Challenges Ahead

road

As we begin the New Year, still riding high on some impressive and meaningful victories from 2016, the utility and excavation construction industry has reasons to be optimistic, but also reasons for concern. There are a number of forces working in favor of governmental priorities, and a number of forces working against them. With the Water Infrastructure Improvements for the Nation (WIIN) Act becoming law in December, which contains the traditional Water Resources Development Act (WRDA), significant water infrastructure project authorizations and new or expanded funding for specific types of water infrastructure projects will be implemented in 2017. The WIIN Act was a meaningful accomplishment for the infrastructure construction community, but 2017 victories will prove more difficult to achieve.

Similar to 2016, the year will start with significant discussion about infrastructure. Last year, the drinking water crisis in Flint, Mich., brought the age and state of disrepair of our water systems nationwide to the forefront. This year, President-elect Donald Trump has made infrastructure a key component of his plan for the first 100 days in office. This emphasis is critical to our country and may prove a significant bellwether for the Trump Administration.

Even though the 2016 election yielded a unified Republican government, it is highly unlikely that Congress will walk in lockstep with the White House. Despite being a priority of the White House, it is unclear how Republicans in Congress will decide to enact infrastructure legislation. Over the last several Congresses, Republicans have opposed spending increases for infrastructure, despite the obvious economic development, job creation and tax revenue generation.

The Freedom Caucus, which is comprised of the House’s most conservative lawmakers and has largely served to impede the Republican leadership over the last two Congresses, has stayed quiet on the President-elect’s plan to spend on infrastructure, despite the groups almost unanimous disdain for spending. Their position will become apparent during the development of the legislation.

Conversely, Democrats, who traditionally support spending on infrastructure, may also provide resistance to infrastructure legislation. It would not be surprising to see unified opposition to any proposals from the White House for purely political and partisan reasons. This would indicate that it won’t matter what the legislation is, Democrats will want to deny Republicans and Trump any sort of victory or accomplishment. However, it is unclear how much they will be able to stop legislation with a 21-member deficit in the House, essentially two members short in the Senate, and a 2018 electoral map that puts Democrats on defense in six states that Trump won by double digits. They may not be able to stop the legislation from happening, but they will be able to make headline-generating soundbites and plenty of logistical and procedural hurdles for GOP leaders.

Preliminary indicators of where opposition could come from in drafting and pushing any infrastructure plan through Congress rests squarely on the costs. Despite a plethora of empirical data on the return to the government and the economy from investing in infrastructure, Members of Congress view legislation with blinders on. Because of the way the Congressional Budget Office scores bills, lawmakers will only see the cost of the bill, in either dollars from the treasury, or a loss of revenue (taxes) accumulated by the government. We all know that infrastructure makes businesses more valuable and productive, creates jobs in a host of industries, including construction, and stimulates economic growth — all of which generate more tax revenue for Uncle Sam. However, lawmakers, especially spending-conscious Republicans, won’t care if the legislation increases the budget deficit. NUCA members need to continue our efforts to educate our lawmakers to understand that infrastructure spending is an investment in our future, not an excessive invoice handed to our children.

Associated with costs, there have been reports of an infrastructure plan being, somehow, woven into a greater tax reform agenda, as a means for paying for infrastructure spending. NUCA has supported legislation that would utilize repatriated corporate dollars to fund an infrastructure bank and the Highway Trust Fund, but there are essentially two primary issues with this approach. First, repatriation could be a one-time fix without a restructuring of the corporate tax code, which is not only a large project, but it is unclear how long it will take to develop a plan and legislation. It is not a sustainable solution, though it does buy significant time and could be implemented quickly. Second, if tax reform is going to be utilized to pay for legislation, everyone, and I do mean everyone, will be lobbying for a slice of the pie, which could mean infrastructure gets a smaller share, or worse, left out entirely.

No matter what happens with the infrastructure plan in the new administration, NUCA will maintain several of the positions we’ve advocated for in years past.

Building on the foundation we’ve built last year within the appropriations process, we will again fight for increased appropriations within the federal budget process. We will once again work with our colleagues and champions to make the case for greater State Revolving Fund appropriations to the EPA and greater Rural Utility Service appropriations to the USDA. Republican control of the Congress creates headwinds for this goal as the federal budget for the remainder of Fiscal Year 2017 will need to be enacted by late April 2017, and the Fiscal Year 2018 budget will need to be completed by the end of September 2017. There is some talk of budget reform, which could throw a curveball in the appropriations process as a whole, but that is far from certain.

Additionally, any infrastructure stimulus or bill would be incomplete without addressing current skilled labor shortages. We intend to make the case for workforce development legislation in the same breath as infrastructure investment legislation. Our broad goal is to attract more young people to the construction industry. A more specific goal is to enact legislation that treats financing vocational or workforce training schools like federal college financing. In other words, we will work to create greater opportunity and flexibility for students to utilize federally subsidized loans or grants for financing vocational training. Doing so will undoubtedly require greater collaboration between America’s vocational schools and construction businesses, which will have the added benefits of exposing young men and women to the positive elements of working in construction. This will also allow the industry to help create a curriculum to ensure that course graduates are job-ready. Promoting workforce development legislation has been a product of ongoing discussions with our membership and partners and is an example of NUCA’s responsiveness to new, evolving or growing member needs.

While NUCA remains committed to pursuing these objectives in the 115th Congress, it is possible, if not likely, that other issues will arise which require our flexibility to address. The Political Insiders newsletter will remain the best communications tool for succinct and timely updates, education and action-alerts. If you are interested in signing up for Political Insiders, send an email to me at will@nuca.com. Political Insiders was designed to be read in three minutes or less and contain the most relevant information for subscribers to act in pursuit of priorities that will directly help their businesses.

Finally, mark your calendars for the Washington Summit May 16 to 18 in Washington, D.C. The Summit is one of NUCA’s most powerful advocacy tools. Planned at the very end of President Trump’s first 100 days, the Summit will be pivotal to our legislative success in 2017. Whether you’ve been attending for years or are a first-timer, the Washington Summit will be an enlightening and empowering event. I encourage you to make plans to attend and make your accommodations early.

This year has the potential to be a banner year for NUCA, our members and our industry. We must continue to build on the progress our Government Affairs have made over the past three years. To do so, we need your attention, participation and activism in support of our priorities and your businesses.

Let’s get to work.

Will Brown is NUCA’s director of Government Affairs.

Written By