AGC Member Survey Highlights Impact of Fiscal Cliff/AGC Leaders Hear from Capitol Hill
Yesterday, AGC executive board members, along with other AGC
tax policy leaders within the association, participated in a call with House Majority
Whip Kevin McCarthy (R-Calif.) where McCarthy described the fiscal cliff situation
as “going nowhere.” This statement comes
the day after AGC concluded a survey that illustrates how the fiscal cliff is already
impacting AGC members and how they conduct their business. The survey results also highlight the drastic
action that members will potentially be forced to take if indiscriminate tax
increases and indiscriminate spending cuts go into effect on Jan. 1.
According to the nearly 600 AGC members who responded to the
survey, the construction industry is already feeling the impact of the fiscal
cliff, especially the weight of the potential threats of higher tax rates and
cuts to federal construction spending. The majority of AGC’s members are small
businesses organized as pass-through entities – they pay business taxes at the
individual rates and so do many of their customers. The results of this nationwide survey show the
potential for reduced job opportunities, reduced capital investment, layoffs
and benefit reductions if fiscal cliff negotiations fail to produce a
resolution. If a compromise is not reached, it will result in significantly
higher tax rates and reduced federal construction spending.
The macroeconomic impacts of going over the fiscal cliff –
as stated in a recent Congressional Budget Office report – has the potential to
“spark a recession,” reduce GDP growth from 2.2 percent to 0.5 percent and
cause unemployment to spike to over 9 percent by the end of next year. Many of the respondents to the AGC survey were
found to be small businesses, with 67percent
employing less than 100 employees and 74 percent doing less than $50 million in
work annually. Fifty-four percent of these respondents have already taken
action with regard to the fiscal cliff, typically by postponing hiring and
capital investment. Of the 46 percent of
the contractors who have not already taken action, 63 percent plan to take
action if rates rise. They also plan to reduce job opportunities, capital
investment, employer contributions to health care and 401(k)s, and their
workforce. Construction program cuts as a result of sequestration – AGC has already estimated a potential $6 billion
reduction in federal construction spending based on the sequester – will have
similar impacts according to the survey.
AGC is sending the survey results to all members of Congress
and to the White House.
For more information, please contact Jeff Shoaf at 202-547-3350 or firstname.lastname@example.org.
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New AGC Report: Sequestration Could Cut $6 Billion from Construction
to a new AGC report,
if Congress and President Obama fail to avert the indiscriminate, across-the
board cuts--called sequestration--federal construction investment accounts
could see upwards of $6 billion in cuts. The possible sequestration cuts could
put some 170,000 jobs, $20.4 billion in GDP and $6.6 billion in personal income
sequestration cuts could reduce many federal construction investment accounts,
with the exception of the Highway Trust Fund, Airport Improvement Program,
Department of Veterans Affairs accounts, and General Services Administration
accounts. The AGC report details those possible cuts to construction investment
accounts based upon the Office of Management and Budget's Sept. 14
continues to tell Congress to push off sequestration for one year to allow time
for sensible budget reform and to prioritize construction investment.
more information, please contact Jimmy Christianson at (703) 837-5325 or email@example.com.
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AGC Joins Coalition to Keep Tax-Free Status for Municipal Bonds
AGC has joined Municipal Bonds for America, a new coalition
designed to educate lawmakers about the municipal bond market and the impact
that the tax-exemption that which enables state and local governments to
finance vital infrastructure at the lowest cost to their taxpayers. AGC joins a
growing membership comprised of bond issuers, regional bond dealers, and state and
local government organizations all dedicated to making sure municipal
bonds maintain their current status.
With the ongoing negotiations over the fiscal cliff and
larger tax reform options on the horizon, removing or capping the tax exemption
for municipal bonds has been proposed as a potential change to the tax code.
And with federal investment in many municipal areas like water and sewer continuing
to decline, the burden for reducing the ever growing need for these
infrastructure improvements and maintenance is falling to state and local
governments. These government entities are relying upon municipal bonds to
finance this construction. The 2012 election showed a higher than average
success rate on smaller than average pool of construction-related
ballot initiatives, most of which were bond questions. AGC is concerned
about the effect raising the cost of this finance tool will have on
construction demand, particularly with the public construction market outlook just
beginning to improve. AGC will continue to fight for keeping the tax-exempt
status on municipal bonds, and will take an active role in this new coalition
to ensure the continued availability of the crucial construction finance tool.
Learn more about the coalition here: http://www.munibondsforamerica.org/
For more information, please contact Scott Berry at
(703) 837-5321 or firstname.lastname@example.org.
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Multi-Employer Pension Update - Retirement Security Review Commission Conclusions
During the 2012 National Coordinating Committee for
Multiemployer Plans (NCCMP) Conference, a presentation was made discussing
NCCMP’s Retirement Security Review Commission (RSRC) and some of the
conclusions of the commission so far. AGC is participating in the RSRC, which
is a labor-management, cross-industry group of stakeholders established to
develop a long-term solution to the multi-employer pension problem.
The conclusions summarized in the document
include suggestions for technical changes to the Pension Protection Act, new
tools for deeply troubled pension plans and a framework for a new flexible plan
design. The commission continues to work on publishing a final report with
recommendations for congressional and regulatory action on multi-employer
pension reform, expecting any legislative action to likely occur in 2013.
more information, please contact Jim Young at (202) 547-0133 or email@example.com.
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Senate Passes National Defense Authorization Act; AGC Continues to Press for Small Business Reform
On Dec. 4, the Senate passed its version of the National
Defense Authorization Act of Fiscal Year 2013 (NDAA) by a vote of 98 to 0. As
the Senate considerate the legislation, AGC sent
a letter to senators urging their inclusion of small business
contracting reforms. Among those reforms, AGC especially urged inclusion of:
(1) counting small business participation at lower tiers towards the federal
small business procurement goals; and (2) addressing the definition a “bundled
contract” to include contracts for construction services, thereby forcing
federal agencies to justify why they bundle.
The House-passed version of the NDAA includes the contract
bundling language AGC supports. However, the Senate did not adopt any small
business contracting reforms. AGC testified before the House Small Business
Committee earlier this year on these important reforms. AGC will work with
House and Senate members about its small business contracting priorities during
the NDAA conference committee negotiations, likely to begin next week.
For more information, please contact Jimmy
Christianson at (703) 837-5325 or firstname.lastname@example.org.
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OSHA Considering Safety Checklist for Federal Procurements; AGC Seeking Further Member Input
The Occupational Health and Safety Administration’s (OSHA)
Advisory Committee on Construction Safety and Health (ACCSH) has proposed
federal contactor submission of a health and safety checklist as an evaluation factor for
the award of contracts directly from the federal government.
At the Nov. 28 ACCSH meeting, AGC shared its concerns with
the checklist. Among AGC’s concerns, the association suggested that the
checklist be revised to note that each subcontractor
should only have one onsite safety representative. Some trades may only have
two workers in a work crew and may have five crews working on different floors
or areas of a building. Each trade needs only one assigned site
safety representative who is responsible for the project safety plan compliance
and attends weekly safety meetings with the general contractor and others.
AGC welcomes additional member feedback concerning both the
need for this checklist and revisions of it. AGC will continue to work closely
with ACCSH on this and other safety issues.
For more information, please contact Kevin Cannon at (703)
837-5410 or email@example.com
or Jimmy Christianson at (703) 837-5325 or firstname.lastname@example.org.
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