A move to pay for part of a transportation funding bill by cutting almost $2 billion in aid to states most impacted by the 2008 financial collapse was thwarted after senate leaders faced opposition from the rank-and-file.
Senate Majority Leader Mitch McConnell (R-Ky.) on Friday acknowledged the resistance and announced “one additional modification” to the bipartisan deal.
“It removes provisions that would have terminated the $1.7 billion Hardest Hit Fund mortgage program,” he said.
“Several senators on both sides of the aisle–and in particular, Sen. [Rob] Portman (R-Ohio) on our side of the aisle [who] has been a real champion on this issue–expressed their opposition to its termination,” he added.
McConnell then said that the bill’s managers have “reduced spending levels to accommodate this change, while ensuring that this bill is fully paid for for three years.”
The bipartisan legislation was negotiated by himself and the ranking member of the Senate Environment and Public Works Committee, Barbara Boxer (D-Calif.).
Congressional leaders are rushing to pass a transportation funding bill by July 31, when legislation that currently authorizes transportation spending will expire.
The money that senators had sought to claw back from the Hardest Hit Fund has not yet been “committed in contracts.”
The other half of Ohio’s senate delegation, Sherrod Brown (D) claimed that this ultimately would cost his state $71 million.
“These funds were to help those communities demolish homes, renovate homes, counseling for people to avoid foreclosure — all the things that preserve home ownership for as many people as possible,” he said Thursday.
The city of Detroit alone would have lost $100 million, according to the Detroit Free Press.
Authorized by the Troubled Asset Relief Program, the Hardest Hit Fund was created by the Treasury Department in 2010 to held distressed homeowners in 18 states and Washington, DC.
It isn’t clear which party put forth the proposal to wind down the fund, but the AP reported Monday that Senate Finance Committee Chair Orrin Hatch (R-Utah) “drew up a list of about $80 billion in tax changes and spending cuts that could be used to pay for transportation spending.”
A press release distributed by the Senate Environment and Public Works Committee claimed that the money for distressed homeowners is no longer needed because “house prices have sufficiently recovered and foreclosure activities have sufficiently abated.” It also claimed that “funds in this would be better put to use for Americans in infrastructure investments.”
