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Highways-student loan deal poised for votes

Thursday - 6/28/2012, 8:16pm  ET

By JOAN LOWY
Associated Press

WASHINGTON (AP) - Republican leaders pushed a sweeping highways-student loans package salvaging millions of construction jobs and maintaining low interest rates on millions of new college loans toward a House vote Friday even as conservative groups mounted a last-minute and likely futile campaign against it.

Favorable action by the Senate on what would be the only big jobs measure Congress has enacted this year was assured. Leaders said they hoped get it done Thursday night, but then ran into procedural hurdles that pushed back a vote until Friday. Lawmakers in both parties hoped to get an early start bragging about a rare accomplishment four months before the election.

The conservative Heritage Action for America and the anti-tax Club for Growth urged a "no" vote on the bill in emails Thursday to lawmakers, warning that it will be counted as a key vote on their legislative scorecards.

"This massive bill spends too much money, will continue taxpayer bailouts for highway spending and keeps subsidies that have contributed directly to skyrocketing tuition rates," Club for Growth spokesman Barney Keller said.

Despite the backlash from such core conservative groups, the bill's supporters expressed confidence. "We got a pretty good reception in conference this morning," Rep. Bill Shuster of Pennsylvania said after House Republicans met on the bill.

After three months of haggling, House and Senate negotiators reached agreement on the package Wednesday. It includes a two-year, $100 billion spending plan for highway and mass transit construction and repairs, $6 billion to prevent rates on new student loans after from doubling after Saturday, and a five-year renewal of federal flood insurance subsidies.

The bill gives states more flexibility over how they spend federal highway aid, consolidates transportation programs and shortens environmental delays to get highway projects built faster. It also expands a loan guarantee program aimed at increasing private investment in infrastructure projects.

Democrats and Republicans each gave way on issues important to their political constituencies, but both sides also scored victories. Republicans sacrificed proposals to force a go-ahead with the proposed Keystone XL oil pipeline in the Midwest and to prevent the Obama administration from regulating coal ash as a hazardous toxin. Democrats gave ground on environmental protections blamed for stalling some road projects and safety, biking and pedestrian programs.

House Republican leaders pitched the package to their members in a closed-door meeting Thursday morning that was interrupted by news of the Supreme Court's health care decision.

Rep. Bill Cassidy, R-La., said some conservatives have doubts about voting for the package after House negotiators dropped a House-passed provision requiring the government to approve the Canadian border-Gulf Coast Keystone pipeline. President Barack Obama has vowed to veto the bill if it included the pipeline measure.

But Cassidy said, "There's also concern among conservatives to have a decent infrastructure and some certainty for our (state transportation departments) back home and our contractors so they can build roads.... It is a mixed bag. I will just tell you that." He said he was still undecided on how he would vote.

Rep. Jim Jordan, R-Ohio, chairman of the influential House Republican Study Committee, will vote against the package, his office said.

Florida Republican Rep. Steve Southerland, one of the deal's negotiators, said he expects the package to win passage, explaining that no one has argued a short-term extension is in the nation's best interest and that contractors want and deserve certainty. "I think we will have the votes," he said.

Without the bill or a short-term extension, federal aid transportation aid to states would expire, as well as the government's ability to collect federal gasoline and diesel taxes _ 18.4 cents a gallon and 24.4 cents, respectively _ that fund most of those programs. Democrats estimate that would cost an existing 1.8 million transportation-related jobs, as well as forgo another estimated 1 million jobs the bill would create.

Similarly, interest rates for on new subsidized Stafford loans for college students would double to 6.8 percent beginning Sunday. That automatic increase was approved by Congress five years ago to save money. The bill extends the current 3.4 percent rate for 12 months, saving some 7.4 million students an average $1,000 in higher interest costs over the life of the loan, typically a decade or longer.

Congressional leaders rolled the highway and student loan into a single bill because both are financed in part with pension law changes. Aides said the pension proposals might end up raising more than $18 billion in the final legislation.

The extension of the federal flood insurance program was added to the bill this week. It protects 5.6 million households and businesses and addresses a shortfall arising from claims after 2005's Hurricane Katrina by reducing insurance subsidies for vacation homes and allowing for increases in premiums.

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Associated Press writers Andrew Taylor and Jim Abrams contributed to this report.

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Follow Joan Lowy at http://www.twitter.com/AP_Joan_Lowy


(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)