(WASHINGTON) — After months of wrangling, arm-twisting, bitter debate and closed-door negotiations, Congress finally has a bipartisan deal for the American people. Just in time.
The agreement, which couples a student loan interest rate extension with a long-awaited boost for infrastructure, passed the House first, 373-52. A short time later, the Senate approved the deal 74-19, with one senator voting ‘present.’
For months, progress stalled as Republicans debated internally over a long-term highway bill and Congress searched for an agreeable method to prevent new subsidized Stafford loan rates from doubling from 3.4 to 6.8 percent on July 1. The deal extends current rates for another year for approximately 7.6 million students signing up for new loan agreements.
House Democratic Whip Steny Hoyer, D-Md., blamed Republicans for taking Congress “to the brink,” but he said the bipartisan deal gives “certainty to millions of students and that will pave the way for jobs and economic growth.”
“Keeping these rates low recognizes the challenges our graduates face in today’s tough job market,” he stated. “Let us continue in the spirit of bipartisanship that enabled us to pass this bill and work together to meet the challenges we face as a nation.”
After months of disagreeing over how to pay for the $6 billion bill, legislators finally came together late this week over how the bill would be financed. About $5 billion of the cost will be offset by “smoothing,” a tactic that creates a “stabilization range” for employers to compute their pension liabilities and around $500 million collected by increasing Pension Benefit Guaranty Corporation fees.
Currently there are no limits in place for how many years a student could receive a Stafford loan subsidy, but $1.2 billion of the cost of the extension would be recovered by limiting access to the loan to six years for a 4-year degree.
“Republicans and Democrats worked hard to find common ground,” Senate Minority Leader Mitch McConnell, R-Ky., said Friday morning. “The agreement we’ve reached will ensure that college students who are already facing enormous challenges in the Obama economy won’t be paying higher interest rates next month.”
Tucked into the deal are two other critical pieces of legislation set to run out of money soon: the highway bill that has plagued both chambers and an extension of the National Flood Insurance Program, which was due to expire at the end of July.
As the hurricane season looms, the agreement extends funding for flood insurance until September of 2017.
For months, the House was unable to pass its version of the highway bill, instead opting eventually for a short-term extension to give negotiators another 90 days to work out a deal. But that temporary patch was set to expire Saturday, threatening federal highway and transit aid programs and the government’s authority to levy federal fuel taxes expire, and putting about 4,000 jobs at the Department of Transportation at risk.
The agreement funds federal highway, transit and highway safety programs at current levels through the end of FY 2014. It does not include earmarks or increase spending and is fully offset with many reforms included in the Senate-passed highway bill.
“We speed up project delivery, cut red tape, and do it without jeopardizing environmental laws,” Sen. Barbara Boxer, who led the negotiations from the Senate-side, said. “For the first time, we send half of the funds for bike paths and pedestrian walkways directly to local entities, and we protect those funds while giving states more flexibility on their share.”
The Keystone XL Pipeline was left out of the final deal, breaking off 52 hard-line House Republicans from supporting the deal. As a result House Democrats helped carry the vote, with none opposing.
Republicans are already promising another run at Democrats for opposing the pipeline, which they contend would create tens of thousands of jobs.
Copyright 2012 ABC News Radio
Heather Kelly, CNN Newswire
Alanna Petroff, CNN Newswire