Friday, July 31, 2009

Wisconsin Also Robs Peter To Pay Paul

Government funds set asied for specific purposes aren't really set aside for specific purposes, we are learning this week. Governor Jim Doyle and the Wisconsin state legislature balanced that state's budget by dipping into 'segregated" funds to the tune of nearly $240 million, including $65.8 million from the Transportation Fund. No wonder the construction industry is in such dire straits.

ALERT: Construction Industry Robbed By Congress!!

Stealing From the Stimulus

We doubted the $787 billion in stimulus appropriations could all be spent without being raided for other purposes, and the House of Representatives today began the Robin Hood act by proposing a measure to take $2 billion away from the construction industry and give it to the auto industry instead. Because the $1 billion appropriated to fund "cash for clunkers" has already been exhausted, and nobody wants to spend time before today's scheduled adjournment figuring out how to raise revenue to buy more old cars and trucks, the House proposes to take $2 billion from the $11.6 billion appropriated for renewable energy loan guarantees and pump it into the CARS program.

There were feeble mumblings of promises to find $2 billion to restore the Title 17 loan guarantee funds sometime in the future, but I don't recall Robin Hood ever giving anything back to those he stole from.

Thursday, July 30, 2009

Highway Trust Fund $7 Billion Band-aid Passes Both Houses

After cruising through the House Wednesday on a vote of 363 to 68, the $7 billion interim appropriation from general Treasury funds to tide the Highway Trust Fund over the Congressional August recess sailed through the Senate late Thursday on a vote of 79 to 17. Proposed Republican amendments to take the cash from stimulus appropriations rather than general revenues were thoroughly trashed on the Senate floor. Nevertheless, the stark controversy about whether to work towards a prompt six year reauthorization when Congress comes back into session in September, or to push through a temporary 18 month reauthorization deferring the touchy discussion of needed new revenue sources until after midterm elections, remains unresolved.

Wednesday, July 29, 2009

School Construction Funding Of $700 Million Approved In Subcommittee

The Senate Labor - HHS Appropriations Subcommittee yesterday approved the fiscal year 2010 appropriations measure for the Labor and Health and Human Services Departments, recommending total appropriations of $163.1 billion for the two Obama administration agencies. The measure specifically includes $700 million for school construction and renovation, an area of funding cut from the American Recovery and Reinvestment Act at the last minute. It seems likely that this bill will pass both houses of Congress before the current appropriations expire. Advancement of this measure on a voice vote is the only good news out of Washington for the construction industry so far this week.

Employee Free Choice Act Thrown In the Freezer

According to Senator Tom Harkin, talks with Senators Arlen Specter, Mark Pryor, Sherrod Brown, Thomas Carper and Charles Schumer lead Harkin to conclude that card check legislation could not get the required 60 votes in the Senate this year. Whether some watered down compromise preserving a requirement for secret ballot elections regarding union representation could emerge before the end of the session remains to be seen.

Highway Trust Fund Fix Bumped to $7 Billion

At the request of Senate leadership and the Obama administration, the temporary fix to tide the Highway Trust Fund over the five week Congressional recess has bumped from $5 billion up to $7 billion with the concurrence of House Majority Leader Steny Hoyer and Transportation and Infrastructure Chairman James Oberstar. The House passed the bill this evening and the Senate may act tonight or early tomorrow.

Meanwhile across the Potomac in Virginia, the sort of problems to come, should Oberstar's wish for a long term reauthorization measure before the current law expires September 30 not be granted, are being dramatically illustrated. Virginia's Department of Transportation has closed 18 highway rest stops and cancelled 1,400 road construction and repair projects, making $2 billion in budget cuts. Last Monday VDOT also laid off 600 employees. The urgency of the situation for the construction industry could not be more apparent!

Tuesday, July 28, 2009

Oberstar Caves To $5 Billion Short Term Highway Trust Fund Fix

Look for the House to pass a bill this week including an infusion of $5 billion from the general Treasury into the Highway Trust Fund to keep it solvent while Congress is in recess for five weeks between Friday and Labor Day. Oberstar still wants a six year reauthorization before the end of September, while Senate leadership wants an 18 month temporary extension to work on new funding sources to augment or replace shrinking motor fuel tax revenues. Oberstar initially wanted to press for his six year extension of the fund by limiting temporary cash assistance to $3 billion, but gave in to the $5 billion figure sought by the Obama administration and Congressional leadership in return for avoiding a vote on the 18 month extension proposal at least until after Congress reconvenes in September. Senate Finance Committee Chairman Max Baucus is on board with the $5 billion very temporary fund transfer. So, the suspense about future highway, transit and bridge construction projects remains.

