WASHINGTON (AP) ? Hoping to avert the kind of headlines politicians dread, congressional leaders are aiming for final passage by week's end of legislation reshaping federal transportation programs and preventing a doubling of interest rates for millions of new student loans.
Without action by Saturday, federal authority to conduct road, mass transit and other transportation programs would end, along with the government's ability to collect gasoline and diesel taxes that fund most of those programs, costing what Sen. Barbara Boxer, D-Calif., said would be 3 million jobs. Democrats and Republicans were eager to avoid blame for shuttering transportation projects when voters are focused on the nation's weak employment market.
"The highway bill boils down to one simple thing: jobs," said Sen. Max Baucus, D-Mont., a bargainer on the legislation.
House and Senate leaders reached agreement Wednesday on the transportation and student loan measures and decided to wrap them together in hopes of sidestepping parliamentary obstacles and speeding Congress' work. Provisions renewing and revamping federal flood insurance were included as well.
On the highway measure, Republicans dropped demands for one provision forcing federal approval of the proposed Keystone XL oil pipeline from Canada to Texas, and another blocking the government from regulating toxic ash produced by coal-fired power plants. In exchange, Republicans won concessions curbing environmental reviews for highway projects and diverting money away from bike paths and pedestrian safety projects.
With each party blocking the other's top legislative initiatives, Democrats and Republicans said the highway bill loomed as Congress' most prolific job-creating measure until the November elections. It would give states more flexibility to spend federal money, impose new safety regulations and expand a federal loan guarantee program to encourage private investments in transportation projects.
Unless lawmakers act this week, interest rates for subsidized Stafford loans issued starting Sunday would double to 6.8 percent. That automatic increase was approved by Congress five years ago to save money, but few lawmakers want to face voters after infuriating millions of college students and their parents by driving up school costs.
The increase, if not avoided, would affect 7.4 million students projected to get the loans during the 12 months starting Sunday. It would cost each an extra $1,000, on average, over the decade or more it typically takes to repay the money.
"At a time when we're trying to get our economy recovering, do you really want to raise the rates on students?" said Rep. Jim Jordan, R-Ohio, a leader of House conservatives.
The student loan measure has been a political battlefield for months, with President Barack Obama touring the country to accuse Republicans of not acting to prevent the rate increase. Though some GOP lawmakers have opposed the rate freeze, Republican presidential challenger Mitt Romney and Republican congressional leaders said two months ago that they supported it, and the sole remaining fight has been over how to pay for it.
The student loan measure was projected to cost $6 billion.
Under the compromise, $1.2 billion would be paid for by limiting federal subsidies for undergraduates to a maximum of six years. Currently those subsidies ? a period during which the government does not charge interest ? can last as long as it takes an undergraduate to get a diploma.
Another $5 billion would come from changing how companies calculate the money they must set aside for their pension programs. The changes would make their annual contributions lower and less variable, in effect reducing their tax deductions.
An additional $500 million would come from pegging to inflation the fees companies pay to federally insure their pensions.
Aides said the pension proposals might end up raising more than $18 billion in the final legislation, with the excess helping pay for the transportation measure.
The federal flood insurance program, which protects 5.6 million households and businesses, has gone deeply into the red from claims after 2005's Hurricane Katrina. Senate legislation would try to return the program to fiscal soundness by allowing premium increases and reducing subsidies for vacation homes.
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