Construction Legislative Week in Review July 21, 2011
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On the Inside
More than 200 Cosponsors in House as Efforts Continue to Repeal 3 Percent Withholding
House Passes 21st FAA Extension
Clamour for Cuts Sacrifices Construction Spending
Senate Outlines 2-Year Highway Bill
Still No Deal on Deficit Reduction
More than 200 Cosponsors in House as Efforts Continue to Repeal 3 Percent Withholding

Momentum continues to build in Congress to repeal the 3 percent withholding tax. AGC members and the construction industry have been at the forefront of the repeal campaign. In the last several weeks, AGC has sent out individualized state-by-state updates to our members, and as a result, the House has 208 cosponsors and the Senate is at 28 cosponsors.  If you want your state’s list please email

The most recent additions to the House cosponsor list are:

Rep Buerkle, Ann Marie [NY-25] - 7/15/2011
Rep Cleaver, Emanuel [MO-5] - 7/19/2011
Rep Gingrey, Phil [GA-11] - 7/19/2011
Rep Hinchey, Maurice D. [NY-22] - 7/19/2011
Rep Kelly, Mike [PA-3] - 7/19/2011
Rep Kinzinger, Adam [IL-11] - 7/19/2011
Rep Lamborn, Doug [CO-5] - 7/15/2011
Rep McKeon, Howard P. "Buck" [CA-25] - 7/19/2011
Rep Miller, Candice S. [MI-10] - 7/15/2011
Rep Young, Todd C. [IN-9] - 7/15/2011

There are no new Senate cosponsors this week.

AGC continues to ask its members to contact their elected officials, reach out to local stake holders and state and local agencies; and these efforts have not gone unnoticed by Congress.  However, Congress has yet to schedule a debate on the bill so action cannot stop.  Please continue to make contact with your legislators and encourage your employees to do the same by using the AGC Legislative Action Center.

Use the tools below to ask your Representative to cosponsor H.R. 674, and your Senators to cosponsor S. 89 or S. 164, which would permanently repeal the requirement. Click here or watch this video to learn more about the 3 percent withholding tax from AGC's Jeff Shoaf.

For more information, please contact Jeff Shoaf at (202) 547-3350 or Return to Top

House Passes 21st FAA Extension
Senate and White House Opposition Could lead to Shutdown of FAA

Amid opposition from the White House and the Senate, the House of Representatives passed by a vote of 243-177, the 21st extension of the Federal Aviation Administration (FAA) funding and tax extension bill, which would authorize funding for FAA through September 16.  Unlike previous extensions, this bill is not a “clean” extension; meaning it includes policy changes to current law.  The policy change in question would remove 13 of the 103 airports currently receiving Essential Air Service subsidies from the program, which would likely cause  those airports lose all scheduled air service.

Chairman of the Senate Commerce, Science, and Transportation Committee, Jay Rockefeller (D-WV) objected to the House extension in a letter to House Transportation and Infrastructure Committee Chairman John Mica (R-FL) “guaranteeing the Senate will reject the FAA extension.”  In addition, the White House has expressed their opposition to the House extension through this Statement of Administration Policy. The Senate has introduced a “clean” extension that would authorize funding for FAA through September 26.   The House and Senate have until midnight Friday to come to a resolution by either agreeing on a “clean” extension or the House-passed bill.  If no agreement can be reached, it would lead to a shutdown of the Airport and Airway Trust Fund, starting at midnight on Saturday, furloughing all non essential FAA employees paid out of the Trust Fund (air traffic controllers will be declared essential to public safety and have to work).  A shutdown would also mean that payments of grants by the FAA would stop and the excise taxes on aviation that support the Trust Fund would be repealed.

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

Clamour for Cuts Sacrifices Construction Spending

In addition to major cuts written about last week in funding for wastewater and drinking water construction, the emotional cry to cut spending continues to result in slashed federal construction programs .Significant cuts are in store for the construction programs of the General Services Administration, Military Construction, and the Department of Veterans Affairs.

AGC Leads Coalition to Fights Big Cuts to  GSA New Construction and Lease Program

Now that the House is preparing to finalize an FY 2012 spending plan for the General Services Administration that eliminates funding for design and construction services and allocates only $280 million for repairs and alterations, AGC is working with numerous partners in the construction and real estate industries to call on Congress to ensure sound funding for these programs. A letter drafted by AGC and the Building Owners and Managers Association (BOMA) International, calls on Congress to restore funding for the agency to levels proposed by the Obama Administration. The reductions approved by the House Appropriations Committee come on the heels of the recent FY 2011 budget deal that cut the agency’s budget by $1.7 billion.

Senate Passes FY 2012 Military Construction and Veterans Affairs Spending Bill

The Senate approved by a 97-2 vote the FY 2012 Military Construction and Veterans Affairs Appropriations bill (H.R. 2055). The bill provides $13.7 billion for military construction and family housing. This figure is $1.049 billion below the budget request by President Obama and $2.87 billion below the FY 2011 enacted level, due primarily to the completion of the BRAC 2005 construction phase in FY 2011. For VA, the plan provides a total of $589 million in funding for the major construction projects, a $486 million decrease from the $1.076 billion adopted in FY 2011.

The bill now goes to Conference with the House of Representatives. In addition to funding considerations, AGC has been working to enact a provision allowing U.S. contractors who are working for the U.S. government in the Middle East to receive a 20 percent bid evaluation preference on projects procured in the U.S. Central Command Area of Responsibility. Currently, the preference is afforded only to work procured in countries bordering the Arabian Gulf. This new language is included in the House-passed version of the legislation, but not in the Senate version. AGC is working with House and Senate leaders to ensure this provision is included in final version of the bill.

