3:22pm

Tue June 26, 2012
Politics

Congress Taking Student Loans, Highway Bill To Wire

Originally published on Tue June 26, 2012 7:06 pm

Congressional leaders on Tuesday said they were close to a deal to solve two big issues facing lawmakers — student loan interest rates and federal highway funding.

Both issues with looming deadlines have high stakes for middle-income Americans: If Congress fails to reach agreements by this weekend, the federal highway program would come to a halt, and student loan interest rates would double, to 6.8 percent.

Student Loans

President Obama has been hammering on the issue of student loans for days.

"This issue didn't come out of nowhere; it's been looming for months," Obama said last week. "But we've been stuck watching Congress play chicken with another deadline."

This should be a no-brainer, the president said. If Congress doesn't act by July 1, more than 7 million students would see their interest rates double, costing them an average of $1,000 more per year.

Even more perplexing is the fact that almost everyone in Congress seems to agree that the interest rates should stay down.

So what's the problem? Well, how to pay for it. That's the root of just about every conflict in Congress these days. And it shows just how much the coming election plays into this year's policy debates.

Republicans want to pay for the lower interest rate by cutting money from health care programs. Democrats want to raise payroll taxes on wealthier Americans.

The Highway Bill

Then, there's the highway legislation. It's a massive bill — worth more than $100 billion to fund infrastructure projects for the next two years. It means thousands of construction jobs, and that's one reason three-quarters of the Senate voted for it earlier this year.

But in the House? Well, here's what Speaker John Boehner, the Ohio Republican, said after meeting with negotiators from his own party last week.

"They've been heavily engaged, and clearly there's some movement that's been under way," said Boehner, before quickly changing the subject during a Q-and-A with reporters. "So, we're continuing to do our work. Listen, the American people deserve the truth about what happened in 'Fast and Furious.' "

House Republicans seem far more interested in talking about the Justice Department's botched sting operation and a possible Thursday vote on whether to hold Attorney General Eric Holder in contempt of Congress.

Meanwhile, as negotiators try to work out thorny problems like construction spending and gasoline taxes, Washington's anti-tax guru has been lobbying Republicans hard, behind the scenes.

Grover Norquist, the head of Americans for Tax Reform, reminded many GOP lawmakers last week of their pledge not to raise taxes on anything, ever. Norquist exacted this pledge from nearly every Republican freshman elected in 2010.

Sen. Richard Durbin, D-Ill., the Senate's No. 2 Democrat, says that stance could jeopardize the highway bill altogether.

"All the good bipartisan work in the Senate is going to go for naught if the House Republicans, particularly the Tea Party Republicans, are gonna wait for the thumbs up from Grover Norquist," says Durbin.

When Senate Minority Leader Mitch McConnell, the Kentucky Republican, announced Tuesday afternoon that a deal was near on both standoffs, he had very little to say about the details.

He couldn't even say whether Congress would actually pass a highway bill or just extend the current one until after November's election: "That, to my knowledge, is not yet resolved, as to whether that will be some kind of extension or a full multiyear bill, but those two could end up together."

By "those two" he meant the highway funding and the student loan interest rate bill.

Negotiators are now debating whether to roll these two issues together and take one big vote on them. That might be easier, considering the huge distractions still to come this week: the Holder contempt vote, and Thursday's expected Supreme Court decision on the health care law.

As House Democratic leader Nancy Pelosi, D-Calif., put it, this week "so many things are coming together. Or not."

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Transcript

AUDIE CORNISH, HOST:

Congressional leaders announced today that they're close to a deal that might solve two big issues they're facing this week - student loan interest rates and federal highway funding. Both are high stakes issues for middle income Americans, which means in an election year, lawmakers have an incentive to resolve them. NPR's Andrea Seabrook tells us more.

ANDREA SEABROOK, BYLINE: Another deadline bearing down on Congress, another standoff between the parties. This time, the deadline is the last day of June, so if members of Congress don't come together on a deal by this weekend, the federal highway program will halt and student loan interest rates will double. Let's take student loans first.

President Obama has been hammering on it for days.

PRESIDENT BARACK OBAMA: This issue didn't come out of nowhere. It's been looming for months, but we've been stick watching Congress play chicken with another deadline.

SEABROOK: This should be a no-brainer, the president said. If Congress doesn't act, more than 7 million students will see their interest rates double, costing them an average of $1,000 more per year. Even more perplexing is the fact that almost everyone in Congress seems to agree that the interest rates should stay down. So what's the problem? Well, how to pay for it.

That's the root of just about every conflict in Congress these days and it shows just how much the coming election plays in this year's policy debates. Republicans want to pay for the lower interest rate by cutting money from health care programs. Democrats want to raise payroll taxes on wealthier Americans. Then there's the highway legislation. It's a massive bill worth more than $100 billion and it would fund infrastructure projects for the next two years. It means thousands of construction jobs.

And that's one of the reasons three-quarters of the Senate voted for it earlier this year. But in the House, well, here's what Speaker John Boehner said after meeting with Republican negotiators last week.

REPRESENTATIVE JOHN BOEHNER: They have been heavily engaged and clearly there is some movement that's been underway.

SEABROOK: Now, listen to how quickly Boehner changes the subject.

BOEHNER: So we're continuing to do our work. So the American people deserve the truth about what happened in Fast and Furious.

SEABROOK: House Republicans seemed far more interested in talking about the Justice Department's botched sting operation against illegal gun sellers and about the vote they plan for Thursday to hold Attorney General Eric Holder in contempt. Meanwhile, as negotiators try to work out thorny problems like construction spending and gasoline taxes, Washington's leading anti-tax activist, Grover Norquist, is working behind the scenes.

He reminded many GOP lawmakers last week of their pledge not to raise taxes on anything ever. Norquist exacted this pledge from nearly every Republican freshman elected in 2010, which, says Dick Durbin, the Senate's number two Democrat, could jeopardize the highway bill all together.

SENATOR DICK DURBIN: All the good bipartisan work in the Senate is going to go for naught if the House Republicans, particularly the Tea Party Republicans, are going to wait for the thumbs-up from Grover Norquist.

SEABROOK: So when Republican Senate leader Mitch McConnell announced this afternoon that a deal is near on both standoffs, he had very little to say about the details. He couldn't even say whether Congress will actually pass a highway bill or just extend the current one until after November's election.

SENATOR MITCH MCCONNELL: That, to my knowledge, is not yet resolved as to whether that will be some kind of extension or a full multi-year bill. But those two could end up together.

SEABROOK: By those two, he means the highway funding and the student loan interest rate bill. Negotiators are now debating rolling these two issues together and taking one big vote on them. That might be easier, considering the huge distractions still to come this week - that contempt vote and the Supreme Court decision on the health care law. As House Democratic leader Nancy Pelosi put it, this week, so many things are coming together - or not.

Andrea Seabrook, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.