Construction Legislative Week in Review
www.agc.org February 10, 2011
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On the Inside
TAX
Senator Files Amendment to Repeal 3 Percent Withholding Mandate
BUDGET
House Appropriators Proceed With Funding Cuts
TRANSPORTATION
Administration to Request More High Speed Rail Investment
House Transportation & Infrastructure Committee Sets Dates for Surface Transportation Road Show
REGULATORY
House Republicans Hold Hearing on Regulatory Roadblocks
FEDERAL
Recovery Board Chairman Supports Move to Expand Reporting Requirements
CONGRESS
Retirement Announcements and Resignations Begin Just Weeks Into the New Congress
TAX
Senator Files Amendment to Repeal 3 Percent Withholding Mandate
 

Senator Olympia Snowe (R-Maine) Tuesday filed an amendment to repeal the 3 percent withholding mandate during consideration of the Airport and Airway Trust Fund Reauthorization being considered by the Senate.  While Snowe did not ask for a vote on the amendment, she did make a statement to bring the issue to the attention of the committee and asked that the committee consider it soon.

In response, Chairman Max Baucus (D-Mont.) agreed that the Committee should take a closer look at the issues raised by 3 percent withholding and hinted at a hearing in the near future.  Baucus also called for a Government Accountability Office (GAO) study on the impact of the law on business and government. He also urged Congress’ Joint Committee on Taxation to complete a review of tax compliance provisions in law and regulation that have been put in place since the law was enacted in 2006 to address the tax gap issues for which 3 percent withholding was intended. 

Currently, two pieces of legislation have been introduced to repeal 3 percent withholding in the Senate.  The first is a bill by Senator David Vitter (R-La.), S. 89.  The second was introduced by Senators Scott Brown (R-Mass.) and Snowe, S. 164.  The latter provides for a revenue offset of unobligated federal spending. 

A House bill is expected to be introduced shortly by Congressmen Wally Herger (R-Calif.) and Earl Blumenauer (D-Ore.). 

AGC urges all members to contact their Senators and Representatives using AGC’s Legislative Action Center here

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

BUDGET
House Appropriators Proceed With Funding Cuts
Continuing Resolution Pending, Possibility of More Cuts Loom
 

Following on the heels of the House Budget Committee announcing its discretionary spending levels target of $1.055 trillion for the remainder of FY 2011, the House Appropriations Committee this week provided some details on plans to make programmatic funding cuts to meet the $1.055 trillion target set by the Budget Committee.   

In order to reach that mark the House Appropriators originally called for a $35 billion reduction from enacted FY 2010 levels and over $73 billion less than President Obama’s FY 2011 budget request. However, this afternoon House Republicans abandoned that plan and are instead going to make additional cuts in order to achieve a savings of $100 billion from President Obama’s FY 2011 budget.  

The question remains what impact these cuts will have on the construction industry.  That should become clear later this week when House Republicans unveil the Continuing Resolution that will fund the government through the end of FY 2011.  Earlier this week, the Appropriations Committee did release a partial list of specific programmatic cuts they intend to make.  After reviewing the cuts AGC determined that several of the proposed cuts have the potential to impact a number of the over 80 federal construction accounts that we track.  In total there are about $4.5 billion in cuts to agencies and programs that provide funding for construction-related work.  Some of the cuts include:

  • Flood Control and Coastal Emergencies - $30M
  • GSA Federal Buildings Fund - $1.7B
  • Natural Resource Conservation Service - $60M
  • Land and Water Conservation Fund - $348M
  • Clean Water State Revolving Fund - $700M
  • Drinking Water State Revolving Fund - $250M
  • EPA Brownfields - $48M
  • High Speed Rail - $1B
  • FAA Next Gen - $234M
  • Amtrak - $224

Of the over 70 cuts that have been announced so far, there has been no mention of funding cuts to federal surface transportation programs.  The cuts released so far are to discretionary spending and in many cases are major reductions.  However, the federal-aid highway program funding is not considered discretionary funding.  Therefore, it remains unclear whether any reductions will be made to programs funded through the federal-aid highway program. 

As this very fluid appropriations and budget process continues to evolve AGC will advocate for the importance of continued investment in our federal infrastructure programs.

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

TRANSPORTATION
Administration to Request More High Speed Rail Investment
 

Vice President Joseph Biden and Transportation Secretary Ray LaHood this week announced the Administration’s intent to request a significant increase in funding for its high speed rail initiative.

As part of the president’s budget request for FY 2012, which will be presented on Monday, February 14, President Obama will request $8 billion for new high-speed rail infrastructure investment. This will be a down payment on his proposal for a six-year $53 billion investment in high-speed rail.  The FY 2012 funds are proposed to be split equally into two accounts with $4 billion going to network development and $4 billion for system preservation and renewal. 

Biden indicated that the high speed rail initiative will be part of the Administration’s proposal for the six-year highway and transit reauthorization legislation. Neither Vice President Biden nor Secretary LaHood indicated how the initiative would be funded.

Congressional reaction to the announcement was immediate. House Transportation Committee Chairman John Mica (R-Fla.) and Railroads Subcommittee Chairman Bill Shuster (R-Pa.) issued a press release expressing "extreme reservations" regarding the Administration’s plan. Both criticized the $10.5 billion in high-speed rail grants issued over the last two years from stimulus funds and other legislation.

