AED Washington Insights Newsletter
November 2003
Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team
In this Issue:
House T&I Committee leadership unveils TEA-21 reauthorization plan
In a major step forward in the process of reauthorizing federal surface transportation programs, the bipartisan leadership of the House Transportation & Infrastructure (T&I) Committee unveiled a bold plan on November 19th to spend $375 billion on roads and transit over the next six years.
The legislation, known as the Transportation Equity Act: A Legacy for Users (TEA-LU), would increase funding for transportation infrastructure by more than 70 percent above the record amounts provided by the 1998 Transportation Equity Act for the 21st Century (TEA-21). In so doing, the bill would create an estimated 1.3 million new jobs.
Bill provides $298.7 billion for highway program
Of the $375 billion provided for surface transportation over six years, $298.7 billion would be allocated for highways and $69.2 billion for transit. The Federal Motor Carrier Safety Administration and the National Highway Traffic Safety Administration would receive $3.3 billion and $4.2 billion respectively. Under the plan, the federal highway program would grow from $39.8 billion in 2004 to $59.2 billion in 2009. By comparison, Congress appropriated $31.6 billion for roads in FY 2003.
Given estimates that seven percent of every federal highway dollar makes its way into the hands of equipment distributors, the bill would mean an additional $546 million in economic activity for the equipment industry in the first year alone. The value of the bill to the equipment industry over the next six years would be more than $20 billion.
In addition to the funding levels, other highlights of the legislation include:
- A provision to ensure that, by 2009, states receive a return of at least 95 percent on the gas tax money they send to Washington (the current guaranteed return percentage is 90.5 percent).
- A new Congestion Relief Program that gives priority to projects that increase motor vehicle travel reliability, maximize road capacity and efficiency, and remove bottlenecks.
- A new High Risk Rural Road Safety Improvement Program to target funding for safety improvements on rural two-lane roads (more than 60 percent of all traffic fatalities occur on rural roads).
- More than $10 billion for programs to improve the movement of people and goods along trade corridors, on designated truck lanes, to and from intermodal facilities, and in areas currently underserved by existing infrastructure.
To read the T&I Committee’s executive summary of the bill and see how much additional highway funding your state would receive, click here:
http://www.aednet.org/government/pdf/tea-lu-exec-summary.pdf
Funding mechanisms uncertain
Absent from the T&I Committee plan were concrete proposals about how to pay for the substantial funding increases. However, during the meeting at which the bill was unveiled Chairman Young said that he continues to favor a user fee increase as one of the ways to pay for the bigger road program.
AED has long supported raising the gas tax highway user fee by a few cents per gallon as one of the most fiscally responsible ways to pay for additional highway infrastructure investment. Some conservative Republican members of Congress, however, have said they oppose increasing any taxes, including those that pay for roads. Another complicating factor is that primary jurisdiction over the decision about whether to raise gas taxes rests with the House Ways & Means Committee, not the T&I Committee where support for the idea is strongest.
House bill to move in February
Young said that he expects the legislation to be acted on by the T&I Committee in early February and that he hopes to get it to the House floor by the end of that month.
Once the bill passes the House, a conference will be held with the Senate to hash out differences between the two chambers’ TEA-21 reauthorization plans. The Senate Environment & Public Works Committee passed its version of the highway bill on November 12th. That legislation, known as the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003 (SAFETEA), would provide $255 billion for federal surface transportation programs over the next six years, $120 billion less than the House proposal.
The temporary TEA-21 extension enacted in September expires on February 29th and another short-term extension may be necessary to keep road money flowing to the states while the final details of the conference report are hammered out.
Act now to voice your support
All of the T&I Committee leaders who spoke at the November 19th meeting noted that the involvement of concerned citizens at the grassroots level would be critical to the success of efforts to enact the proposed highway funding increases.
AED urges all of its members to contact their representative and senators by email, phone, or fax to express support for the T&I Committee initiative. Contact information can be found at http://www.congress.org or in your AED congressional directory. In communicating with lawmakers you can use the following simple message "as is" or modify it as you see fit:
| Dear Representative OR Senator X:
The bipartisan leadership of the House Transportation & Infrastructure Committee recently unveiled a bold plan to reauthorize TEA-21. The proposal would make our roads safer, reduce congestion, improve the environment, create jobs, and strengthen our economy by substantially increasing funding for federal surface transportation programs.
I am writing to urge you to support the T&I Committee plan and to help enact legislation that creates a six-year, $375 billion highway and transit program. It is critical that Congress increase annual funding for infrastructure programs to the level that the U.S. Department of Transportation has said is necessary to reverse the decay of our nation’s transportation infrastructure ($60 billion per year for highways and more than $13 billion per year for transit).
I also urge you to support increasing the highway user fee (i.e., the gas tax) to help pay for increased infrastructure investment. A user fee increase is one of the fairest and most fiscally responsible ways to offset the costs associated with additional highway spending.
Thank you for your consideration of my comments.
