Senate backs Export-Import Bank as part of highway bill
In a rare Sunday session, the U.S. Senate gave overwhelming approval to a plan to re-authorize the charter of the Export-Import Bank, as part of its six-year highway bill. The bank’s charter expired in June. All four U.S. senators from Missouri and Illinois voted for the plan, backed by Democrats and mainstream Republicans. Tea Party Republicans have long opposed the bank, calling it “corporate welfare” for big business. Supporters disagree and say the bank helps businesses of all sizes.
The issue is so divisive that on Friday, U.S. Sen. Ted Cruz, R-Texas, who opposes the Ex-Im Bank, accused Senate Majority Leader Mitch McConnell, R-Ky., of lying to bank opponents. Cruz, who is vying for the Republican presidential nomination, says McConnell had told him that Ex-Im Bank language would not be considered.
In an apparent response to Cruz’s Friday outburst, Sunday’s session opened with U.S. Sen. Orin Hatch, R-Utah, presiding over the chamber and reminding senators of a rule that prohibits members from imputing the motive or reputation of another senator in floor debate.
The Sunday session was necessary to give Senate leadership enough time this week to use the procedural vote on the bank amendment. The so-called “cloture” vote -- which succeeded 67 to 26 -- limits debate on the amendment to no more than 30 hours. Senators may agree to take up the issue at any time short of that deadline, but the Senate has cut off the ability of bank opponents to endlessly delay consideration of the amendment.
Illinois Republican Sen. Mark Kirk, sponsored the amendment to add the bank language to the highway bill. "Nearly 90 percent of Ex-Im's transactions each year directly benefit small businesses, and nationwide the bank supports more than 205,000 American jobs," Kirk said in a statement released after the vote.
Highway bill and the road to the White House
If approved, this would be the first multi-year highway bill since the administration of President George W. Bush. Congress has approve more than 30 short-term extensions of the Highway Trust Fund since 2009, in part, because few lawmakers in either party have been willing to support an increase in the federal motor fuel tax.
One of McConnell’s objectives in backing a six-year highway plan is to push the issue beyond next year’s presidential election.
While the plan authorizes spending for six-years, it only guarantees funding for the first three. Beginning with the fourth year of the plan, lawmakers will have to approve additional funding.
U.S. Sen. Roy Blunt, R-Mo., says that, while he’d like to see guaranteed funding for the entire six years, this plan is far better than what he says would be the costly spending of another short-term fix. “Every time you have one of these short-term extensions, you needlessly spend money on roads and bridges that you could have spent more wisely if you’d had more time,” Blunt said Sunday, in a conversation with St. Louis Public Radio.
Banks oppose Senate highway funding plan
The Senate plan is paid for with a long list of so-called “off-sets” in spending and other changes. One of those changes would reduce the dividend banks are paid by the Federal Reserve for parking their money in the Fed’s bank. That dividend is currently 6 percent.
Under the Senate plan, that dividend would be reduced to 1.5 percent, for banks with more than $1 billion in assets. That reduction generates about $17 billion of the projected $50 billion the Senate plan would guarantee for each of the first three years of its plan, on top of the money generated by the federal motor fuel tax.
Banks across the country say they were caught off guard by the proposed reduction of the dividend payment and have been scrambling to urge lawmakers to back-away from the dividend reduction. Blunt says that he has heard form Missouri bankers concerned with the dividend reduction. He also says that while he would have preferred to find “one or two big, long-term solutions than a handful of short-term solutions, at the end of the day everybody benefits from a transportation bill that works.”
It is also possible that lawmakers may simply not have enough time to identify a replacement for the amount of funding generated by the dividend reduction. Lawmakers could revisit the dividend reduction funding mechanism when they consider how to fund the second three years of the six-year plan.
Senate Republican leadership wants to send to package to the House this week. Barring congressional action by the end of the week, the flow of Highway Trust Fund dollars to the states will stop. The House is scheduled to leave Washington for its August break at the end of the week. The Senate is scheduled to be in session for one more week to consider cyber security legislation.