Senate, House Part Ways On Health Care Reform

Never mind the five week delay in work in health care reform legislation over the Congressional summer recess, the real problem will emerge in the conference committee when House and Senate versions of the measure will have to be reconciled. It looks like the Senate could pass a version missing most of the heart and soul of the current House bill: no employer mandate, no public option, and a "luxury tax" of up to 35% on health insurance plans costing more than $25,000 per year in premiums.

The real struggle, Congressman and Senators at home in their Districts over the long summer recess will learn first hand from their constituents, will be convincing the large majority of the electorate, generally satisfied with their current doctors and their present health insurance plans, that the new law will not take anything away from them while it spends a trillion dollars over the next ten years extending coverage to 40 million people who do not have any insurance now.

Monday, July 27, 2009

Chicago Regional Rail Summit

Five midwestern governors are meeting in Chicago today with railroad executives to make lobbying plans for a chunk of the $8 billion in stimulus appropriations for high speed rail construction. Illinois Governor Pat Quinn, Iowa Governor Chet Culver, Michigan Governor Jennifer Granholm, Ohio Governor Ted Strickland and Wisconsin Governor Jim Doyle are planning a regional high speed rail network with Chicago as its hub, and they are competing against 277 other grant applicants. Forty states have requested a total of $102 billion, despite the availability currently of only $8 billion in federal stimulus cash. The five governors hope a regional application may boost their grant request to the top of the short list.

Oregon Adopts Its Own Climate Change Laws

Unwilling to await Congressional action on climate change legislation, Oregon's governor last week signed into law a package of bills designed to level off greenhouse gas emissions from that state by 2010. Included in the package of bills are measures promoting home use of solar energy, energy efficiency upgrades for homes and businesses, and power plant emission controls. Construction contractors in Oregon should look forward to increased work in these facets of the construction business.

Highway Trust Fund Strategies Still Divergent

Despite loss of all hope for a long term federal highway trust fund reauthorization bill before Congress takes off for the month of August, the House and Senate are still at odds about how to deal with the likely insolvency of the fund during the month long Congressional recess. House Transportation and Infrastructure Chairman James Oberstar and Highways and Transit Subcommittee Chairman Peter DeFazio want a $3 billion cash infusion to tide the fund over the recess, and force a vote on a six year reauthorization before the fiscal year ends September 30, while Transportation Secretary Ray LaHood, along with Senate Finance Chairman Max Baucus and the Senate Committees on Banking, Commerce and Environment and Public Works are pushing for a $27 billion, 18 month extension to push needed tax increases into the net election cycle.

Friday, July 24, 2009

Highway Trust Fund Reauthorization Runs Out Of Gas

Despite dire warnings from the Associated General Contractors of America, the U. S. Chamber of Commerce, the American Public Transportation Association and other business groups, state governors and local officials that a six year reauthorization of the federal Highway Trust Fund is needed to bring back about half of the 1.5 million construction jobs lost since January 2007, infighting among members of the House Transportation and Infrastructure Committee about how to pay for a $450 billion long term reauthorization measure seems to have doomed the legislative push for passage of a bill before the current legislation expires at the end of September. Congressman Earl Blumenauer is still pressing for a tax on miles driven to replace current motor fuel levies, while Congressman John Mica of Florida wants a "flat tax" of 7.5% on motor fuel purchases, and Congressman Peter DeFazio wants to augment the current motor fuel tax of 18.4 cents per gallon by "upstream" taxes of $1 per barrel on crude oil, plus $190 billion in new levies on speculators in crude oil futures.

Like none of us will see the pump price going up due to these new tax levies!

While our elected representatives continue debating how to find the best way of fooling us voters into believing they haven't increased taxes on us, 750,000 construction tradespeople who could be working this summer are sitting at home trying to figure out how to pay for food, their kids' college tuition, and gas to keep driving from job site to job site looking for work.

