Investing In Political Campaigns

Ever wonder what the rate of return is on those political donations businesses make to campaign funds? Well, these days it's a lot better than the stock market. When it comes to defense contractors, political campaign donations can return an average of nearly $610 on the dollar!

There are 18 Senators on the Senate Defense Appropriations Subcommittee. Among them they collected a total of $1.25 million in campaign contributions from 123 businesses receiving defense contracts earmarked by subcommittee members. An earmark is funding for a specific project written into the appropriations bill, which the Defense Department must spend on that project, whether the Defense Department really wants and needs the project, or not. The 123 businesses making the campaign donations received earmarks in the FY 2010 defense appropriations bill totaling $762.3 million, according to analysis by Taxpayers for Common Sense. That's a return on investment of $609.84 for every campaign dollar donated.

McCain Transportation Earmark Redirection Soundly Defeated

President Obama's campaign promise to veto appropriations bills coming to him with earmarks will be tested this month. Today the Senate defeated by a vote of 68-26 an amendment to the FY 2010 Transportation-HUD appropriations measure which would have stricken $1.7 billion in earmarks for construction projects favored by Senators within their individual states, in favor of spending the cash on modernization of the civil air traffic control system in the U.S. Complaining that 1 civilian flight in 4 in this country is delayed, McCain claims that air travel improvements are perpetually underfunded by Congress in favor of individual Senators' pet local projects. Senate Appropriations Transportation-HUD Subcommittee Chairman Patty Murray points out that the earmarks total less than 1% of the appropriation, and are 50% less than last year.

Republicans Oppose Mass Transit Construction Earmarks

Republican Senators have filed over 50 proposed amendments to the $122 billion Transportation, Housing and Urban Development FY 2010 appropriations bill, attacking every mass transit earmark attached to the legislation. Many of the projects under attack can hardly be characterized as pork barrel work, including $ 85 million for extension of the Washington, D.C. Metro to Dulles airport, $30 million for the Honolulu High Capacity Transit Corridor project, and $75 million for Houston North Corridor Light Rail Transit project. One amendment would prohibit use of federal funds to pay for signs on construction projects announcing that the work is being paid for with stimulus appropriations. Huh?

I can't say whether this onslaught is the result of Republican hatred for mass transit, or Republican hatred for Democratic Congressmen who sponsor these entirely worthy projects. Either way hundreds of millions of badly needed construction project dollars are being held up by political bickering in Washington when the projects are shovel ready and the hard hats are in desperate need of the work.

High Speed Rail On LaHood's A List

In a speech Tuesday at the National Retail Federation leadership conference, Transportation Secretary Ray LaHood repeatedly referred to the need for the United States to develop high speed intercity rail transportation, referring to the stimulus bill's $8 billion in seed money for these projects. In spite of funding difficulties, LaHood said he expects House Transportation and Infrastructure Chairman James Oberstar to produce a workable five year transportation reauthorization bill "pretty soon."

Meanwhile, Congressmen both on and off Oberstar's committee have noted a softening in the Chairman's stance regarding the posting of earmark requests on their websites. In a May 4 letter Oberstar and Ranking Member John Mica merely asked Congressmen to "please post requests for projects on their websites." Although all the earmark requests will ultimately be posted on Oberstar's committee website, the chairman refuses to set a deadline for individual members to post their requests on their own sites, and also refused to say he will disallow any earmarks not posted on individual Congressmen's sires before the legislation passes.

Earmark Hide And Seek

New House rules require every member to post appropriation earmarks he or she has requested on the representative's website so the information is available to the public. A few Congressional leaders proudly display the link to these details in a prominent position on their home pages, but many Representatives have buried the earmark link two or three pages deep on their sites, and called them things like "other issues" or "local appropriations" to keep the word "earmark" out of the conversation altogether.

However, the earmark list is the best early warning about federally funded construction projects which will be released for bid in the near future in your locality. I recommend that you make the effort to carefully scrutinize the web pages of Congressmen in your locality, and once you locate the links, save them in your browser's "favorites" for future reference. Then you can easily scan the current listings from your area of the country or the localities where you do business whenever you need information about what will be coming out for bid in the next half year or so. This kind of advance planning will give you a competitive edge over the contracting businesses less diligent in seeking out advance notice of bidding opportunities before they come out in the Dodge Reports.

