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Economic Stimulus Information

 

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Stimulus Funding Details Released


February 13, 2009

Congress is poised to complete action on economic stimulus legislation, HR 1, The American Recovery and Reinvestment Act of 2009. The House passed the bill 246-183 earlier today and the Senate is scheduled to vote tonight. All three GOP Senators who voted for the Senate version of the bill (Specter, Snowe and Collins) have pledged to vote for final passage.

The Act includes a total of $787.2 billion in spending and tax cuts.

The bill includes $47.8 billion in transportation funding as follows:

  • $27.5 billion for high & bridge formula funding

  • $1.5 billion for discretionary competitive grant program for surface transportation

  • $8.4 billion public transportation

  • $850 million Amtrak capital grants

  • $450 million Amtrak security upgrades

  • $8 billion for construction of high speed and intercity rail projects

  • $1.1 billion Airport Improvement Grants

The House Transportation and Infrastructure Committee provided this chart which shows a state by state and metropolitan area breakdown of the highway, transit and clean water state revolving funds included in the bill.

There are numerous tax provisions to encourage development, capital investment, and increasing certain bonding opportunities on public buildings, schools and other public works. This chart provides an overview of the specific tax provisions that AGC has worked to have included in this bill. A top AGC objective has been full repeal of the 3% withholding on contractor payments by public agencies. AGC was successful in having a one year delay included in this bill and will continue to work for total repeal.

AGC was also successful in having a House bill requirement removed from the final bill that would have only allowed companies that use E-verify to be eligible to compete for projects funded under the bill.

 

Stimulus Update


February 13, 2009

The Congress is poised to pass the American Recovery and Reinvestment Act of 2009. The House passed the bill 246-183 and the Senate is voting now. All three GOP Senators who voted for the Senate version of the bill (Specter, Snowe and Collins) have pledged to vote for final passage.

The Act includes a total of $787.2 billion in spending and tax cuts.

There is a total of $308 billion in appropriated spending, $269 million in direct spending (refundable portion of tax credits, Unemployment assistance, Medicaid reimbursement to states, etc) and $211 billion in tax cuts.

There are numerous tax provisions to encourage development, encourage capital investment, increase certain bonding opportunities on public buildings, schools and other public works. The attached chart provides an overview of the specific tax provisions that AGC has been pushing for in this bill. We did not get the full repeal of the 3% withholding but we did get a one year delay in its imposition. We will continue to push for full repeal this year.

The bill applies Davis Bacon to all funds in the bill and it applies a new Buy American provision to all funds in the bill.

The bill does not apply the Federal Acquisition Regulations beyond the federal projects to all of the funding in the bill even though earlier versions of the bill did apply the FAR to even state and local projects. We were successful clarifying that the FAR should only apply to direct federal contracts.

There is no requirement that contractors use E-verify. The House version of the bill did include a requirement that only companies that use E-verify would be eligible to compete for projects funded under the bill.

There is also a long chart attached that details about $140 billion in construction spending in the bill. Much of the money will be distributed to state governments to be spent. Unfortunately the bill did not make the significant commitment to school construction that AGC had advocated. School renovation, modernization and repairs will be eligible to compete for a portion of an $8.8 billion pot of money that will be distributed to the Governors and designated for education, safety and other critical services.

We are also adding information to our Economic Stimulus website www.agc.org/stimulus on funding for programs that are distributed through a formula. There may be a lag on some of that information as the analysis of the bill is still being done.

Congress Wraps Up Stimulus Package


February 12, 2009

While Congress has not yet voted on the American Recovery and Reinvestment Act, House and Senate negotiators have released details of the plan and expect a vote before the weekend. All reports indicate significant infrastructure investment, as outlined in the AGC summary of infrastructure and public building investment provisions.

