Tentative deal on student loans, roads

House Speaker John Boehner of Ohio, cen­ter, joined by other House GOP lead­ers, ges­tures dur­ing a news con­fer­ence on Capi­tol Hill in Wash­ing­ton Wednes­day fol­low­ing a polit­i­cal strat­egy ses­sion. From left are, House Major­ity Leader Eric Can­tor of Va., Rep. Cathy McMor­ris Rodgers, R-Wash., Boehner, Rep. Renee Ellmers, R-NC, and Rep. Bill Flo­res, R-Texas. (Asso­ci­ated Press | J. Scott Applewhite)

ALAN FRAM

JOAN LOWY

Asso­ci­ated Press

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.

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.

Posted by AP News on Jun 27 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.