Senate To Vote Tuesday On '09 Omnibus Appropriations

Working under the midnight Wednesday deadline imposed by last Friday's continuing resolution, the Senate will consider 12 more Republican proposed amendments to the '09 omnibus appropriations bill today and tomorrow, with all 12 expected to fail, and a cloture vote and passage of the bill expected late Tuesday. The two key proposed amendments come from John McCain, proposing to strip almost all of the 8,330 earmarks from the bill, and from John Thune, to prohibit FCC reinstatement of the fairness doctrine. While the Republicans protest earmarks, it appears that $51 million in earmarks belong to Senate Minority Leader McConnell. Go figure.

Obama Will Sign '09 Appropriations Despite Earmarks

According to both Chief of Staff Rahm Emanuel and OMB Director Peter Orszag, speaking on the Sunday talk shows, President Obama will sign the appropriations legislation for fiscal 2009 Congress is expected to send him this week, after clearing the Senate and the conference committee, despite 8,330 earmarks costing about $7.7 billion out of the $410 billion appropriated, or a little less than 1.9% of the total expenditures authorized in the bill.

Despite heavy Republican criticism that the Oval Office is now backing down from the campaign pledge of "no earmarks," these two high level staffers characterized the '09 appropriation measure as "last year's business," and emphasized that Obama will not be so forgiving in connection with the future budget and appropriation bills coming to his desk.

Obama is letting no grass grow under his feet or those of his staff, naming Kansas governor Kathleen Sebelius as his nominee to head his Health and Human Services Department, and spearhead the drive for health care reform. This could indeed prove to be the first multitasking administration in a long time. We hope we can continue cutting through the blizzard of activity to keep readers focused on those legislative actions affecting the construction industry.

Fiscal '09 Budget Passes House

On a vote of 245 in favor and 178 opposed, the $410 billion fiscal year 2009 omnibus appropriations bill passed the House February 25. The Senate has to vote on the bill next week because the continuing resolution funding federal government operations at fiscal 2008 levels expires March 6. Unless the Senate passes the omnibus before that deadline, another continuing resolution would be necessary to avoid a government shutdown.

This appropriation for fiscal 2009 includes budget increases of about 8% for most federal government operations. It also contains 8,330 earmarks, which can be viewed at this link:

http://appropriations.house.gov/FY2009_consolidated.shtml

Senate Majority Leader Harry Reid says he expects the bill to pass the Senate before the March 6 deadline, so when federal employees leave work Friday afternoon they will know they can report back on Monday morning, expecting to get paid for their efforts.

Meanwhile, President Obama unveiled his budget outline for fiscal 2010, which for the first time in many years actually includes every dollar the federal government truly expects to spend, including war spending by the Department of Defense, and a contingency fund for natural disaster relief. The total budget is $3.55 trillion.

The Obama budget outline includes plans for spending over the next ten years, rather than the five year plans the Bush administration was fond of presenting. The outline contains a few things which should give encouragement to the construction industry:

Spending $150 billion over ten years for clean energy initiatives.

Spending $5 billion over 5 years for high speed rail construction, in addition to the $8 billion appropriated in the stimulus legislation.

Spending $64.5 billion on other transportation projects.

In other pro-construction talk around Washington, Interior Secretary Salazar wants to fund a Civilian Conservation Corps of 10,000 young trades workers to begin addressing the $8 billion backlog in national park projects, starting with such urban facilities as Independence Hall in Philadelphia and the Frederick Douglass Home in Washington, D.C.

One negative in the outline is the suggestion that the stimulus bill's one year deferral of the new three percent withholding tax on government contractors will not be made permanent, and collection of the tax will start next year.

Have You Ever Seen An Earmark?

There has been a lot of talk during the presidential campaigns, and since the inauguration of President Obama, about Congressional earmarks in appropriations legislation. Have you ever seen an earmark? If not, click on this link to the House Appropriations Committee home page and you can see 9,000 of them:

http://appropriations.house.gov/FY2009_consolidated.shtml

The link will take you to a listing of the various portions of the $410 billion omnibus appropriation bill pending in the House of Representatives for fiscal year 2009. Congress has to pass this bill before the end of March to avoid a government shutdown. After each section of the bill you will see a line that looks like this:

Summary : Bill : Statement : Certification Letters

Click on "Certification Letters." These letters are the "earmarks" everyone has been talking about. They are requests by individual Senators and Representatives that money be set aside out of the appropriations for specific projects. Note well that the letters do not specify how much is being requested in the earmark.

If you are looking for specific projects in your locality to bid on, scroll through the 9,000 earmarks in this bill and find the letterhead of your own Senators or Congressman, and the letter will identify the project money is being earmarked for.

Happy Hunting!