Congress acts on highways, student loans and flood insurance in deadline deal
WASHINGTON – Facing a trio of deadlines and a Fourth of July holiday, Congress approved a compromise Friday to extend surface transportation programs, block an increase in student loan rates, and revamp the troubled flood insurance program.
The measure will “save” or create about 2.8 million jobs by renewing federal highway and transit programs, lawmakers said, and it delayed for a year the doubling of subsidized federal student loan interest rates, scheduled to increase to 6.8 percent on July 1 if Congress had not acted.
In Missouri alone, lawmakers said, the estimated 160,000 student borrowers in the 2012-13 school year and their families would have had to pay some $129 million extra if the interest rate had gone up.
At the last minute, negotiators of the House-Senate compromise on flood insurance dropped a controversial “residual risk” provision – opposed by many in the Metro East and some Missouri communities – that would have mandated flood insurance for homeowners who live behind approved levees. Illinois lawmakers, with Missouri allies, had successfully fought to kill that requirement.
In another significant step, lawmakers removed a problematic House provision to require approval of the Keystone XL pipeline, a mandate opposed by the White House. But they adopted an “accelerated decision-making” section – opposed by environmental groups – that streamlines environmental review of highway projects.
The House voted 373-52, on Friday to pass the highway/student loan/flood insurance conference report, which was supported by every Democrat who voted and all but 52 Republicans. Every U.S. House member from Missouri and southern Illinois voted yes, with the exception of U.S. Rep Todd Akin, R-Wildwood, who did not vote.
“This is the biggest jobs bill we will likely pass all year in this Congress, said U.S. Rep. Russ Carnahan, D-St. Louis. U.S. Rep. Jerry Costello, D-Belleville, conceded that “this has not been a perfect process and this is not a perfect bill.” But he said the final product was an improvement over the House GOP’s version – which would have reduced funding for road and bridge projects – and “is a good bill for Illinois and the nation.”
Shortly after the House acted, the Senate voted 74-19 to approve it. Missouri’s two U.S. senators and U.S. Sen. Dick Durbin, D-Ill, voted yes. U.S. Sen. Mark Kirk, R-Ill., still recovering from a stroke, did not vote. President Barack Obama is expected to sign the bill, which the White House praised for assuring that “millions of American students will avoid a $1,000 debt hike while millions of construction workers will be able to stay on the job.”
U.S. Sen. Claire McCaskill, D-Mo., called it “an important and good bill that reflects hard-fought compromise.” Sen. Roy Blunt, R-Mo., said the surface transportation portion – which includes a couple of amendments he pushed – “is completely transparent, streamlines the number of highway spending categories, and reforms the cumbersome environmental review process to prioritize federal spending.”
For his part, Durbin described the compromise as “a good bill for Illinois that sends much needed investment to our highway and mass transit systems and gives major infrastructure projects . . . an opportunity to compete for future federal funding.”
On student loans, most Missouri and Illinois lawmakers agreed that it was important to delay a hike in interest rates – at least until a longer-term funding solution can be found. To help pay for the year-long freeze, the government will begin charging interest on subsidized Stafford loans no more than six years after undergraduates start their college studies.
“Thank goodness the politicians standing in the way of this compromise finally agreed that Missouri's college students shouldn't pay drastically more for the chance at a better education and the job opportunities that come with that opportunity,” McCaskill said.
Missouri, Illinois fare well with surface transport
The surface transportation part of the bill continues the funding and maintenance of the nation’s federal highways, bridges and rail programs for the next 27 months, with a relatively small increase in funding after this fiscal year.
"It's a jobs bill," said U.S. Sen. Barbara Boxer, D-Calif., the committee chairperson who led Senate negotiations on the highway segment. She says the bill will save about 1.8 million jobs by continuing federal aid for highway and transit construction to states – and will create another 1 million jobs by using federal loan guarantees to leverage private sector investment in infrastructure projects.
While it authorizes more than $100 billion in federal highway and transport spending, the legislation postpones a decision on how to pay for the programs after fiscal 2014. Federal fuel taxes – 18.4 cents a gallon of gasoline and 24.4 cents a gallon of diesel fuel – would stay the same.
