Capitol Hill Update

Budget and Tax Reform

Earlier this month, the U.S. House approved a budget resolution of $4.1 trillion. The annual budget resolution is non-binding and simply provides an outline of federal spending and revenues. It was approved through the reconciliation process, which allows passage of certain budgetary legislation with a simple majority vote, thus avoiding a filibuster in the U.S. Senate, where 60 votes are needed to end debate and advance legislation. The House passed the budget resolution on a strict party-line vote with all Democrats voting against, along with 18 Republicans. House Republicans viewed this as a major victory and a big step to reforming the U.S. tax code for the first time since Ronald Reagan was president. Meanwhile, in the late hours of October 19, the U.S. Senate, by a vote of 51-49, opted to fast-track a bill by adopting an amendment that nearly aligned its budget resolution with the House's version with the exception of a few minor modifications. Finally, on October 26, by a four-vote margin and with 20 Republicans voting against the resolution, the House concurred with the Senate. The Senate/House budget resolution establishes the framework and becomes the legislative vehicle that will allow Republicans to pass tax reform under the rules of reconciliation, avoiding a Senate filibuster. The plan is to release the GOP tax bill on November 1 followed by a markup in the House Ways and Means Committee a week later, according the Ways and Means Committee Chairman, Kevin Brady (R-TX 8th).  

Meanwhile, the Administration has its own tax reform (Blueprint) package that includes reducing the number of tax brackets from seven to three, lowering the tax rate for business from 35% to perhaps as low as 20% and a one-time tax on earnings businesses make outside the U.S. to potentially spur repatriation. Furthermore, President Trump has appeared to move away from supporting public-private partnerships (P3s), while openly questioning their effectiveness. According to a number of news reports, the Administration’s focus, for the remainder of 2017, will be on tax reform. Based on these latest developments, all signs seem to point to the unveiling of an infrastructure package/plan in early 2018. The last few months remaining in 2017 in Washington promise to be interesting.

Hearings of Interest

On October 11, the U.S. House Transportation & Infrastructure Subcommittee on Highways and Transit, Chaired by Sam Graves (R-MO 6th), conducted a hearing on “Building a 21st Century Infrastructure for America: Highways and Transit Stakeholders’ Perspective.” Chairman Graves’ opening statement including the following remarks: “Gathering input from our stakeholders is essential to the process we use to develop federal surface transportation policy. Enacting a long-term solution for the Highway Trust Fund is a critical component to ensuring that we can address those needs in the future. Since passage of the FAST Act, building consensus on a solution to fund surface transportation programs has been a central priority of mine and of this Committee. Providing federal funding certainty for our non-federal partners is vital to planning and building infrastructure for the 21st Century. A modern infrastructure means a strong America–an America that competes globally, supports local and regional economic development, and creates jobs.” Committee Chairman Bill Shuster (R-PA 9th) added the following observations: “To me, a 21st Century infrastructure means more local jobs for our communities; getting people, goods, products, and crops where they need to go more efficiently and at less cost; and ensuring that America is competitive. President Trump is a builder–he gets it. We look forward to seeing the Administration’s infrastructure proposal. We also want to hear from stakeholders on your policy and funding priorities. One that I think we all agree on is finding a long-term fix to the Highway Trust Fund.”

Among those who testified were James Roberts, President and CEO of Granite Construction, on behalf of the Transportation Construction Coalition, which includes 31 associations (including NASBP) and labor unions. Roberts’ testimony addressed three specific needs and options Congress must consider when crafting an infrastructure package:

  1. Federal Infrastructure Investment;
  2. The Continued Need for and Recommendations to Improve Environmental Review and Permitting for Infrastructure Projects; and
  3. Judicial Review Reforms in Current Law Are Limited and Not Likely To Provide Significant Relief.  

Roberts closed by emphasizing that “given the years of underinvestment at all levels of government, there is no such thing as a quick fix. The sooner we get started, however, the faster we will be able to deliver results for the American people and the first right step would be to fix the Highway Trust Fund now and identify additional tools for the tool box.”

National Defense Authorization Act and Title 41

NydiaAs reported this summer, U.S. Representative Nydia Velázquez (D-NY 7th) sponsored an amendment to the House version of the FY 2018 National Defense Authorization Act (NDAA), which exempts the federal Miller Act from required indexing of the bond threshold for inflation. Periodically increasing the Miller Act threshold means that subcontractors and suppliers on federal construction projects will have no payment protection on increasingly larger projects. Recently, members of the Construction Industry Procurement Coalition (CIPC) signed a letter in support of the Velázquez amendment, along with 11 other issues supported by CIPC, and delivered it to the Chairs and Ranking Members of the House and Senate Armed Services Committees. The Senate approved its version of the NDAA on September 18. The committee staff has been working on the NDAA bill throughout the summer and fall. Meanwhile, the House named 46 Republicans and 27 Democrats as conferees, while the Senate sent every member of the Senate Armed Services Committee, 14 Republicans and 13 Democrats. In previous years, the NDAA typically debated on the House and Senate floors sometime in early December. However, it appears that this year’s NDAA may be debated much sooner. NASBP will keep you apprised of this important effort.

Prior Approval Reform Coalition

The Prior Approval Reform Coalition (PARC) has asked its members to begin making visits to House offices in an attempt to gain additional co-sponsors of H.R. 2101, “The Prior Approval Reform Act,” introduced by Representative Mark Amodei (R-NV 2nd). Currently, the bill has 13 co-sponsors which include, Reps. Smucker (R-PA 16th), Barletta (R-PA 11th), Grothman (R-WI 6th), Womack (R-AR 3rd), Perry (R-PA 4th), Gallagher (R-WI 8th), Barr (R-KY 6th), Byrne (R-AL 1st), Emmer (R-MN 6th), Roe (R-TN 1st), and Budd (R-NC 13th), Cole (R-OK 4th) and Crammer (R-ND At Large). H.R. 2101 repeals the Federal Election Commission’s (FEC’s) requirement that corporate trade associations must obtain written prior approval/authorization before they can directly solicit their members for a PAC contribution. PARC sent a letter to the House and Senate leadership which included 114 signatories urging co-sponsors for H.R. 2101. NASBP has made outreach to several targeted House members requesting visits/support of the bill.

Rep. Amodei has taken a second legislative approach to solve this issue by inserting language to defend the FEC’s enforcement of the prior approval rule in the base text of the House Financial Services and General Government (FSGG’s) spending bill for FY 18. The FSGG spending bill cleared the House earlier this year, but Congress was unable to pass an omnibus spending bill, which would have included FSGG, before the September 30 deadline. Subsequently, Congress was forced to pass a short-term spending bill/continuing resolution (CR) to fund the government until December 8. With less than two months remaining before the CR expires, it may be a tall order for Congress to agree on an omnibus spending bill, which means another short-term CR.