Construction Legislative Week in Review
www.agc.org April 25, 2013
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On the Inside
AGC EVENTS
FedCon Attendees Storm Capitol Hill
ENVIRONMENT
EPA Agrees to Certain Transparency Measures Over Controversial “Sue and Settle” Strategy
TRANSPORTATION
AGC Weighs in onHouse Highway Trust Fund Hearing
TAX
Senate Finance Committee Releases Fourth Tax Reform Option Paper
House Ways & Means Mark Up of Debt Ceiling Proposal
Senate Finance Committee Chairman Announces Retirement
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AGC EVENTS
FedCon Attendees Storm Capitol Hill
 

AGC Federal & Heavy Construction Division and Highway & Transportation Division members launched an all-out offensive on the legislative front during this week’s Federal Contractors Conference in Washington, D.C. As part of a series of organized Capitol Hill visits, AGC members provided their federal elected officials with information on a range of issues, including immigration, Water Resources Development Act reauthorization, the prevention of government-mandated Project Labor Agreements, and implementation the transportation reauthorization law, MAP-21, among others.

In total, AGC coordinated several dozen meetings with U.S. Representatives and U.S. Senators from both sides of the aisle to discuss these important issues. According to the Congressional Management Foundation, in-person constituent meetings with elected officials are considered the most persuasive tactic of communicating with Congress. AGC will continue to facilitate these essential meetings for its members to further the construction industry’s federal legislative agenda.

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

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ENVIRONMENT
EPA Agrees to Certain Transparency Measures Over Controversial “Sue and Settle” Strategy
 

Recently, AGC joined 190 other industry groups on a letter to the U.S. Environmental Protection Agency (EPA) critical of what, over that past several years, has become known to many as the “Sue and Settle”  strategy. This has occurred when an environmental group sues EPA, demanding the agency issue a regulation on an accelerated timeframe, and rather than fighting the lawsuit, EPA will quickly agree to the special interest demands. Many of the environmental rules that are in the pipeline for the next four years are on EPA’s regulatory agenda because of these types of court ordered settlement agreements. These settlement agreements are reached after closed-door negotiations between EPA and environmental groups where other interested parties are excluded, and, ultimately, the taxpayer foots the bill for the interest group’s legal fees. For more on this topic, click here.

EPA has since announced that it will comply with one of the provisions asked for in the letter: a method for providing the general public and the regulated community with timely and transparent access to information involving any legal action, or notice of intended legal action, against the EPA. Groups planning to file citizen suits against EPA must submit a "Notice of Intent to Sue" the agency at least 60 days prior to filing any lawsuit. The agency has agreed to post all such notices on a weekly basis. The "Notices of Intent to Sue" can be found on EPA's website here

For more information, please contact Leah Pilconis at pilconisl@agc.org or Scott Berry at berrys@agc.org. Return to Top
TRANSPORTATION
AGC Weighs in onHouse Highway Trust Fund Hearing
CBO Issues Statement on Highway TrustFund Projections
 

The future solvency of the Highway Trust Fund (HTF) was front and center at a hearing this week in the House Budget Committee.  The hearing titled, “State of the Highway Trust Fund: Long-Term Solutions for Solvency”, focused on the current and projected revenue problem facing the HTF and options to address the solvency of the program. 

According to projections provided by the Congressional Budget Office (CBO) for the hearing, the current trajectory of the HTF is unsustainable and starting in fiscal year 2015, the trust fund will have insufficient amounts to meet all of its obligations, resulting in steadily accumulating shortfalls.  Accordingly,CBO projects that in order to maintain current funding levels, Congress would have to transfer an additional $14 billion into the HTF in 2015 to avoid a shortfall.  CBO's complete statement can be found here.   

CBO’s projections were backed up by the testimony of the three witnesses: Janet Kavinoky of the U.S. Chamber of Commerce and American for Transportation Mobility (of which AGC is a member), Richard Geddes ofCornell University, and Bob Poole of the Reason Foundation.   The three witnesses had different opinions onhow to address the shortfall, with Kavinoky advocating for building on there forms in MAP-21 to increase revenue in the short-term with an increase in the gas tax or a combination of revenue raisers to address the shortfall, while the other witnesses focused more on diminishing the federal role in transportation while maintaining a trust fund that would derive revenue from user fees on miles driven.

Several Budget Committee members participating in the hearing appeared to agree with diminishing the federal role in transportation and giving more power to the states, thereby relying on the states to provide for the majority of their highway and transit needs.  Prior to the hearing, AGC sent a multi-industry group letter to committee members advocating for a continued strong federal role and encouraging members of Congress and the administration to address the long-term solvency of the HTF.  In addition, the AGC-led Transportation Construction Coalition (TCC) submitted a statement  answering the criticisms of those that attempt to undermine federal transportation investment

The solvency of the HTF remains a top priority for AGC.  We will continue to educate members of Congress of the impact of not addressing the projected shortfalls.

