Congress has quickly passed a series of bills, consolidated into one package, that freezes federal student loan interest rates at 3.4% for one year, and extends surface transportation funding for two years. The package also reauthorizes the federal flood insurance program for five years. Congress was clearly eager to get out of town for the Fourth of July recess, because they passed this giant package, in both chambers, in one day.

“We have a bill that will boost this economy. We have a bill that is supported by conservatives and liberals, progressives and moderates. I think it’s a great day,” said Sen. Barbara Boxer, D-Calif., who led Senate negotiations on the transportation portion of the package.

Boxer estimated the bill would save about 1.8 million jobs by keeping aid for highway and transit construction flowing to states and create another 1 million jobs by using federal loan guarantees to leverage private sector investment in infrastructure projects.

Rep. John Mica, R-Fla., chairman of the Transportation and Infrastructure Committee, said: “Probably millions would have been put out of work if we hadn’t acted.”

These are optimistic estimates. As I’ve said all along, it’s better than good, it’s done. Refer back to my longer piece on the three-bill package.

You could call the pension changes that fund much of the bill that isn’t funded by the extension of the gas tax an increase in business taxes. Businesses don’t seem to mind it, because they can change their designations of what counts as pension expenses, saving them more money down the road. Basically, corporations can reduce their pension contributions over time. This reduces their tax deductions, which is how it increases federal revenue, but it also reduces the contributions which isn’t exactly good news for workers.

The measure would allow companies to calculate their pension contributions using a modified average of the interest rates that have prevailed over the last 25 years. The current statutory practice is to average interest rates over just two years. This seemingly small and technical change has a powerful effect on pension calculations, and, by extension, on tax revenue.

A 25-year average rate would be around 7 percent, capturing the tail end of the 1980s, when interest rates were very high. Even with the modification that would let companies plug a higher rate into their pension calculations, making the plans look better funded and reducing the required contributions.

While 25-year averages are perhaps an anomaly, 2-year averages are certainly one! We’re in the midst of a zero interest-rate policy at the Fed.

As I said, better than good, done. But it doesn’t solve long-term problems like the increasing need for student loans to finance runaway costs in higher education, or the need to come up with some mechanism beyond the current gas tax to finance highway projects. Those issues get kicked down the road.

…Incidentally, to clear up a misconception, the $1,000 on average that students would have paid in the event of the rates doubling is spread out over the life of the loan, typically around 10 years. So you’re talking about $100 a year. That doesn’t mean you do it, but some commentators are saying this avoids a $1,000 annual hike, and that’s just not true.