Mitch McConnell’s new highway bill is already on the skids with Dems and GOP

Senate Majority Leader Mitch McConnell’s new highway spending bill is already on the skids, with both Democrats and Republicans questioning $47 billion in fees and penalties the legislation counts on to fund new road-building over the next three years.

Lawmakers voted Wednesday to kick-start debate on the deal, brokered by Sen. Barbara Boxer, California Democrat, and Mr. McConnell, who warned senators they may have to work through the weekend to finish the bill.

But the legislation is already suffering, with Democrats split on whether even to advance the bill to the floor, and critics saying the funding covers only three of the six years of road-building called for in the measure — and even some of the fees, policy tweaks and stiffer tax enforcement that are included are iffy.

“It puts the cart before the horse by committing to six years of spending even though they don’t have the resources to cover the cost,” said Marc Goldwein, vice president of the Committee for a Responsible Federal Budget. “That increases the pressure for a future bailout and also, in some sense, gives highway funding ’first dibs’ on future offsets, which isn’t necessarily fair.”

Of the $47 billion in anticipated money, $9 billion would come from selling more than 100 million barrels of oil from the Strategic Petroleum Reserve — a move Energy Committee Chairwoman Lisa Murkowski called “short-sighted,” saying the reserve is maintained for emergency supplies. Still others questioned whether sales now, with oil prices relatively low, would produce the $9 billion the deal’s authors are counting on.

The bill would also cut Federal Reserve dividend payments to 1.5 percent for banks with at least $1 billion in assets, leaving the rate at 6 percent for smaller banks. Slated to bring in $16 billion, it’s the biggest money-raiser in the deal.

Sen. Richard C. Shelby, Alabama Republican and chairman of the Senate Banking Committee, said he does not see “any nexus” between the payments and highway funding, and Federal Reserve Chair Janet Yellen told the committee last week that such a move “could conceivably have unintended consequences.”

Democrats, meanwhile, said $2.3 billion the bill would raise by denying Social Security benefits to fugitive felons is best kept within Social Security’s trust funds, not siphoned away for highway spending.

“This is, I understand, a departure from what we’ve done in the past, and I’m not happy with it,” said Sen. Richard J. Durbin, Illinois Democrat. “So I have to weigh this.”

Mr. McConnell and his top aides say the spending offsets are reasonable and that a multiyear bill is needed to end Congress’ use of short-term patches, giving state and local leaders the assurance they need to start major projects.

Democrats said they shared those goals but urged Mr. McConnell to slow down, even launching a filibuster Tuesday as they demanded more time to pore over the 1,030-page bill.

Highway funding has been a sticking point for years, leaving Congress to pass short-term extensions rather than a broad multiyear bill that most lawmakers say they’d prefer.

Republicans have ruled out raising the gas tax, which funds most existing road-building but falls about $90 billion short of what the government expects to need over the next six years.

Mr. McConnell was able to find about half of that money, which is why his bill authorizes six years’ spending, while only paying for the first three years of it.

The House, though, is working on a different long-term deal that would rely on a one-time tax on business income brought back to the U.S. from overseas. GOP leaders say that deal will take months to finalize, so the House has already passed a short-term bill keeping the highway program running through mid-December, surmounting an end-of-July deadline.

That’s left the two chambers on a collision course.

“Obviously, the Senate feels otherwise,” said House Speaker John A. Boehner, Ohio Republican. “They’ve got a process underway, and we’ll see what happens.”

Leading House conservatives fear the upper chamber will jam them with a bill that revives the federal Export-Import Bank, an agency that for decades financed the sale of U.S. goods overseas. Its authority expired June 30, meaning it cannot conduct new business.

Conservatives want the bank to stay dead, while the Obama administration says any roads bill should reauthorize the bank, claiming it bolsters jobs and enjoyed decades of support from past presidents.

Meanwhile, Republican Sen. Ted Cruz of Texas and other conservatives are lining up amendments that could slow down debate, including plans to strip Planned Parenthood of funding, prohibit lawmakers from using an employer subsidy while on Obamacare and stop President Obama’s amnesty for certain illegal immigrants.

Mr. Durbin said the GOP contenders have the right to offer amendments, but they are “as meaningful as a Trump speech,” an allusion to businessman Donald Trump’s bombastic remarks on the GOP campaign trail.

“Everyday there’s going to be one, and it’s part of the routine when you have 16 candidates for president trying to edge up 3 or 4 percent in the polls,” he said. “They’ll try to grasp at anything they can.”

Outside groups are also questioning some of the funding.

The labor union that represents IRS employees protested some $2.4 billion in additional revenue Mr. McConnell predicts would come from asking private debt-collection agencies to track down tax scofflaws.

But Sen. Chuck Grassley, Iowa Republican and a longtime proponent of private collections, said the IRS could use the help.

“The private contractors would take on accounts involving taxes that are due and owed that are just sitting dormant right now,” Mr. Grassley said. “The IRS isn’t even pursuing them … it’s hard to see the logic for the resistance.”