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

Senate Outlines 2-Year Highway Bill
EPW Releases Bill Outline, Holds Hearing

A bipartisan deal on policy and spending provisions of the highway section of the surface transportation reauthorization has been reached by Senate Environment and Public Works Committee Chairman Barbara Boxer (D-CA) and Ranking Member Jim Inhofe (R-OK).  The bill has not yet been released, but Senators Boxer and Inhofe issued a 3 page outline of their bill on Tuesday.  The bill, called Moving Ahead for Progress in the 21st Century (MAP -21) would provide $86 billion in contract authority for the federal highway program over the next two years. 

The challenge with this funding level – which is equal to current authorized levels under SAFETEALU – is that it requires the Senate Finance Committee to come up with $12 billion in funding to make the Highway Account of the Highway Trust Fund solvent.  At the MAP-21 hearing today, Senator Inhofe and other Republicans on the EPW Committee pledged their support for the bill at current funding levels but cautioned EPW should not move forward with a bill until the Finance Committee finds the $12 billion.  Finance Chairman Max Baucus (D-MT), who is also Chairman of the EPW Subcommittee with jurisdiction over the Federal highway program, made it clear that he is doing all that he can to come up with the $12 billion, but nothing can be done until the debt ceiling debate  is completed.  This puts Senator Boxer’s self-imposed timetable of marking up a bill before the August recess in jeopardy, considering Ranking Members Inhofe, Chairman Baucus, and Republican EPW members do not want to go to mark-up without funding in place.

AGC will continue to work with members on the EPW and Finance committees to ensure the financing is in place before a final bill is marked-up.

As for the bill itself, according to the outline, the bill addresses several of AGC recommendations for the reauthorization bill, including:

Core Programs:

  • Continues to provide the majority of funding to the States through core programs but consolidates the programs from seven to five:
    1. The National Highway Performance Program
      • Interstate Maintenance, National Highway System, and part of the Bridge program
      • Provides states with  increased flexibility if they adequately maintain the condition of their Interstate system and bridges
    1. The Transportation Mobility Program:
      • Consolidates several existing programs to provide funds to States for projects on all Federal-aid highways and all bridges and tunnels
      • Provides sub-allocation of some funds to metropolitan areas and other areas in the State based on population
    1. National Freight Program
      • Provides formula funds to States for projects to improve the movement of freight on highway, including freight intermodal connectors.
    1. Congestion Mitigation and Air Quality Improvement Program
      • Provides funds to States for projects and programs in air quality nonattainment and maintenance areas for ozone, carbon monoxide, and particulate matter, which reduce transportation related emissions. 
    1. Highway Safety Improvement Program
      • Provides funds to States for infrastructure improvements on all public roads to achieve a significant reduction in deaths and injuries.

TIFIA Expansion

  • Expands TIFIA financing from $122 million per year to $1 billion

Accelerated Project Delivery

  • Expands the use of innovative contracting methods
  • Creates dispute resolution procedures
  • Allows for early right-of-way acquisition
  • Reduces bureaucratic hurdles for projects with no significant environmental impact
  • Encourages early coordination between relevant agencies to avoid delay later in the review process


  • Focuses the highway program on key outcomes such as reducing fatalities, improving bridges, fixing roads, and reducing congestion.
  • States will set their own targets


  • The bill intends to improve the Statewide and metropolitan planning process to incorporate a more comprehensive performance based approach to decision making.

Again, this is just an outline and most of the big questions will be answered if/when the full text of the bill is released prior to a bill being marked up.

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

Still No Deal on Deficit Reduction
Gang of Six in the Senate Releases Proposal

The White House and Congressional leaders continue to suffer through a stalemate in their negotiations to reach a compromise deal on a deficit reduction plan as it relates to increases in our nation’s debt limit.  According to the Treasury Department, we must raise the debt limit by August 2 or face defaulting on our obligations for the first time in our country’s history.  On the August 3 the Treasury will not have enough money coming in to cover scheduled payments.

While hope remains that President Obama and Speaker John Boehner (R-OH) – who are meeting today – can still come to a deal on a long term deficit reduction package there has been talk that a short-term deal to temporarily increase the debt limit could be agreed upon, while a longer term deal is negotiated.  This scenario has become more plausible over the past couple days for two main reasons: 

  1. President Obama has moved off of his position that he would not accept a short-term deal; and
  2. A bipartisan group of Senators known as the “Gang of Six” released their deficit reduction proposal, which has drawn more support than opposition thus far. 

The President has moved in support of a short term increase so both parties can accomplish a broader deficit reduction plan.  The short term deal would allow a larger plan to move through the legislative process, which could take weeks or months.

The “Gang of Six” proposal is a $3.7 trillion deficit reduction proposal that has received some support from Republicans and Democrats.  The plan would immediately cut $500 billion in spending to bring down the deficit. It would also include major tax reform that would net out with about $1.5 trillion in overall tax savings.

The plan calls for ensuring the solvency of the Highway Trust Fund by providing $133 billion through 2021 in revenue to the Trust Fund.  The problem with this provision is they say it should be done without raising the gas tax and offer no alternative. 

Much of the Gang of Six plan would require other agencies and congressional committees to work to find savings, establish guidelines for $80 billion in armed service cuts and $70 billion from health, education, labor and pensions. Under the plan, the Budget Committee would be required to set spending caps that would extend over the next decade.

The deficit reduction remains very fluid and the path forward is still not clear.  AGC will continue to monitor the situation.

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

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