Top Republican rebuffs Senate transport bill with U.S. Ex-Im bank renewal

WASHINGTON (Reuters) - A congressional standoff over U.S. transportation funding deepened on Monday as the No. 2 House Republican said he would reject the Senate's multi-year road and mass transit bill, leaving the Export-Import Bank's fate uncertain in the balance.

The U.S. Senate voted 64-29 to attach a renewal of the Export Import Bank to the $350 billion spending authorization bill, a move that the trade lender's backers had hoped for since Congress allowed its charter to expire on June 30.

While the transportation bill is considered a "must pass" legislative vehicle, House Majority Leader Kevin McCarthy pushed Congress closer to an August 1 cut-off of federal highway construction money on Monday. He said he would not accept the Senate's plan, and said it should instead approve a House-passed five-month extension of transportation funding aimed at buying time for a long-term deal in the autumn.

"We're not taking up the Senate bill," McCarthy told reporters, adding that the House intends to start a five-week summer recess on Thursday and there was too little time to take up the complex, 1,030-page Senate bill, which authorizes spending for six years but only contains specific funding for about three years worth of projects.

But Senate pressed ahead with its mult-year approach, clearing another procedural vote Monday night that sets up at least two more days of debate that could end in a tense standoff with the House.

"Time is running out to get this bill through Congress," Republican Senate Majority Leader Mitch McConnell said in remarks on the Senate floor. "We're up against a deadline at the end of the week. Jobs are on the line."

The highway fund pays for about half of the country's highway and transit projects and is about to go broke because lawmakers for 22 years have been unwilling to raise the gasoline and diesel taxes that have historically fed it.

The highway funding jam-up also made it less likely that the idled Ex-Im Bank will be revived this week as part of a highway funding bill. The trade bank's next chance to resume lending and guarantee operations would not likely come until September.

The Senate late on Monday will vote to formally attach a renewal of Ex-Im's expired charter to the transport measure, a move that has strong support. House Speaker John Boehner has pledged to take up any such legislation from the Senate under an open amendment process.

(Reporting by David Lawder and Richard Cowan; Editing by Kevin Drawbaugh and Cynthia Osterman)