As President Joe Biden’s busy first 100 days in office—which included enactment of a $1.9-trillion pandemic rescue bill and proposals for two other massive measures—wrap up, the months ahead also are expected to generate plenty of legislative and regulatory action with major impact for the construction sector.
The industry’s prime legislative focus in coming months will be the progress of one of Biden’s two proposed bills—the $2.2-trillion American Jobs Plan Act, unveiled on March 31. It includes about $1 trillion to fund what ENR views as traditional infrastructure programs.
Biden’s plan has won praise from construction organizations, unions, environmental groups and congressional Democrats. But Republicans criticized it for being too expensive, with elements they view as not core infrastructure and funding that rolls back the 2017 cut in the corporate tax rate.
As of Biden’s Day 100 on April 30, the potential legislation’s size, shape, structure and timetable are unclear and industry officials say developments are entering a new phase.
“President Biden has set the agenda focused on infrastructure and jobs and now it’s time for Congress to act,” Jay Hansen, National Asphalt Pavement Association executive vice president for advocacy, told ENR. “During his second 100 days, all eyes will be on Congress as the House and Senate committees prepare and report out legislative text based on those proposals.”
Steve Hall, American Council of Engineering Companies senior vice president for advocacy, said in an interview, “I think the next hundred days will be critical in defining … the parameters of the package—the details, the schedule, etc.” He adds, “A lot of progress needs to happen in the next hundred days if we are realistically looking at the possibility of success this year. We need to get bills out of committee. We need to get bills to the House and Senate floor.”
The Laborers’ International Union of North America is among organizations pushing for the American Jobs Plan and its infrastructure components. “It’s a jobs, jobs, jobs bill,” says Terry O’Sullivan, its general president. “We’re looking to get it over the finish line,” he said in an interview.
A key question is whether Congress will aim for an omnibus multi-sector infrastructure package or split the legislation into several separate bills, each focused on a specific category.
“A lot of progress needs to happen in the next hundred days if we are realistically looking at the possibility of success this year. We need to get bills out of committee. We need to get bills to the House and Senate floor.” —Steve Hall, Senior Vice President, ACEC
A group of about a dozen Senate Republicans responded to the American Jobs Plan on April 22 with a $568-billion counterproposal with a shorter list of infrastructure types to be funded.
Both sides indicated that they are open to negotiating.
“I applaud a group of Republican Senators who just put forward their proposal,” Biden said in his April 28 address to a joint session of Congress. “We welcome ideas.”
Sen. Shelley Moore Capito (W.Va.), a leader of the Republican group, said in an April 29 statement that earlier that day she “had a constructive and substantive call with President Biden about infrastructure.”
She added that “we both expressed our mutual desire to …. find common ground to address these challenges and deliver results for the American people. I stand ready to be a partner in advancing infrastructure legislation in a bipartisan way—just as we’ve done in the past.”
Capito acknowledged in an earlier television interview that Democrats at any time could decide not to pursue a bipartisan route. “Until they do that I’m going to keep going in and fighting for Republican principles and a narrowing of a focus of a more reasonable, common sense infrastructure package,” she said.
Moving on Legislation
Meanwhile there is definite progress on Capitol Hill on legislation related to individual infrastructure sectors.
The brightest sign emerged on April 29, when the U.S. Senate approved a measure providing $35 billion for drinking water and wastewater treatment infrastructure in an overwhelming 89-2 bipartisan vote. Similar, but larger, legislation has been introduced in the House.
Read related story on the Senate’s $35-billion water infrastructure bill here]
Moreover, for the largest infrastructure sector, highways and bridges, the Senate Environment and Public Works Committee and House Transportation and Infrastructure Committee continue work on drafting their versions of bills to reauthorize the Fixing America’s Surface Transportation, or FAST, Act, the most recent multi-year highway-transit law.
