Congressional leaders have talked about an economic stimulus package that could total as much as $500 billion. It is unlikely that it would be taken up before the 111th Congress convenes on January 6, 2009, and it will not be sent to the president before President Elect Obama takes the oath of office on January 20.
Infrastructure Investment
While details of the package are still under development, it is widely expected that the infrastructure investment component of the package could represent 20-30% of the total package. AGC has been successful in coordinating information from various owner groups about projects ready to go and relaying our message that a significant investment in infrastructure will spur economic development, helping to cultivate support among key Congressional decision-makers. Significant increased investment is expected in transit, airports, schools, roads, bridges, public housing, flood protection and waste water and drinking water infrastructure projects in the stimulus bill. Support for infrastructure investment is also strongly supported by President-elect Obama, who announced on November 21 a new initiative to save or create 2.5 million jobs in the next two years that includes infrastructure investment, school modernization and new energy policy initiatives.
At a meeting of the National Governors Association on December 2, the nation's governors requested that the stimulus package include as much as $136 billion worth of road and bridge repair projects that are “ready-to-go.” The governors are also asking for direct aid to states experiencing significant budget deficits and urged President-elect Obama to consider establishing a national infrastructure bank that could issue bonds to finance infrastructure projects as part of the economic stimulus package currently being developed. During his campaign, Obama proposed creating an infrastructure bank that could issue up to $60 billion in tax-credit bonds, which provide investors with a tax credit instead of interest payments. AGC endorsed similar legislation introduced in the 110th Congress.
Below are funding needs AGC has compiled from many owner groups that have been identified as “ready-to-go” projects.
| Water Resources |
$7 billion - $10 billion in new funding for the Corps of Engineers |
| Highways and Bridges |
At least $30 billion for projects as identified by AASHTO |
| Drinking Water and Wastewater Treatment Systems |
$10 billion for the repair and construction of publicly owned sewage treatment works
$10 billion in new financial aid to the nation's drinking-water treatment systems |
| Public Transit |
$3.6 billion for transit projects already authorized |
| Aviation |
$600 million worth of capital improvement projects |
| Dams |
$50 million for the dams in greatest need of repair |
| School Construction |
$10 billion needed for repairs and new construction |
| Federal Facilities |
$1 billion for repair and alterations |
| Public Housing |
$1 billion for the Public Housing Capital Fund |
Energy
As details of the structure of the stimulus package continue to emerge, another central component of the measure would be a “green-jobs” program. The program may include home weatherizing, installation of “smart meters” designed to reduce home energy use, tax breaks or direct government subsidies for a variety of clean energy projects, including solar arrays, wind farms, biofuels and clean coal technology. Members of Congress have also talked about spending $100 million or more on energy transmission upgrades.
Tax Incentives
In November, the Senate Finance Committee proposed one-year extensions through 2009 of bonus depreciation and Section 179 elective expensing to help stimulate business investment. The bonus depreciation provision would allow a taxpayer to depreciate 50 percent of the cost of an asset in the year in which the asset was acquired (i.e., 2009). The Section 179 elective expensing provision would allow small businesses to elect, in lieu of depreciation, to deduct up to $250,000 for property acquired and placed into service in 2009. AGC has endorsed the section 179 expensing and has also proposed a full repeal of the 3 percent withholding law set to go into effect in 2011 as part of the stimulus package. In addition, we are working with owner groups to identify other tax incentives that would stimulate building improvements and construction such as accelerated depreciation of certain energy efficiency improvements or green building additions.
Take Action
AGC will continue to press Members of Congress in Washington to enact an economic recovery package with infrastructure investment as soon as possible. It is critical to continue educating your Members of Congress in the coming weeks about the projects that are ready to go in your area and the important economic contributions offered by the construction industry. Please use the tools on AGC’s
Legislative Action Center to contact your congressional delegation and urge them to support infrastructure investment in an economic recovery package.
