Details on the Federal Construction Funding for Fiscal 2012
After much uncertainty,
late last week Congress struck a deal to collectively pass the remaining
appropriations measures for FY 2012. The legislation, (H.R.
Rept. 112-331) funds the federal agencies under the
remaining nine Appropriations bills, including: Defense, Energy and Water,
Financial Services, Homeland Security, Interior/Environment, Labor/Health and
Human Services/Education, the Legislative Branch, Military Construction/Veterans
Affairs, and State/Foreign Operations. AGC has advocated for this measure to
come together to ensure predictability for the FY 2012 federal construction
programs for both the construction industry as well as the government.
The legislation upholds the overall regular
(base) discretionary level of $1.043 trillion as agreed to in the Budget
Control Act (BCA). When combined with the previous “minibus” Appropriations
bill enacted in November, total discretionary funding for FY 2012 will equal
$1.043 trillion – $7 billion less than last year’s level of $1.050 trillion and
$98 billion less than the President’s request. Alone, this nine-bill
legislation includes a total of $915 billion in regular security and
non-security discretionary funding – $6 billion below last year’s (FY 2011)
level for these same agencies, and more than $70 billion below the President’s
AGC has done an analysis of the FY 2012
appropriations that can be found here.
Of the federal construction accounts tracked by AGC there was an overall
decrease of nearly $7.5 billion, or just over 6 percent of the final FY 2011
funding levels. The FY 2011 federal
construction accounts were cut by nearly $18 billion. Since 2010, these federal construction
programs have been cut by approximately $35 billion from an all time high.
The following is a summary of appropriations
bills and the federal construction programs that AGC closely monitors:
Energy and Water
The total funding level for Energy and Water
programs equals $32 billion – $328 million over last year’s level and $4.5
billion lower than the President’s request.
- Army Corps of Engineers – The Army Corps of Engineers is funded at $5
billion, an increase of $145 million above last year’s level and $429 million
above the budget request. This funding will help advance American
competitiveness and export ability by providing $1.8 billion for navigation projects
and studies. The bill also provides resources to advance public health and
safety by funding flood and coastal storm damage reduction at $1.66 billion –
including $437 million for critical dam safety improvements.
- Key Policy Rider: The legislation
includes an AGC-supported a one-year block on Obama administration efforts to
rewrite federal rules so that environmental considerations are given greater
weight when planning and designing levees, locks, dams and other water
projects, under the massive 2012 spending bill slated for approval. The provision
would block USACE from spending FY12 funds to implement the rules, which are
known as the "principles and guidelines" for how USACE-built projects
are developed. Even if the White House Council for Environmental Quality (CEQ)
releases the policy in 2012, the Army Corps would be blocked from implementing
it. The provision dictates that the Army Corps should continue to operate from
the 1983 rules through the next fiscal year.
Military Construction (MilCon)/Veterans Affairs (VA)
The MilCon/VA section of the legislation includes
a discretionary total of $71.7 billion, a decrease of $1.4 billion below last
year’s level and a decrease of almost $2.1 billion below the President’s
- Military Construction – The bill provides $13.1 billion for military construction
projects – a decrease of $3.5 billion below last year’s level and $1.7 billion
below the President’s request. Within the total, the bill funds Military Family
Housing Construction at $1.7 billion, which provides for a total of 48 new
family housing construction projects, 80 replacement projects, and improvements
to 216 family housing units. In addition, the legislation contains $1.1 billion
for construction and alterations for new or existing military medical
facilities, and fully funds the FY 2012 BRAC request.
- Veterans Affairs (VA) – The legislation includes a total of $122.2
billion in both discretionary and mandatory funding for the Department of
Veterans Affairs. The bill provides $589,604,000 for the construction of
“major” projects and an additional $482,386,000 for “minor” construction
projects. The legislation includes provisions to increase spending oversight at
the VA, including requiring the agency to report on construction savings and
restricting the agency from taking certain spending actions without notifying Congress.
The agency will receive $50,000,000 for the construction
and acquisition (including funds for sites and expenses, and associated design
and construction services) of new facilities in FY 2012. An additional $280,000,000
shall remain available until expended for repairs and alterations, and design
and construction services.
Department of Labor (DOL)
bill provides $14.5 billion for the Department of Labor, which is $145.4
million above last year’s level and $251.2 million below the President’s
request. The increase above FY 2011 is due to a provision that fully funds Job
Corps in the current fiscal year (see below). Absent this provision, the
conference agreement reduces the Department of Labor’s budget by $545.6 million
below last year and $942.2 million below the request.
- Occupational Safety
and Health Administration (OSHA) – The conference agreement includes
$565,857,000 for the Occupational Safety and Health Administration (OSHA).
