2010 Election

New Congress, New Threats and Opportunities

Incumbency and experience were the cause of significant losses for sitting Committee Chairs of the Budget, Armed Services and Transportation Committees. The conflict continued unabated when Nancy Pelosi (D-Calif.) issued a statement this morning celebrating the Democratic majority for "courageous action" and Jim DeMint (R-S.C.) issued a statement urging new members not to "fall into line."

The Republican majority and shrinking Democratic numbers will alter the legislative and regulatory issues AGC members face during a lame duck and in the future. While the change in power is clear, what exactly will come of it is not. In the coming weeks and months, AGC will work to analyze and interpret events in Washington, D.C., and will keep you updated on what the changes in Congress mean in practical terms. Republicans will start the lame duck session with 42 instead of 41 senators as a result of special elections held in conjunction with the general election. The 112th Congress will require bipartisanship to pass even small issues. The tone will be set early in the Congress by the interaction between the leaders of both parties, both chambers and the president - in fact, it may be set during the lame duck session beginning November 15.

The lame duck agenda will include the funding for the rest of fiscal year 2011 (nine months worth of federal funding) and the extension of SAFETEA-LU and FAA authorization, as well as deciding how to handle the expiring tax cuts, extension of the Medicare doc fix and extension of unemployment benefits. It could also include the confirmation of Jacob Lew as the new Office of Management and Budget director. They could also vote on a bill to block the imposition of the greenhouse gas rule and the Defense authorization. The productivity of the lame duck will likely signal the productivity of the 112th Congress.

Federal Funding/Budget

  • The Continuing Resolution (CR) that provides funds to continue the operation of the federal government expires December 3. The CR is necessary because Congress has failed to enact any of the 12 appropriations bills for FY 2011. Under the terms of the CR most government programs will continue to be funded at FY 2010 levels. Congress intends to wrap up the 12 unfinished appropriations bills in a large omnibus during the lame-duck session.

Infrastructure

  • Transportation Funding: Since SAFETEA-LU expired on September 30, 2009, the highway and transit program has been operating under short term extensions. The latest extension expires on December 31, 2010. Congress must take action during the lame duck session to at least extend authorization into next year. The Congressional Budget Office has projected that between the revenue coming in and the general fund reimbursement last March, the Highway Trust Fund is able to support current funding levels through 2011. Although the administration has made two high profile announcements about the need for a six-year bill and suggested that it be front-loaded with an additional $50 billion, the long-term reauthorization is unlikely to be considered until the new Congress convenes.

  • Aviation: The Federal Aviation Administration bill has been operating under short-term extensions since it expired in 2007. It remains unclear if Congress will be able to resolve a number of contentious issues in the legislation before it expires again.

  • Water Infrastructure: Congress has been close to reauthorizing the state revolving fund, but has yet to do so.

    Water Resources Development: Congress failed to pass a Water Resources Development Act (WRDA) since the last bill was enacted in 2007. Only the House has introduced legislation and the Senate has held several hearings on the measure during the 111th Congress.

    Federal Facilities: The Congress approved a significant amount of funding for Federal facilities as a part of the stimulus, and funding for BRAC.

Labor & Immigration

  • Labor Issues: The Miner Safety and Health Act would make significant changes to both MSHA and OSHA. AGC opposes the legislation because it turns the clock back on well over 10 years of progress in improved workplace safety while creating a more adversarial relationship between employers and OSHA. Negotiations are expected to resume on the bill that passed a House Committee earlier this year.

    The Paycheck Fairness Act is on the Senate calendar after the mid-term election. The bill limits defenses to Equal Pay Act claims and permits unlimited punitive and compensatory damages. This bill would limit employers to base pay decisions on factors like professional experience and local labor market rates. Employees would have to specifically opt-out of class action lawsuits which would likely dramatically increase the size and penalties of class actions.

  • Safety: It is possible that the Occupational Safety and Health Administration (OSHA) could issue a proposed rule regarding confined spaces in construction before the end of the year.

    Immigration: The immigration bill, known as the Development, Relief, and Education for Alien Minors ACT (DREAM Act), could potentially be considered in the Senate but passage of any comprehensive bill is unlikely. The DREAM Act would give conditional permanent resident status to undocumented people who entered the U.S. before their 16th birthday and are pursuing higher education or are part of the military.

  • Pensions: With temporary pension relief in response to the market downturn beginning in 2008 having already been enacted, longer-term reform to pension law likely will have to wait until the 112th Congress.

  • Project Labor Agreements:There is not going to be action taken on legislation (HR 983 and S 90) to restrict the use of project labor agreements.

Tax Policy

  • 2001 & 2003 Tax Cuts: Without Congressional action, income tax rates, capital gains, dividend, and estate tax rates will increase on January 1, 2011. Congress is contemplating three key scenarios: 1) a short-term compromise in which all tax cuts are extended for all taxpayers; 2) extend lower rates for individuals making $200,000 a year or less or couples making $250,000 a year or less; or 3) allow all taxes to go up next year, and then consider a retroactive, permanent extension for all tax payers. The second option does not currently enjoy majority support in the House. Congress also has to reach a consensus on rates for capital gains, dividends, and the estate tax.

