Associated General Contractors of America

Bill Reopening Federal Government Prevents New Construction Starts

A late-Wednesday compromise between Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) broke the Congressional logjam and brought an end to the government shutdown and stalemate over the debt ceiling. The bill – known as the Continuing Appropriations Act, 2014 – will fund the government at Republican-supported post-sequester levels of $986 billion until Jan. 15, 2014, and will extend the debt ceiling until Feb. 7, 2014.?

President Obama signed the bill after it passed the Senate by a vote of 81-18 and the House of Representatives by a vote of 285-144. All Democrats and 27 Republicans in the Senate voted yes and, in the House, 87 Republicans joined all Democrats in supporting the bill with 144 Republicans voting no.

The only Obamacare-related provision will require the Health and Human Services secretary to certify to Congress that proper income-verification procedures are in place before any subsidies are given to those who qualify for federal help while buying insurance on the new exchanges. 

The bill included no funding changes to federal construction accounts, but three three provisions impact construction firms. The first prohibits the start of new direct-federal construction FY 2014 projects that did not receive any funding in FY 2013. The second provision allows the Federal Highway Administration to allocate up to $450 million in Emergency Relief highway appropriations to Colorado for repair of 2013 flooding damage. The third provision raised the cap on the amount that can be spent on the U.S. Army Corps Olmsted Locks and Dam Project on the Ohio River to $2.9 billion from $1.56 billion. The measure does not appropriate funds, but allows work on the project to continue. Without the cap increase, this major public works project would have been shutdown in November. 

A key component of the Reid-McConnell deal – but not included in the legislation passed last night – was a bipartisan agreement for the House and Senate to go to conference on their respective fiscal-year 2014 budgets. The committee will immediately begin debating top-line spending levels (there is a $90 billion difference between the House and Senate budgets) and then will seek to negotiate long-term solutions to the nation’s fiscal challenges, including ways to responsibly address across-the-board spending cuts known as sequestration. The conference would be required to issue a report by Dec. 13, 2013 (the last scheduled day in the first session of the 113th Congress).

If the budget conference committee fails to find common ground on how to deal with sequestration, discretionary spending, entitlement programs and revenue, there is the potential for another federal shut-down, as short-term extensions of government funding and the debt limit expire on Jan. 15 and Feb.7, respectively.

Precedent is not on the side of success as learned from the last similar panel – the so-called “super committee” of 2011 – that was deadlocked and adjourned in disagreement.

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