Sincerely,
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Congress limits scope of cooperative purchasing program after AED complaints
We won! Construction equipment was not included in a new program that allows state and local governments to buy anti-terrorism technology through federal supply schedules.
This past summer, the Senate added language to its version of the FY 2004 defense authorization bill (HR 1588) that would have allowed states and municipalities to buy from federal supply schedules "any product, equipment, or device . . . and any service . . . designed, developed, modified, or procured for the purpose of preventing, detecting, identifying, otherwise deterring, or recovering from acts of terrorism" (emphasis added). The program threatened to put equipment distributors and others into direct competition with the federal government for sales to public customers.
AED mounted an aggressive lobbying campaign to oppose the program. Our message was simple: Congress shouldn’t allow the war on terrorism to become a war on America’s small businesses.
We told lawmakers that AED’s members are committed to helping state and local entities get the technologies they need to fight terrorism, but that we oppose the federal government selling and brokering these goods and services, particularly when doing so would devastate the independent businesses that are the cornerstone of the U.S. economy.
We also pointed out that the broad definitions of "antiterrorism technologies and services" included in the Senate bill would allow state and local entities to purchase an almost infinite variety of goods and services on the premise that they could be used to fight terrorism with no requirement that they actually be used for that purpose.
Upon learning of the proposed program, Reps. Anne Northup (R-KY) and Rob Bishop (R-UT) sent a joint "Dear Colleague" letter to House Armed Services Committee Chairman Duncan Hunter (R-CA) urging that the cooperative purchasing program not be included in the final defense bill.
In conference the program was scaled back to cover only "anti-terrorism technologies and anti-terrorism services for the purposes of preventing, detecting, identifying, deterring, or recovering from acts of terrorism." In other words, under the language included in the conference report, the fundamental question is whether the thing being procured is specifically an antiterrorism product or service, not (as was the case in the Senate bill) whether the product or service is being procured for an antiterrorism purpose.
For equipment distributors that difference is critical. While it''s likely that construction equipment would have been covered under the original Senate language (a product procured to recover from acts of terrorism), it will be hard for federal procurement officials to argue that construction equipment is fundamentally "antiterrorism technology." Of course, that doesn''t mean we don''t expect them to try.
Scaling back the cooperative purchasing language in the defense bill is a major victory for AED. Distributors who do business with states and municipalities can rest a bit easier. But we don’t think the fight is over. As the Office of Federal Procurement Policy (OFPP) moves to implement the program, AED and its members will have to watch closely, and intervene if necessary, to ensure that the antiterrorism cooperative purchasing program isn’t expanded beyond what Congress intended.
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Get the recognition you deserve for supporting the WEF and AED’s work on Capitol Hill
AED’s Annual Meeting and CONDEX are just around the corner and fundraising for AED’s Washington Education Fund (WEF) is in full swing. The WEF is crucial to the association’s continued success in Washington. And, with TEA-21 reauthorization at the top of the agenda, your WEF contribution is more important than ever. Over the past year the WEF has supported:
- The AED: Your Voice in Washington video
- The AED-NUCA depreciation bonus study
- AED’s depreciation bonus education campaign
- Legislative fax alerts
- AED’s construction industry breakfast series for members of Congress
- Congressional lobbying kits
- AED Washington staff travel to local group meetings
If you think the AED’s work on Capitol Hill on issues like the depreciation bonus, cooperative purchasing, death tax repeal, and infrastructure funding are important, we hope that you’ll join your industry colleagues in supporting the WEF for 2004.
This year, for the first time ever, companies that support the WEF will receive a plaque thanking them for being a part of AED’s work in the nation’s capital. WEF supporters also will be recognized at AED’s Annual Meeting and in AED publications. Supporters will be recognized at four levels: Champion ($2,500 contribution); Patron ($1,250); Donor ($750); and Friend ($350).
The clock is ticking. To be recognized for your contribution at AED’s Annual Meeting, you must pledge your support no later than December 5th. Click here to download the WEF pledge/contribution form:
http://www.aednet.org/government/pdf/wef-contrib-and-pledge-form.pdf
You can also pledge your support by contacting AED’s Washington office by email at aeddc@aednet.org or by phone at 703.739.9513.
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Census Bureau reports housing starts at highest rate since 1986
It sounds as though Christmas may have come a little bit early for the construction industry this year. The U.S. Census Bureau reported November 19th that housing starts, considered to be a good indicator of the health of the construction and equipment industries, rose 2.9 percent in October to their highest rate in 17 years.
The Census Bureau said that "Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,960,000. This is 2.9 percent (±5.8%) above the revised September estimate of 1,905,000 and is 18.6 percent (±6.8%) above the October 2002 rate of 1,653,000."
"Single-family housing starts in October 2003 were at a rate of 1,617,000; this is 5.7 percent (±6.2%) above the September figure of 1,530,000. The October estimate for units in buildings with five units or more was 319,000," the Census Bureau said.
More information about the new housing starts figures, including a region-by-region analysis can be found at:
http://www.census.gov/indicator/www/newresconst.pdf
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