Highlights include $4.6 billion for the Corps of Engineers; $1.2 billion for the VA hospital and medical facility construction and improvements; $3.1 billion for repair, restoration and improvement of public facilities; $4.2 billion for facilities sustainment, restoration and modernization; $2.33 billion for Department of Defense Facilities; $1 billion for the Bureau of Reclamation; $48 billion for transportation infrastructure; $14.5 billion for environmental clean-up and clean water programs; $39.5 billion to local school districts for modernization or other purposes; and $4.5 billion for increased energy efficiency in federal buildings. AGC will alert all members as soon as more information is available. In addition, www.agc.org/stimulus is updated regularly with stimulus news and AGC’s efforts related to the bill.

Thanks to a strong grassroots effort nationwide, AGC of America, AGC’s nationwide network of Chapters and members can be proud that combined efforts resulted in a bill that will bring work and jobs back to the construction industry.

AGC committed thousands of hours over the last several months to advocating for investment in infrastructure and public buildings. AGC submitted written and oral testimony to six Congressional hearings and delivered four letters to Capitol Hill on behalf of member companies advocating for investment in infrastructure and public buildings. In addition, activity on AGC’s legislative action center was unprecedented, ultimately sending 12,000 letters to Senators and Representatives in support of the stimulus plan while countless phone calls were made to Congressional offices. AGC and its coalition partners stirred grassroots efforts with five new advertisements and significant media coverage, and AGC’s petition for investment now includes more than 3,000 supporters.

AGC Presents Podcast on Details of Recovery Plan, Requests Member Help

AGC created a 30-minute podcast February 2 to update members on the status of the stimulus plan then circulating on Capitol Hill and urged members to contact their Senators in support for infrastructure investment as part of the stimulus plan. Visit www.agc.org/stimulus.

AGC of America: Working for You

In January alone, members of AGC benefited from three free webinars and thousands of man and woman hours working in support of infrastructure investment in the pending stimulus plan.

Two webinars, For CEOs Only: Where Do I Turn for Answers in Tough Times? and Have We Hit Bottom?, were designed to help members cope with the economic downturn. Last week’s webinar, Understanding the New FAR Requirements for Mandatory Disclosure and Stronger Compliance Programs, provided detailed analysis of the federal government’s new Mandatory Disclosure Rule for federal contractors.

 

Simonson Says: Looking for a Turnaround


February 12, 2009

Will February mark the low point in the economic cycle? Assuming President Obama signs the tax and spending relief package this month, and Treasury goes ahead with further banking and credit measures announced by Secretary Geithner on February 10, the economy will soon begin getting a strong double dose of stimulants.

The fiscal stimulus should start flowing quite promptly. Within weeks, taxpayers will receive reductions in withholding, unemployment checks will be boosted, and individuals unemployed for more than six months will keep receiving checks longer. Meanwhile, consumers are already receiving the equivalent of hefty tax cuts through drops in interest rates and in gasoline, heating and other prices. The combination of these governmental and market changes may end the spending strike that has kept retail sales tumbling for three months. Already, the National Association of Realtors reported that its index of pending home sales—houses under contract but not yet closed—improved in January. That should translate into higher home sales in March, followed by a revival of housing-related purchases.

Within a few weeks of enactment of the stimulus bill, the Federal Highway Administration and other agencies will notify state and local governments how much they will be eligible for under various infrastructure stimulus programs. Direct federal spending on construction will also begin to pick up.

The rise in stimulus-induced construction will not be enough at first to offset the sharp cutbacks states are undertaking now to balance their budgets during the current fiscal year. But by the third quarter, public construction spending may level off.

The stimulus bill will also help some categories of private construction, such as power, perhaps communications, and residential improvements (for energy efficiency). And tax incentives in the bill may help get private development off (or into) the ground in high-unemployment “recovery zones.”

But much private construction, as well as bond-funded public construction, will depend on the success of the Federal Reserve, Treasury and other financial agencies in restoring the banking and credit systems. The timing for that breakthrough remains uncertain.

The media, policy makers from both parties, and economists will be watching closely for signs of a turnaround. You can help identify it. Send examples of either improvement in the demand for construction and availability of credit, or continued contraction, to simonsonk@agc.org.

