Construction industry groups cheered the House's Oct. 27 approval of legislation to repeal a mandate that government agencies withhold 3% of contract dollars from companies doing that work. But their focus quickly turned to the Senate, where they hope lawmakers will agree to the House measure and send it to the White House to be signed. A majority of the Senate recently voted for a different withholding-repeal bill, handicapping the prospects there for the House-approved measure.
The House's strong 405-16 vote for the repeal bill has given the industry a lift. Geoff Burr, Associated Builders and Contractors vice president of federal affairs, says, “Even people who followed this closely didn't expect there only to be 16 no votes on this bill. And that overwhelming support in the House might force the Senate's hand to some degree.”
Jeffrey Shoaf, Associated General Contractors of America senior executive vice president for government affairs, says the outlook is excellent for a 3% repeal in the Senate. He says the size of the House margin “sets up a pretty strong reason to make [Senate approval] happen.”
Shoaf also notes that a repeal bill offered by Senate Minority Leader Mitch McConnell (R-Ky.) got 57 votes in an Oct. 20 procedural vote. That represented a majority of the Senate but was three votes short of the 60 needed to ward off a filibuster and ensure passage.
Moreover, the Office of Management and Budget issued a statement on Oct. 25 supporting the House's legislation.
The measure heading to the Senate will have two parts. It combines the repeal bill with another bill that would raise more than enough revenue to offset the repeal legislation's estimated $11-billion cost. That “pay for” measure—which the House also passed on Oct. 27 but on a narrower 262-157 vote—would change the definition of “adjusted gross income” to determine eligibility for a tax credit under the 2010 Patient Protection and Affordable Care Act. The change requires counting all of a taxpayer's Social Security benefits in adjusted gross income.
Looking at the Senate, Burr says, “I think that the only remaining sticking point is the pay-for.” Senate lawmakers had intended to use the health-care provision to offset costs in other legislation, he believes, adding, “I think that [revenue-raiser] could be the one thing that continues to hold this up. But it would be a shame if something that 405 House members agree on and the majority of senators agree on did not get a vote simply because of that.”
On Oct. 31, Sen. Scott Brown (R-Mass.) introduced the House-passed bill in the Senate and, in a Nov. 1 news conference, called on Senate Majority Leader Harry Reid (D-Nev.) to bring a “clean bill” to the floor. Brown said the bill has bipartisan support in the Senate and should “easily pass” if lawmakers avoid the partisanship that has been characteristic of recent debate. The Senate bill has 30 co-sponsors, six of whom are Democrats, Brown said.
The 3% mandate was enacted in 2006; originally slated to take effect on Jan. 1, 2011, it has been delayed twice. Unless the requirement is abolished, it is set to kick in at the start of 2013.
Construction groups say that holding back 3% of contracts' value would be a severe blow to an industry already struggling to rebound from a deep slump. An AGC survey released on Oct. 21 reported that, of the firms responding, 49% said the 3% withholding would lead them to hire fewer workers, while 65% said they would have to pare equipment purchases.
