discrimination based on pay disparities); Omnibus Appropriations bill(s) for fiscal 2011; extension of federal unemployment benefits; suspending cuts to Medicare reimbursement rates for physician services; extending the Bush tax cuts all or in part; extending the aviation and surface transportation programs; and potentially a vote on the debt commission recommendations (report to Congress is due Dec. 1). 

AGC will keep you posted on any legislation that is added to the agenda that will impact the construction industry.

For more information, contact Jeff Shoaf at Return to Top

AGC Continues to Monitor Mid-term Election Results

On Tuesday, AGC held a post-election conference call that reviewed the new Congress and the threats and opportunities the industry may face during the upcoming lame duck session 112th Congress.

AGC’s election Web page contains information on the impact of the election on the industry, as well as materials to help you navigate the changing political environment. The Web page also contains an audio recording of Tuesday’s conference call hosted by AGC’s chief executive officer, Steve Sandherr.

For more information, contact Jim Young at (202) 547-0133 or Return to Top

Senator Proposes Bill to Reform Alaska Native Contracting

Senator Claire McCaskill (D-Mo.), chair of the Senate Contracting Oversight Subcommittee, is pressing forward in her efforts to investigate the effectiveness of the Alaska Native Corporation (ANC) program. McCaskill has expressed on numerous occasions her concerns over the unique government contracting preferences for ANCs and will soon introduce legislation to treat ANCs equal to other small, disadvantaged businesses seeking government contracts.  Senators in Alaska are expected to strongly oppose this legislation.

If enacted, her legislation would:

  • Eliminate the ability of ANCs to receive sole-source contracts exceeding the caps applicable for other 8(a) participants of $3.5 million for services or $5.5 million for goods;
  • Eliminate the automatic designation of ANCs as socially disadvantaged business enterprises, requiring ANCs to demonstrate their social disadvantage by providing evidence of "racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups";
  • Eliminate the automatic designation of ANCs as economically disadvantaged, requiring any ANC seeking to participate in the 8(a) program to demonstrate that corporation's economic disadvantage upon entering the program;
  • Require ANCs to count all affiliates and subsidiaries in size determinations for 8(a) eligibility, which shall be limited to no longer than nine years, as is required for other 8(a) participants;
  • Require ANCs who choose to participate in the 8(a) program to own a majority interest in only one 8(a) subsidiary at any one time;
  • Require ANCs who choose to participate in the 8(a) program to be managed by individuals who qualify as socially and economically disadvantaged under the program, as other 8(a) participants must do; and
  • Prohibit ANCs who chose to participate in the 8(a) program from operating as pass-throughs to non-Native companies that do not qualify under the 8(a) program.

Following an investigative series published by the Washington Post in October, Senator McCaskill also called on the Small Business Administration's inspector general, the agency's independent auditor, to investigate the claims made in the articles and asked that the inspector general report back to Congress and if necessary, refer its findings to the Department of Justice.

AGC is currently conducting a review of this legislation and its potential impact on government contracting.

To view of copy of Senator McCaskill’s letter to the SBA IG, click here.  To view a summary of Senator McCaskill’s proposed legislation, click here.

For more information, please contact Marco Giamberardino at (703) 837-5325 or Return to Top

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