 

Construction Job-Loss Figures Underscore Urgency of Stimulus, AGC Economist Says


February 6, 2009

“Today’s report on job losses underscores the urgency of implementing a job-boosting economic stimulus package focused on infrastructure,” said Ken Simonson, chief economist for The Associated General Contractors of America. Simonson commented on the January employment data from the Bureau of Labor Statistics.

“It is tragic that 3,500,000 jobs have disappeared in the past 12 months and the unemployment rate has climbed to 8.5 percent before seasonal adjustment, or 7.6 percent, seasonally adjusted,” Simonson stated. “Construction workers have suffered far more than their share of that pain, accounting for 747,000—or more than one-fifth—of the job cuts and an unemployment rate of 18.2 percent in January, not seasonally adjusted.”

Simonson pointed out that the job destruction is no longer confined to homebuilding. “In the past 12 months, nonresidential builders and specialty trade contractors, along with heavy and civil engineering construction firms, have had to lay off 309,000 workers, or nearly 7 percent of their workforce. Many of these workers would be re-employed within weeks if Congress passes a stimulus bill with at least $150 billion of construction spending.”

 

$10 Billion Over Two Years Needed for Flood Control, Navigation, Ports, Locks and Dams


Coalition Announces Support for Landrieu’s Senate Stimulus Amendment

February 4, 2009

A group of 128 organizations today announced their support for a proposed amendment to the Senate stimulus package that would provide almost $10 billion over the next two years for vital new navigation, flood control, and lock and dam projects nationwide. Led by the Water Resources Coalition, the group says its members are taking a range of steps to help support the passage of the amendment, authored by Louisiana Senator Mary Landrieu.

“Modern waterways are vital to a healthy water supply, efficient goods movement, reliable flood control, clean electric power, and safe recreation,” said Patrick J. Natale, P.E., F.ASCE, the executive director of the American Society of Civil Engineers. “Making this kind of investment now will go a long way in protecting public health, safety and welfare, and in shoring up the ability of these systems to support our economy.”

The broad range of groups, who announced their support for the amendment in a letter to the Senate leadership today, said the amendment was needed to counter years of underinvestment in the nation’s waterways, ports and drinking water systems. They committed to working with Senator Landrieu and her colleagues to help win passage for the amendment.

The group noted, for example, that the U.S. Army Corps of Engineers has already identified $12 billion worth of ready-to-go water projects and the Association of State Dam Safety Officials has estimated that $50 billion is needed to rehabilitate dams across the nation. In addition, the group also noted that the Environmental Protection Agency has estimated that $535 billion is needed to modernize drinking and wastewater facilities nationwide.

“We’re committed to ensuring that the nation’s neglected water infrastructure receives the level of support experts have long called for,” said Stephen Sandherr, chief executive officer of the Associated General Contractors of America. “We have a unique opportunity to put people to work, stimulate new economic activity and leave a legacy of healthy families, strong communities and growing commerce.”

To view the group’s letter to the Senate leadership and see a list of supporting groups, click here.

 

House Passes Stimulus Package–Senate Likely to Vote Next Week


January 28, 2009

The House by a vote of 244 to 188 passed the American Recovery and Reinvestment Act of 2009, better known as the Stimulus Package. The bill now goes to the Senate, which is expected to take up its version next week. The Senate version differs from the House version significantly, most notably by including a one-year AMT patch. AGC members were at the forefront of this legislative struggle, sending almost 10,000 letters, delivering a petition signed by over 3,000 supporters and making an unknown number of phone calls in support of this legislation. The package includes significant funding for all of the major construction markets, in most cases exceeding yearly appropriations as compared to FY ’08. The funds generally have to be obligated in 180 days, with unobligated funds reprogrammed by their disbursing agencies. Similar provisions apply to funds not spent in 2 years, with any unspent funds being reprogrammed by disbursing agencies.

The debate now shifts to the Senate. We strongly urge you to reach out to your employees, your suppliers, your subcontractors and your local government and business community leaders to ask them use the tools on the AGC website to contact your Senators. Visit AGC of America's economic stimulus information page.

