Just to set up this week, we’re going to see verdicts in two major Supreme Court cases, on the health care individual mandate and the Arizona immigration law; a contempt vote in the House against Attorney General Eric Holder; and in Congress, we have deadlines on two important pieces of legislation, the transportation funding bill and the student loan interest rate bill. Of all that, we’re probably closest to getting a satisfactory outcome on that interest rate bill, as Senate leaders have approached a deal to avoid a doubling of the interest rate.
Senate leaders have effectively reached an agreement to freeze student-loan interest rates at 3.4 percent for one year, staffers briefed on talks said on Friday evening.
“There is deal that is being finalized right now,” a Senate Democratic aide said. “Right now, what they are doing is crossing t’s and dotting i’s.”
An official announcement of the agreement is expected on Monday or Tuesday.
Extending the interest rate at 3.4% for one year costs about $6 billion, and the holdup has always been on how to pay for it. The deal will include a mix of pay-fors from both sides. At least $1.2 billion would be covered from cutting off subsidized loans after six years. Most of the rest would come from changes to how pensions are calculated, which would lower certain business tax deductions, and increases in premiums to the Pension Benefit Guaranty Corp.
But time could still run out. First of all, the Congressional Budget Office needs to score the package. And John Boehner has not been involved in the talks on the House side. We’ve seen before deals worked out between the parties in the Senate, only to falter in the House. And in this case, there’s only a week to get it all done. There are also other bills in line ahead of this for the Senate floor, like a flood insurance bill and a must-pass FDA user fee bill. If a mischievous Senator decides to force a cloture vote, you may not see this come out of the Senate until Thursday or even Friday.
So students still can fret the fact that their loan rates could double by the end of the week.