  • 3% Withholding: Enacted in 2005, and scheduled to go into effect on January 1, 2012, the 3% withholding law requires federal, state, and local governments with annual expenditures over $100 million to withhold 3% of every payment to a contractor. Received a one-year delay in the stimulus, but additional action, including additional delay or repeal, will most likely wait until the first session of the 112th Congress.

Energy & Climate Change Policy

  • Climate Change: One of the first votes in the Senate in November will be a procedural vote on legislation to create incentives for natural gas vehicles and plug-in electric vehicle infrastructure. Attempts may be made to enact a renewable energy standard (RES) that would require U.S. electricity to be produced by renewable energy sources. There is also a slight chance that Congress may consider legislation that would delay pending U.S. Environmental Protection Agency regulation over greenhouse gas emissions from stationary sources for two years. The first EPA greenhouse gas regulations are scheduled to take effect in 2011.

Oversight and Government Reform

  • Oversight: The 111th Congress did little in terms of holding major oversight hearings and received criticism for not addressing the financial crisis, implementation of the stimulus, contracting reform or EPA mission creep.

The closely divided Congress will contrast with the large majorities Democrats held after the 2008 election. Some of the new members bring with them their own agenda and an anti-establishment mentality that could impact how leaders in both parties try to corral votes. The outstanding question is this: Will there be more partisanship or more bipartisanship? The agenda will be dictated by what the lame duck does or does not accomplish.

Congress and the Administration may be able to work together on trade issues, education and deficit reduction. However, many members will be cognizant of the recent voter backlash against members of Congress who had moved more toward the center. The parties will elect leaders and committee chairs during the lame duck. Included below is a run-down on who AGC anticipates will be the Congressional leaders in the 112th Congress.

Federal Funding/Budget

  • There is a pretty strong sentiment within the Republican Conference to make the earmark moratorium permanent or at the least greater transparency and rules governing the earmarking process. Whether newly elected GOP members hold to this pledge remains to be seen.

  • It is also likely there will be an across the board cut to discretionary spending, leaving the appropriators with smaller allocations. There is no sign that the many federal construction accounts that AGC tracks will be spared from these reductions.

Infrastructure

  • Transportation Funding: Current Ranking Member and expected Chairman John Mica (R-FL) recently released a report focused on cutting waste and saving billions of dollars in agencies and departments. There was no mention of the need for additional investments in infrastructure or using some of the potential billions saved and re-investing that money. With regard to surface transportation he wants to move quickly on it but does not support the increasing the gas tax to pay for it. He has floated a national sales tax as a pay-for. Mica will focus on expedited project delivery of transportation projects to lower costs as well as expediting and streamlining the Army Corps wetlands permitting process.

    The Senate will have less turnover in key leaders. The senate may move in the direction consistent with Obama in their "livability agenda".

  • Water Infrastructure: There is potential for funding cuts of authorized water infrastructure. Conversely, provisions like Davis-Bacon and Buy American are less likely to be added to bills authorizing the SRFs. Prospects for creative funding mechanisms like a user-fee based clean water trust fund are darker with the rise of anti-tax sentiment among new and returning members.

    Water Resources Development: Given that the WRDA bill is primarily comprised of Congressional earmarks, with about a dozen or so projects specifically requested by the U.S. Army Corps of Engineers, there is potential for a smaller WRDA bill out of the House of Representatives. If the Senate moves on a bill, it will likely be a much larger package with a good number of additional project requests from Members of Congress.

    Federal Facilities: Funding challenges, particularly the stated goal by new Republican leadership and President Obama to curb spending near FY 2008 levels does not bode well for increased investment in significantly new spending for Federal facilities for FY 12.

Labor & Immigration

  • Labor Issues: Pensions, EFCA, OSHA legislation, GMLA Legislation, Workforce Training, Family and Medical Leave, NLRB nominations, and Independent Contractor legislation are all likely to remain discussion items in the 112th Congress. The direction of the debate will be greatly impacted by the elections.

    EFCA, OSHA legislation, FMLA revisions, possible attempts to change The Worker Adjustment and Retraining Notification Act (WARN Act), act and Independent Contractor legislation are likely to be stalled due to the GOP takeover in the House and the closer margins in the Senate. There is potential for some bipartisanship on some issues.

    House Republicans can fight some of the actions and regulations being promulgated by the DoL, such as the funding of the Green Job training programs that are currently only available to unions and those affiliated with unions. A change could also have an impact on funding levels for the Susan Harwood Training Grants at OSHA.

  • Safety: OSHA is likely to issue a notice of proposed rulemaking on the issue of crystalline silica. This proposed rule is likely to cover exposure limits, methods of compliance, exposure monitoring and training.

  • Immigration: Immigration Reform will remain to be a challenge with business having few friends on either side of the aisle on this issue. Unlike the 111th Congress, the closer ratio's in 2011 could create a better climate for the development of a reasonable new visa program as well as liability protections for use of E-Verify. Senators Schumer and Graham will likely continue to be the main offices dealing with CIR in the Senate.

