Even as slimmed down as it is, Senate Majority Leader Harry Reid’s new jobs bill has provisions that construction officials like, but the $15-billion measure is much less generous to public works than the $154-billion version the House passed in December. With Democrats’ Senate majority no longer filibuster-proof and GOP votes hard to get, Reid faces a tough fight to get his bill approved.

Reid’s bill has an incentive for companies to hire new workers, plus an expanded bond program and an extension for a depreciation break.
Photo: Manuel Balce Ceneta / AP
Reid’s bill has an incentive for companies to hire new workers, plus an expanded bond program and an extension for a depreciation break.

The Nevada Democrat’s proposal, introduced Feb. 11, caught many off-guard because it came only hours after Senate Finance Committee leaders unveiled a bipartisan, $90-billion jobs package.

Instead of endorsing that plan, Reid sliced it into four elements. One part drawing construction support deals with transportation. It would extend the Safe, Accountable, Flexible, Efficient Trans- portation Equity Act: a Legacy for Users through Dec. 31, three months longer than under the House jobs bill. SAFETEA-LU is set to lapse on Feb. 28.

Reid’s bill also would plug the Highway Trust Fund’s recurring financial hole through a $19.5-billion shift from the general fund; the House’s “Jobs for Main Street” bill has a similar provision. Reid’s plan would restore $8.7 billion of unobligated highway contract authority that expired on Sept. 30. That language is not in the House bill.

A second element of Reid’s bill would help states and localities finance school and energy projects by letting them issue Build America Bonds instead of tax-credit bonds. Build America Bonds, created by the American Recovery and Reinvestment Act, give localities a federal subsidy that equals 45% of their borrowing cost. Tax-credit bonds give bondholders a federal credit in lieu of interest payments.

Construction could take advantage of a third Reid provision, which would exempt companies from the Social Security payroll tax for each unemployed worker whom they hire. Each newly hired worker would have to have been unemployed for at least 60 days. Companies could gain a $1,000 bonus credit for every worker who stays on their payroll for 52 weeks.

Equipment makers could benefit from the Reid bill’s extension through 2010 of the Section 179 depreciation break for capital-goods purchases. It would let companies “expense” up to $250,000 in purchases, with a phase-out when total capital purchases top $800,000.

Construction and state officials support the highway provisions, though they are not all they desired. Jack Basso, American Association of State Highway and Transportation Officials’ director for program finance and management, says a highway-transit extension through December would give states stability and let them move on large projects.

The National Asphalt Pavement Association backs Reid’s bill, says Jay Hansen, vice president for government affairs. But Hansen adds, “What’s missing of course is extra funding for the federal highway program—more stimulus dollars like what was in the House package.” The House bill has an added $47 billion for highways and other public works. Hansen says, “We’re told that another jobs bill is right behind this one that will include more money for highways and transit.”

rollout uneven for ARRA highway funds
Percent of state�s funding allocated to projects under way, as of 12/31/09
Maine 100.0% $130.8
Wyoming 99.2% 157.6
Utah 97.4% 213.5
New Hampshire 92.2% 129.4
Iowa 89.5% 358.2
Virginia 22.9% 694.5
Hawaii 32.4% 125.7
Nevada 40.9% 201.4
Delaware 43.5% 121.8
Arkansas 45.0% 351.5
Source: House transportation and infrastructure committee

First, however, Reid has to get his new proposal approved. A procedural vote was slated for Feb. 22. He said the Democratic caucus is “very supportive” of the bill. But even if all Democrats are onboard, Reid still would be one vote short of the 60 needed to end a filibuster.

Winning any GOP votes won’t be easy. The Finance Committee’s top Republican, Charles Grassley (Iowa), was miffed the plan he crafted with Finance Chairman Max Baucus (D-Mont.) was sidetracked. Grassley spokeswoman Jill Kozeny said, “Senator Reid’s announcement sends a message that he wants to go partisan and blame Republicans, when Senator Grassley and others were trying to find common ground on solutions to help get the economy back on track and people back to work.” If other GOP senators feel the same way, Reid’s bill at best will face a long, uphill slog.

That’s not good news for those worried SAFETEA-LU will run out. Cathy Connor, Parsons Brinckerhoff senior vice president, says, “I think at this point they’re going to have to deal with the SAFETEA-LU extension separately. I don’t see how they can complete a jobs bill by Feb. 28.”

While the Senate debates a new jobs bill, states are turning more ARRA aid into project starts. A Feb. 9 AASHTO report says 9,240 highway and transit projects, worth $20.6 billion, were under construction as of Dec. 31. That’s up from Nov. 30, when work had begun on 8,587 projects worth $19.7 billion. But the rollout rate varies from state to state.