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Trump Budget – Status Quo for Federal Construction

This week, President Trump released his first budget request, which covers fiscal year 2018 and also looks out over the next 10 years (2018-2027). The proposal, “A New Foundation for American Greatness,” calls for $1 trillion in total tax cuts over the next 10 years, while also cutting federal spending by $4.6 trillion over the same time period. The budget assumes the economy will grow by $2.1 trillion, which would reduce 10-year deficits by $5.6 trillion and balance the budget in FY 2027.
As with most budgets submitted by respective administrations, President Trump’s is largely seen as a messaging document that primes the budget and appropriations debate for the coming year. This year however, the budget carries a bit more relevance due in large part to the president’s promise to include $200 billion for his infrastructure initiative. The budget did provide a fact sheet detailing four key principles for the White House’s initiative but did not provide any details on a specific infrastructure plan.
In terms of federal construction accounts tracked by AGC, the budget is status quo with previous year’s appropriations and budget requests—approximately $120 billion. While the budget provides significant funding increases for border wall construction and a $5 billion dollar down payment on the administration’s infrastructure initiative, it also cuts TIGER grants, Capital Investment Grants for transit projects, rural water programs, and the Community Development Block Grant Program. Even more troubling, the budget assumes that funding for the Highway Trust Fund will be cut by $95 billion in 2021.
A full analysis of the FY 2018 budget for federal construction accounts can be found here.
Additional details on budget funding and policy issues—including the infrastructure initiative—can be found here.
For more information, contact Sean O’Neill at [email protected] or (202) 547-8892.

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Job Training and Education Programs Receive Large Cuts in FY 18 Budget

Enforcement Agencies See Similar Cuts
The fiscal year 2018 budget proposal shows new priorities for the Trump Administration, with the Federal Education and Training Programs taking the brunt of the proposed budget cuts. The Department of Labor’s budget (DOL) includes a 20 percent reduction in funding from the FY 2017 enacted level, and large job training reductions and employment service accounts represent some of the largest cuts. Funding for state grants for the Workforce Innovation and Opportunity Act (WIOA) have received a 40 percent cut, and funding for apprenticeship grants have received a 5 percent reduction. WIOA overwhelmingly passed Congress in 2014, so it is unlikely that Congress will allow the proposed cuts.
The FY 2018 budget proposal also contains reductions within the Department of Education for accounts that fund career and technical education. The budget proposes a 15 percent reduction in funding despite the fact that Congress is working towards reforming and reauthorizing career and technical education.
Among the federal agencies within the DOL, funding levels are little changed. The Wage and Hour Division received a small increase for compliance assistance and outreach to employers, while the Office of Labor-Management Standards received one of the largest percentage increases—primarily to fund a program that audits larger international unions. Meanwhile, funding for the National Labor Relations Board has been decreased. The Occupational Safety and Health Administration’s funding has stayed relatively level, but the budget does call for the elimination of Susan Harwood Training Grants, a grant program that AGC has benefitted from and that has provided valuable safety training to thousands of industry workers.
The budget also proposes dramatic changes to the premium structure paid to the Pension Benefit Guaranty Corporation. Ultimately, these large increases would have to be absorbed by contributing employers and would require congressional approval first. AGC will strongly oppose any such unilateral increases.
Interestingly, the budget proposal calls for the merging of the Office of Federal Contract Compliance Programs and the independent Equal Employment Opportunity Commission. AGC is concerned by this merging of agencies, and it remains unlikely that Congress will approve of such a change.
Finally, among one of the more public proposals in the budget is a proposal to create a federal-state parental leave benefit program within the unemployment insurance program. Beginning in 2020, this program would provide six weeks of family leave to new parents. The proposal expands upon President Trump’s campaign promises, but like many others, the details of how such a program might work in practice have yet to be determined.
For more information, contact James Young at [email protected] or (202) 547-0133.

