Changes are currently underway in Washington that could drastically affect funding of the nation's construction industry. The Bush administration's 2003 budget has sent waves of unease throughout the industry with calls for drops in the funding of highway and federal prison construction as well as the funding of the Army Corps of Engineers construction program. According to the Associated General Contractors of America (AGC), funding will drop 28% for highways and 50% for prisons. In addition, the Army Corps of Engineers program will suffer a cut of $275 million. Commenting on the proposed cuts to infrastructure spending, Stephen E. Sandherr, chief executive officer of the AGC, has said that the budget "compromises several U.S. construction programs and threatens to sacrifice jobs in the industry."

However, the AGC concedes that the budget does have its good points. "On the positive side, the budget does renew President Bush's call for an economic stimulus package, energy independence and permanent tax relief," Sandherr says. "But," he hastens to add "a lack of commitment to national infrastructure investment may have a detrimental impact on long term economic growth." He also mentions that cutting infrastructure investment will "risk weakening the recovery that is barely under way."

There is also a bill currently making the rounds in Washington that proposes to change funding rules for political campaigns. This bill is aimed at barring political parties and candidates from accepting what is known as "soft money," contributions made in such a way as to avoid federal regulations. The bill has already been passed by the House of Representatives and is expected to go before the Senate in the near future. Unregulated "soft money" contributions from unions and industry advocates have been increasing in recent years. Construction employer's soft money contributions totaled $10.1 million in 2000, up from $6.7 million in 1996. Although, overall, soft dollars' share of total construction campaign spending has actually dropped from 21% in 1996 to 19% in 2000. Restrictions to soft money contributions are expected to shift the emphasis back to "hard money" contributions.

Union officials for the most part are holding off judgement until they see what the final bill looks like despite the fact that it could have a potentially harmful effect on their political clout. Construction trade unions' soft money totaled $6.7 million in 2000, more than four times that contributed in 1996. Jim Spellane, spokesman for the electrical worker's union, believes the bill will have little effect on his union. He does concede, however, that union education and get-out-the-vote efforts could become a more important aspect of political influence if the bill passes. For the time being, speculations on the bill's ramifications remain just that. Even if the Senate passes the bill, there is some question as to whether the President will endorse it.

Sources: Bush Budget Threatens Construction Funding
Building Design & Construction, Feb. 4, 2002
http://www.bdcmag.com/index.asp?layout=front_page&webzine=bdc&publication=bdc

'Soft Money' Restrictions Coming
Tom Ichniowski & Sherie Winston
Construction.com, March 4, 2002
http://www.construction.com/NewsCenter/Headlines/ENR/20020304a.jsp