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TAUC Legislative & Regulatory Update – September 2017
Congress returns from its annual August recess with a number of looming deadlines. While the President and Republican Congressional leaders would like to turn to comprehensive tax reform, they are dealing with a pressing need to complete the fiscal year 2018 spending bills to keep the government operating beyond September 30th; raising the debt ceiling; and providing disaster assistance to deal with the aftermath of Hurricane Harvey.
In an effort to finalize the FY 2018 budget process, the House is preparing to consider an appropriations package consisting of eight non-security bills in the next couple of weeks. At this point, the Senate is unlikely to consider the House package and will continue to try to move individual spending bills, so a continuing resolution will be needed to keep the government operating. During consideration of the House spending package, we are aware of a number of amendments filed to repeal Federal prevailing wage protections and prohibit the use of project labor agreements.
In other words, it’s going to be a very busy September. Here is an exclusive update from TAUC on issues of vital interest to contractors and the union construction and maintenance industry.
Multiemployer Pension Reform
The Pension Benefit Guaranty Corporation (PBGC) released its annual projections report, which found that its multiemployer insurance program will become insolvent by the end of fiscal year 2025 or earlier. According to the report, more than 100 plans insured by the agency have told their members that their plans will be insolvent within 20 years. The projected deficit in the Multiemployer Program is $59 billion.
Also last month, the actuarial consulting firms Segal Consulting and Cheiron Inc. issued reports that found there are 114 multiemployer pensions covering more than 1 million workers due to run out of money within the next two decades. The report estimates that critically declining multiemployer pensions have $43.5 billion in total assets but owe $79.9 billion in liabilities. However, Cheiron and Segal also found that distressed funds represent only about 8-9% of the total number of multiemployer pensions in the United States.
TAUC continues to work with union contractor associations and the AGC to educate members on the need for congress to authorize composite plans. We are hopeful that bipartisan legislation will be introduced in the House after congress returns from the August recess.
There have been a number of developments related to infrastructure, which continues to be a top priority for President Trump.
White House Hosts Meeting on Infrastructure with State and Local Officials: On August 30, the White House Office of Intergovernmental Affairs hosted a meeting with about 150 state, local, and tribal officials to provide an update on efforts to develop a new infrastructure package and to discuss ideas for infrastructure investment.
Administration officials indicated during the meeting that the White House is aiming to roll out an “infrastructure plan” before the end of September. The plan — most likely a general proposal or outline of the administration’s top priorities — is expected to include information on energy, water, potentially broadband, VA hospitals, and, transportation projects. Providing $200 billion in direct federal spending over 10 years ($20 billion a year) will probably remain the underlying organizing principle, which, when combined with state, local, and private sector investments, is intended to reach a goal of $1 trillion in infrastructure investment over a decade.
However, when Congress might actually act on the plan remains up in the air. National Economic Council Chairman Gary Cohn said the White House continued to hope action on infrastructure would come this year, but told reporters it would “come on the heels of taxes,” another complex issue without a firm proposal ready for congressional consideration.
Energy Infrastructure: The Senate finally confirmed two nominees to the Federal Energy Regulatory Commission (FERC), ending a six-month period where the commission didn’t have enough members to establish a quorum and take action. By restoring a quorum, the agency can now begin working through a $13 billion backlog in energy infrastructure projects that had been stalled. TAUC had previously signed a letter to Senate leaders urging consideration of FERC nominees so that the agency had the necessary quorum.
Infrastructure Project Permitting Streamlining: President Trump signed an executive order designed to cut the federal environmental permitting process down to two years and make sure one lead agency oversees a project’s NEPA and permitting process.
Infrastructure Advisory Council Dissolved: The White House recently announced the Presidential Advisory Council on Infrastructure will not move forward. The Council, formally established by Executive Order on July 19, was to be comprised of 15 non-government members with experience in such sectors as real estate, finance, construction, transportation and logistics, and regional and local economic development. It was to be responsible for advising the President on “Federal Government funding, support, and delivery of infrastructure projects.
Apprenticeship and Training
As you may recall, in June President Donald Trump signed an executive order that called for the federal government to reduce its role in creating and monitoring apprenticeships to allow private entities to take the lead. The executive order also created the Task Force on Apprenticeship Expansion, which is charged with the mission of identifying strategies and proposals to promote and expand apprenticeships, especially in sectors where apprenticeship programs are insufficient.
Following on those developments, now there is also action on training initiatives on Capitol Hill. Sen. Tammy Baldwin (D-Wis.) has stated that she intends to introduce legislation to expand apprenticeships and public-private partnerships. Under the “Partners Act,” states would request funds from the DOL to start or expand public-private apprenticeship initiatives. States would then provide up to $500,000 over two years for apprenticeships designed as collaborations between businesses and educational institutions.
TAUC and its partners in the Construction Employers of America coalition will continue to monitor this effort to ensure that any changes to the federal government’s role in apprenticeship and training does not weaken standards or undermine existing programs.