  • Pensions: This closer alignment could make it possible to get some traction on reasonable pension reform, although Republicans will need to be convinced that pension reform will help employers as much, if not more, as employees. Pension reform proposals such as "partitioning" still have substantial cost issues. AGC and stakeholders will propose additional reforms to protect the long-term viability of pension plans and the ability of employers to meet their pension obligations.

  • Project Labor Agreements:The administration is expected to continue to encourage agencies to use PLAs. GOP attempts to legislate against PLAs will likely be futile. However, a GOP Congress would be able to provide oversight on agencies requiring the use of PLAs to ensure that any agreements are fulfilling the executive order set forth by the Administration.

Tax Policy

  • 2001 & 2003 Tax Cuts: If the 111th Congress is unable to reach an agreement on the Bush-era tax cuts prior to adjournment, tax policy likely will be the first item on the agenda for the 112th Congress. The 112th Congress also may consider broader tax reform issues, but for the limited exception of a bill introduced by Senator Ron Wyden and out-going Senator Judd Gregg, no proposals were introduced or considered in the 111th Congress that would provide insight to the possible direction of either Democrats of Republicans in the new Congress. A Republican majority in the House, however, may attempt to use the tax code to address U.S. competitiveness issues and on-going economic concerns.

  • 3% Withholding: Senator Chuck Grassley's (R-IA) departure from the ranking member slot (due to committee term limits) may remove a key obstacle to Senate action on repeal or delay.

    In the House, there is no known opposition to 3 percent repeal exists on the Ways and Means committee, but potential pay-go issues may still exist moving forward.

Energy & Climate Change Policy

  • Climate Change: With cap and trade having played a role in Republican gains in the mid-term elections, it is likely both the House and Senate will vote on whether to rein in EPA regulations on greenhouse gas emissions. In the House, expect votes on rolling back EPA authority and little, if any, action on cap and trade legislation Senator Boxer (D-CA) will retain her chairmanship of the Environment and Public Works Committee where she can gain approval of a cap and trade bill. However, with a smaller Democratic majority, passage of a cap and trade bill remains a long-shot.

Oversight and Government Reform

  • Oversight: Incoming House Republican leaders are expected to use the oversight functions of the Standing Committees to point out wasteful spending and Administration policies that hinder job creation. It is widely expected that incoming Chairman Darrell Issa (R-CA) will hold hearings on EPA and its role in the climate change debate, put a close to the Countrywide Mortgage scandal, encourage government to be more transparent and accountable, and examine Federal policy with respect to the economy and job creation.

Federal Construction Spending

Both Republicans and Democrats have pledged austerity. Republicans in Congress and President Obama have put some specifics to where they feel construction spending should be. In his FY 2011 budget, the president proposed holding spending close to $112 billion in 2011 and a three-year discretionary funding freeze. For 2012, he has instructed departments to cut their spending by five percent more. The Republicans have pledged to impose a hard budget cap, and hold spending at about 2008 levels (Congress appropriated a little more than $107 billion for construction in 2008, very close to where the Obama Administration would be with a five percent cut for 2012). The lower spending levels and the hard budget cap envisioned by the Republicans will likely create a battle for funds in a zero sum world. In addition, AGC envisions a significant fight among Republicans on how to handle or how to limit earmarks. Fewer earmarks could result in fewer votes for construction spending legislation in the future.

Obama Administration Overview

With President Barack Obama now halfway through his first term, his reelection efforts start today. Leading up to Election Day this year, he said his major priorities for the next two years were overhauling the nation's immigration laws, passing energy, education, transportation and climate-change legislation, and shrinking the federal deficit. Even with both Houses of Congress, Obama had difficulty winning approval of the health care and financial reform bills, and he failed to pass cap and trade legislation. His goals will now be even more challenging. The president will need to decide if he will work with or work against a divided Congress. President Obama will probably continue to advance goals that do not rely as much on Congress, such as making greater use of the executive branch's regulatory machinery. However, much of his agenda could be scuttled by the economy, and based on the election results he will have to address the jobs situation before the larger social issues.

AGC Congressional Voting Records

The AGC Congressional Vote Records provide information about elected federal legislators through the votes they cast on key construction industry issues. Key votes are selected on the basis of AGC's top legislative priorities which are determined prior to the start of each Congress the AGG Legislative Action Committee.

Prior to each key vote every legislator is notified AGC?s position and the impact the vote will have on the construction industry. The voting record lists only officially recorded roll-call votes. When possible AGC only considers votes that are substantive, procedural votes are only used in extreme cases where a true measure of support or opposition for a bill can be determined.

House
 
Senate
 

Additional Information

How to Use the Vote Records

AGC members can use the voting record to hold Senators and Representatives accountable for their positions on key construction industry issues.

AGC members can use the vote records when meeting with legislators, drafting letters to legislators or considering financial support of campaigns. AGC PAC considers voting records along with other criteria when considering AGC PAC support.

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