President Trump’s abrupt announcement, via Twitter, on Oct. 6 that he was pulling out of negotiations over a new coronavirus relief and economic stimulus package will cause severe harm to construction contractors and workers, industry officials say. Some industry groups are urging the president to reopen the talks.
Trump also said he would revisit the matter after the election. But he roiled the waters further within the next 24 hours, again using Twitter, to call for additional funds, but narrowly targeted.
Those targets included reviving direct payments to individuals and the Paycheck Protection Program of forgivable loans to small businesses, plus $25 billion in payroll assistance for airlines, which are suffering from a downturn in travel.
Then on Oct. 8, the issue continued to churn in Washington.
House Speaker Nancy Pelosi (D-Calif.)—congressional Democrats' lead negotiator on coronavirus-related legislation—spoke with Treasury Secretary Steven Mnuchin—the White House's top negotiator, Pelosi deputy chief of staff Drew Hammill said on Twitter.
Hammill added, "Their conversation focused on determining wehther there is any prospect of an imminent agreement on a comprehensive bill. The Secretary made clera the President's interest in reaching such an agreement."
But Hammill also noted that a White House spokesperson "contradicted that assertion," adding, "The Speaker trusts that the Secretary speaks for hte President."
Industry groups say more federal assistance, including infrastructure aid, is critically needed. Brian Turmail, a spokesman for the Associated General Contractors of America, said via email, “Absent new federal relief measures—including liability protections, new infrastructure investments and relief for state and local construction budgets—many more construction workers will lose their jobs as firms struggle to survive.”
Turmail added, “Waiting to provide additional federal relief until after the election means job losses, firm closures and dwindling demand for new construction equipment, materials and supplies. The combined economic impacts of delaying relief will further cripple the already wounded economy and undermine chances for a near-term recovery.”
The harshest criticism of Trump’s move to end negotiations came from construction unions. In a blistering statement on Oct. 6, Sean McGarvey, president of North America’s Building Trades Unions, said he was “appalled” by Trump’s decision.
McGarvey said, “This is a breathtaking failure of leadership by the self-proclaimed ‘deal maker’ and a revealing display of priorities for him and his Republican allies.”
He added, “We are in the midst of a pandemic that requires humility, cooperation and true leadership, and by every measure, President Trump is failing our hardworking members in the construction industry, all frontline essential workers and indeed, the entire nation.”
McGarvey said, “He should immediately reverse course and convene negotiators until a deal is reached.”
Jeff Urbanchuk, spokesman for the American Council of Engineering Companies, said via email: “We object to the administration’s decision to politicize stimulus talks for use as a campaign message point.”
Many ACEC member firms are small businesses and some received loans earlier this year under PPP. Urbanchuk said, “America’s small businesses, including thousands of small and midsize engineering consultancies and the professionals they employ, are looking to Washington for certainty as they weather the ongoing effects of the pandemic.”
He added, “We hope the president reconsiders his position and works with his counterparts in Congress to come to an agreement on a path forward, even in principle, before the election.”
More PPP Needed
Kristen Swearingen, Associated Builders and Contractors vice president for legislative and political affairs, said via email that in the latest round of the negotiations, "ABC has continued to advocate for legislation that supports the small business community, its workforce and the U.S. construction industry."
Swearingen said the key issues for ABC are more funds for PPP, which she calls "a vital lifeline for the U.S. construction sector." She said in addition to more funding, ABC favors "critical fixes" to PPP which would permit businesses to deduct from their income those expenses paid with forgiven loans from the program.
Swearingen added another ABC priority is providing employers "targeted liability relief" from "unfair lawsuits" related to the pandemic. Liability protection has been the prime goal in COVID relief legislation for Senate Majority Leader Mitch McConnell (R-Ky.). McConnell hasn't been directly involved in the latest negotiations.
For days, Pelosi had been negotiating with Mnuchin over a possible relief measure.
Pelosi steered to passage on May 15 a $3.4-trillion package, dubbed the Heroes Act, but Republicans dismissed it, partly because of its size.
Then, on Sept. 30 she proposed a smaller Heroes 2 measure, estimated at $2.4 trillion, which the House approved the following day, basically along party lines.
Pelosi later came down to $2.2 trillion and said the reductions stem from changing the time period in which the funds could be used.
Mnuchin offered a $1.6-trillion counter-proposal.
Negotiations Called Off
The two sides had been continuing to talk over various proposals. In fact, Mnuchin and Pelosi had scheduled a meeting for Oct. 6 when Trump intervened, saying on Twitter that Pelosi was “not negotiating in good faith.”
Trump directed Mnuchin and his other representatives “to stop negotiating until after the election when, immediately after I win, we will pass a major stimulus bill that focuses on hardworking Americans and small business.”
As engineering and construction groups study the shifting landscape of stimulus legislation, specifics are few, except for the text of the House's $2.4-trillion Heroes 2 bill.
That package included relatively little direct federal construction money. By ENR’s count, it provided about $9 billion. That included $5 billion in ”emergency facilities aid” for upgrades to ventilation systems at elementary and secondary schools, and $1 billion for hospitals “and critical infrastructure” in U.S. territories and other “insular areas.”
The measure also included $600 million for modifications to Indian Health Service facilities to add patient isolation and quarantine space and for other maintenance and improvement work.
Transit Funds Needed
In addition, the legislation included $2.5 billion for Federal Transit Administration Capital Investment Grants, which fund new rail transit and bus transit projects. The proposal also included much bigger allotments of multi-purpose funds for transit systems—$32 billion—and airports, $13.5 billion.
The majority of those funds were expected to go for non-construction purposes. But both industries are important engineering and construction industry clients and their financial problems would almost certainly affect infrastructure work.
Those industries were, and still are, pushing hard for funds to fill the huge revenue gaps they are experiencing due to coronavirus' impact on traveling.
American Public Transportation Association President and Chief Executive Officer Paul Skoutelas said in an Oct. 7 statement that Congress and the administration should “return to the negotiating table and work together to provide emergency funding for public transportation as quickly as possible.”
Skoutelas added, “The crisis is worsening, and the industry’s very survival is at stake.”
Joel Bacon, American Association of Airport Executives executive vice president, said, “Further delays from Washington in providing assistance to airports, airlines, concessionaires and others belie the urgency of the situation facing the entire aviation ecosystem in the wake of the pandemic.”
Bacon said, “We need quick, comprehensive action for the industry to keep workers on the job, to allow critical projects to move forward, and to help airports meet ongoing financial obligations including debt payments and increased operational expenses for cleaning, sanitization and enhanced public health measures.”
Heroes 2 contained no specific allocation for state highway agencies, which have been seeking $37 billion over five years to make up for lost fuel tax and other revenue due to the impact of the pandemic on motor vehicle travel. On Oct. 5, the American Association of State Highway and Transportation Officials reiterated its $37-billion “ask.”
The Heroes-2 package did include $238 billion in fiscal relief for state governments plus $179 billion for cities, counties and other localities and $19 billion for tribal and territorial governments. The bill’s language regarding eligible uses of the funds was broad and could be read as including highway infrastructure purposes.
Story updated on 10/8/2020 with comments from aide to Speaker Pelosi.