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builders and contractors

Reflected in section four of the U.S. Constitution’s 14th Amendment—commonly referred to as the Public Debt Clause—is a clear instruction that the “validity of the public debt of the United States” “shall not be questioned.” However, before President Joe Biden signed the Fiscal Responsibility Act into law on June 3, officially suspending the limit on federal debt through Jan. 1, 2025, and avoiding the nation’s first-ever default just days before the deadline, the full faith and credit of the United States was in question and the consequences of a potential default dire.

With the Republican-led U.S. House of Representatives bent on reining in what they view as fiscally irresponsible federal spending levels—and President Biden’s 2024 budget request seeking to expand federal spending by $1.4 trillion and add nearly $4.8 trillion in new taxes targeted at businesses and individuals—the path of the FRA throughout the many stages of negotiations was fraught. Faced with a looming default deadline in early June, House Republicans passed a proposal on April 26 to increase the debt ceiling while tackling Washington spending by a 217-215 vote. Labeled the Limit, Save and Grow Act, the proposal contained measures to cut costs, increase energy production, rein in overly burdensome and costly regulations, and streamline federal permitting.

The successful passage of the proposal and “stick-togetherness” of Senate Republicans also provided a largely unified Republican front against President Biden and many Congressional Democrats’ pledge to enact a “clean” debt-ceiling hike. While the president continued to insist on a clean debt hike for weeks following House passage of the LSGA, the bill ultimately forced the White House to shift tactics and negotiate with Republicans to craft the must-pass FRA.

For the construction industry, default could have been catastrophic, limiting the availability of credit and financing for key projects, resulting in lost jobs, delayed or cancelled construction and a potential recession. Through the extension of the debt ceiling of the FRA, the construction industry can continue to build in their communities and work to modernize our nation’s infrastructure.

While negotiations whittled down much of the LSGA, the FRA includes federal spending cuts, work requirements for beneficiaries of certain federal benefits and reining in of costly rules and regulations. Perhaps most significantly for the construction industry, the FRA streamlines the federal permitting process, modernizing National Environmental Policy Act requirements for the first time in decades to minimize the excessive paperwork, litigation, stalls and delays that have plagued critical construction projects.

As we put the debt-ceiling crisis in the rearview and the administration looks to implement more than $1 trillion in federal spending for infrastructure, energy and technology projects across the country, these much-needed reforms will ensure efficient timelines and cost-saving modernizations.