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AGC Testifies Before Congress

Impact of Change Order Delays on Contractors
Yesterday, AGC members Ed DeLisle and Andy Brown testified at the House Small Business Committee hearing on change order delays and the impacts they can have on federal construction contractors. Members of Congress heard how federal agency delays in processing and paying change orders can disrupt cash flow, impact schedules, waste taxpayers’ money, and restrict opportunities for contractors to bid on additional projects. AGC called for greater transparency, oversight, and agency action to address delays in paying contractors for the work they do for the federal government.
AGC will continue to advocate for greater accountability among the different federal agencies in the change order process. In March, the House of Representatives’ Small Business Committee requested that the Government Accountability Office (GAO) conduct a review on the use of change orders on federal construction contracts. This bipartisan request was a direct result of AGC’s efforts with both parties in Congress to address the many issues associated with change orders.
Previously, AGC called on the Federal Acquisition Regulation Council to improve the data federal agencies collect regarding the administration of change orders in response to the Council’s information request. AGC’s recommendations would require federal agencies to collect a range of data regarding the timeliness of action by the contracting officer (CO) to encourage greater CO accountability.
For more information, contact Jordan Howard at [email protected] or (703) 837-5368.

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AGC Successfully Challenges Contract Goals for DBE Participation

On May 16, the U.S. Court of Appeals for the Ninth Circuit reaffirmed that that the states within that circuit cannot lawfully impose contract goals for DBE participation in federal-aid highway projects unless, and until, they “establish the presence of discrimination within [their] transportation contracting industr[ies].”
In this case, Mountain West Holding Company v. State of Montana, the court then held that the State of Montana had not met that burden, explaining that “a decline in DBE participation” over a six-year period when the state ran a race-neutral program was “not necessarily evidence of discrimination against DBEs.”  The court also observed that the state had failed to account for differences in the “size, age [or] geography” of its DBE and other construction companies, or why it was “appropriate” to compare “the proportion of available subcontractors to the proportion of prime contract dollars awarded.”  [Emphasis in original.]
In May of 2015, AGC of America and its Montana chapter had jointly filed a friend-of-the-court brief in the Ninth Circuit in support of the contractor’s position.
For more information, contact Mike Kennedy at [email protected] or (703) 837-5335.

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Congress Asks AGC for Ideas on Making the Endangered Species Act More Efficient, Cost-Effective

AGC members report struggles with Endangered Species Act (ESA) requirements that delay infrastructure projects and significantly increase costs while not necessarily providing commensurate species and habitat benefits. At the request of Congress, AGC has identified legislative and administrative improvements to the ESA that support: the protection of listed species; responsible land and resource management; and streamlined delivery of critical infrastructure projects.
AGC’s May 23 response to the House of Representatives Natural Resources Committee flags construction specific concerns and offers possible ESA reforms related to:


  • species listing or delisting;

  • critical habitat designation;

  • timing, length and application of the Section 7 “consultation” process; and

  • compensatory mitigation practices and policies.

Additionally, AGC explained how the current interplay between the ESA and the National Environmental Policy Act (NEPA) is forcing excessive paperwork, duplicate consultation procedures and reviews, and inefficient project planning and construction phasing (due to, in the case of ESA, time-of-year restrictions relating to tree and bush clearing and species surveys). AGC suggested improvements to current law that would reduce the frequency of NEPA document/decision re-evaluations and related ESA re-analysis.
AGC’s letter concludes by calling on Congress to reform the citizen suit provisions in 20 environmental statutes that are being used to challenge all types of projects, land restrictions and permit requirements relating to projects.
For more information, please contact Leah Pilconis at [email protected].

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AGC Provides Regulatory Reduction Suggestions to EPA

Per the U.S. Environmental Protection Agency’s (EPA) request, AGC provided 30 pages of comprehensive and detailed recommendations for EPA’s regulatory evaluation in line with recent executive orders and presidential initiatives. In its submissions, AGC highlights the regulatory burden the construction industry bears and offers specific program modifications and solutions relating to water issues, oil spills prevention and preparedness, air and climate issues, lead-based paint issues, contaminated sites and liability, as well as compliance and enforcement initiatives.  To view the complete set of AGC submissions to EPA, click here, here and here.
For more information, contact Leah Pilconis at [email protected] or Melinda Tomaino at [email protected].