Michele Stanley, National Stone, Sand & Gravel Association vice president for government and regulatory affairs, says Democrats and Republicans on both committees are committed to completing a FAST Act successor. They even are looking far ahead, discussing the shape of an eventual conference committee to work out differences after each chamber approves its version of the bill, she said in an interview.
One impetus pushing the lawmakers and staff is that surface transportation is the only infrastructure sector facing a hard, and looming, deadline. A FAST Act extension expires on Sept. 30.
O’Sullivan of the Laborerss’ union says he is looking for a “robust” five-year measure that will eclipse the $305-billion FAST Act. He also hopes to see union-friendly provisions included in the eventual transportation bill, such as prevailing-wage, apprenticeship and local-hire requirements.
On the other hand, Associated Builders and Contractors is concerned about those same provisions, says Ben Brubeck, ABC vice president of regulatory, labor and state affairs. Brubeck says they are included in the American Jobs Plan framework that the White House released in March.
Looking at the path forward for an infrastructure bill, Stanley says one option lawmakers may pursue is to combine individual bills such as highways and transit, drinking water and wastewater treatment and maybe others into a bigger package.
“I could see that that merged bill looks like $800-900 billion in order to get to a [bipartisan] compromise that both sides would be able to vote on,” she says.
Pro and Con on PRO Act
Although infrastructure is the top construction legislative priority, other important measures are pending or are on the horizon.
A fierce battle is underway over the Protecting the Right to Organize, or PRO, Act, which the House passed in March. The building trades and other labor unions strongly support the bill.
In another example of Biden’s generally pro-union leanings, in his April 28 address to Congress, he called on lawmakers to approve it. “We’ve never had a president that is more union-friendly than President Biden,” says O’Sullivan.
But ABC, the Associated General Contractors of America and other business groups are fighting to block the measure in the Senate.
Jimmy Christianson, AGC vice president for government relations, says Senate Majority Leader Chuck Schumer (D-N.Y.) “has promised the AFL-CIO a vote when there are 50 co-sponsors. There’s currently 47.”
Campaigns for and against the Senate measure have been launched in the handful of states whose senators have not yet committed one way or the other.
ABC’s Brubeck said in an interview that if the bill makes it to the Senate floor, it probably would face a filibuster, if current filibuster rules remain in place.
But he does not rule out the possibility that pro-PRO Act lawmakers would try to pass the bill, or some portions of it, via the reconciliation mechanism, which requires a simple majority. “There are certainly provisions that could get broken off into executive orders or into different legislative vehicles,” he says.
Along with the infrastructure authorization bill, or bills, construction sector groups will keep a keen eye on fiscal 2022 appropriations measures, because most funding in authorization bills is subject to annual appropriations.
Activity also is expected on the regulatory front.
First to move forward is likely to be an Occupational Safety and Health Administration COVID emergency temporary standard. It now is under review at the Office of Management and Budget, says Nick Goldstein, American Road & Transportation Builders Association vice president for regulatory and legal issues.
The standard is a top priority for organized labor and would take effect quickly, perhaps upon publication in the Federal Register.
ARTBA had written to OSHA early this year to express its views on the upcoming standard. “We don’t think that there should be a one-size-fits-all approach here,” Goldstein said in an interview.
He notes that transportation construction workers are often outside and socially distanced and their anti-COVID precautions might well be different from those needed in confined indoor spaces, such as meatpacking plants or assembly lines.
Focus on Environment, Energy and Climate
Biden also is expected to make further moves on environmental regulations. Goldstein assumes administration officials will look at possible actions, from modifications to repeal, regarding the Trump rewrite of the Waters of the United States rule, which determines the scope of federal authority over various types of bodies of water.
Another possibility is action concerning Trump modifications to the National Environmental Policy Act, which sets requirements for construction project environmental impact statements and less-stringent reviews.
“I would expect you would see regulatory proposals starting to advance this administration’s priorities—and perhaps that would even [happen] more quickly than undoing what the last administration did,” says Goldstein. Examples, he says, could include climate change and environmental justice and equity.
