Cheers are resounding through the construction industry after voters on Nov. 2 propelled President Bush to re-election and solidified Republicans’ hold on both houses of Congress. Those results mean four more years of a pro-business regulatory and policy stance in Washington, industry executives say.

But the reaction also carries an undercurrent of worry. Industry executives fear that severe budget pressures will squeeze spending for federal infrastructure programs that many firms rely on. Some are nervous that the pinch may affect the long-delayed transportation bill, which is far and away construction’s main priority.

Bush already has begun to outline his second-term goals. In a Nov. 4 press conference, he said the top items include simplifying the tax code, changing Social Security to give individuals more say and dealing with "frivolous lawsuits" in health care. Bush will be aggressive. "I earned capital in the campaign, political capital, and now I intend to spend it," he said.

The election outcome represents "really positive news on the regulatory and tax side," says Associated General Contractors CEO Stephen E. Sandherr. "This President is going to continue to pursue a pro-growth economy with the understanding that taxing businesses, small businesses and individuals is not the right way to grow the economy."

Pam Whitted, National Stone, Sand and Gravel Association vice president for government affairs, says it appears that Bush will push to make permanent the tax cuts enacted in his first term. She hopes that will include repealing the inheritance tax, which now is set to return after 2010. "The outlook for that looks pretty positive in the 109th Congress," she says.

AGC’s Sandherr also expects the administration’s generally pro-business regulatory attitude to continue. "We think that [the administration’s] common-sense approach on environmental and safety regulation...is good for our industry," he says. Steve Hall, the American Council of Engineering Companies’ vice president for government affairs, views Bush’s re-election "as a positive, opening new opportunities on issues such as tort reform, which is a key priority for our industry, and other business-regulatory type of issues." He adds, "I think the same sentiment holds true for...the new makeup of Congress."

The Associated Builders and Contractors hopes that besides estate-tax repeal, Congress also will pass legislation codifying Bush’s 2001 executive order barring union-only project labor agreements on federally funded projects. ABC also will lobby for a bill to let companies band together in association health plans, says Bill Spencer, vice president for government affairs.

But Spencer concedes that the industry may not get everything on its wish list. Despite gaining four seats in the Senate, Republicans still are five votes short of the 60 needed to halt a filibuster.

Industry officials also realize that they face a rough battle for federal funds to feed their markets. The federal deficit hit a record $413 billion in 2004. The Congressional Budget Office projects that will fall to $348 billion in 2005, but that does not...