Highway Fund Deadline Nears With Congress Nowhere Close to Deal

U.S. Senate action on legislation to fund the nation’s roads and bridges for three years will stretch into next week, just days before a July 31 deadline, putting pressure on both chambers to consider a short-term extension.

The House will need to act on the Senate’s ambitious six-year plan to rework infrastructure and highway-safety policy. The Highway Trust Fund would begin to run short during next weekend’s start of a scheduled August recess for House members.

House Republican leaders this week declared the Senate’s funding measure dead on arrival. They have urged the Senate to debate the House bill that would provide funds through Dec. 18, leaving time for talks on finding other sources of money for infrastructure.

Failure to act before the end of the month would mean payments to states for road and bridge projects could soon be reduced and spread out, U.S. Transportation Secretary Anthony Foxx said Friday.

“I hope we don’t keep perpetuating the problems, and not looking squarely at what the country needs,” Foxx told reporters.

An expiration of highway funding could trigger 4,000 layoffs at the Transportation Department, Foxx said, including employees at the Federal Highway Administration, the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration.

As the Highway Trust Fund balance runs low, the U.S. will deliver remaining funds to states based on allocation funding until it’s out of money, Foxx said.

Not ‘Small Impact’

“It’s definitely not a small impact,” he said.

Foxx said the Obama administration hasn’t taken a position on the Senate bill because it’s still being modified.

“We’re looking carefully at the Senate proposal,” he said. “We’re taking it seriously.” He said the administration supports the House package because it allows negotiations to continue on a long-term bill.

The Senate Friday advanced its bipartisan plan to fund U.S. highways and mass transit for three years.

The 51-26 vote on H.R. 22 will be followed by further Senate action as soon as Sunday, including procedural votes on amendments to reauthorize the U.S. Export-Import Bank and a proposal by Majority Leader Mitch McConnell to repeal Obamacare.

“Our country needs a multi-year highway bill and we’ll get there if we just continue to stick together,” McConnell, a Kentucky Republican, said on the Senate floor after the vote.

Republican Senator Ted Cruz of Texas, a presidential candidate, immediately attacked McConnell on the Senate floor for allowing a vote on reauthorizing the Ex-Im Bank, which has become a target of conservative Republicans.

Ex-Im Bank

While McConnell opposes reauthorizing the bank, he agreed to allow a vote on it after senators strongly backed Ex-Im in a June 10 test vote. The majority leader said Friday he offered the Obamacare repeal because Ex-Im “shouldn’t be the only vote” on a highway bill amendment.

Cruz insisted that McConnell had promised not to seek a renewal of the bank.

“I cannot believe he would tell a flat-out lie,” said Cruz of McConnell. The Texas Republican said the Obamacare amendment was “meaningless political theater” and an “empty show vote” that will fail.

Also opposing the Senate plan is the banking industry, which objects to a provision that would reduce dividends to banks from the Federal Reserve.

Five financial industry groups made their objections clear to the Senate measure in a July 16 letter to Senate leaders obtained Tuesday by Bloomberg.

Dividend Cut

They, along with Senate Banking Committee Chairman Richard Shelby, oppose the Senate’s plan to help fund the highway bill by reducing the 6 percent dividend paid by the Fed to member banks. It would be cut to 1.5 percent for banks with more than $1 billion in assets, which is expected to generate more than $16 billion for the highway fund.

Meanwhile, House leaders say they won’t agree to the Senate plan. Majority Leader Kevin McCarthy of California told reporters Wednesday that his chamber won’t take up the Senate’s bill.

At a news conference Wednesday, House Speaker John Boehner of Ohio said the chamber already passed “a responsible approach last week to fund our highway program through the end of this calendar year, and continues to work to get a long-term, fully funded bill in place.”

The House Republican plan, passed 312-119 on July 15, would fund highways through Dec. 18 with $8.1 billion in revenue gained mostly by tightening tax compliance rules. The House bill is H.R. 3038.

International Tax Plan

That short-term funding is intended to buy time for lawmakers while they work on an ambitious plan to tie international tax changes to a six-year highway funding bill.

House Transportation and Infrastructure Chairman Bill Shuster of Pennsylvania told reporters this week, “I am going to oppose this,” when asked about the Senate plan.

Shuster said he’d be willing to stick around Washington to finish a bill, but that other House members have set plans for the start of the recess. He said there wouldn’t be enough time to go through the six years’ worth of policy in a few days.

An amendment to the highway bill offered by Senator Mark Kirk, an Illinois Republican, would reauthorize the Ex-Im Bank through September 2019.

The measure would require the bank to increase the share of its lending that goes to small businesses, mandate an inspector general audit of its risk management practices and create a chief ethics officer for the bank.

Loan Guarantees

Ex-Im provides loans, loan guarantees and insurance to aid overseas sales by U.S. companies. The 81-year-old bank, renewed without controversy for decades, is opposed by conservative Republicans who say it benefits only a few large corporations that don’t need government assistance.

The bank can’t approve new applications unless Congress acts to revive it, though it can continue work on existing agreements.

The House has voted about 60 times to repeal or delay all or part of Obamacare. The Senate was under Democratic control until January.

Congress adopted a budget in May that would allow Republicans to use a procedure called reconciliation to bypass Democrats and send a repeal of Obamacare to the president’s desk. Obama would veto that, though, and Democrats would provide enough votes to sustain the veto.

Congressional Republicans last month acknowledged their options were limited in replacing Obamacare after the U.S. Supreme Court upheld the law’s federal subsidies.

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