For more information,please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org.
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TAX
Senate Finance Committee Releases Fourth Tax Reform Option Paper
 

On April 25, the Senate Finance Committee released the fourth of six tax reform option papers. This latest document outlines ideas regarding “Infrastructure, Energy, and Natural Resources.” The policy paper contains a broad set of principles, policy concerns and options for reform.

Potential broad principles for reform include:

  • Generate sufficient resources to support federal transportation policy on a sustainable basis.
  • Ensure that users and direct beneficiaries of infrastructure systems bear the cost of their use.
  • Promote economic efficiency by maximizing benefits relative to costs for any projects with federal involvement.

Some specific concerns about infrastructure funding include the following:

  • Mismatch between amounts authorized and trust fund revenues;
  • Deterioration of the user-fee model;
  • Declining revenue from existing sources;
  • Inadequate funding to meet additional needs; and
  • Uncertainty created by temporary extensions.

Options proposed and explored by the committee consist of the following areas:

  • Limit infrastructure spending to trust fund revenues;
  • Devolve federal revenues to states;
  • Maintain the user fee model but increase existing taxes and fees;
  • Establish new user fees and taxes to replace or supplement current user fee system;
  • Designate other sources of revenue for the Highway Trust Fund; and
  • Provide additional financing options for states.

For more information on the Finance Committee tax policy papers, you can visit the webpage here.

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org.
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House Ways & Means Mark Up of Debt Ceiling Proposal
 

On April 24, the House Ways and Means Committee approved H.R. 807, the “Full Faith and Credit Act,” on a 22 to 14 party-line vote. This latest action from the House is viewed as a pre-emptive salvo in the debt ceiling debate that will likely play out over the course of the summer. In the event the debt of the U.S. government reaches the statutory debt limit, H.R. 807 as amended would allow the Treasury Secretary to issue debt to the extent necessary to pay principal and interest on certain obligations as outlined in the bill, such as borrowing for debt obligations and Social Security.

Ways and Means Chairman Dave Camp (R-Mich.) noted that H.R. 807 did not raise the debt ceiling, but instead would provide clarity about what was to be done when the Treasury Department hit the limit. Chairman Camp said it could come to the floor as early as the week of May 6, when the House returns from a one-week legislative recess.

In the past, when a breach of the debt limit approaches, the Treasury Department has taken so-called “extraordinary measures” – steps that allow a few extra months to finance Social Security, military salaries and other payments. Following that maneuver, no remaining legal or prudent measures would be available to create additional headroom under the debt limit, and the U.S. would begin to default on its obligations. It is expected that the Treasury will have to conduct these methods starting May 19. The Treasury is thought to have enough borrowing capacity to keep selling debt until August or September.

The most recent increase in the debt limit came in February, when President Obama signed into law a bill to temporarily suspend the debt ceiling through May 18. Currently, the debt subject to limit stood at $16.7 trillion. As in the past, credit ratings agencies have warned government officials that delays in raising the debt ceiling and or an absence of a plan to bring down the deficit could result in a formal review of the credit rating of the U.S., potentially leading to a downgrade of the government’s AAA status.   

AGC continues to monitor the negotiations on the national debt and its implications on other fiscal policies being debated in Congress. For more information on the Ways and Means Committee markup of the Full Faith and Credit Act, you can visit the webpage here.

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org. Return to Top

Senate Finance Committee Chairman Announces Retirement
 

On April 23, Senate Finance Committee Chairman Max Baucus (D-Mont.) announced that he will not run for re-election in 2014, raising questions on Capitol Hill about whether comprehensive tax reform can be completed now that neither of the leaders of Congress's tax-writing committees will be in charge after the next election. Chairman Baucus has served 36 years in the Senate and has served as the top Democrat on the Finance Committee since 2001. He has been a pivotal figure on issues of tax policy, health care and entitlement programs.

The prospect for comprehensive tax reform to move faster or slower will play out as Chairman Baucus and House Ways and Means Chairman Dave Camp (R-Mich.) proceed with debate in their respective committees as lame-duck chairmen. Under rules set by the House Republican leadership, Chairman Camp is term limited as chairman. With the culmination of both of the chairmen’s careers, observers believe the tax writers will be unconstrained by politics and be able to make tough choices while crafting a new tax code. The reverse is evident as well - that the tenor of the debate will be impeded by political brinksmanship as the mid-term elections come in to view.

Chairman Baucus has favored revenue-neutral tax reform on the corporate side of the tax code, while indicating that reforms to the individual tax code could generate additional revenue. The Finance Committee continues to conduct closed-door bipartisan meetings on a range of tax policies, followed by the public release of tax reform options papers drafted by committee staff.

Baucus is the eighth senator to announce plans to retire at the end of the 113th Congress. Former Democratic Governor Brian Schweitzer is considered the potential frontrunner for a Senate run in Montana.

For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org. Return to Top

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