Transportation, student loan bill passed
Congress emphatically approved legislation Friday preserving jobs on transportation projects from coast to coast and avoiding interest rate increases on new loans to millions of college students, giving lawmakers campaign-season bragging rights on what may be their biggest economic achievement before the November elections.
The bill sent to President Barack Obama to sign enables just over $100 billion to be spent on highway, mass transit and other transportation programs over the next two years, projects that would have expired Saturday without congressional action. It also ends a bare-knuckle political battle over student loans that raged since spring, a proxy fight over which party was best helping voters muddle through the economic downturn.
Under the bill, interest rates of 3.4 percent for subsidized Stafford loans for undergraduates will continue for another year, instead of doubling for new loans beginning on Sunday as scheduled by a law passed five years ago to save money.
Interest rates would have mushroomed to 6.8 percent for 7.4 million students expected to get the loans over the coming year. The rise would have added an extra $1,000 to the average cost of each loan and antagonized students -- and their parents -- four months from Election Day.
As usual for bills this size, the compromise ended up sprinkled with unrelated nuggets dealing with Asian carp, roll-your-own tobacco and federal timber aid.
The final transportation measure dropped a provision -- which had drawn an Obama veto threat -- that would have forced government approval of the controversial Keystone XL oil pipeline from Canada to the Texas coast. But it contains curbs on environmental reviews of transportation projects. Republicans had sought those in hopes of cutting construction time almost in half.
The bill consolidates federal transportation programs and gives states more flexibility in spending money from Washington. It also contains an array of safety initiatives, including new requirements aimed at buses. And it makes advocates of bike and pedestrian paths compete for money with other transportation projects.
Most of the overall measure was financed by extending federal taxes on gasoline and diesel fuel for two more years.