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Elections, MAP-21 and 'Fiscal Cliff' Top Federal Construction News in 2012

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During the contentious and costly 2012 elections, construction industry and union groups poured more than $139 million total into federal campaigns. But after the votes were in on Nov. 6, the balance of power was little changed between the parties.

Industry, which generally backed Republican candidate Mitt Romney, and organized labor, which supported the victorious President Obama, both predict a second Obama term will be similar to the first. That is likely to mean a continued tough regulatory policy in areas such as air and water pollution and workplace safety. On the spending side, Obama is expected to keep talking up infrastructure spending. But ongoing deficit worries will put pressure on funding for public works.

An early sign of the administration’s second-term direction will come when State Dept. officials decide whether to approve the Keystone XL pipeline from Canada through the U.S. Midwest. The State Dept. rejected the pipeline application in January, but energy company TransCanada, which plans to build the project, has filed a revised application. Two important Obama allies are on opposite sides of the issue: Building trade unions want to see the project built, but environmental groups are seeking to block it.

At the state and local levels, voters approved most construction-related bond issues, totaling $3.2 billion in statewide initiatives and about $36 billion in local initiatives. One of the largest measures approved was an Arkansas sales tax to back $1.3 billion in bonds for highways.

Congress: MAP-21 Funds Highways, Transit Through FY14
Although partisan fights stalled many bills in Congress in 2012, Democrats and Republicans did join to pass several major construction-related measures. The most important was a two-year highway-transit reauthorization, the $104.4-billion Moving
Ahead for Progress in the 21st Century Act (MAP-21), signed into law on July 6. The measure, which was delayed for more than 33 months, provides a small increase over current funding levels.

But it gives a big boost to the popular Transportation Infrastructure Finance and Innovation Act (TIFIA) federal loan program. The newly expanded TIFIA program drew a large number of initial applications for the aid the Dept. of Transportation has available for the current fiscal year. MAP-21 also includes provisions aimed at accelerating projects’ environmental reviews to get construction started more rapidly.

Although MAP-21 has been on the books for less than six months, construction industry officials already are thinking beyond it. They are pushing for Congress to come up with ways to shore up the weakened Highway Trust Fund, the federal-aid highway program’s principal revenue source. The fund’s highway account is expected to start showing a deficit after MAP-21 lapses on Sept. 30, 2014.

Another key 2012 Capitol Hill development was the passage of a four-year aviation re-authorization, enacted on Feb. 14, which includes $13.4 billion for Airport Improvement Program construction grants.

Other successes came in international-trade legislation, including a three-year Export-Import Bank reauthorization and a measure to establish permanent normal trade relations with Russia, enacted on Dec. 14. The legislation is expected to give a lift to U.S exports of construction equipment to natural-resource-rich Russia.

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