House Sets Vote on Plan to Double Funding for Global Infrastructure Projects
Must-pass FAA bill includes ‘Build Act,’ a bid to counter China’s influence by bolstering development financing
WASHINGTON—The U.S. House of Representatives is set to vote this week on a must-pass piece of legislation that includes a provision that would dramatically bolster American funding of global infrastructure and development projects.
Legislators have included the “Build Act,” seen by its supporters as a major step to counter China’s growing influence in global development, in legislation that would reauthorize the Federal Aviation Administration.
The legislation is seen as something that must be passed by the end of the month, because it is essential for the operation of the air-travel system and lawmakers are reluctant to pass another short-term extension.
The Build Act would significantly boost the U.S. role in international development by combining several little known government agencies into a new body with authority to extend $60 billion in development financing—more than doubling the cap of the current agency that performs that function.
A House GOP aide said the FAA bill would likely come up for a vote on Wednesday. On Monday, Senate Majority Leader Mitch McConnell (R., Ky.) said that the Senate would vote soon on the FAA bill, a step that essentially guarantees the infrastructure-spending measure will become law. The Build Act legislation has been supported by the White House, which is seeking to counter China’s ambitions to become the leader of global development finance.
The new agency would be known as the U.S. International Development Finance Corp. It would take over the functions of the Overseas Private Investment Corp., which currently has a $23 billion portfolio of loan guarantees, direct lending and political risk insurance. Recent OPIC financing has included projects such as a toll road in Colombia, a geothermal power plant in Honduras, cellphone towers in Uganda and a nuclear-fuel storage facility in Ukraine.
The legislation would combine OPIC with several programs run by the U.S. Agency for International Development, the biggest of which is known as the Development Credit Authority.
The legislation has been popular because OPIC, which is the core of the new agency, turns a profit for taxpayers. A Congressional Budget Office analysis earlier this year concluded the new and larger agency would continue to operate at a profit. But OPIC has been limited by a congressional cap on its portfolio size and a prohibition on owning equity stakes in projects, issues addressed by the new legislation. The new agency would have authority to do $60 billion in projects, and would be allowed to take equity stakes in its investments.
The Build Act gained a sense of urgency due to Washington’s concern about China’s aggressive initiatives to fund global infrastructure projects. Under the global investment plan known as the One Belt, One Road Initiative, China has spent hundreds of billions of dollars (and is thought to be willing to spend trillions) on projects like superhighways, railroads, harbors and ports.
The bill had previously passed the House with unanimous support in July and was supported by most senators. But the legislation had been held up in the Senate. Unless the bill won unanimous support from every senator, Mr. McConnell would have had to schedule several days of time to debate the legislation, but Mr. McConnell’s focus had been confirming judges and passing bills to avert a government shutdown at the end of September.
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