WASHINGTON — Congressional leaders have reached tentative deals that would prevent a doubling of student loan interest rates and revamp the nation’s transportation programs, congressional officials said Wednesday. If completed, the compromises would resolve two vexing issues on which lawmakers face weekend deadlines for action.
House and Senate leaders have tentatively agreed to a one-year extension of today’s 3.4 percent interest rates for subsidized Stafford loans, said a congressional Republican who spoke on condition of anonymity to reveal the issue’s status. The measure — which would affect 7.4 million students projected to get new loans starting July 1 — is the same package that Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday they had crafted between themselves.
At the same time, congressional leaders have tentatively agreed on a two-year bill to overhaul federal highway programs, Senate aides said. The government’s authority to spend money on highways, bridges and transit systems expires Saturday, as does its ability to levy gasoline and diesel taxes. They spoke on condition of anonymity because the deal wasn’t final.
Sen. James Inhofe, R-Okla., top Republican on the Senate Environment and Public Works Committee, said bargainers would drop a requirement that the government approve the proposed Keystone XL oil pipeline that is to run from Canada to Texas. House Republicans had pushed for inclusion of the Keystone provision, but the White House threatened to veto the bill if it was included.
Critics have complained that requirements for environmental impact statements before highway construction projects can proceed have caused unnecessary delays and driven up costs. Under the agreement, the average time it takes to complete a highway project would drop from 15 years to about eight years, they said.
The agreement also makes other kinds of transportation programs eligible for the same pool of money that funds transportation enhancements, which means there will probably be less money to go around for biking and walking projects, they said.
Congressional leaders are talking about combining the highway and student loan measures into a single bill to reduce potential procedural obstacles, and hope to vote final approval this week. Lawmakers hope to then leave Washington for a July 4 recess.
Earlier Wednesday, House Speaker John Boehner, R-Ohio, told reporters that lawmakers were moving toward an agreement on the highway and student loan issues.
Boehner made his remarks a day after Reid and McConnell said they’d struck a bipartisan agreement that the White House later said it supported. Those statements put pressure on Boehner to accept the deal, which if enacted would avoid antagonizing millions of students and their parents in an election year.
President Barack Obama highlighted the student loan issue during visits to college campuses this spring amid a campaign year in which the struggles of many families to cope with the limp economy has been a defining issue. Hoping to prevent him from using the dispute in the fall campaign, GOP presidential challenger Mitt Romney said in April that he backed an extension of the lower rates. GOP congressional leaders said the same.
In recent weeks, the key dispute has been over how to pay the student loan bill’s $6 billion price tag.
Under the agreement, the government would raise $5 billion by changing the way companies calculate the money they have to set aside for pensions. That change would make their contributions more consistent from year to year, in effect reducing their payments initially and lowering the tax deductions they receive for their pension contributions.