Military No-Bid Stimulus Spending Costing Taxpayers A Bundle

According to an Associated Press analysis of 570 military construction and repair projects worth $420 million and paid for with cash from the American Recovery and Reinvestment Act appropriations, no-bid contracts awarded to small minority and disadvantaged contractors under federal set aside programs are priced about 3% less than designer budget estimates, while competitively bid military contracts funded from the same source are coming in about 11% under designer budget estimates. Given the fact that the no-bid deals represent 25% of the total spent so far, and the total stimulus appropriation of $7.4 billion for this work, at present rates the use of no-bid awards will end up costing taxpayers $148 million dollars in wasted stimulus cash. I think I recall a Presidential promise to put an end to no-bid contracting by the military and other federal government agencies.

Meanwhile, three cabinet officials were hauled before the House Budget Committee today to testify about the effects of the stimulus appropriations in the economy. Agriculture Secretary Tom Vilsack testified that his department has increased food assistance to 33 million people, Transportation Secretary Ray LaHood said commitment of $22.3 billion to transportation projects has put people back to work in 24 states, and Interior Secretary Ken Salazar said his department will spend $305 million to create 3,000 jobs.

Thursday, July 23, 2009

Health Care Reform Postponement Is Now Official

Senate Majority Leader Harry Reid dumped President Obama's August deadline for floor action on Health Care Reform legislation into the shredder today with the announcement that the Senate won't take up the measure until after Labor Day. Private negotiations continue in caucus rooms on both sides of the Capitol, but progress is apparently insufficient to speed any legislation through both houses of Congress any time soon. While Senators and Representatives are home in their Districts during the month of August, look for millions of dollars worth of television advertising on the issue from both parties and the numerous health care and insurance interests involved in the debate. If you sell advertising time on the airwaves for a living, August should be a very lucrative month.

Climate Change Bills Inch Forward

Although agricultural opposition to the climate change measures in the House and Senate is dropping off now that the USDA says the increased costs to farmers resulting from the legislation would amount to only about 0.3%, businesses trading overseas still oppose the House version's requirement for mandatory imposition of tariffs on goods from countries not participating in international climate agreements, and Senate Environment and Public Works Chairman Barbara Boxer still wants stronger consumer protections for residential ratepayers in the Senate measure.

E-Verify "Must Play, Must Pay" Proposed

Congressman Mark Shuler of North Carolina and Senator Mark Pryor of Arkansas are proposing legislation to require all employers in the country, not just those doing business with the federal government, to check the citizenship and work authorization status of every employee through the Homeland Security Department's E-Verify system. At the same time, during hearings by the House Oversight and Government Reform Committee today, Representative Jackie Speier of California proposed the imposition of a fee for each employer use of the system to check a prospective or current employee's authorization to work in the United States. The Social Security Administration estimates that a mandate to use E-Verify for checking up on everyone working in the country would cause the annual need for another 450,000 people to visit Social Security field offices to correct mistaken information now lodged in the system.

Timely Highway Trust Fund Reauthorization Gains An Ally

Joining in House Transportation and Infrastructure Chairman James Oberstar's efforts to bring a six year reauthorization of the federal highway trust fund to the house floor before the current law expires September 30, House Ways and Means Select Revenue Measures Subcommittee Chairman Richard Neal supports a $3 billion temporary cash infusion to tide the fund over the Congressional August recess and keep everyone's feet to the fire for a long term solution to shrinking revenues for public transit, highway, passenger rail and water transportation infrastructure funding. With the Senate and the Obama administration favoring an eighteen month extension and postponement of revenue issues until after next years House elections, the battle lines appear to be hardening. House Ways and Means Committee member Earl Blumenauer described the process as a five way dance among the Department of Transportation, and authorizers and appropriators in both houses of Congress.

Employee Free Choice Act Faces Arbitration Hurdle

Emboldened by their apparent victory in keeping the secret ballot requirement part of union organizing efforts, business groups are now turning against the federal arbitration provisions of this labor legislation. U. S. chamber of Commerce Labor Law Policy Executive Director Michael Eastman called the bill's binding arbitration provision "a non-starter for the business community," and Coalition for a Democratic Workplace Chairman Brian Worth said the apparently defunct card check rule was "only half the political problem" - binding arbitration seemingly being the other half.

Wednesday, July 22, 2009

Is Health Care Reform On the Ropes?

