Shutdown Risk Returns
Another partial federal government shutdown is increasingly likely as federal funding expires at the end of the day Friday, Jan. 30. The House approved a package covering the remaining appropriations before leaving for recess on Jan. 23, but the Senate remains divided, particularly over Homeland Security provisions tied to immigration enforcement. Senate Democrats have signaled they will block the House measure unless changes are made. Any amendments would require a follow-up vote in the House, whose members are not scheduled to return until Feb. 2. With little time and no clear compromise, the risk of a funding lapse is growing.
If a shutdown occurs, it would likely be shorter than the 43-day shutdown in 2025. Even a brief lapse, however, could have tangible impacts on the construction industry, including delayed federal project funding, slowed inspections and reviews and cash-flow disruptions for contractors. Past shutdowns have also created administrative backlogs that can delay projects dependent on federal support.
Some Permitting Reform Advances
Unrelated to the funding debate, the House Energy and Commerce Committee on Jan. 21 advanced seven bills aimed at easing Clean Air Act permitting and regulatory requirements. After nearly six hours of debate, the measures were approved largely along party lines as part of the committee markup process. For the concrete and cement industries, this legislation could reduce regulatory risk under the Environmental Protection Agency’s New Source Review (NSR) permitting program.
Republican leaders described the package as a long-overdue update to a statute last significantly revised in 1990. Committee Chair Brett Guthrie (R-Ky.) said the bills would reduce regulatory burdens that, in his view, inhibit economic growth, investment and job creation. Democrats opposed the package, with Ranking Member Frank Pallone (D-N.J.) warning that the proposals weaken core Clean Air Act protections.
The bills address a range of issues, including EPA review timelines for air quality standards, easing NSR permitting requirements for certain industrial upgrades and allowing states to discount pollution from foreign sources when determining compliance. One measure, H.R. 161 by Rep. Morgan Griffith (R-Va.), would narrow the definition of a “modification” under the Clean Air Act to encourage efficiency upgrades without automatically triggering more stringent permitting. Plants would be better positioned to undertake routine maintenance, equipment replacement and reliability upgrades without the risk that such projects are reclassified as major source modifications.
While supporters argue the bills could reduce regulatory risk for concrete and cement facilities, the proposed legislation remains at an early stage. The package faces additional hurdles in the House and would still need to clear the Senate, where prospects are uncertain. As a result, any potential regulatory changes are likely to be long-term considerations rather than near-term developments.
Mathew Morgan is a Partner at Barnes & Thornburg LLP, a full-service national business law firm providing advice in all the areas required to do business in today’s marketplace. Matt provides companies and trade associations with strategic, legislative and political counsel on a variety of business-related issues, including taxation, trade/tariffs and appropriations matters. Prior to joining Barnes & Thornburg, Matt served in the White House from 2017-2020 as the chief counsel to the Vice President and as a deputy assistant to the President.