With one day remaining before the deadline for the current surface transportation authorization to expire President Obama signed HR 22, a 5-year (FY 2016-2020), $305 billion surface transportation reauthorization. The bill will require offsets to make a $70 billion general fund transfer to the Highway Trust Fund. About $52 billion of this would go to highways and a little over $18 billion to mass transit.
Multiple offsets were found to fund the overall measure, some of which are controversial. Some of those offsets include; cutting the dividend the Federal Reserve (Fed) pays to member banks, transferring funds from the Federal Reserve surplus account to help the Fed offset losses and selling a portion of the Strategic Petroleum Reserve (SPR).
According to some analysts selling off portions of the SPR may come up short. The sales price per barrel used in the calculation for the offset is $89 per barrel. The current (ICE) Crude Oil Brent price is $44.20 per barrel.
The offset cutting the dividend from the Fed was used by lawmakers to reverse an earlier decision codified in the budget deal that would cut the crop insurance program by $3 billion. The conference report on the surface transportation bill repeals the crop insurance cut retroactive to November 2. If the language to reverse the cut in the crop insurance program is not enacted this month, the U.S. Department of Agriculture would technically be required to cancel the Federal Crop Insurance Corporation’s Standard Reinsurance Agreement.
The leaders of the respective House and Senate panels, Senate Environment and Public Works (EPW) Chairman James Inhofe (R-OK), ranking member Barbara Boxer (D-CA), House Transportation and Infrastructure Chairman Bill Shuster (R-PA) and ranking member Peter DeFazio (D-OR) praised the bipartisan work of the conference committee.