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Sen. Reid suggests deal to pay for transportation, student loan extensions
Senate Majority Leader Harry Reid (D-Nev.) said Thursday that Congress should consider combining reforms to pension contributions with a proposed surface transportation bill that appears stalled in House-Senate negotiations.
In a letter to House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.), Reid said his preference would be for Congress to reach an agreement on transportation funding by itself.
But failing that, Reid said combining an increase in the amount paid for premiums on retirement plans backed by the Pension Benefit Guaranty Corporations with the transportation bill that passed the Senate earlier this year would provide enough money for highway funding and extending student loan interest rates that are set to double in July.
"I read your letter of May 31 to President Obama on student loan interest rates, in which you said, 'in the interest of finding common ground on a way to pay for a one year extension of the current student loans rate we are open to other solutes that we have all supported in the past,'" Reid wrote. "In that spirit, I want to offer another bipartisan proposal that recently passed the Senate with strong support from Republicans."
"My preference would be to use the funds raised by these two proposals to pay for both measures, and pass them immediately - since as you know, both are critical to the economic security of middle class families, and both must be addressed before the end of June," Reid wrote to the GOP leaders.
"However, if House Republicans are still not ready to pass the transportation jobs, I suggest that we use part of these offsets to pay for the student loan legislation, and pass that measure immediately so that middle class families will not see their interest rates double on July 1," he continued. "The remainder of these offsets will still be available to finish completion of the transportation jobs bill once the conference committee completes its work."
The deadline for the student loan interest rates to double from 3.4 to 6.8 percent is the same as the scheduled expiration of the current fund for road and transit projects. The House has passed a subsequent extension of transportation funding through Sept. 30, but the Senate has not yet taken up the measure.
A spokesman for McConnell said Thursday that the Senate GOP leader would consider Reid's proposal to avoid both deadlines.
“We will review these new proposals and hope that they will finally review the bipartisan proposals we sent a week ago,” McConnell spokesman Don Stewart said in a statement. “But bottom line, now that Democrats are willing to take this issue seriously, and not just use students as props, we may be making progress.”
Boehner spokesman Michael Steel said the speaker would also be willing to consider the offer from Reid too.
"We look forward to the Senate considering Senator Reid's proposal - and if the Senate passes it, we will address it,” Steel said in a statement.
Bernie Becker contributed to this report.