President Obama is refusing to release to news media the list of health industry big wigs who have met with him at the White House in recent weeks to discuss health care reform legislation, and according to Senate Finance Committee Ranking Member Charles Grassley, when Obama met with Blue dog Democratic Congressmen last week to discuss changes their caucus wants to the House version of the measure, the Representatives listed ten major changes they want before a floor vote in which their opposition could kill the legislation altogether. Grassley reports the president responded "You're going to destroy my presidency." Republicans, hopeful the August recess will give their anti- administration advertising campaigns in key states a chance to gain traction, keep referring to health care reform legislation as Obama's "Waterloo."

Utah Senator Orin Hatch has dropped out of negotiations in the Senate Finance Committee on that chamber's version of health care reform legislation, noting as reasons for his withdrawal the employer mandate, unfunded Medicaid mandates, and inclusion of a public option which he believes will lead quickly to a single payer health care system. Congressman Bart Stupak of Michigan, speaking for himself and others who oppose abortion rights, predicts the House version of the bill will not pass unless it abortion opponents are permitted to offer an amendment on the floor prohibiting use of public funds to pay for any abortion procedures. "If we don't get a clean shot, if we don't get the amendment we want ... I think it's enough to take down [the legislation]. I'm not just going to roll over."

Finally, after yesterday afternoon's weekly Democratic policy luncheon, Senate Majority Leader Harry Reid was asked by a reporter whether the notoriously foul-mouthed White House Chief of Staff Rahm Emanuel had consulted with Reid on the Senate bill. Reid's response: "Any guidance from Rahm? No, but he did call me twice during lunch. And I would like to say his language is getting better, but I think it's getting worse."

Fingerprint Bill Due By Labor Day, Schumer Says

Senate Judiciary Immigration Subcommittee Chairman Charles Schumer announced yesterday at his panel's hearing on immigration reform that he expects to introduce legislation by Labor Day which would require every citizen and immigrant working in the United States to have fingerprint information on file with the government, associated with either a new identification number or a plastic ID card identifying the person as someone legally authorized to work in this country. Akin to a social security card, passport, driver's license and company identification cards at many places of employment, the card could eventually substitute for all of those things if the computer information now associated with each different form of identification were to be linked by computer to the new identification number or card.

The Homeland Security Department estimates it would cost more than $200 million annually to operate such a system once it is up and running. Extrapolation from that figure indicates the initial cost of setting up the system and fingerprinting all working citizens and resident aliens authorized to work here would cost between $2 billion and $5 billion. Illinois Congressman Luis Gutierrez of the Congressional Hispanic Caucus strongly favors the proposal, saying, "As Congress examines biometrics as part of a new and better system, I want to encourage you to ignore the naysayers, those who claim this can't be done. Incorporating an effective employment verification system is our only hope for truly ending illegal immigration."

Welcome to Gattaca, ladies and gentlemen. Form a line here, roll up your sleeves and ink your fingertips.

Tuesday, July 21, 2009 Website Is Still Completely Opaque

Despite the best efforts of an administration which campaigned on promises of government transparency, the website which was set up to provide ordinary citizens with raw data regarding the spending of nearly a trillion dollars in economic stimulus appropriations still comes up far short of the finish line. To begin with, the RAT [Recovery Accountability and Transparency] Board just signed a contract to spend $18 million more on development of the website, yet copies of that very contract have not yet been posted on the site. receives an average of 2,300 hits a minute by citizens, reporters, and others interested in the details of stimulus spending, and about 200,000 government contracts funded by stimulus appropriations have already been awarded. I suppose it may be a bit unfair to criticize the RAT board for being slow in posting the details of contracts awarded by other agencies, but it does seem it should be able to put up a link to a .pdf copy of the one contract it has signed with Smartronix, Inc. for improvement of its own website. Any of you technically literate folks out there who can explain why they haven't done this yet?

Senate Finance Proposes $26.8 Billion Highway Trust Fund Infusion

Senate Finance Committee Chairman Max Baucus proposed late yesterday that Congress appropriate general funds totaling nearly $27 billion to tide the federal Highway Trust Fund over for 18 months while Congress works out a permanent six year reauthorization of surface transportation funding. The Baucus measure would reimburse the Highway Trust Fund $14.7 billion in lost interest on road construction balances and $4.8 billion in lost interest on mass transit balances as a result of a 1998 prohibition on the fund collecting interest on the money from motor fuel taxes which is the major source of federal revenue for surface transportation construction and repairs.

Baucus proposes removing the ban on Highway Trust Fund balances accruing interest for the benefit of the fund, and also would reimburse the fund $7.3 billion used for emergency projects since 1989.

House Transportation and Infrastructure Committee Chairman James Oberstar is still pressing for a six year reauthorization measure before the current law expires September 30, 2009, but this move in the Senate seems to have doomed any chance of a long term reauthorization bill reaching the floor of both houses before the fiscal year closes.

Senate Hearings On Fingerprinting All U. S. Workers

In case you thought Senator Charles Schumer was joking when he proposed requiring the federal government to keep fingerprints of everyone working in this country, the Senate Judiciary Immigration Subcommittee is holding hearings today on the feasibility of requiring all workers to participate in a "biometric verification system" using fingerprint or iris scan data embedded in a permanent identification card which would be required for verification by employers of the employee's legal right to work in this country. Business opposition to the plan so far is based on the issue of who would pay for such a system, rather than the privacy concerns expressed by the ACLU and others.

New Hampshire Uses Stimulus Funds To Explore Broadband Expansion

New Hampshire Governor John Lynch has signed a bill creating the office of "Director of Broadband Technology Planning and Development" funded by federal stimulus appropriations, to explore ways to bring high speed internet service to rural areas of the state as a replacement for the dial up internet access which is the sole connection available to most residents of those locales. Keep watching the Director's office for announcements of opportunities for construction work on such projects.

Saturday, July 18, 2009

High Speed Rail Demand Heats Up

The U. S. Department of Transportation has announced that 278 separate grant requests have been filed seeking funding out of the $8 billion appropriated for high speed rail construction in the American Recovery and Reinvestment Act. If your business builds rail lines, or supplies those who do, get out your pencils and sharpen them, it seems a raft of contracts will be coming up for bidding once the successful grants have been awarded.

Card Check Dropped From Employee Free Choice Act

Bowing to pressure from moderate members of their own party, Democratic Senate leaders have dropped the card check provision from the Employee Free Choice Act, in favor of alternative provisions shortening the time period for secret ballot elections which will still be required before a business can be forced to bargain with a union acting on behalf of its employees. This is a major defeat for big labor at the hands of senators from right to work states seeking to preserve the secret ballot rights of all workers employed by companies which are the subject of union organizing campaigns, and frees each voting employee from pressure by either union organizers or company executives who would otherwise know the individual worker's vote on the question of union representation.

It appears the bill is likely to pass now that it has been gutted of its most controversial provision, and its passage will signal renewed union organizing campaigns in the construction industry in right to work states in particular. The effect on construction businesses in those states where union membership is already required for construction tradespeople will be minimal. You probably already know which category your own home state falls into.

Surface Transportation Policy Issues Postponed

Wednesday the Senate Environment and Public Works Committee, with a single dissenting vote, approved an 18 month, $60 billion extension of the highway trust fund, rather than addressing the funding issues which will bankrupt the highway trust fund cash balance in a couple weeks. Despite the appearance on Capitol Hill of 100 members of the U. S. Chamber of Commerce lobbying in favor of a full six year authorization of the highway trust fund before it expires in six weeks, funded by motor fuel tax increases, it seems Congress would rather be looking at tax increases during the Presidential election cycle than facing blow back from constituents at mid-term election time.

Health Care "Public Option" Is Hardly Optional

For those of you closely following the health care debates in both houses of Congress, the phrase "public option" is undoubtedly a familiar one. It is utterly misleading, however. Buried on page 16 of the 1,018 page House version of the health care legislation is a provision innocuously headed "Protection The Choice To Keep Current Coverage" is a provision prohibiting any insurance company from selling new individual health insurance policies after the bill becomes law. So, if this measure passes, everyone will be required to purchase health insurance, but health insurance will only be available by means of a group policy through your employer, or through Medicare, Medicaid, or the so called "public option" plan run by the federal government. No matter what your situation, you are prohibited from getting health insurance by means of an individual policy.

This law will be a disaster for the construction industry. How many construction companies are there out there where the owner is the only non-union employee? The owner covers his tradespeople through a union health and welfare plan, which provides them with solid gold Cadillac benefits, but he will no longer be able to buy comparable coverage for himself, because the "public option" benefit levels will never be as generous as union health and welfare plans, and private sector insurers will be prohibited by law from selling a policy to the owner. If you fall into this situation, you need to get on the phone to your Congressman right now and get this horrible provision stricken from the bill before you are forced into the government monopoly "public option" health insurance.

Wednesday, July 15, 2009

Highway Trust Fund Reauthorization Delayed A Year And A Half

Senate leadership support for a temporary 18 month extension of the Highway Trust Fund seems destined to insure that no permanent reauthorization bill will come out of Congress for at least that long, and maybe not at all during President Obama's first term in office. Senate Majority Leader Harry Reid, together with Senate Environment and Public Works Chairman Barbara Boxer and Ranking Member James Inhofe, have all come out in favor of an 18 month temporary extension bill.

House Transportation and Infrastructure Highways Subcommittee Chairman Peter DeFazio predicts the 18 month extension bill will cost the construction industry a million jobs because states will not begin investing in long term projects until a full six year reauthorization is passed. And House Transportation and Infrastructure Chairman James Oberstar predicts the 18 month delay will stretch to four years before a long term reauthorization can be enacted. "An 18 month extension will put us into the next presidential election cycle. It will take four years," Oberstar said. "I know how this body works ... Inertia becomes the enemy of progress."

Meanwhile, House Transportation, Housing and Urban Development Appropriations Subcommittee Ranking Member Tom Latham predicts the Highway Trust Fund will become insolvent in about three weeks from today. The subcommittee Monday unanimously approved its portion of the fiscal 2010 transportation and infrastructure budget, which includes #10.5 billion for public transit construction, $1.5 billion for Amtrak construction, and $4 billion for high speed intercity passenger rail construction.

Obama Proposes $2.5 Billion For Community College Construction

In a speech in Warren, Michigan, yesterday President Obama proposed a federal investment of $12 billion in community colleges across the country, including $2.5 billion for construction and renovation of community college buildings. Administration officials say this represents "seed money" for capital fundraising campaigns.

Sufficient Stimulus Funding Obligated

All 50 states have met the June 30, 2009, deadline for obligating 50% of their highway funds appropriated in the American Recovery and Reinvestment Act, and 15 states have already obligated 80% or more of the cash. The Obama administration is castigating suggestions by Senate Majority Whip Jon Kyl of Arizona that the stimulus money not already spent should be diverted to other purposes. In a letter to Arizona Governor Jan Brewer, Transportation Secretary Ray LaHood listed all the money and projects committed to that state but not yet spent, and concluded, "I believe the stimulus has been very effective in creating job opportunities throughout the country. ... However, if you prefer to forfeit the money we are making available to the state, as Senator Kyl suggests, please let me know."

What Does Health Care Reform Mean To The Construction Industry?

Key details of health care reform legislation between the House version of the legislation and the Senate's measure remain to be resolved in Committee markups, floor debates and ultimately a conference committee, but here's what it is likely to look like for contractors:

Companies with annual payrolls greater than $400,000.00 will be required to provide health insurance for all employees, or pay the federal government a penalty equal to 8$ of total payroll. Individual families not covered through their employers will be required to buy individual or family coverage on their own, or pay a penalty amounting to 2.5% of their gross income. And a federal surtax for healthcare ranging from 1% for families with incomes above $350,000 up to 5.4% for families earning over $1 million will be imposed on everyone, to pay for government subsidies to assist low income families get private insurance, or Medicare or Medicaid coverage.

The Congressional Budget Office now predicts that the House version of the measure will likely cost taxpayers $1 trillion. And, in a publicity bid to soften the opposition to adoption of a public plan to compete with private health insurance companies, the Senate Health, Education, Labor and Pensions Committee concluded its markup of the Senate bill by accepting an amendment from Senator Tom Coburn of Oklahoma requiring all Representatives and Senators to participate in any public plan adopted by Congress. Coburn said in proposing the amendment, "We're in leadership positions, and if it's not good enough for us, then it's not good enough for America." the amendment was adopted by a vote of 12-11, and afterwards Coburn remarked, "I'd love to be a church mouse in the conference committee when this gets dropped."

I guess in Congress what's sauce for the goose is not necessarily sauce for the gander.

Tuesday, July 14, 2009

Oberstar Caves In To Congressional Scheduling Realities

Tossing in his cards, House Transportation and Infrastructure Committee Chairman James Oberstar is preparing legislation transferring $7.3 billion from general federal funds to the highway trust fund, in recognition of the plain fact that the legislative agenda in Washington D.C. will be consumed by health care reform and climate change bills, leaving no room for debate on the funding mechanism for Oberstar's proposed 6 year, $500 billion highway trust fund reauthorization before the end of this fiscal year, when the current legislation expires.

