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Cautious Optimism on Loans, Highway Bill

Congressional leaders were cautiously optimistic yet again Tuesday that an extension of transportation spending authority and a deal on student loan interest rates could be struck by midnight Wednesday, but several major stumbling blocks stand before an agreement, despite sunny pronouncements from negotiators.

With every hour of closed-door talks, the mood among aides shifted on whether an agreement could be reached to satisfy both House rules on how long legislation needs to be posted before a vote and the Saturday deadline for both big-ticket items.

In public statements, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) conceded that a deal on extending the current student loan interest rates, set to double July 1, is imminent. But negotiators still aren’t sure how to proceed, whether to tie the measure to the transportation bill or to move it separately if it appears that bill is flailing.

“We have to have an agreement by tomorrow. Otherwise, we can’t get the bill done. And we’re very close to having everything done, but until we get everything done, nothing is done,” Reid said Tuesday. “I appreciate the House Republicans working so well. I know we can pass a bill. But as I told my caucus, everyone has to be very, very patient now and wait and see how the process works out.

“It won’t include everything we did here in the Senate. I’m sure of that,” Reid continued before saying he was convinced it could be a good bill.

Perhaps the statement, including rare praise for House Republicans, was a warning to Reid’s rank and file who have expressed consternation about the GOP’s demands for easing environmental rules beyond changes already agreed to in the Senate’s $109 billion, two-year bill.

Senate Democratic leaders have long expressed the opinion that House Republicans would have to come closer to their position, given the broad bipartisan vote in the Senate in March. House GOP leaders never brought Speaker John Boehner’s (Ohio) highway offering to the floor, and the 74 votes the Senate bill garnered have left many rank-and-file Democrats in no mood to give more to House negotiators.

Most of the GOP grievances are based on long-argued items not included in the Senate bill, chiefly the Keystone XL oil pipeline, but other points of contention include language easing coal ash regulations and changing the way environmental permits are processed.

Environmental streamlining changes were the focus of talks over the weekend, sources said, and have been discussed more widely. Reid acknowledged he has fielded concerns from those worried about environmental issues, but he warned that the people who are complaining haven’t read the bill text — largely because it hasn’t been agreed to or written yet.

“I have received calls from a number of my Senators, people outside the Senate. We have concerns about a lot of things, but they don’t know what’s in the bill,” Reid said. “I’ve tried to alleviate the concerns that my Members have until they see what’s in the bill. And in the meantime, as I said before, everyone has to just kind of sit still and see what the negotiators work out.”

The idea that leaders will pair the transportation effort directly with the student loan effort gained momentum Tuesday, weeks after it was first floated by Reid to Republicans as a way to pay for the package.

Time is running short to extend both measures, which expire at the end of this month, and Members and their staffs are concerned about the firestorm of issues that will consume Capitol Hill on Thursday, from the Supreme Court’s ruling on President Barack Obama’s signature health care law to a House vote on whether to hold Attorney General Eric Holder in contempt of Congress.

Sources are worried that if a deal isn’t hammered out by tonight it will cause problems on multiple fronts. First, negotiators would blow past the House Rules deadline that states any bill needs to be posted for three legislative days before the chamber can vote. Moreover, there won’t be enough time or breathing room to vet major deals that affect millions of jobs in highway construction and put millions of students on the hook for a doubling of student loan interest rates.

McConnell said Tuesday that the White House has not been involved in negotiations, and some Republican aides speculated that there was division among administration officials over whether to strike a deal or let Congress fail and blame the GOP. Democrats insist that the narrative of an obstructionist Republican Party already has been set and that they are focused on making sure these important provisions do not lapse.

“We’re moving toward completion this week of both the extension of the student loan rates at the current level for another year. The president’s been largely uninvolved in that, but Sen. Reid and I have an understanding that we think will be acceptable to the House,” McConnell said. “They may or may not be coupled with the highway proposal over in the House. That, to my knowledge, is not yet resolved as to whether that will be some kind of an extension or a full multiyear bill, but those two could end up together. Both need to be dealt with this week.”

The White House released a statement praising any deal on loan rates: “We’re pleased that the Senate has reached a deal to keep rates low and continue offering hard-working students a fair shot at an affordable education.”

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