President-elect Donald Trump and very narrow U.S. Senate and House GOP majorities will find a long list of campaign pledges to fulfill when they meet in January 2017. For the construction industry, there are opportunities—and challenges—to work for with the new Congress on Capitol Hill and in the Trump transition team.
New tax breaks could build infrastructure
The opportunity list for construction contractors includes many new Trump Administration promises to address the national infrastructure needs for roads, airports, water systems, bridges, and public buildings including military bases and veterans’ health facilities. While Congress has resisted raising tax revenue for these needed investments in recent years, President-elect Trump is suggesting a new and massive tax break for private funding of infrastructure through infrastructure investment bonds.
A new tax incentive for an infrastructure bank will need to be passed early in the new Congress and it is the hope that private investors will purchase infrastructure bonds in sufficient amounts in all states to advance construction projects.
Congress must act on airport construction, water bills
With the FAA’s airport construction program expiring in September 2017, Congress must act to reauthorize a major airports program. In addition, a comprehensive water resources bill must be passed for urban water systems.
In October, Mr. Trump proposed a $1 trillion, 10-year “revenue-neutral” energy infrastructure plan in his first 100 days to promote energy exploration and fuel transportation, extraction, and refining upgrades.
One legislative initiative SMACNA and other industry groups have supported in Congress is a bipartisan bill that would allow the repatriation of overseas corporate profits if a portion of the profits would be invested in infrastructure bonds and some would go to offsetting the deficit.
Probable tax reform puts energy efficiency incentives in doubt
Also, a priority is a $5.5 trillion-dollar tax package to stimulate the economy and include a long list of investment incentives, corporate rate cuts to a yet-to-be-specified list of targeted incentives. Tax reform is expected to move on Capitol Hill and that raises questions concerning the many energy efficiency incentives for residential, commercial, and industrial retrofits and new construction.
Repeal of ACA could impact booming health-care construction
Another big question is should Congress and the White House move to repeal the Affordable Health Care Act (ACA)? What would the impact be on the fast-growing health-care facilities construction sector?
Labor-management issues under the microscope
Challenges for the union segment of the construction industry will be how the new Trump Administration handles the labor-management issues of Davis-Bacon, project labor agreements (PLAs), and multiemployer pension plan reforms.
While the House has narrowly supported each in the past, the Republican platform vows to repeal Davis-Bacon and PLAs—but is silent on pension reforms.
Many regulations will be examined
A long list of regulations governing environmental quality standards, federal apprenticeship standards, enforcement rules for energy codes, building standards, labor standards, and OSHA standards will be subject to promised regulatory review with a stated goal of eliminating more than half of current rules and regulations.
It is expected that most, if not all executive orders, including one supporting PLAs, will be revoked in the early days following the inauguration, as in past GOP administrations.
You can make a difference by staying informed and active. Visit SMACNA’s Advocacy Webpage to learn the issues, then call or personally visit your members of Congress to let them know how you stand on these important industry issues.