The administration and Congress also announced last month stepped-up federal efforts to clean up, study and regulate widespread PFAS chemicals in the U.S., as more states also do the same.
Central to all Administration actions in the first 100 days—and going forward—is Biden’s announced action earlier this month to cut carbon emissions by 50% to 52% by 2030 to help mitigate climate change. The reduction is double what the Obama Administration pledged in 2015. The current administration has unveiled multiple efforts to support renewable energy, modernize the electric grid and reduce automobile emissions.
“Progress starts with the kinds of commitments the Biden Administration is making and the goals they are putting in place, and we see these actions as a positive development that could unlock a period of tremendous growth across the U.S,” Dan Johnson, Mortenson president and CEO, told ENR by email.
Biden, in the first 100 days, canceled the Keystone XL pipeline and indefinitely halted oil and gas leasing on federal lands, among other things. At the same time, on April 28 the Senate used the Congressional Review Act to roll back a Trump administration rule and reinstate Obama-era controls on methane leaks from oil and gas wells.
“The administration is taking a comprehensive whole-of-government approach to decarbonization by deploying resources across the federal government,” says Brady Hays, vice president at Black & Veatch. “Development of GHG emitting energy will no longer be the top priority moving forward.”
“Anybody that’s in the energy market right now in North America should be incredibly happy about these announcements.” —James Amato, Transmission Director, Burns & McDonnell
Senate Democrats back Biden’s efforts with multiple bills to encourage more renewable energy, including a proposed overhaul on April 21 of the energy tax code that would revamp tax breaks for clean energy projects, as well as a companion measure to repeal many existing tax incentives for fossil fuels.
Incentives for Cleaner Energy
The administration is at the mercy of Congress to take steps to incentivize renewable energy but is taking what action it can, including an April 27 announced plan to make $8.25 billion in U.S. Dept. of Energy loans available to upgrade and expand the country’s electric grid, allowing more clean energy connections.
Other announcements support offshore wind, long-term battery storage, green hydrogen production, electrification of vehicles and overall resilience in the sector.
The announcements are “much more significant than I would have imagined from a transmission investment perspective” said James Amato, director of transmission development and strategy for the U.S. and U.K. at Burns & McDonnell. “Anybody that’s in the energy market right now in North America should be incredibly happy about these announcements.”
The Biden Administration also is trying to jumpstart offshore wind development slowed during the Trump era, announcing in March a goal to install enough offshore wind turbines to produce 30,000 MW of electricity by 2030.
Amato says it’s the first time that both policy and financing for offshore wind are “at the altar together.”
“In my mind it reinforces the confidence that lenders or investors can have in that market,” says Jake Merriman, managing director for transmission at Burns & McDonnell.
The U.S. offshore wind sector has included expertise from Europe, Merriman said. But he, as well as Hay and Amato, agree that the U.S. construction sector has been moving toward supporting renewable energy through programs to retrain workers from fossil fuel industries.
More efforts are needed, however, such as getting states and the federal government to align in siting transmission lines from offshore projects to onshore electric grids. Policy changes related to clean energy are also needed at the Federal Energy Regulatory Commission.
Amato says FERC Chairman Richard Glick is “going to have to grapple with a couple of things.”
The executive says that with the shift to renewables, the model of a regulated monopoly for U.S. utilities designed by Thomas Edison more than 100 years ago, “is on life support.” Additionally, the agency’s Order 1000, enacted in 2011 to help ease transmission planning and cost allocation, has not worked as planned and needs to be revamped.
Despite the push for more clean energy, Merriman and Amato point out that natural gas must still be a bridge fuel because the switch to renewables will take time.
“We are optimistic that there will be a tremendous amount of design and construction work from the proposed bill for years to come,” Hays said.
Story updated on 4/30/2021 with comments from Associated Buliders and Contractors and Laborers’ International Union of North America.
