Off the Wall
In Washington, the Sun is Shining
Apart from, perhaps, a handful of charmed defense contractors, the relationship that most businesses have with government is anything less than a positive and fulfilling one. Not only does government tap a significant amount of business income through a myriad of taxes, it also extends its bureaucratic reach into employee management, record-keeping and other aspects of day-to-day business operations. For most businesses, the government is like the meddling, overpaid, trouble-making partner we could do well without.
While it is unlikely we'll get the federal monkey off our backs anytime soon, for much of the past year, business in general--and the construction industry in particular--has enjoyed a day in the sun thanks to a business-friendly administration. During the first year of the Bush administration, the federal government has been particularly responsive to the interests of the construction industry, scuttling meddlesome regulations and overhauling provisions in the tax code. While it's not known how long this day in the sun will last, as long as the sun keeps shining, industry organizations are pursuing a proactive legislative agenda in hopes of winning gains on other fronts. But it will be hard topping the benevolence already demonstrated this past year by lawmakers.
Early last spring, a top priority of the newly--and briefly--Republican-dominated Congress was the elimination of a proposed OSHA ergonomics standard developed during the Clinton administration. Business groups had been unanimous in their criticism of the standard, which would have forced employers to identify and remedy perceived workplace ergonomic hazards and compensate workers for repetitive motion and other injuries.
Praise and relief
Not long after, Congress handed Bush his first significant gain by passing a tax reform package featuring across-the-board tax cuts, rebate checks and a 10-year phaseout of inheritance taxes. Industry organizations celebrated the tax package with gushing praise."Elimination of the death tax has been AGC's top legislative priority and we salute Congress for demolishing this onerous tax," said Stephen Sandherr, CEO of the Associated General Contractors of America, upon delivery of the tax reform bill for Bush's signature.
Just as federal policy began to seem user-friendly, the momentum--and mood--in Washington shifted when Vermont Sen. Jim Jeffords tipped the Senate majority to the Democrats early in the summer. But political agendas were really knocked off track by the events of Sept. 11, which put national defense, economic stimulus and support of a global war on terrorism at the top of lawmakers' priority lists.
Since that time, given the positive strides our nation's military has achieved in Afghanistan, not to mention the rebound of economic indicators to near normal levels, many in Washington seem eager to get back to business as usual. In fact, signs of partisan bickering were clearly evident during the drafting of the recently enacted economic stimulus package.
While some of the top priority items on industry groups' political wish lists have been already been tackled by Congress, a backlog of legislative proposals have yet to see the full light of day in Congress. A number of the initiatives enjoy near-universal industry support, while others are favored by certain segments of the industry.
Topping the list are those proposals that would increase government spending and financing for public construction. While Bush's budget agenda already includes increases in construction financing for transportation, military housing, government facilities and prisons, a number of legislative proposals hope to stimulate the construction and renovation of public schools by up to $25 billion through a combination of spending and incentives. Among the more notable initiatives is America's Better Classroom Act, bipartisan sponsored legislation that would provide federal tax credits to pay for interest on school modernization bonds.
Full of energy
Energy policy is another key concern for industry advocates such as the National Association of Home Builders, which is calling on Congress to tuck away energy credits for homeowners as the Senate draft its version of a major energy bill. Two Senate proposals include NAHB-supported energy conservation incentives similar to initiatives that have already passed in the House."With more than 100 million existing homes across America, and more than 1.5 million new homes built every year, a lion's share of needed energy conservation can be achieved through positive incentives directed at the housing market," said Bruce Smith, president of the NAHB. "We strongly urge the Senate leadership and others who are crafting the Senate's energy bill to include tax incentives for energy-efficient homes as a way to accomplish national energy conservation goals while helping the American consumer."
Brownfields policy reform is another legislative proposal backed by the NAHB and other industry organizations. Earlier in the year, the Senate passed the Brownfields Revitalization and Environmental Restoration Act, which promotes the cleanup and reuse of brownfields and addresses key liability concerns faced by property owners. A House subcommittee is putting together its own version of a brownfields reform bill, which was a key issue for Bush during the presidential campaign.
On another front, a controversial House proposal has divided industry support into opposing camps. The Construction Quality Assurance Act, backed by industry groups such as the American Subcontractors Association, The Painting & Decorators Contractors Association and the Finishing Contractors Association, would prohibit the practice of bid shopping on federal construction projects. While the measure enjoys unanimous support among subcontractor industry groups, it's staunchly opposed by others. The Construction Industry Round Table--a group composed of leading AEC executives--considers the measure worse than a proposal defeated last year in the House.
While the book currently remains open on these and many other industry legislative initiatives, construction industry advocates should have good reason our time in the sun is not short-lived. Of course, that's assuming we've moved beyond the threats to our nation's safety and economic well being.
And, for the time being, the sun is shining in Washington. Let's enjoy it while we can.
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