From DTN report on DC legislation;
Highway Bill Compromise Reached
House and Senate negotiators reached agreement on a long-term U.S. highway funding plan, said Rep. Reid Ribble, R-Wis., adding that lingering questions have been raised regarding how it would be funded.
The highway measure also would revive the US Export-Import Bank, whose charter expired June 30, said Ribble.
Lawmakers have until Dec. 4 to enact a highway plan or pass another temporary funding extension, and House Speaker Paul Ryan, R-Wis., said his chamber will vote on the bill this week. “We expect to have very good majority support†for the measure, Ryan said during a news conference.
Republicans were told that the measure would provide funds for roads, bridges and mass transit projects for five years. The plan would total $305 billion, according to Rep. Steve Cohen, D-Tenn.
"The highway plan would be financed in part by a one-time use of Federal Reserve surplus funds and by a reduction in the dividend national banks receive from the Fed. If so, that would be a compromise between the bills passed earlier by the House and Senate. The House favored using the Fed’s surplus capital, which totaled $29.3 billion as of Oct. 29, while the Senate had voted to reduce the annual 6% dividend received by national banks to 1.5%. Banks vehemently opposed the dividend reduction.
The financial industry would reportedly have to share a portion of the dividend with the government, and it would be a floating payout tied to 10-year U.S. Treasuries, which currently yield about 2.2%, sources detail. If Treasury yields rose higher than 6%, the Fed wouldn’t have to pay the banks more. Banks with $10 billion or less in assets would be exempt from the reduction, contacts added.
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 funds, which totaled $29.3 billion as of Nov. 25. If the surplus account goes above $10 billion, that capital would be swept to the government, according to the people.
The apparent agreement avoids any increase in the 18.4 cents per gallon gasoline tax that finances the Highway Trust Fund (HTF) and has been unchanged since 1993. The trust fund has been running deficits of $10 billion a year or more as gas tax revenue has fallen short, partly because of greater auto fuel efficiency.
Meanwhile, House GOP leadership also included language in the final conference report to do away with $3 billion in crop insurance spending over ten years."
Highway Bill Compromise Reached
House and Senate negotiators reached agreement on a long-term U.S. highway funding plan, said Rep. Reid Ribble, R-Wis., adding that lingering questions have been raised regarding how it would be funded.
The highway measure also would revive the US Export-Import Bank, whose charter expired June 30, said Ribble.
Lawmakers have until Dec. 4 to enact a highway plan or pass another temporary funding extension, and House Speaker Paul Ryan, R-Wis., said his chamber will vote on the bill this week. “We expect to have very good majority support†for the measure, Ryan said during a news conference.
Republicans were told that the measure would provide funds for roads, bridges and mass transit projects for five years. The plan would total $305 billion, according to Rep. Steve Cohen, D-Tenn.
"The highway plan would be financed in part by a one-time use of Federal Reserve surplus funds and by a reduction in the dividend national banks receive from the Fed. If so, that would be a compromise between the bills passed earlier by the House and Senate. The House favored using the Fed’s surplus capital, which totaled $29.3 billion as of Oct. 29, while the Senate had voted to reduce the annual 6% dividend received by national banks to 1.5%. Banks vehemently opposed the dividend reduction.
The financial industry would reportedly have to share a portion of the dividend with the government, and it would be a floating payout tied to 10-year U.S. Treasuries, which currently yield about 2.2%, sources detail. If Treasury yields rose higher than 6%, the Fed wouldn’t have to pay the banks more. Banks with $10 billion or less in assets would be exempt from the reduction, contacts added.
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 funds, which totaled $29.3 billion as of Nov. 25. If the surplus account goes above $10 billion, that capital would be swept to the government, according to the people.
The apparent agreement avoids any increase in the 18.4 cents per gallon gasoline tax that finances the Highway Trust Fund (HTF) and has been unchanged since 1993. The trust fund has been running deficits of $10 billion a year or more as gas tax revenue has fallen short, partly because of greater auto fuel efficiency.
Meanwhile, House GOP leadership also included language in the final conference report to do away with $3 billion in crop insurance spending over ten years."