While Speaker Nancy Pelosi has stated that a long term highway reauthorization would be "a great jobs bill," leadership has recognized that time for debating other major issues in Congress will leave little time for the detailed work needed to bring a new 6 year reauthorization to the floor of both houses.

Meanwhile, criticism of the stimulus infrastructure spending already approved in the American Recovery and Reinvestment Act is growing. A study released July 9 by the New York Times shows that the 100 largest metropolitan areas, where two thirds of the population lives and three fourths of the nation's economic activity takes place, are receiving less than half of federal stimulus dollars for road and bridge construction. According to Owen D. Gutfreund at City University of New York, "We have a long history of shortchanging cities and metropolitan areas and allocating transportation money to places where few people live."

Illinois Governor Signs $31 Billion Construction Legislation

Late yesterday Illinois Governor Pat Quinn signed legislation funding $31 billion in construction projects across the state, breaking a political log jam which had threatened loss of $3.7 billion in federal stimulus finding which is now included in the $31 billion construction total. The remainder of Illinois' first capital construction legislation in ten years will be funded by increased income taxes, higher driver licensing fees, and increased taxes on alcoholic beverages, tea and coffee, candy, makeup and grooming supplies. New revenue from video gambling machines now to be permitted, with a limit of five machines in any bar, restaurant, filling station and convenience store licensed to sell alcoholic drinks, is expected to contribute $300 million per year towards these construction projects.

Governor Quinn predicts this government investment will create 439,000 new jobs in Illinois.

Searching For Stimulus Work?

Here's a link to a search tool you can use to find how stimulus money is being used to let construction contracts in cities and towns near your business location:
Good hunting!

Wednesday, July 8, 2009

Mandatory E-Verify Proposed

Yesterday Alabama Senator Jeff Sessions offered an amendment to the fiscal year 2010 Homeland Security appropriations bill which would permanently authorize the Homeland Security Department's E-verify program for checking on line to see whether employees and prospective employees are legally authorized to work in the United States, and to make it mandatory for all businesses contracting with the federal government to use the E-verify system to validate the legality of all their workers. The Obama administration has twice delayed a federal rulemaking which would impose the same requirement, which is now supposed to take effect by rule on September 8.

Following an announcement this afternoon by Homeland Security that the mandatory E-verify rule will in fact be enforced by them after September 8, the Sessions amendment was adopted by voice vote on the Senate floor.

Full Committee Approves $133.9 Billion Military And VA Appropriation

The Senate Appropriations Committee has voted 21-0 to approve and send to the Senate floor a $133.9 billion spending measure, including $23.6 billion for military and veterans' administration construction. The Senate version of the bill is slightly bigger than the parallel House appropriation, and includes $5.7 billion for construction at military hospitals and dispensaries, $1.9 billion for construction at VA hospitals and clinics, $12.6 billion for construction at active military bases and reserve centers, $2 billion for construction of military family housing, and $1.4 billion for military construction in Afghanistan. The bill was approved by a subcommittee just yesterday.

Water And Energy Get $33.3 Billion

Yesterday the House Appropriations Committee approved the fiscal year 2010 water and energy appropriations bill totaling $33.3 billion, including $5.4 billion for clean up of old nuclear weapons manufacturing plants, and $5.5 billion for construction projects for the Army Corps of Engineers.

Tuesday, July 7, 2009

Congressional Highway Trust Fund Split Widens

Evidence of the widening split in Congress over how to deal with the $7 billion shortfall in the Highway Trust Fund, looming well before the current legislation expires September 30, is becoming clear as details of an "off the record" June 26 meeting of about 75 transportation lobbyists and other industry leaders with Democratic Congressional Campaign Chairman Chris Van Hollen are beginning to leak out. Maryland Congressman Van Hollen, who is also a member of the House Ways and Means Committee and Assistant Speaker of the House, spoke at the event hosted by Congressman Earl Blumenauer of Oregon.