Carnahan said the final compromise means that “Missouri gets a bigger piece of the funding pie for transportation projects” than it would have under previous versions. He said the surface transportation provisions would channel more than $900 million a year into Missouri projects, preserving or creating an estimated 100,000 jobs in the state.
Durbin and Costello, in a joint statement, said that Illinois also would do well under the final bill, getting an estimated $4 billion total over three years for highways, including continued funding for the new Mississippi River bridge at St. Louis. The state would also get about $1.5 billion over three years for mass transit.
"After this extension, tens of thousands of folks across Missouri can keep their jobs upgrading and maintaining the roads and bridges we depend on every day," McCaskill said in a statement, adding that she was “disappointed that the bill does not include approval of the Keystone XL pipeline.”
Blunt said Missourians who want more certainty in federal policies should be pleased that “the bipartisan passage of this highway bill provides more of that certainty while allowing the federal government to fulfill its role of maintaining a healthy infrastructure.”
He said the final version includes his “off-system bridge” provision that sets up a dedicated revenue stream for bridges that are not on the federal-aid or nation highway system. More than one-third of Missouri’s off-system bridges are classified as deficient – the seventh highest percentage of problem bridges among states.
Blunt and House allies, including U.S. Reps. Blaine Luetkemeyer, R-St. Elizabeth, and Sam Graves, R-Tarkio, also helped push for a “farm vehicle exemption” that exempts farmers and ranchers from complying with commercial driver’s license requirements if they operate farm vehicles within 150 miles of their farm.
While Blunt and other GOP lawmakers praised the “accelerated decision making” part of the bill – to streamline the process of approving transportation projects – many environmentalists objected. Christy Goldfuss, a public lands expert at the liberal Center for American Progress, said it will curtail “the public’s ability to comment on the impacts of transportation projects for communities, ncluding on water, air and public safety.”
Metro East gets break in flood insurance
Another significant part of the conference report would revamp the troubled national flood insurance program over five years, ending in 2017. As subsidies are phased out, some flood insurance rates are expected to increase.
Critics say that the flood insurance program, now awash in $18 billion in red ink, has become a drain on taxpayers at a time of fiscal austerity.
The original Senate committee version of the bill would have set up a “residual risk” system that would have required communities that live behind even approved levees – such as residences in the American Bottoms areas in Metro East – to buy flood insurance even if they are certified.
This week, Durbin and Costello – both members of the House-Senate conference committee that negotiated the final version – were able to remove that “residual risk” section from the legislation. They had support from Illinois Republicans, including Kirk and U.S. Rep. John Shimkus, R-Collinsville, as well as lawmakers, including McCaskill and Blunt, from other river states.
Working with the bipartisan coalition, Durbin said he and Costello “were able to remove this proposal” from the final version. “We will continue to do everything we can to protect the investment that Metro East families and businesses have made to strengthen their levees and protect against floods.”
A spokesman for Kirk said “eliminating this provision means that Metro East families won't pay twice for flood protection -- first for levees and then again for mandatory flood insurance” -– a reference to the fact that Metro East counties had approved a sales tax that is paying for major improvements in their levee systems.
Opponents of the “residual risk” provision contend that homeowners and businesses living behind flood control structures already are paying for flood protection through infrastructure. Also, a mandatory insurance purchase rule would have ignored investment made by federal, state and local governments in infrastructure and created a disincentive for economic development in levee-protected areas.
McCaskill and Blunt also had urged Senate leaders to drop that section, which would have affected some Missourians living along the Mississippi, Missouri and other rivers. McCaskill said putting the flood insurance program on a better long-term footing was important to the state.
"Without this reauthorization, no one in a flood area could have bought, sold, or built a home, which in a state with so many lakes and rivers is something we couldn't allow to happen," McCaskill said. "That kind of limbo is bad for the economy and for Missouri families.”
While many insurance groups supported the “residual risk” provisions as a way of widening the pool of insured, spokespersons for SmarterSafer.org – a coalition of insurance, environmental and spending-watchdog groups – generally praised the final flood insurance package.
“Congress passing the extension of the national flood insurance program for five years is a momentous step towards better protecting our communities, environment and taxpayers,” said a SmarterSafer statement. “Reforms in the bill will guard lives and property, help ensure flood maps are accurate, phase out expensive subsidies, and allow the program to access private sources of financing.”