Bipartisan Groups of Senators Working to Avert Both Spending and Tax Portions of the “Fiscal Cliff”

Although Congress has adjourned until after the Nov. 6 election, bipartisan groups of senators are meeting to start compiling a plan to avoid the looming fiscal cliff.  The Gang of Six (senators Warner (D-VA), Chambliss (R-GA), Durbin (D-IL), Conrad (D-ND), Crapo (R-ID) and Coburn (R-OK)), which has been discussing a bipartisan deficit reduction plan since late 2011, has recently added two Senators (Alexander (R-TN) and Bennett (D-CO))  and planned meetings between now and election day.  This group is primarily focused on avoiding the fiscal cliff of the automatic tax increases that will impact all working Americans on January 1, 2013. In addition, another bipartisan group consisting of Senators McCain (R-AZ), Levin (D-MI), Ayotte (R-NH), Graham (R-SC), Shaheen (D-NH) and Whitehouse (D-RI)  has been focused primarily on avoiding the $109 billion of indiscriminate, automatic budget cuts—a process called sequestration—currently set to occur on Jan. 2, 2013, The Second group is largely angling to avoid cuts to defense programs.  AGC chapters and members met with their Congressional offices this week during the National Chapter Leadership Conference to discuss the impacts of the fiscal cliff on the construction industry. The groups are discussing a three-step process to avert both elements of the fiscal cliff. The first step would be an agreement on an overall deficit reduction figure—which some have noted to be $4 trillion over 10 years—achieved through tax and entitlement reform as well as spending cuts. With that framework approved, relevant congressional committees would be responsible for drafting the details within six months to a year. The commission’s tax, entitlement and spending reforms could yield as much as $2 trillion in savings. Lastly, Congress would vote to replace sequestration with specific budget cuts and delay the expiration of the Bush tax cuts. Details of this plan remain unclear and the situation is extremely fluid. However, the consequences of falling off the fiscal cliff remain clear: many federal construction investment accounts could see an 8 to 10 percent cut in available budgetary resources and taxpayers will experience as $390 to $500 billion tax increase. AGC continues to work with House and Senate staff to encourage a bipartisan proposal to not ignore the positive impact infrastructure investment has on our overall economy and the impact of ignoring required maintenance of our infrastructure assets.  More information on the fiscal cliff can be found here and the prioritization of infrastructure investment here. For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org or Sean O’Neill at (202) 547-8892 or oneills@agc.org.