Tenative Deal on Student Loans, Says AP Sources
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.
Inhofe said another GOP provision blocking the federal government from regulating the toxic ash generated by coal-fired power plants would also be jettisoned.
House Republicans won concessions from the Senate on environmental reviews of highway projects, Senate aides and environmentalists said.
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.
The aides said they were working to put the agreement into legislative language, which must happen before House and Senate leaders formally sign off on the deal.
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.
Another $500 million would come from increasing the fees companies pay for the government to insure their pension plans, linking those fees to inflation.
In addition, $1.2 billion would be saved by limiting federal subsidies of Stafford loans to six years for undergraduates.
The White House threatened to veto a House-passed bill extending the lower interest rates because it was paid for by cutting a preventive health care program that Obama helped create. Republicans blocked a Democratic version in the Senate paid for by boosting taxes on owners of some privately held corporations.
Congressional leaders are discussing combining the student loan bill with the highway legislation. Any extra funds raised by the student loan measure could help pay for the highway legislation.
The last long-term transportation bill expired in 2009. Congress has kept programs going through a series of nine short-term extensions. The bill would overhaul transportation programs, giving states more flexibility in how they spend federal money, step up the pace of road construction by shortening environmental reviews, impose new safety regulations and boost funding for a federal loan guarantee program aimed at increasing private investment in highway and other transportation construction projects.
The Senate passed a bipartisan, $109 billion transportation bill in March. House Republicans were unable to pass their own comprehensive transportation bill because of divisions in their party.
Instead, they passed a three-month extension of current programs coupled with controversial provisions that would have required the government to approve the Keystone XL oil pipeline and blocked the Environmental Protection Agency from regulating the toxic ash created by coal-burning power plants.
(Copyright 2012 by The Associated Press. All Rights Reserved.)