Highlights of the Stimulus Package:

  • Highway and Transportation Infrastructure Funding: Over $43 billion for transportation infrastructure, including: $30 billion for bridge and highway funding, to be distributed by existing formulas, with a portion of the funds within each state being suballocated by population areas; $9 billion for transit funding, with new construction being distributed on a discretionary basis, and upgrades, repair, and other assistance being distributed according to existing formula; and $3 billion for Airport Improvement Grants, distributed on a discretionary basis.
     

  • Building Infrastructure Funding: Approximately $55 billion in Building Infrastructure, including: $6.7 billion for GSA buildings, $8.5 billion for Military Construction, and $1 billion for VA Construction– all distributed at the discretion of the particular federal agency of jurisdiction. This also includes $20 billion for k-12 School and Higher Ed Construction, distributed by Title I formulas (for K-12) and by a new formula (for Higher Ed).
     

  • Water Infrastructure: More than $15 billion for Water Infrastructure, including $6 billion for the Clean Water State Revolving Fund, $2 billion for the Drinking Water State Revolving Fund, and $1.5 billion specifically set aside for Rural Water and Waste Disposal projects. Water Resources construction also includes $4.5 billion for the Corps of Engineers, and $500 million for the Bureau of Reclamation.
     

  • Tax Provisions: Permanent repeal of 3% withholding tax on government contractors, extension of increased small business expensing, extension of the depreciation bonus, a 5-year carry-back of net operating losses, long term extension and modification of the renewable energy tax production credit, a tax credit bond option for state and local governments, and numerous bonding provisions for energy and schools.

Other Provisions in the Bill

  • Davis-Bacon Requirements: Any projects funded directly by or assisted in whole or in part by and through the Federal Government will have Davis-Bacon wage requirements. In addition, the bill calls for the application of Davis-Bacon to any projects funded by tax bonds.
     

  • Buy American: The House bill mandates that iron and steel used in construction and repair projects funded under the bill be produced in the United States unless found to be prohibitively expensive (by increasing the cost of the project by 25 percent).
     

  • Federal Contracting Requirements: The Federal Acquisition Regulation shall apply to contracts awarded with funds in the Act where pre-existing contracting regulations do not exist. Contracts are encouraged to be awarded as fixed-price contracts through the use of competitive procedures. Existing contracts already awarded may be utilized in order to obligate such funds expeditiously (such as multiple award contracts). Any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the website www.Recovery.gov.
     

  • E-Verify: The House bill mandates the use of the “E-Verify” electronic verification system for all businesses receiving funds derived from the stimulus. This would be both direct federal and federal-aid projects. Efforts are underway to get this provision removed from the final bill. The Senate may consider an amendment that would create a more expansive E-Verify requirement. This remains a moving target which will likely be addressed in conference.

For more information visit the AGC of America's economic stimulus information page.

 

Message from Stephen Sandherr, AGC of America chief executive officer


Letter to Former Labor Secretary Robert Reich Regarding Construction

As some of you may have seen, former Labor Secretary Robert Reich recently testified at a Congressional hearing hosted by Congressman Charlie Rangel, and later made the same comments on his personal blog, that funding infrastructure projects as part of the stimulus would merely put “white men” to work. As a result, he is calling for the establish of racial hiring quotas for any company involved in stimulus related work.

I have sent a letter to Secretary Reich outlining the current significant diversity of the construction workforce and explaining the many steps being taken by the nation’s construction companies to continue to maintain a diverse workforce. I have asked Secretary Reich to renounce his inaccurate characterizations of the construction workforce and his calls for new racial quotas. Click here to see to view the letter.
 

AGCA Stimulus Update


January 23, 2009

This week the House Appropriations Committee and House Ways and Means Committee approved their portions of the $825 billion economic recovery bill, clearing the measure for full House consideration. The House Rules Committee is preparing the final bill for floor consideration, and we expect debate on the bill to begin early next week with a vote on final passage by mid-week in the House.

The Senate Finance Committee today released details of its $275 billion tax package. The Senate Appropriations Committee is reportedly finalizing details on its package for release early next week. Both committees are expected to consider their packages on Tuesday with possible floor consideration in the Senate beginning later next week. Both the House and Senate are working to complete the bill and present to President Obama by February 13.

