Sunday, June 12, 2016

Bonding Bills, Special Sessions and Special Interest: Could Banking Industry Be Stalling for Higher Interest Rates?

Ever since the financial melt down and the Federal Reserve's drastic slashing of interest rates to stave off a second Great Depression I have wondered why we have not funded sorely needed projects to rebuild the state and the nation's crumbling infrastructure.  It seems like a no brainer.  With the cost of borrowing money the lowest it has and will ever be you would think the parties could agree that now is the time.  So what is the hold up?  Republicans.  

While most Minnesotans are aware that the Republican controlled House played games waiting until the last hour of the 2016 session so they could pass a fait accompli bill with just enough time left for the Democrat controlled Senate to rubber stamp their version without amendment and then adjourned.  When Governor Dayton discovered a possible $100 million mistake in the bill that did pass he pocket vetoed it and announced he is willing to call a special session to correct the mistake and pass the bonding bill that they ran out of time to reconcile in a conference committee.  Now the Republicans are dragging their feet again refusing to agree in advance to the agenda for the special session. 

So I got to thinking, why would the supposed fiscally conservative Republican party be so adamant in their opposition to a bonding bill that most would agree is needed for things like replacing decrepit bridges and municipal water works and waste treatment plants?  The people of Minnesota would save money on the low interest rates.   Hmmm...Could it possibly be the one special interest that would not make as much money if the bill passed now as opposed to the next regular session when the interest rates may well rise?

A simple google search produced a result to a link to the Center for Responsive Politics' page on campaign contributions by the commercial banking industry and look what I found:   

     "In the early 1990s, the industry split its support between Democrats and Republicans,           but since then has heavily favored Republicans, with the exception of the 2008 election         cycle. In recent years, the lean has become even more pronounced. In 2014, 72 percent       of the industry's donations to candidates and parties, or more than $19 million, went to         Republicans."

So a year or two from now when you wonder why we are paying higher interest rates to commercial banks for finance charges on loans or bonds to cover public works projects we could have done earlier at a lower rate you can do like the bankers and thank their pals the Republicans.

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