Thursday evening
September 8 at 7 p.m. Washington D. C. time President Obama will speak to a
joint session of Congress about initiatives he is proposing to put 25.4 million
unemployed and underemployed Americans back to work in a growing economy.
Outside Obama’s senior staff no one is exactly certain what his proposals will
include, but we expect to hear him talk about the following, not necessarily in
the order presented here:
Construction
Industry
About half of the Obama
Administration proposals will be aimed directly at the ultra-high unemployment
among skilled construction tradespeople:
FAA Reauthorization
The current temporary
reauthorization of funding for the FAA expires September 16. When Congressman
John Mica forced a shutdown of FAA runway and tower construction projects, that
Congressional action stopped work on $2.5 billion of infrastructure
construction until Transportation Secretary LaHood pushed through emergency
legislation to put tradespeople back to work on these projects. The money to
pay these workers will stop flowing again on September 17 unless a clean FAA
reauthorization bill is enacted and signed into law by then, or another temporary
extension is passed.
Surface Transportation
Reauthorization
There has not been the
customary six year Highway Trust Fund reauthorization since Obama took office.
Instead, highway, water and rail transportation infrastructure construction
across the country has been financed by a series of three and six month
temporary extensions. Some of the slack has been taken up by stimulus
appropriations, but the stimulus was intended to add to, not substitute for, regular
surface transportation initiatives, and as a result, the economy has not been
stimulated.
House Republicans on
the Transportation and Infrastructure Committee are proposing to slash the
level of appropriations from past legislation by more than half. Look for Obama
to seek $550 billion in appropriations over the next six years, rather than the
$230 billion Republican six year proposal.
Infrastructure Bank
The idea of a federal
infrastructure bank to draw private investment into toll highway, rail and port
facility construction – projects in which private investors could earn a
reasonable return on their investment – has succeeded in facilitating
infrastructure construction in Europe and elsewhere. This is a pet project of
the Obama administration, plus there are two versions of proposals already put
forward by Senator John Kerry (D. Mass.) – who proposes a $10 billion federal
start up appropriation – and Representative Rosa DeLauro (D. Conn.) - who
proposes $25 billion in federal seed money. Both versions would include
investments in highway, rail, waterway, drinking water and sewage treatment,
and energy projects. DeLauro’s version would also include broadband
communications construction.
Commercial Building
Retrofits
Another proposal which
has been the subject of Obama administration trial balloons lately is the idea
of a tax incentive to promote private investment in retrofitting existing
commercial buildings for greater energy efficiency. This would put thousands of
skilled tradespeople back to work without any direct federal expenditure, and
would bring millions of private dollars now on the sidelines back into our
economy. Also, it has the additional factor of appealing to Republicans, who
are more likely to support an initiative that looks like a tax cut for
business. Apparently Obama’s Jobs and Competitiveness Council is behind this
proposal.
School Building
Renovations
This proposal will be
buried in the middle of the speech somewhere. Obama is always an advocate for
improving the education systems of America, but because this particular
initiative would involve new direct federal expenditures, it will likely draw
strong opposition from across the aisle.
Broadband Tower
Construction
While the stimulus
early in Obama’s term appropriated a great deal of cash for studying the
broadband needs of unserved and underserved areas of the nation, there has not
been a lot of actual communication tower construction with those funds. Only
about 68% of U. S. land area is currently covered by broadband communication
networks – Obama will seek expansion of that coverage to 98%. This is another
program which could bring private investment into play with minimal direct
federal expenditures, as revenue from broadband users could ultimately repay
investors for most of the cost of connecting outlying populations to cable TV
and the internet.
Power Grid
Modernization
This has been another
favorite of Obama’s, as part of his alternative energy initiatives and climate
change reduction legislation. Of course, power grid modernization should also
attract considerable private investment from utility companies if the right
incentives are enacted. And, significant segments of the skilled construction
trades would be put back to work should power grid construction expand
significantly. The massive outages on the east coast from recent storm damage
will highlight the need for this sort of infrastructure investment.
Local Construction Initiatives
You may not hear
anything about this one in Obama’s speech, but Representative Judy Biggert (R.
Ill. 13th District) announced a couple weeks ago that Veterans
Administration Secretary Eric Shinseki has approved construction to transform
the old Silver Cross Hospital building in Joliet, Illinois into a 60,000 s.f.
VA outpatient clinic to serve the growing south suburban population of
returning veterans. Silver Cross is moving into a new hospital facility in New
Lenox.
Other
Obama Proposals
Of course the
construction industry won’t be the president’s only target for economic
improvement. His speech will likely also include initiatives like tax
incentives, direct federal expenditures, and cutting red tape to improve the
economic competitiveness of American private enterprise. In the tax incentive
category, look for proposals to extend the temporary 2% reduction in payroll
tax rates; a tax credit for putting new employees on company payrolls; and an
additional tax credit for hiring returning armed forces veterans. Proposed
direct federal expenditures could include further extension of unemployment benefits
for out of work Americans; assistance to local school districts for hiring more
teachers; and specialized job training programs aimed at the long term
unemployed. Finally, in the competitiveness category, we expect Obama to push
ratification of three pending free trade treaties; and improvements in patent
law to speed up commercialization of new American inventions.
