Construction Legislative Week in Review
www.agc.org December 6, 2012
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On the Inside
FISCAL CLIFF
AGC Member Survey Highlights Impact of Fiscal Cliff/AGC Leaders Hear from Capitol Hill
New AGC Report: Sequestration Could Cut $6 Billion from Construction
AGC Joins Coalition to Keep Tax-Free Status for Municipal Bonds
LABOR
Multi-Employer Pension Update - Retirement Security Review Commission Conclusions
CONGRESS
Senate Passes National Defense Authorization Act; AGC Continues to Press for Small Business Reform
SAFETY
OSHA Considering Safety Checklist for Federal Procurements; AGC Seeking Further Member Input
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FISCAL CLIFF
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 shoafj@agc.org. Return to Top

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New AGC Report: Sequestration Could Cut $6 Billion from Construction
 

According 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 at risk.

The 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 sequestration report.

AGC continues to tell Congress to push off sequestration for one year to allow time for sensible budget reform and to prioritize construction investment.

For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top

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 berrys@agc.org. Return to Top

LABOR
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.

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

CONGRESS
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 christiansonj@agc.org. Return to Top

SAFETY
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 cannonk@agc.org or Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org. Return to Top

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