The Building Tradesman Newspaper

Friday, March 31, 2017

McGarvey predicts $1 trillion infrastructure bill by year’s end

By The Building Tradesman



SAN ANTONIO (PAI)—The president of North America’s Building Trades is confident Congress will enact a 10-year $1 trillion infrastructure construction bill by the end of this calendar year, aided by a strong push from new Republican President Donald Trump.

“The timetable” for its passage will start after lawmakers “dispose of health care and after or with tax reform,” said Sean McGarvey, the Building Trades president in a March 14 interview during the AFL-CIO Executive Council meeting in San Antonio.

That’s because Trump’s track record so far shows he keeps his campaign promises, and investing in infrastructure – roads, bridges, subways, railroads, tunnels, retrofitting buildings and more – was a big one on the campaign trail. It creates jobs, Trump said.

The legislation is important not just to construction workers, but to the entire country. The American Society of Civil Engineers calculates the U.S. has a 10-year infrastructure investment gap of $2 trillion-$3.6 trillion in crumbling roads, defective bridges, aging subways, faulty train tunnels, elderly airport runways and buildings that need green retrofitting. 

And McGarvey’s unions – the former AFL-CIO Building and Construction Trades Department – calculate each billion dollars of construction spending creates tens of thousands of construction jobs. Estimates give a range of 21,000-40,000 jobs per billion dollars. 

McGarvey also bases his confidence on a combination of other factors, including:
• Overwhelming and bipartisan public support for infrastructure investment, with backing of up to 80 percent of respondents in some polls.
• Trump’s campaign pledges, restated at a meeting with McGarvey and three building trades union presidents at the White House three days after the GOPer was inaugurated. Trump senior adviser Stephen Bannon has also been in direct contact with the building trades.

 • Formation of huge coalitions -- including the Operating Engineers, the Laborers and the Carpenters, plus the Chamber of Commerce and the Business Roundtable, and other groups in the Transportation Construction Coalition -- to push for a new infrastructure bill.

• The fact that congressional committees have already started to gather evidence and draft the legislation, without waiting for Trump to send his version to Congress. 

• That Trump told his National Economic Commission to create and evaluate infrastructure proposals.

But despite McGarvey’s optimism, there are some remaining obstacles. One is the congressional timetable. Even the Building Trades chief doesn’t expect a measure before November. Neither does Senate Minority Leader Chuck Schumer, D-N.Y., who supports it, McGarvey says.

Another: Two groups of hostile House Republicans. One, led by Rep. Steve King, R-Iowa, will try to eliminate the Davis-Bacon Act’s prevailing wage provisions from any infrastructure bill, “but we have the votes to beat that,” McGarvey says.

McGarvey has a track record for that prediction: Bipartisan coalitions, including up to 33 Republicans and all the Democrats, have defeated past attempts by King and his allies to kill the 86-year-old Davis-Bacon Act. The act guarantees prevailing local wages on any federally funded construction projects, and many states have their own “little Davis-Bacon Acts,” too.

The other group, led by the right wing House Freedom Caucus, is dead set against any new spending, adds AFL-CIO Transportation Trades Department President Ed Wytkind. His unions include workers who toil on completed subways, running the buses and driving trains.

“The Republican leadership has a segment” of rank-and-file lawmakers “that say ‘no’ to everything,” Wytkind says. “A lot of them don’t understand the difference between ‘investing in the country,’” through infrastructure spending “and, ‘wasting taxpayer dollars.’”

The key, Wytkind says, is “to get them to ‘yes.’”

A fourth problem is the long time needed for approval of infrastructure projects, caused by delays in getting needed state, and often federal, permits. McGarvey trusts Trump to take care of that, at least on the federal level. The president has said he opposes excessive delays.

But the biggest problem the infrastructure legislation faces is how to pay for it. The prime revenue source, the federal gas tax of 18.4 cents per gallon, hasn’t risen since 1993, and lawmakers are loath to increase it. It’s also inadequate to fill the billion-dollar yearly need.

So McGarvey and other infrastructure backers are already offering other ways to pay for infrastructure, in addition to raising the gas tax. They include:
• Repatriating corporate profits now stashed overseas. McGarvey estimates that alone would yield $250 billion.

• Creating a private-public infrastructure bank, which would use federal money to leverage private investment in nationally needed transportation infrastructure projects.

• Tax credits for infrastructure investment.

• A variety of other financing sources that “Congress, working its way through the rest, comes up with.”

Several of those items, notably the tax credits and possibly the bank, would be attached or included in the tax reform legislation that McGarvey predicts will proceed through Congress.

But in the end, McGarvey says, the fate of the infrastructure bill rests with Trump, and with his determination to keep his promise of “creating jobs” to the blue-collar voters, including building trades union voters, who cast droves of ballots for the Manhattan mogul. “One thing we know for sure: Like it or not, he’s the president of the United States,” McGarvey says.