Moving Forward
This year has seen a drastic increase in the public’s frustration with Congress and the Obama Administration. The re-election of President Obama, one-third of the Senate and the entire House of Representatives in November 2012 brought more than 80 new elected officials to Washington. When you add those to the 105 new Members of Congress from the 2010 election, you find that over a third of Congress is in their first or second term. In addition, the number of Democrats and Republicans who make up the moderate middle have been decimated (and all-but eliminated) by the last two election cycles — making the opportunity for bipartisan compromise much smaller and the propensity for argument much higher. And that’s exactly what we saw.
The first half of the 113th Congress will undoubtedly be defined by what Congress did not do, rather than what it accomplished. The productivity of Congress has been among the lowest in the history of Congress, passing less than 50 bills into law. Despite the lack of substance from Congress, we have all witnessed the increase in rhetoric and grandstanding from our representatives. This fact only exacerbates the public’s increasing impatience with their government. One of the many criticisms of Congress this year centered on Congress’ inaction, especially of its primary responsibility.
The “power of the purse” that Congress commands over the budget process has been one of those neglected responsibilities. The last time Congress fulfilled the entire budget process was in 1997. In 2009, the House and Senate passed an Omnibus appropriations bill, a spending bill that funds the government but is not a budget. Since then, the House and Senate have not passed an inclusive budget. Both chambers have passed parts of a budget, but have not agreed. In 2013, this stymied process came to a head when the House and Senate could not agree on spending levels by the beginning of the fiscal year (October 1) and the government shut down from lack of funding. Republicans viewed the divide as an opportunity to attack Obama’s healthcare law, the Affordable Care Act, and the size of government, while Democrats refused to negotiate spending while the government remained closed.
The shutdown lasted more than two weeks and ultimately ran into the looming debt ceiling. Republicans in the House passed several bills in an attempt to negotiate with the Democrat-controlled Senate who continued their refusal to compromise. In the end, the House passed, with the majority of Democratic support, a Senate negotiated bill to reopen the government, increase the debt ceiling and enter a negotiation for budget talks.
In another example of Congress’ failure to fulfill its responsibilities, a Congressional promise from last year has been neglected. The sequestration negotiations at the end of 2012 yielded a promise of over-arching tax reform both for personal and business filers in 2013. Both House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Senate Finance Committee Chairman Max Baucus (D-Mont.) have publically expressed action and negotiations toward overall tax reform, but as of press time, even a plan — let alone legislation — has not been offered.
Other items that were expected in 2013 that have not yet materialized by Congress include a FARM Bill, immigration reform and gun control, just to name few. Even with the stalemates in Congress, NUCA has seen progress in our legislative priorities that warrant optimism.
In May, the Senate Environment and Public Works Committee (EPW) passed the bipartisan Water Resources Development Act (WRDA). This legislation will have a meaningful and beneficial impact on NUCA members who work as subcontractors to Army Corps of Engineer projects. This legislation will permit new projects to begin feasibility studies, chief’s reports and project construction. Probably the most important part of the Senate version of WRDA is the Water Infrastructure Financing Investment Act (WIFIA) inclusion. This section of the bill will authorize $50 million per year for five years ($250 million total) to fund WIFIA’s pilot program. This pilot program, modeled after the popular TIFIA for transportation financing, would serve as a funding mechanism states and communities can utilize to help finance large water infrastructure projects. These funds will be loaned to the project authorizers and returned to the fund, with interest, that will again be sent out to assist in financing additional water projects. This would be a huge initiative for NUCA members and our water industry colleagues, by allowing low-cost, water infrastructure financing both to the community and to the government. This will result in more contracts for businesses to pursue as financing barriers are lowered.
On the House side, the Water Resources Reform and Development Act (WRRDA) passed the House nearly unanimously (417-3) in October. After months of waiting after the Senate bill’s passage, Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) introduced what was one of, if not the, most bipartisan bills this Congress has seen. Several challenges presented themselves that probably delayed committee action. First, the House is still operating under an earmark ban. Historically, because of the nature of authorizing water resources projects, the WRDA bill has been considered an earmark bill — though not necessarily in the dirty terms people usually associate earmarks. Circumventing this ban would be tricky while still authorizing specific projects for the Army Corps to undertake. Second, the political environment has not lent itself to easy negotiations. As I said earlier, the diminishing moderate middle has made bargaining for specifics very difficult, making appeasing the environmentalists on the left and the Tea Party on the right, very difficult.
But in the end, the product is good. WRRDA contains significant reforms to the project authorization process which will allow faster project study and development which will result in less lead time before construction. The bill also contains the ability for state and local governments to finance projects, at any stage of the process, with public-private partnership (P3s) money. This will also allow greater access to capital for part of the project funding. These P3s can be utilized for feasibility studies, chief’s reports or project construction which will help not only keep the cost of projects down, but allow the Army Corps to undertake a higher number of projects. The House-passed WRRDA is not perfect, however, as it did not include the WIFIA financing mechanism.
Because the House and Senate passed different versions of this bill, a conference committee was set up to negotiate the differences. NUCA, and our coalition partners, have been working diligently to ensure that the interests of utility and excavation contractors are heard and represented in this conference. We do not know how long it will take for the conference to negotiate a final package, but the fact that both chambers have appointed conferees is a sign that both chambers want this legislation to move forward and be enacted.
Another item worth being optimistic about is water financing. I won’t go so far as to say that Congress finally gets it, but there are certainly more Members of Congress who see the looming problems with continually cutting water infrastructure financing measures. As a result, many of our old ideas and some new ideas are worth getting excited about. NUCA’s long-term priority, Private Activity Bonds (PABs), continue to be discussed as an option for reliable, low-cost funding. After primary sponsor Geoff Davis retired last year, Congressman Tom Reed (R-N.Y.) has stepped in as the PAB champion. His position on the Ways and Means Committee makes him an optimal leader on this issue and has allowed him, on several occasions, to advocate for PABs inclusion in greater tax reform plan. As a byproduct of the House WRRDA negotiations, Transportation and Infrastructure Committee Ranking Member Nick Rahall (D-W.Va.) and Water Resources Subcommittee Ranking Member Tim Bishop (D-N.Y.) have publically discussed assurances from Committee Chairman Shuster to address infrastructure financing upon the completion of WRDA. Hints suggest this will take the form of a State Revolving Fund (SRF) which would be the perfect opportunity to address PABs. Additionally, assurances from committee staff indicate that legislative language has already been drafted that includes a lift of the state volume cap for PABs on water and wastewater projects. While this is no guarantee the final product will contain this language, it certainly makes the initial part of the conversation easier on our coalition of supporters.
Despite the abysmal track record of Congress in 2013, NUCA members have reason to be optimistic. The table has been set for a 2014 that could see multiple, top-tier priority wins for NUCA and our allies. But now is not a time to rest on our laurels and skate through hoping for the right outcome. As we saw with the Highway Bill, we have to follow through until the job is done and the ink is dry. That’s why I’m not slowing down, and neither should you.
Will Brown is NUCA Government Relations Manager.
