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Congress poised to avert highway fund shutdown, for now

Ted Cruz

Sen. Ted Cruz (R-Texas) speaks to reporters on Capitol Hill on July 21.

(Michael Reynolds / European Pressphoto Agency)

Congress is poised to avert a looming shutdown of federal highway accounts with passage of a temporary measure that will keep operations funded for the next three months, but the move creates a possible new crisis point for the fall.

The House approved a compromise stopgap bill Wednesday by a vote of 385 to 34, as Speaker John A. Boehner (R-Ohio) allows lawmakers to dash out of town early for the August recess. The Senate was to follow suit soon after.

As part of the deal, Congress was also tacking on a provision to help the Department of Veterans Affairs avoid closing healthcare clinics amid its own budget shortfall. The agency will be able to tap $3 billion over the next two months to cover rising costs associated with providing veterans faster health services in order to avoid long wait times.

Lost in the compromise, though, was an effort to salvage the Export-Import Bank, the 81-year-old federal financial institution whose ability to make new loans was halted by Congress last month amid criticism that the bank was an example of corporate welfare.

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Renewing the bank’s authority created a tense standoff in Congress when Sen. Ted Cruz of Texas, a Republican presidential candidate, accused the party’s Senate leader, Mitch McConnell of Kentucky, of lying over a deal to allow a vote on the matter. 

“It is a profound mistake to allow the Export-Import Bank to remain without lending capacity,” Treasury Secretary Jacob Lew said Wednesday at a breakfast sponsored by the Christian Science Monitor. “What it means is our businesses ... are competing on unfair terms with foreign competitors.”

The last-minute highway compromise averts the immediate crisis that could have shut down transportation projects nationwide as of Friday. But the temporary nature of the deal sets up another potential stalemate in three months as Congress has no long-term solution for funding highway accounts.

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The highway fund has run into trouble because the 18-cents-a-gallon federal gas tax, which provides much of program’s revenue, has not kept pace with construction costs and inflation. In addition, vehicles have become more fuel-efficient. The last time the gas tax was raised was 1993.

To keep the fund operating, Congress is approving $8 billion to continue transportation projects through Oct. 29, largely paid with a mishmash of revenues from various federal sources.

Reaching a long-term solution has been difficult because the House and Senate, both controlled by Republican majorities, have different approaches.

The House wants to overhaul the international business tax code to fund the highway accounts, but McConnell said Tuesday he was “skeptical” of that approach.

Instead, the majority leader this week pushed a bipartisan bill in the Senate that would fund the highway accounts for three years by drawing on a hodgepodge of budget trims and new revenue streams.  

The Senate bill also carries several key changes to transportation policy, and is expected to be a starting point for broader discussions with the House on a compromise when lawmakers return from their summer recess after Labor Day.

However, the future of the Export-Import Bank remains uncertain. The House finished its work Wednesday, with the Senate expected to recess next week, with no action to save the institution.

Conservatives want to wind down the bank, but backers from the business community say it is needed to provide loans to overseas firms that buy U.S. exports.

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Staff writer Jim Puzzanghera in Washington contributed to this report.

For the latest from Congress and 2016 campaigns, follow @LisaMascaro.

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