Van Hollen told the assembled thought leaders of the transportation industry that House Transportation and Infrastructure Chairman James Oberstar's bold six year proposal to fund surface transportation with $450 billion for roads and bridges and $50 billion for high speed rail will require "support ... from both the left and the right." Van Hollen predicted that "unless groups like the U. S. Chamber of Commerce are willing to provide political cover so members know they are not going to get absolutely skewered ... there is no way we can talk about a revenue solution." Oberstar's six year plan will cost $140 billion more than motor fuel taxes will bring in to the Trust Fund. These taxes - currently 18.4 cents per gallon - have not been raised since 1993. U. S. Chamber of Commerce President Thomas Donahue has testified before the House Transportation and Infrastructure Committee that, if Oberstar's proposed legislation includes program reforms like limits on earmarks and non transportation spending, Oberstar can expect "the full weight of the Chamber ... behind an effort to increase user fees to provide the revenue our transportation infrastructure badly needs."

There are wide rifts developing among Oberstar's panel members, some of whom favor a straightforward motor fuel tax increase, and others, led by Highways and Transit Subcommittee Chairman Peter De Fazio, who favors a tax on crude oil futures and options, and a third faction headed by Congressman Blumenauer, who wants a temporary motor fuel tax increase while phasing in a new tax on miles traveled rather than gallons pumped. De Fazio has also proposed an alternative measure which would index motor fuel tax levels to inflation after 2011, and immediately issue bonds for $60 billion against the anticipated future revenue increases to fill the Highway Trust Fund shortfall.

Talk about voodoo economics! How is taxing crude oil futures or indexing future motor fuel taxes to inflation, while paying interest on $60 billion in government bonds, going to avoid pump price increases?

Further complicating the already Gordian complexity of the political situation is the Obama administration's insistence that a temporary 18 month funding measure be enacted to put off the revenue issue until after mid term elections - while throwing the question directly in the path of Obama's own 2011 re-election campaign. Ibuprofen, anyone?

The level of uncertainty these political maneuverings throw into the planning processes of state and local governments which depend on this cash to flow at a steady pace, and hence on the heavy civil segment of the country's construction industry, is literally unimaginable. Add to it the utter failures to advance capital expenditure budgets in the legislatures of several heavily urbanized states this session, and it seems the big appropriations for "shovel ready" infrastructure projects in the American Recovery and Reinvestment Act this spring will be useless for producing any long term job creation in the construction sector of the American economy. No wonder Biden and Obama are already running a second stimulus package up the flagpole!

Senate Panel Unanimously Approves $23.6 Billion Military Construction Spending

Yesterday the Senate Military Construction and Veterans Affairs Appropriations Committee approved a fiscal 2010 $134 billion spending measure, including $23.6 billion for military and veterans construction. The Senate version of the bill is slightly bigger than the parallel House appropriation, and includes $5.7 billion for construction at military hospitals and dispensaries, $1.9 billion for construction at VA hospitals and clinics, $12.6 billion for construction at active military bases and reserve centers, $2 billion for construction of military family housing, and $1.4 billion for military construction in Afghanistan.

Friday, July 3, 2009

American Architecture Firms Stiffed By GSA

If you have ever served in the military of the United States, you are undoubtedly familiar with the acronym SNAFU, and you probably know both the polite and not so polite phrases those initials stand for. It's difficult to describe this situation involving stimulus funding in any other manner. There is a beautiful Beaux Arts federal office building standing vacant at 50 United Nations Plaza in San Francisco in what is known as the Civic Center area of the city. Opened in 1936, this historic structure was closed and shuttered in 2007 when a new San Francisco federal office building, designed by Morphosis Architects of Santa Monica California, opened. The closed building was used as a substitute interior set for San Francisco's City Hall during the filming of the movie "Milk," and the General Services Administration had considered a proposal to redevelop the building for apartments, but decided to leave it vacant instead.

With passage of the American Recovery and Reinvestment Act earlier this year, GSA budgeted $121 million for renovation of 50 UN Plaza, and advertised for bids from architects to design the renovation project. Yesterday the GSA announced that it has chosen an architecture team led by Foster + Partners of London, England over San Francisco based architecture firms Skidmore Owings & Merrill, William McDonough/ Hornberger + Worstell, and Architectural Resources Group/HKS as designer for the project.

Under the Brooks Act, GSA is free to select an architect on criteria other than cost of services for projects like this built with federal money. Never mind the fact that Foster + Partners is a winner of the coveted Pritzker Prize for architecture. Weren't the jobs created by stimulus projects supposed to be created in the United States? The renovation of this historic building will involve modernization of its utilities, installation of new washrooms, and opening up of interior working spaces while preserving the historic facade, stairwells and corridors. No local architect firms are up to the task? What gives?