After much uncertainty, late last week Congress struck a deal to collectively pass the remaining appropriations measures for FY 2012. The legislation, (
H.R. 3671,
H. Rept. 112-331) funds the federal agencies under the remaining nine Appropriations bills, including: Defense, Energy and Water, Financial Services, Homeland Security, Interior/Environment, Labor/Health and Human Services/Education, the Legislative Branch, Military Construction/Veterans Affairs, and State/Foreign Operations. AGC has advocated for this measure to come together to ensure predictability for the FY 2012 federal construction programs for both the construction industry as well as the government.
The legislation upholds the overall regular (base) discretionary level of $1.043 trillion as agreed to in the Budget Control Act (BCA). When combined with the previous “minibus” Appropriations bill enacted in November, total discretionary funding for FY 2012 will equal $1.043 trillion – $7 billion less than last year’s level of $1.050 trillion and $98 billion less than the President’s request. Alone, this nine-bill legislation includes a total of $915 billion in regular security and non-security discretionary funding – $6 billion below last year’s (FY 2011) level for these same agencies, and more than $70 billion below the President’s requested levels.
AGC has done an analysis of the FY 2012 appropriations that can be found
here. Of the federal construction accounts tracked by AGC there was an overall decrease of nearly $7.5 billion, or just over 6 percent of the final FY 2011 funding levels. The FY 2011 federal construction accounts were cut by nearly $18 billion. Since 2010, these federal construction programs have been cut by approximately $35 billion from an all time high.
The following is a summary of appropriations bills and the federal construction programs that AGC closely monitors:
Energy and Water
The total funding level for Energy and Water programs equals $32 billion – $328 million over last year’s level and $4.5 billion lower than the President’s request.
- Army Corps of Engineers – The Army Corps of Engineers is funded at $5 billion, an increase of $145 million above last year’s level and $429 million above the budget request. This funding will help advance American competitiveness and export ability by providing $1.8 billion for navigation projects and studies. The bill also provides resources to advance public health and safety by funding flood and coastal storm damage reduction at $1.66 billion – including $437 million for critical dam safety improvements.
- Key Policy Rider: The legislation includes an AGC-supported a one-year block on Obama administration efforts to rewrite federal rules so that environmental considerations are given greater weight when planning and designing levees, locks, dams and other water projects, under the massive 2012 spending bill slated for approval. The provision would block USACE from spending FY12 funds to implement the rules, which are known as the "principles and guidelines" for how USACE-built projects are developed. Even if the White House Council for Environmental Quality (CEQ) releases the policy in 2012, the Army Corps would be blocked from implementing it. The provision dictates that the Army Corps should continue to operate from the 1983 rules through the next fiscal year.
Military Construction (MilCon)/Veterans Affairs (VA)
The MilCon/VA section of the legislation includes a discretionary total of $71.7 billion, a decrease of $1.4 billion below last year’s level and a decrease of almost $2.1 billion below the President’s request.
- Military Construction – The bill provides $13.1 billion for military construction projects – a decrease of $3.5 billion below last year’s level and $1.7 billion below the President’s request. Within the total, the bill funds Military Family Housing Construction at $1.7 billion, which provides for a total of 48 new family housing construction projects, 80 replacement projects, and improvements to 216 family housing units. In addition, the legislation contains $1.1 billion for construction and alterations for new or existing military medical facilities, and fully funds the FY 2012 BRAC request.
- Veterans Affairs (VA) – The legislation includes a total of $122.2 billion in both discretionary and mandatory funding for the Department of Veterans Affairs. The bill provides $589,604,000 for the construction of “major” projects and an additional $482,386,000 for “minor” construction projects. The legislation includes provisions to increase spending oversight at the VA, including requiring the agency to report on construction savings and restricting the agency from taking certain spending actions without notifying Congress.
General Services Administration
The agency will receive $50,000,000 for the construction and acquisition (including funds for sites and expenses, and associated design and construction services) of new facilities in FY 2012. An additional $280,000,000 shall remain available until expended for repairs and alterations, and design and construction services.
Department of Labor (DOL)
The bill provides $14.5 billion for the Department of Labor, which is $145.4 million above last year’s level and $251.2 million below the President’s request. The increase above FY 2011 is due to a provision that fully funds Job Corps in the current fiscal year (see below). Absent this provision, the conference agreement reduces the Department of Labor’s budget by $545.6 million below last year and $942.2 million below the request.
- Occupational Safety and Health Administration (OSHA)– The conference agreement includes $565,857,000 for the Occupational Safety and Health Administration (OSHA).
