House-Senate negotiators agree on U.S. highway bill, revive Ex-Im Bank

Reuters News
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Posted: Dec 01, 2015 5:27 PM

By David Morgan and Sarah N. Lynch

WASHINGTON (Reuters) - Senate and House of Representatives negotiators reached agreement on Tuesday on a $305 billion, five-year transportation bill that would fund roads, bridges and mass transit, while also reviving the embattled Export-Import Bank.

The legislation, which has bipartisan support, is expected to reach the floor of each chamber by Friday, when a short-term funding measure runs out. If approved and signed into law by President Barack Obama, it would be the first U.S. highway measure in a decade to last longer than two years.

The legislation would renew the EXIM Bank's charter through Sept. 30, 2019, after it expired on June 30 in the face of conservative opposition.

The measure to revive the bank, which helps Boeing Co and other companies with foreign competitors, has wide support in Congress. The agreement would reduce EXIM’s total lending limit by $5 billion to $135 billion and provide a number of reforms aimed at improving transparency and governance.

To pay for various transportation projects, the bill calls for a one-time transfer of $19 billion from the Federal Reserve's surplus funds. It would also cap the Fed from holding in excess of $10 billion in surplus funds in the future, with anything above that cap transferred to the general fund of the Treasury.

The legislation would eat away at the profits of big national banks by reducing the current 6 percent dividend they get from the Fed by an amount tied to yields on 10-year Treasuries. Currently, the 10-year rate is around 2 percent.

Smaller banks with less than $10 billion in assets would be exempt and still be eligible to receive a 6 percent dividend.

Other funding sources include an increase in customs fees and cost-saving measure to require the Internal Revenue Service to use private tax collection agencies.

The transportation bill falls short of the six-year, $480 billion package the Obama administration proposed earlier this year as a step toward reversing the deterioration of U.S. infrastructure and accommodating economic and population growth.

Negotiators from the House and Senate released a 1,302-page conference report that also includes provisions to support rail transportation and auto industry whistleblowers.

It would also raise penalties for automakers that violate vehicle safety rules and meet Obama industry spending targets for defect investigations and other vehicle safety measures, should regulators meet prescribed reforms.

(Additional reporting by Richard Cowan and David Lawder; Editing by Kevin Drawbaugh and Leslie Adler)