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Government Shutdown Avoided—But Drama Not Over

Article-Government Shutdown Avoided—But Drama Not Over

A hard hat and a law book with a gavel on it on top of blueprints
A key $1 trillion infrastructure bill that could be a lifeline for roofers heading into 2022 and beyond hung in the balance.

On Sept. 30, the Senate and House approved a stopgap spending bill that will avert an impending government shutdown by funding every federal government agency at current levels through Dec. 3. 

However, the drama isn’t over. 

As of Monday, House progressives were blocking the passage of the infrastructure bill to negotiate a larger reconciliation bill. 

President Biden sided with progressives and House Speaker Nancy Pelosi has delayed the infrastructure vote to allow more time for negotiations. 

And there are just two weeks before Congress must raise the debt ceiling or face an unprecedented default. 

As Congress careens toward what financial leaders called a budgetary catastrophe in the form of a loan default, a key $1 trillion infrastructure bill that could be a lifeline for roofers heading into 2022 and beyond hangs in the balance.

But the passage of that long-overdue infrastructure package is tied to a reconciliation budgetary package that may be a bitter pill for the industry to swallow.  

Congress had been fighting over three different but related issues: The infrastructure bill, avoiding a government shutdown and raising the debt limit so the government can continue paying its bill.

The latter issue has been characterized as “catastrophic” to the economy if allowed to happen.

On the infrastructure front, industry groups have urged Congress to act.

“By providing for critical investments in buildings and other physical infrastructure in a fiscally responsible manner, we believe the Infrastructure Investment and Jobs Act will have a positive impact on the roofing industry and broader U.S. economy,” wrote NRCA CEO, Reid Ribble, in a statement. “NRCA also is pleased to see lawmakers work together to develop solutions in a bipartisan manner. We urge the House to take up this bipartisan legislation for a vote as soon as possible.”

Other groups had outright condemning party leaders standing in the way of the much-needed spending package for purely political reasons. "The House Republican leadership’s unfortunate decision to encourage its members to vote against the Bipartisan Infrastructure Bill puts at risk legislation that President Trump would have been proud to sign when he was in office,” wrote AGC CEO Stephen E Sandherr. ". . .That is why 19 Republicans voted in support of the measure when it passed the Senate last month."

Sandherr went on to say the measure “represents the best opportunity to support good-paying construction jobs and needed new investments in our aging” infrastructure. . . .“That is why we are urging all Representatives to vote for the bipartisan bill.”

Trent Cotney, NRCA legal Counsel, said support for the bill is shared by NRCA and 10 other organizations.

Cotney, the CEO of Cotney Attorneys & Consultants, added that the bill’s focus on resiliency, energy efficiency and renewable energy is particularly good for roofers.

“It also would help develop career skills in the energy efficiency and renewable energy industries that will ultimately benefit the roofing industry,” he said. 

Ribble said the organization lobbied hard to make sure the infrastructure package favored roofers. 

"We are making sure the bill includes a robust vertical construction element and also resilience in construction is important,” he said.

But while that bill hung in the balance, another connected $3.5 trillion reconciliation bill not only threaten to tank it but also contained an estimated $2.2 trillion in tax increases industry groups vehemently opposed, according to NRCA. “

Many of its provisions are inconsistent with policies that spur economic growth and investment,” NRCA said in a statement noting that it joins the U.S. Chamber of Commerce and other business groups in opposition to the legislation.

Cotney said the reconciliation bill contains the necessary funding for the infrastructure package, but added, ". . .a host of new regulatory requirements and huge increases in agency penalties (including a new maximum OSHA penalty of $700,000) far outweigh any benefits that might be realized,” by roofers.

Cotney seemed less concerned about the possibility of a shutdown noting that there have been 17 since 1977, with most lasting no more than three days.

But he said a prolonged shutdown would impact key roofing programs such as the federal E-Verify program; and furloughing of federal contractors including OSHA.

In a post about a possible shutdown he said it could have a major impact on federal construction workers in the following ways:

  • Critical path deals;
  • Increased costs due to suspensions;
  • Delayed project solicitations for new federal construction projects;
  • Delayed approvals (e.g., changes orders)

Duane Musser, NRCA’s VP, Government Relations, said a potential partial government shutdown, would affect roofers in several ways, such as:

  • Work on federal contracts could be stopped/slowed. Whether you are deemed essential or non-essential, work or do not work, you will not be paid. Congress normally provides back pay but could choose not to;
  • Any non-essential government services that facilitate supply chain activities that are stopped/slowed due to partial shutdown would exacerbate supply disruptions;
  • The operations of the Occupational Safety and Health Administration would be curtailed to only emergency operations

Ultimately roofers should think about how to protect themselves.

“A shutdown may qualify as an excusable, compensable delay which may entitle a contractor to a time extension,” Cotney wrote. “If a project is suspended by a shutdown, contractors need to be ready to show how the shutdown impacted their project schedule.”

Another ominous deadline looms on Oct. 18.

That’s when Congress must raise the debt ceiling to continue paying its bills.

In fact, Treasury Secretary Janet L. Yellen warned lawmakers this week of “catastrophic” consequences if Congress failed to raise or suspend the statutory debt limit in less than three weeks, saying inaction could lead to a self-inflicted economic recession and a financial crisis.

Ribble agreed with that assessment.

“If the government defaults the stock market will take a hit, but even more importantly government cannot make payments,” Ribble said. “So, if you are roofing a federal building you may want to halt construction if that happens.”

Editor’s note: This is a developing story. Check back for updates.

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