- The Washington Times - Wednesday, June 27, 2012

Congressional leaders were poised Wednesday to reach a deal on stalled legislation to keep federal transportation, transit and rail projects running, as House Republican leaders prepared to bow to Democratic pressure to exclude a provision for a controversial oil pipeline.

The compromise to fund transportation projects through September 2014 was expected to be finalized by midnight in time for a Friday vote. The measure would be merged with a bill to keep federally subsidized student loan rates from doubling — a move designed to streamline their approval ahead of end-of-month deadlines for both.

Republicans appeared willing to give up demands that the so-called “highway bill” include a provision for the proposed Keystone XL pipeline, which would bring oil from Alberta, Canada, to Steele City, Neb. It has strong support from business and labor groups but sparked a backlash from environmentalists and some property rights advocates.

Republicans had pushed hard for Keystone, saying it would create thousands of jobs and foster greater domestic energy independence. Most Democrats are adamant about leaving the pipeline out of the measure, saying it’s unrelated to transportation issues.

Democrats in return are expected to give up certain environmental reviews of highway projects and drop calls for a program that funds bike paths, pedestrian safety projects, beautification and other “transportation enhancements.”

The deal would keep spending levels in the transportation component of the bill at current levels.

Highway bills, which often run for five years, typically move through Congress without great controversy. And in March, a two-year, $109 billion version sailed through the Senate with broad bipartisan support.

But efforts to renew surface transportation funding sputtered this winter in the House, where Republicans rejected their leadership’s five-year, $260 billion version before the measure could even get to the floor for a vote. Funding for surface transportation projects was to expire at the end of March before Congress passed a three-month extension.

Pressure on lawmakers had intensified in recent weeks, however, with federal transportation funding set to expire Sunday. Members of both parties were eager to avoid a politically precarious shutdown of highway projects — and the loss of construction jobs.

House Transportation and Infrastructure Committee Chairman John L. Mica, Florida Republican, praised the deal, calling it “unprecedented” because he said it doesn’t include any earmarks — lawmaker-requested pet projects — or tax increases.

“This legislation is specifically designed to reform and consolidate our transportation programs, streamline the bureaucratic project process and give states more flexibility to save taxpayers’ hard-earned money,” he said.

Sen. Barbara Boxer, California Democrat who co-authored the initial Senate version, said she was glad House Democrats and Republicans met “half way.”

“We speed up project delivery, cut red tape and do it without jeopardizing environmental laws,” she said. “Our country needs the kind of economic boost that this bill offers.”

Meanwhile, the package’s student loan component calls for maintaining the current 3.4 percent interest rate on federally subsidized Stafford loans for another year. The rate is scheduled to double unless Congress acts before Sunday.

Stopping the rate increase would save 7.4 million students an average of $1,000 a year — a move called for by President Obama in his State of the Union address this year. The $6 billion loan subsidy would be paid for by curbing companies’ tax breaks for pension payments and limiting federal subsidies of student loans to six years for college undergraduates.

The Obama administration applauded — and partially took credit for — the loan deal, with White House press secretary Jay Carney saying it came about “because the president made a federal case out of it.”

“We’ve come to a point where hopefully we will reach an agreement that everyone finds acceptable,” added Mr. Carney. “And that is purely a result of the leadership the president has shown on this matter.”

This article is based in part on wire service reports.

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