As the House prepares for floor consideration and the Senate begins committee deliberations, we need all our chapters and members to contact your Representative and Senators and urge them to support the bill. We will be contacting the entire membership on Monday with a call to action in support of the stimulus package. For information on the economic stimulus proposals before Congress and to contact your members of Congress, please visit AGC’s on-line resources on the Legislative Action Center.

There is also time to sign AGC’s petition to show your support of the economic stimulus www.agc.org/letsbuild. To date, AGC has generated over 11,000 letters and petitioners.

AGC has a number of other efforts to promoted the economic stimulus package before Congress. More information will be available next week.

See the following charts for summaries of the infrastructure investment and tax provisions in the economic stimulus proposals:

 

Stimulus Update: Congressional Leaders Release Details of Stimulus Package


January 21, 2009

On January 15, the House Democratic Leadership announced details of the American Recovery and Reinvestment Act. Details of the $825 billion package were released by the House Appropriations and Ways and Means Committees. The total package consists of $275 billion in economic recovery tax cuts and $550 billion in targeted investments, coupled with several unprecedented accountability measures. AGC estimates that approximately $150 billion of the spending proposed in this bill would benefit the construction industry

Congressional Committees will take up the bill this week, with the goal of sending a final product to the White House by mid-February. Today, the House Appropriations Committee will hold a markup on provisions of the economic stimulus package, the House Ways and Means Committee will hold a markup on the tax provisions in the economic stimulus package tomorrow and the Senate Finance Committee will hold a markup next week. Additionally, AGC has been invited to testify before the House Committee on Transportation Infrastructure and Stephen Fuller, Dwight Schar Faculty Chair and University Professor and Director, Center for Regional Analysis, George Mason University will testify on behalf of AGC on how infrastructure investments will help create or support over 1.85 million jobs in less than two years. His testimony also focused on a study AGC commissioned that estimates that every $1 billion invested in infrastructure projects would create or sustain over 28,500 new direct and indirect jobs. Each billion invested would add about $3.4 billion to the Gross Domestic Product (GDP) as it ripples through the economy and about $1.1 billion to personal earnings.

AGC is continuing to meet with House and Senate leaders to increase the proposed investments in infrastructure in the draft package and enact the bill as soon as possible.

Stimulus Funding:

In many instances, funds would be distributed through existing formulas. How funds are spent, all announcements of contract and grant competitions and awards, and formula grant allocations must be posted on an open government web site. Governors, mayors or others making funding decisions must personally certify that the investment has been fully vetted and is an appropriate use of taxpayer dollars. A Recovery Act Accountability and Transparency Board would also be created to review management of recovery dollars and provide early warning of problems. Federal and state whistleblowers who report fraud and abuse are protected. Finally, there are no earmarks in this package.

Stimulus Tax Provisions:

The House Ways and Means Committee’s $275 billion tax package would provide tax, health and other benefits to American families, as well as incentives for businesses to grow and create jobs. Highlights in the package benefiting the construction industry include:

  • Full repeal of the 3 percent withholding law

  • Bonus depreciation

  • 5-year carry-back of net operating losses

  • Extension of increased small business expensing

  • Repeal AMT limits on new private activity bonds

  • School construction bonds

  • Remove repayment requirement on $7,500 first-time homebuyer credit

  • Tax exempt and tax credit bonds to “recovery zones” (i.e., areas of high unemployment, foreclosures or poverty)

  • Various energy efficiency tax incentives and bonds

AGC Press Statement:

Last week, AGC’s CEO Stephen Sandherr released a statement indicating that the newly released details of the proposed stimulus package provide encouraging signs that Congress is willing to make significant, but essential, investments needed to rebuild our aging infrastructure and inefficient public buildings while repairing America’s ailing economy. However, he pointed out that in an environment where almost 900,000 construction workers have lost their jobs, the construction community has the capacity to do even more work than is currently being considered.

