March 2011: Government Affairs

March 2011

In January, the Legislative Committee met during the MCAA Convention in Las Vegas. We discussed the wrap-up of the 111th Congress, the changed political dynamic and its impact, and what we can expect from the 112th Congress. Despite a highly politicized and polarized climate on Capitol Hill, we believe that the MCAA still is positioned to realize legislative victories and continue building relationships with Members of Congress.

As was expected, Republicans picked up 63 seats to take control of the House of Representatives, holding a 242-193 majority. Republicans picked up six seats in the Senate, where Democrats hold a 53-47 majority.

While much will be made about “the message of the electorate,” it is clear that this Congress will be highly politicized leading up to the 2012 Presidential election and the Senate elections, when Democrats must defend 23 seats (think the Democrat wave in 2006).

Outside of healthcare and financial reform, Congress saved most legislating for the lame duck session that concluded shortly before Christmas. An overview of relevant legislative accomplishments includes the following:

• Continuing Appropriations through March 4, 2011 – funded MilCon, Energy & Water, among others
• Tax Relief Act – extended many 2001 and 2003 tax breaks through 2012: personal income tax brackets; temporarily patched the AMT; reinstated the estate tax; and expensing and depreciation provisions
• Defense Spending Bill

However, a number of our priorities did not pass Congress and will be on the table for the 112th:

• 3% withholding
• Life-cycle costing on MilCon projects
• Permanent estate tax and AMT fix.

112th Congress Priorities MilCon – LCC. We came very close to getting language to direct the Army to use a 50-year life cycle cost requirement in MilCon projects. Congressman Chet Edwards was prepared to offer report language, and during Senate debate on the omnibus appropriations bill, Senators Inouye and Murray were receptive to our idea.

We were able to get our 50-year language in the Approps bill that died with no action; and a similar version (not our exact language, but it included 50 years) in the Omnibus Senate bill sponsored by Senator Inouye (HI) which died on the Senate floor. In sum, we lost our language due to process and politics – 100 percent beyond our control.

Congressman Culberson (R-TX) is the incoming chairman of the MilCon Approps Subcommittee. We are very close to his office, and we plan to make the initial run with our language through the House, since the new Republican majority will pass all approps bills before the summer recess.

Congressman Dicks and Senator Inouye both have asked us to meet with the Secretary of Defense in the coming months to revisit this issue.

Regulation/Agency Rulemaking. Given the House Republican’s positioning of the Oversight and Government Reform Committee, we will see a bully pulpit attacking the federal agencies for their prior rulemaking and regulations. Chairman Darrell Issa already has scheduled more than 160 oversight hearings, where federal agencies will be brought in to testify. House Republicans will use this committee to slow the pace of regulations and provide sunlight on how the agencies operate.

This could be a great opportunity for the MCAA to testify on harmful DOL/OSHA regulations and rulemakings.

3% Withholding Tax. The Masonry Industry opposes the 3% withholding tax. The MCAA has met with Members of Congress to generate cosponsors and pass H.R. 275 (Meek-Herger) and S. 292 (Specter-Vitter), which would immediately repeal this requirement. These bills, despite having cosponsors, went nowhere in the 111th Congress.

Senator Vitter has reintroduced this legislation, and we will work with Congressman Herger to do the same for the 112th Congress. Our legislative focus is on pitching this as a pro-Small Business/jobs bill. This bill passed a Republican House previously, and we need to coordinate with the Senate to push it across the finish line.

Conclusion The House will prove to be open to many of our ideas, but we must be careful not to be tied-in to large bills that have no chance of passing the Senate. A prudent approach is to focus on LCC through appropriations, and try to pass our priorities stand-alone, or tied to pro-small business/mini-jobs bills. There are 23 Senate Democrats up for re-election in 2012, so many of those votes could be in play if Senate Republicans pitch their case properly, and the House provides them with legislative opportunities.

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