McCarthy Intervenes for Bus Company Targeted by Spending Bill

House Majority Leader Kevin McCarthy (R-Calif.) intervened in House-Senate spending bill negotiations to exclude a bus manufacturer in his district from a proposed funding restriction, according to two people familiar with the negotiations.

A lobbying effort to protect the domestic freight rail industry from Chinese incursions won language in the House and Senate Transportation-HUD spending bills that would restrict the use of federal funds for contracts with Chinese state-backed companies.

The language could prove costly for BYD, or Build Your Dreams, the Chinese-supported electric bus manufacturer based in McCarthy’s district that’s the only bus company that would be covered by the ban.

BYD’s future contracts to supply buses to U.S. transit agencies could be affected by the provision in the Senate-passed T-HUD spending bill (H.R. 6147), the office of Sen. Tammy Baldwin (D-Wis.) confirmed to Bloomberg Government. Baldwin was a cosponsor of the Senate provision with Sen. John Cornyn (R-Texas).

The committee-approved House spending bill (H.R. 6072) would have affected both rail and buses, but McCarthy — just elected to be minority leader starting next year — proposed language that would exempt buses, a congressional aide and transportation lobbyist familiar with the spending bill negotiations told Bloomberg Government.

“American taxpayer money should not be spent to buy foreign products and support workers in other countries. China is unfairly underbidding U.S. railcar manufacturers, dealing a significant blow to the foundries and steel manufacturers who have supplied the domestic railcar industry for decades,” Baldwin said in an emailed statement.

Parochial Concerns, National Security

The Senate provision is only forward-looking, so current contracts shouldn’t be affected, but if the bus or rail companies receive subsidies from the Chinese government, their future contracts could be affected, according to Baldwin’s office.

The restrictions on rolling stock, if McCarthy is unsuccessful, would benefit domestic electric bus manufacturers like California-based Pro Terra and New Flyer, which in recent years has invested $25 million into expanding its 36 acre, five-building campus in Anniston, Ala., and has facilities in Wisconsin and Minnesota.

McCarthy’s move pits him against senior Republican lawmakers in both chambers, including Rep. Kay Granger (R-Texas), who proposed the House language, Senate Majority Whip Cornyn, and Senate Appropriations Chairman Richard Shelby (R-Ala.).

McCarthy’s office didn’t respond to a request for comment.

Shelby hadn’t seen McCarthy’s language and wasn’t willing to comment on the proposed changes to the T-HUD bill.

“I’ve just come back from China, we all better be concerned about China,” Shelby told Bloomberg Government.

The Chinese rolling stock provision is one of several in the spending bill negotiations with no resolution, according to several lobbyists and legislative staff familiar with the discussions.

To contact the reporter on this story: Shaun Courtney in Washington at scourtney@bgov.com

To contact the editors responsible for this story: Paul Hendrie at phendrie@bgov.com; Loren Duggan at lduggan@bgov.com