The timing for the announcement coincided with an announcement from the House Appropriations Committee Chairman that as part of the Committee’s deficit reduction efforts for FY 2011, $1 billion in existing high speed rail funding would be eliminated. 

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

House Transportation & Infrastructure Committee Sets Dates for Surface Transportation Road Show
 

As we reported last week, House Transportation and Infrastructure Committee Chairman John Mica announced several cities throughout the country he plans to visit and hold field hearings and a public forum on the pending surface transportation reauthorization bill.  AGC has been working with Chairman Mica and Transportation Committee Members who will be hosting these events to ensure that AGC members have the opportunity to share their views on what the Committee should prioritize as it writes the surface transportation bill.

The Road Show will take place February 14-25.  Chairman Mica will visit Beckley and Charleston, W.V. on February 14; Philadelphia, Pa., on February 17; Scranton, Pa., and Rochester, N.Y. on February 18; Columbus, Ohio and Indianapolis, Ind., on February 19; metropolitan Chicago, Ill., on February 20; Vancouver, Wash., on February 21; Fresno, Calif., on February 22; Los Angeles, Calif., on February 23; Oklahoma City, Okla., and Jonesboro, Ark., on February, 24; and metropolitan Memphis, Tenn., on February 25.

Times, locations, and witness lists for the field hearing and public forums are still being finalized.  Once they are set AGC will share them with our members to ensure maximum AGC participation in these events.

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

REGULATORY
House Republicans Hold Hearing on Regulatory Roadblocks
 

The House Oversight and Government Reform Committee held a hearing on how current and proposed rules and regulations are burdening job creation. AGC recently sent a letter in response to Committee Chairman Darrell Issa’s (R-Calif.) request for specific issues AGC believes could stifle job creation.

Republicans have pledged to strongly utilize the Oversight function of Congress to weed out programs and regulatory burdens that do not contribute to the economy or job creation. As many as ten standing Committees will be contributing to this task. The House Rules Committee is sending to the House floor this week a resolution that instructs the major House committees to "inventory and review existing, pending and proposed regulations and orders from agencies of the federal government, particularly with respect to their effect on jobs and economic growth.

AGC will continue working with Congressional leadership to provide real world examples of how to improve job creation and reduce unnecessary and burdensome rules for the construction industry.

To view a copy of AGC’s letter to Chairman Issa, click here.

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

FEDERAL
Recovery Board Chairman Supports Move to Expand Reporting Requirements
 

Not satisfied with the amount of reporting required of contractors receiving work from “direct” federal and federal-aid work, Recovery Accountability and Transparency Board Chairman Earl Devaney stated that it is time to expand current reporting requirements to capture stimulus project recipient awards at every level and has asked the Administration to implement that recommendation.

Current reporting rules from the Office of Management and Budget (OMB) require prime recipients and first-tier subrecipients to report how they are using Recovery Act funds. But subsequent layers of subrecipients currently are exempt from the requirements. Chairman Devaney believes that in order to present the clearest picture possible, it is necessary to require reporting at every level to ensure tax dollars paid out to contractors are not misappropriated.

AGC expressed substantial concern over the amount of detail and the burden of reporting the amount of information called for in the reporting rules. In addition, AGC expressed great concern about how expanding the requirements to lower tiers would provide substantial challenges and numerous pitfalls for prime contractors whose sub-recipient reports were to be found inaccurate. AGC will stay on top of this issue and work to ensure the current requirements are not expanded substantially in a manner that would provide additional burdens on construction contractors working for the federal government.

To read the details of Chairman Devaney’s recommendations, click here.

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

CONGRESS
Retirement Announcements and Resignations Begin Just Weeks Into the New Congress
 

The political establishment received a surprise yesterday with Representative Chris Lee’s (R-N.Y.) announcement that he would be resigning his seat immediately, and only hours after a report surfaced showing him in unflattering light.  Lee was in his second term and had recently been given a spot on the powerful Ways and Means Committee.  Across the country, Representative Jane Harman (D-Calif.) announced earlier this month she would step down at the end of February to head a Washington, D.C. think tank. Harman was in her 9th term.  Both seats could be vacant for a considerable amount of time as no dates for a special election have been announced.

In the Senate, Jon Kyl (R-Ariz.) and Jim Webb (D-Va.) both announced this week they would not seek reelection in 2012. Kyl, the number two GOP member in the Senate, has long been an ally to AGC and will be missed by the industry. Webb is in his first term as Senator and his announcement will make the battle for his seat more competitive next year. Kyl and Webb join Joe Lieberman (I-Conn.), Kent Conrad (D-N.D.) and Kay Bailey Hutchinson (R-Texas) as Senators not seeking reelection.

Join us for an update on the recent developments in Congress and its impact on the construction industry during AGC’s 92nd Annual Convention in Las Vegas March 21-25, 2011. During the convention there is an AGC Legislative Issues Luncheon, featuring a full legislative and regulatory issue rundown by AGC’s Government Affairs Team, and a Political Contributions Subcommittee Meeting. Information on the convention is available at http://convention.agc.org/.

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

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