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House Committee Advances Career and Technical Education Reform, AGC Calls for Swift Passage

Send a letter to Congress in Support of H.R. 2353
This week the House Committee on Education and the Workforce advanced the Strengthening Career and Technical Education for the 21st Century Act, which would reform career and technical education. Please contact your U.S. representative and urge them to support this legislation which aligns programs with local employer needs, includes better reporting, increases work-based learning, promotes industry-recognized credentials and increases federal investment.
The bill is similar to legislation that passed in the House last Congress but failed to advance through the Senate. AGC remains hopeful the legislation will again pass the House later this year and that the Senate will follow suit and approve the bipartisan effort. AGC joined the Jobs and Careers Coalition and a multi-industry effort in advocating for the bill this week.
The bill is important to the construction industry because it authorizes funding for career and technical education programs, providing more than $1 billion annually to high schools and post-secondary vocational training programs. The bill was last authorized over a decade ago, and it no longer addresses the skills gap in today’s workforce. The greater flexibility to states on how they spend their allotments, the new performance metrics and the alignment of programs with other education and workforce training legislation will streamline federal programs. Similar to other education and workforce training programs, the success of the program rests on how it is ultimately implemented and how well employers collaborate and engage with educators in their local and state communities.
For more information, contact James Young at [email protected] or (202) 547-0133.

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House Members Continue to Push Highway Trust Fund Fix as Part of Tax Reform

Tell your Rep. to Sign Bipartisan Letter in Support of Long-Term Fix – DEADLINE TODAY
A bipartisan group of members of the House of Representatives are circulating a letter asking House Ways & Means Committee Chairman Kevin Brady (R-Texas) and Ranking Democrat Richard Neal (Mass.) to fix the Highway Trust Fund as a part of any tax reform package the committee considers. Contact your representative and urge them to sign this letter, which is being circulated by Transportation & Infrastructure Subcommittee on Highways and Transit Chairman Sam Graves (R-Mo.) and Ranking Democrat Eleanor Holmes Norton (District of Columbia).  As of press time, 156 members of the House have signed onto the Graves/Holmes Norton letter (check to see if your representatives has signed on).
If you recall, Representatives Graves and Holmes Norton circulated a similar letter last year (check here to see if your Rep. signed the 2016 letter) that was signed by 130 bipartisan members of the House. The FAST ACT provides funding certainty for the Highway Trust Fund through fiscal year 2020.  However, following the FAST Act's expiration, the Highway Trust Fund will face cuts of approximately $18 billion per year.  A permanent fix for the Highway Trust Fund needs to be found in order to eliminate these cuts.
For more information, contact Sean O’Neill at [email protected] or (202) 547-8892.

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AGC, Industry Allies Successful in Effort to Suspend FHWA Greenhouse Gas Measures

The Federal Highway Administration (FHWA) will announce in tomorrow’s Federal Register that it will indefinitely suspend portions of a rule requiring states to develop performance measurements for tracking Greenhouse Gas (GHG) emissions for federal-aid highway projects.  The suspension of the rule is a significant victory for AGC and our industry allies who fought the GHG rule that was issued in the waning days of the Obama Administration.
AGC questioned FHWA’s authority to issue the rule at the time and had asked Transportation Secretary Chao to consider rescinding it as the regulation goes beyond requirements outlined in the surface transportation authorization legislation, MAP-21. AGC will continue to monitor this issue, as the Federal Register notice stated that FHWA will be publishing a Notice of Proposed Rulemaking in the “coming week” pertaining the GHG measure.
For more information, contact Sean O’Neill at [email protected] or (703) 837-8892.

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Tell Congress to Repeal Prior Approval

Contact your U.S. representative to urge them to support the repeal of the burdensome prior approval requirement by co-sponsoring H.R. 2101 – the Prior Approval Reform Act. This legislation would repeal the prior approval requirement that discriminates against corporate-member trade association PACs, like AGC PAC.
Under the Federal Election Campaign Act, your company is required to grant written approval to AGC PAC if individuals on the administrative/executive team would like to learn more about the PAC and/or be solicited to contribute.  No other political entity, including corporate, labor union, and individual membership association PACs, is subject to the prior approval requirement.
AGC members have a constitutional right to join together in support of or in opposition to candidates for political office. Requiring prior approval discourages AGC members from participating in the national association's PAC, and creates an unequal playing field that restricts First Amendment rights to free speech. Help us repeal this burdensome requirement. Please contact your representative and urge them to co-sponsor H.R. 2101 today.
For more information, contact David Ashinoff at [email protected] or (202) 547-5013.

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