Get your news from a source that’s not owned and controlled by oligarchs. Sign up for the free Mother Jones Daily.


In order to close a $70 billion gap in highway funding, Congress plans to raid the Federal Reserve and sell some oil from the Strategic Petroleum Reserve. Yesterday I called these moves “ill considered,” but David Dayen writes that there’s at least one pay-for in the transportation bill that’s also pretty good public policy.

Ever since its founding, the Fed has paid banks a 6 percent annual dividend on the stock they buy to become members of the Federal Reserve system. In 1913 this was designed to entice banks to join the newfangled scheme. Today, it’s just an annual gift. So Senate drafters decided to cut the dividend to 1.5 percent and use the rest of the money for the transportation bill. Banks went ballistic, but in the end they were unable to keep their full handout:

When the final bill was released Tuesday, the dividend reduction remained in there, albeit with some modifications.

The reduction now applies only to banks with over $10 billion in assets, compared to the $1 billion threshold in the original bill. Instead of cutting the dividend to 1.5 percent, the rate will now match the interest rate of the highest-yield 10-year Treasury note at the point that the dividend is due. For context, the high yield at the last Treasury auction was 2.304 percent.

It’s a small thing, but it’s always nice to see big banks lose a battle now and again. It keeps us all on our toes.

BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate