After Elections, Construction Looks for Action on Key Issues
After an estimated $6 billion in spending and months of fierce campaigning, the results of the Nov. 6 federal elections have left things about where they were: President Obama is still president, the Democrats have increased their Senate majority by a couple of seats, and the Republicans’ control of the House remains nearly as strong as it was.
Will bipartisan deals now prevail where conflict once was the rule?
"It's a new ball game, but the teams are the same," says David Bauer, senior vice president of the American Road & Transportation Builders Association.
The construction industry will be watching how the teams address key legislative proposals, including infrastructure spending and regulatory and labor issues, among others.
In the 112th Congress, the White House and congressional lineups created a hotly partisan environment and near-gridlock on major legislative issues.
Among the few exceptions were bipartisan deals on two key construction bills: a four-year aviation reauthorization and a 27-month surface-transportation bill, the Moving Ahead for Progress in the 21st Century Act (MAP-21). Those bills had to travel long, bumpy paths but did get enacted in 2012.
A key question for construction is whether the election results will prompt the two sides to edge more toward such bipartisan deal-making and away from entrenched, widely differing positions.
The first test will come in the lame-duck session that is expected to start next week, when lawmakers must decide how to avoid tumbling off the “fiscal cliff”—the billions of dollars in tax breaks that expire on Dec. 31 and mandatory spending cuts that kick in on Jan. 2 under budget “sequestration.”
Willingness To Negotiate
On Nov. 9, President Obama said he had invited congresional leaders from both parties to the White House next week to start to address the fiscal issues. Later that day, White House Press Secretary Jay Carney said the meeting would take place on Nov. 16. Earlier, congressional leaders indicated they were open to negotiating.
On Nov. 7, Senate Majority Leader Harry Reid (D-Nev.) said in a press conference, "We have to sit down and act on [debt reduction] now, not later.” He added, “I will do everything in my power to be as conciliatory as possible … but I want everyone to understand that you can’t push us around.”
Later on Nov. 7, House Speaker John Boehner (R-Ohio) told reporters that Republicans are willing to work with Obama to address the tax and spending issues. He said the GOP could "accept some additional revenue" through tax-code changes that "curb special-interest loopholes and deductions."
But Boehner also said, "[Obama] must be willing to reduce spending and shore up entitlement programs.”
Still, possible points of friction have emerged. Obama called for action to hold tax rates at their current level for those earning up to $250,000 a year. Earlier that day at a press conference, Boehner said that raising the rate for the wealthiest taxpayers will affect many small-business owners. He said, "Raising tax rates will slow down our ability to create the jobs that everyone says they want."
The expiring tax cuts affect many in construction, particularly those whose companies are organized as partnerships or S Corporations and pay taxes at individual rates. Sequestration cuts could deal a blow to many construction programs, including U.S. Environmental Protection Agency water-infrastructure accounts.
In his Oct. 22 debate with his Republican rival, former Massachusetts Gov. Mitt Romney, Obama flatly said sequestration “will not happen,” but he didn’t elaborate.