Related Links:

  • To view a copy of the House Appropriations Committee Plan, click here.

  • To view a copy of the House Ways and Means Committee Plan, click here.

  • To view AGC’s analysis of the bill, click here.

  • To view a copy of Stephen Fuller’s testimony, click here.

  • AGC Press Statement, click here.

For more information, please visit www.agc.org/cs/economic_stimulus.


Economic Stimulus Package Still in the Works


January 12, 2009

The American Recovery and Reinvestment Act stimulus package is still being assembled and different groups are continuing to pop up asking for a piece of the pie. The goals of the program are to ensure that all elements are Targeted, Timely and Temporary. Importantly, there would be no state match required for these funds. Senior Congressional Leadership and the Senior Transition Officials continue to meet on the size of the program, the various elements of the plan and the process for getting the money out.

What has been reported are general agreements. But nothing is final yet and a draft bill will not be available until late this week at the earliest. There is still concern in some parts that construction will be slow to spend. That is where we need help from you and your members. If you or your members foresee impediment to quick implementation of this funding (permitting, paperwork, etc…) please email Jeff Shoaf at shoafj@agc.org. We are trying to remove any barriers to the quick utilization of this funding. Specific earmark projects are opposed by Obama but loved by Congress.

Please communicate to Congress (using www.agc.org/lac) and state and local governments please let them know what types of projects AGC members in your area can get underway quickly. Let them know we have labor and materials ready and urge them to do anything they can to expedite the paperwork. Make sure that good projects that are ready to go should be funded and not rebid.

AGC of America is working to unite building, highway, and water groups to talk about the stimulus we can deliver. As far as the mix of funding it is still fluid. We are pushing for as much stimulus as possible to vertical and horizontal construction using as many existing programs as possible to aide quick stimulus.

Here is our estimate of what will be included in the package as of today:

  • Tax provisions $300–350 billion (including expensing, net operating loss carry back, etc.)

  • Aid to states $100–200 billion

  • Medicaid Reimbursement $100 billion

  • Unemployment Insurance and Food Stamps $7–10 billion

  • Defense Projects $10 billion

  • Military Construction $20 billion

  • Infrastructure and Public Buildings $75–125 billion

  • Infrastructure Bank $60 billion

The goal is to create and or sustain 3 million jobs. The Democrats are committed to getting the bill finished by mid-February.

Infrastructure has been used to describe traditional public works like public buildings repairs and construction, school construction, highways, bridges, transit, drinking water systems, waste water systems as well as non traditional infrastructure like health IT and broadband in rural areas.

Programs will likely be administered through existing programs such as public buildings through GSA, schools through the Department of Education and highway and transit funds by existing formula to be administered by state DOTs and local authorities.

The infrastructure bank being considered would likely be similar to the National Infrastructure Bank that Obama sponsored while in the Senate. It was designed to expand and enhance funding for qualified transit, public housing, water, highway, bridge, or road infrastructure projects for loans, loan guarantees, and other financial assistance. It will issue general purpose and project-based infrastructure bonds exempt from state and local taxation. The Bank will receive an infusion of federal money that would be leverage to provide $60 billion in spending over the next 10 years.

AGC continues to press Congress to enact an economic recovery package with infrastructure investment as soon as possible to prevent further job losses in the industry and to create additional job opportunities for contractors and their workers.

For more information, please visit: www.agc.org/cs/economic_stimulus

Infrastructure Coalition Sends Letters, Begins Media Campaign


January 12, 2009

A coalition of organizations in the building design and construction industry sent two letters two congress and the President-elect last week. The first letter focused on including infrastructure investment in a stimulus and the identified needs in the different building markets. The coalition also sent a letter of tax incentives that would stimulate the economy, improve energy efficiency, and create job opportunities in a stimulus package.

To view the letters or to view the broad based originations in the building design and construction industry that signed the letters follow the links: Tax Letter, Infrastructure Letter.

In addition, the coalition will be placing advertisements in Roll Call, the widest read publication on Capitol Hill by policy makers.

If you have any questions please contact Jeff Shoaf at shoafj@agc.org.