- Key Policy Riders:The legislation includes several legislative provisions to reduce government overreach, rein in excessive regulation, and help foster a good economic environment for job growth. Some of these provisions include:
- A prohibition on OSHA’s development of the AGC-opposed musculoskeletal disorders (MSD) reporting requirement, otherwise known as the “ergonomics” regulation. The conferees noted that OSHA's National Emphasis Program (NEP) on Recordkeeping has been underway since October, 2009 to assess the accuracy of injury and illness data recorded by employers. The conferees direct the Secretary of Labor to submit a report, not later than 90 days enactment of this Act, to the Committees on Appropriations of the House and the Senate detailing the findings of this NEP, as well as other Department activities, related to the accuracy of employer reporting of injury and illness data.
- A prohibition on the implementation of the H-2B Wage Methodology rulemaking – saving employers millions in unnecessary costs;
- A prohibition on the implementation or enforcement of DOL’s “coal dust” rule until an independent assessment of the integrity of the data and methodology behind the rule is conducted;
- A prohibition on the National Labor Relations Board from implementing electronic voting procedures, preserving the integrity of the secret ballot election;
State and Foreign Operations
The Legislation provides $42.1 billion in regular discretionary funding for the State Department and foreign operations. This is more than $6 billion below last year’s level and $8.7 billion below the President’s request.
- Overseas Buildings Operations (OBO)- The conference agreement provides $1,537,000,000 for Embassy Security, Construction, and Maintenance for the Office of Overseas Buildings Operations (OBO). Accordingly, OBO will receive $762,000,000 for preserving, maintaining, repairing, and planning for buildings that are owned or directly leased by the Department of State. In addition, OBO will receive an additional $775,000,000 for worldwide security upgrades, acquisition, and construction.
- Key Policy Rider: The conferees are concerned with the long-term sustainability of the operating, maintenance, and utility costs of new diplomatic and consular facilities and directs the Secretary of State to impose a moratorium on beginning any new Capital Security construction projects until the Secretary provides the following information to the Committees on Appropriations: (I) the additional annual costs for operations and maintenance, including utilities and salaries, and the number of additional facilities and engineering staff that have been hired to operate the diplomatic and consular facilities that have become operational since the CSCS program began; (2) the estimated additional costs for operations and maintenance, including utilities and salaries, and the number of additional facilities and engineering staff necessary to operate the diplomatic and consular facilities that have been funded and/or are being constructed; and (3) the plan for addressing the $111,000,000 in deferred maintenance at existing diplomatic and consular facilities reported in the Department's 2010 financial statements.
As previously reported, Congress approved a measure that fully funded the Agriculture, Commerce/Justice/Science (CJS), and Transportation/Housing and Urban Development (THUD) Appropriations bill -- also known as the “Mini-bus” – for Fiscal Year 2012.
The minibus is an improvement over an earlier House appropriations transportation bill that would have cut federal highway funding by $14 billion. The Senate version of that same bill would have maintained current funding levels. AGC communicated with members negotiating the final minibus bill, urging them to accept the Senate funding levels. AGC succeeded in getting the final funding level for the highway program at $39.883 billion (including $1.662 billion in emergency relief) which is nearly identical to the prior years’ funding level. Below is a list of other programs and their fiscal year 2012 funding levels as provided in the "minibus.”
|
FY 2011(enacted) |
FY 2012 (conference) |
| Federal-aid Highways (obligation limit) |
$41.107 billion |
$39.144 billion |
| Federal-aid Highways (obligation limit) |
$41.107 billion |
$39.144 billion |
| Federal-aid Highways (Emergency Relief) |
|
$1.663 billion |
| FTA Formula/Bus Grants (Obligation Limit) |
$8.343 billion |
$8.361 billion |
| FTA Capital Investment Grants |
$1.597 billion |
$1.955 billion |
| TIGER Discretionary Grants |
$527 million |
$500 million |
| Amtrak |
$1.503 billion |
$1.439 billion |
| FAA Airport Grants (Obligation Limit) |
$3.515 billion |
$ 3.350 billion |
AGC will continue to educate members of Congress on the impact of the budget cuts on the overall economy, the construction industry, and their district and state. Please take this opportunity to understand what construction programs are being cut and talk to your members of Congress about how these cuts will impact your area, your company and your employees. Here is a short-hand method for analyzing the impact of nonresidential construction on GDP, earnings and jobs:
- An extra $1 billion in nonresidential construction spending would add about $3.4 billion to GDP, about $1.1 billion to personal earnings and create or sustain 28,500 jobs.
- 9,700 jobs would be direct construction jobs located in the state of investment.
- 4,600 jobs would be indirect jobs from supplying construction materials and services. The majority of these jobs would be located within the state of investment but there would be some out of state jobs supported.
- 14,300 jobs would be induced when workers and owners in construction and supplier businesses spend their incomes locally and nationwide.
Currently, AGC follows annual appropriations for more than 70 federal construction accounts, totaling more than $100 billion annually. We realize that Republicans and Democrats are looking for ways to reduce spending, and we are making the case that construction improvements are a necessary investment in national economic competitiveness that should not be postponed.
For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org. 