- Key Policy Riders: The legislation
includes several legislative provisions to reduce government overreach, rein in
excessive regulation, and help foster a good economic environment for job
growth. Some of these provisions include:
- A prohibition on OSHA’s development of the AGC-opposed
musculoskeletal disorders (MSD) reporting requirement, otherwise known as the
“ergonomics” regulation. The conferees noted that OSHA's National Emphasis
Program (NEP) on Recordkeeping has been underway since October, 2009 to assess
the accuracy of injury and illness data recorded by employers. The conferees
direct the Secretary of Labor to submit a report, not later than 90 days
enactment of this Act, to the Committees on Appropriations of the House and the
Senate detailing the findings of this NEP, as well as other Department
activities, related to the accuracy of employer reporting of injury and illness
- A prohibition on the implementation of the H-2B Wage
Methodology rulemaking – saving employers millions in unnecessary costs;
- A prohibition on the implementation or enforcement of DOL’s
“coal dust” rule until an independent assessment of the integrity of the data
and methodology behind the rule is conducted;
- A prohibition on the National Labor Relations Board from
implementing electronic voting procedures, preserving the integrity of the
secret ballot election;
State and Foreign Operations
The Legislation provides $42.1 billion in
regular discretionary funding for the State Department and foreign operations.
This is more than $6 billion below last year’s level and $8.7 billion below the
- Overseas Buildings
Operations (OBO) - The conference agreement provides $1,537,000,000 for Embassy
Security, Construction, and Maintenance for the Office of Overseas Buildings
Operations (OBO). Accordingly, OBO will receive $762,000,000 for preserving,
maintaining, repairing, and planning for buildings that are owned or directly
leased by the Department of State. In addition, OBO will receive an additional
$775,000,000 for worldwide security upgrades, acquisition, and construction.
- Key Policy Rider: The conferees are concerned with the long-term sustainability of the
operating, maintenance, and utility costs of new diplomatic and consular
facilities and directs the Secretary of State to impose a moratorium on
beginning any new Capital Security construction projects until the Secretary
provides the following information to the Committees on Appropriations: (I) the
additional annual costs for operations and maintenance, including utilities and
salaries, and the number of additional facilities and engineering staff that
have been hired to operate the diplomatic and consular facilities that have
become operational since the CSCS program began; (2) the estimated additional costs
for operations and maintenance, including utilities and salaries, and the
number of additional facilities and engineering staff necessary to operate the
diplomatic and consular facilities that have been funded and/or are being
constructed; and (3) the plan for addressing the $111,000,000 in deferred
maintenance at existing diplomatic and consular facilities reported in the
Department's 2010 financial statements.
As previously reported, Congress approved a measure that
fully funded the Agriculture, Commerce/Justice/Science (CJS), and
Transportation/Housing and Urban Development (THUD) Appropriations bill -- also
known as the “Mini-bus” – for Fiscal Year 2012.
The minibus is an improvement over an earlier House
appropriations transportation bill that would have cut federal highway funding
by $14 billion. The Senate version of that same bill would have
maintained current funding levels. AGC communicated with members
negotiating the final minibus bill, urging them to accept the Senate funding
levels. AGC succeeded in getting the final funding level for the highway
program at $39.883 billion (including $1.662 billion in emergency relief) which
is nearly identical to the prior years’ funding level. Below is a list of
other programs and their fiscal year 2012 funding levels as provided in the
FY 2012 (conference)
FTA Formula/Bus Grants
FTA Capital Investment Grants
TIGER Discretionary Grants
FAA Airport Grants (Obligation
$ 3.350 billion
AGC will continue to educate members of Congress on the
impact of the budget cuts on the overall economy, the construction industry,
and their district and state. Please take this opportunity to understand
what construction programs are being cut and talk to your members of Congress
about how these cuts will impact your area, your company and your employees. Here is a short-hand method for analyzing the
impact of nonresidential construction on GDP, earnings and jobs:
- An extra $1 billion in
nonresidential construction spending would add about $3.4 billion to GDP,
about $1.1 billion to personal earnings and create or sustain 28,500 jobs.
- 9,700 jobs would be directconstruction jobs located in the state of investment.
- 4,600 jobs would be indirectjobs from supplying construction materials and services. The majority
of these jobs would be located within the state of investment but there
would be some out of state jobs supported.
- 14,300 jobs
would be induced when workers and owners in construction and
supplier businesses spend their incomes locally and nationwide.
AGC follows annual appropriations for more than 70 federal construction
accounts, totaling more than $100 billion annually. We realize that Republicans
and Democrats are looking for ways to reduce spending, and we are making the
case that construction improvements are a necessary investment in national
economic competitiveness that should not be postponed.
For more information, please contact Sean O’Neill at (202)
547-8892 or email@example.com.
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