Negotiators from both chambers of Congress reached agreement Tuesday on a five-year U.S. highway plan, although several House members said they weren’t happy with some of its funding mechanisms, including provisions to take money from banks.
The highway measure also would revive the U.S. Export-Import Bank, whose charter expired June 30. Lawmakers have until Friday to enact a highway plan or pass another temporary extension of transportation funding, and House Speaker Paul Ryan said his chamber will vote on the bill this week.
“We expect to have very good majority support” for the measure, Ryan told reporters at a news conference in Washington. Third-ranking Senate Republican John Thune of South Dakota told reporters his chamber will vote either late this week or early next week. A vote next week would require lawmakers to pass a short-term extension.
The legislation would provide $281 billion over six years for roads, bridges and mass transit, a Democratic aide said. The measure was discussed on Tuesday by members of a House and Senate conference committee working to reconcile differences between separate bills passed in each chamber.
The measure would be financed in part by a one-time use of Federal Reserve surplus funds and by a reduction in the 6 percent dividend that national banks receive from the Fed. The dividend would be reduced by an amount tied to yields on 10-year U.S. Treasuries, currently about 2.2 percent. If Treasury yields rose higher than 6 percent, the Fed wouldn’t pay the banks more. Banks with $10 billion or less in assets would be exempt from the cut.
The Fed’s surplus capital comes from the 12 reserve banks. The highway bill would allow for a one-time draw of $19 billion from the surplus, which totaled $29.3 billion as of Nov. 25.
House, Senate Versions
The financing mechanism is a compromise between the highway bills passed earlier by the House and Senate. The House favored using the Fed’s surplus capital, while the Senate had voted to reduce the annual 6 percent dividend for national banks to 1.5 percent. Banks vigorously fought the dividend cut, which was estimated to generate about $17 billion over 10 years for the highway trust fund.
The agreement again avoids any increase in the 18.4 cents per gallon gasoline tax that finances the highway trust fund, unchanged since 1993. The trust fund has run deficits of $10 billion a year or more as gas tax revenue has eroded, in part due to increased fuel efficiency.
Republican Reid Ribble of Wisconsin complained about “phony pay-fors” in the plan, which he said include the use of the Federal Reserve surplus and raising customs fees.
“We aren’t going to raise the gas tax, but we are going to raise customs fees,” Ribble said. Still, he said he would probably vote for the bill and that he believed it would pass both chambers.
“There’s going to be some things in there that are obviously not the most pleasant to accept,” said Representative Dave Reichert, a Washington Republican on the conference committee. But the deal is better than repeat short-term highway plans, and it will give lawmakers time to put together more permanent funding, he said.
Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means committee, said that he didn’t like some tax proposals in the compromise legislation. He wasn’t specific and said he would still support the bill.
The Export-Import Bank has been unable to approve new requests for financial assistance, including loans, insurance and guarantees, since Congress let its charter expire. The 81-year-old institution is intended to help American companies sell big-ticket items to overseas buyers. Its biggest beneficiaries include Caterpillar Inc., Chicago-based Boeing Co. and Fairfield, Connecticut’s General Electric Co.
Lawmakers in the Senate and the House overwhelmingly support reviving the bank. It’s opposed by some Republican leaders, including Ryan, who say it helps big companies that shouldn’t need government assistance.
One of Ex-Im’s chief backers, Republican Representative Stephen Fincher of Tennessee, teamed up with Democratic Whip Steny Hoyer of Maryland to force a House vote Oct. 27 that demonstrated majority support to revive the bank.