–Congress Confronts Deadlines on Transportation, Student Loan Bills
–Lawmakers Nervously Await Supreme Court Decision on Health Care
–Senate Takes Up Flood Insurance; House Works On FY’13 Spending Bills

By John Shaw

WASHINGTON (MNI) – With Congress’s Fourth of July recess looming
next week, lawmakers will try to complete and pass bills to reauthorize
the nation’s surface transportation programs and prevent an increase in
the interest rate for some student loans.

Congress will work on these and other legislative matters while
keeping a wary eye on the Supreme Court which is expected to rule
Thursday on the constitutionality of the 2010 health care law which
President Obama championed.

Regarding the student loan interest rate bill, congressional
leaders are exploring options to develop legislation that would prevent
a mandated increase in some student loan interest rates from going
forward.

Senate Majority Leader Harry Reid and Senate Minority Leader Mitch
McConnell are taking the lead in trying to craft a compromise.

Congress passed a bill in 2007 that was signed by President Bush to
temporarily reduce the interest rate on subsidized Stafford loans to
college undergraduates from 6.8% to 3.4%. That interest rate decrease is
set to expire July 1. Extending the interest rate reduction would cost
$6 billion for one year.

Obama has backed legislation extending the interest rate reduction
to 3.4%.

House Republicans have passed legislation that extends the student
loan interest rate reduction for another year and pays for the $6
billion cost by tapping funds from prevention and public health services
that were established by the 2010 health care law.

Reid has said that extending the student loan interest rate
reduction is important to seven million students and should be paid for
by ending a tax break for S corporations.

Now that the scheduled interest rate increase on July 1 is
approaching, leaders from both parties are actively exploring compromise
proposals to fund the package.

Reid has suggested two pension-related provisions to pay for the
package. Republicans have offered four suggested offsets.

The other matter which is the subject of intense bipartisan talks
concerns a bill to re-authorize the nation’s surface transportation
programs.

A House-Senate conference committee continues to work on drafting a
compromise transportation bill.

The Senate passed a two-year $109 billion surface transportation
bill. House Republicans unveiled a five-year $260 billion plan, but
never presented it to the full House.

House Speaker John Boehner has said that if an agreement can’t be
reached by the end of this month on a surface transportation bill, he
will push a stop-gap bill to fund current transportation programs until
after the November elections.

Another alternative is that Congress may pass a short-term
extension of transportation programs while the final multi-year package
is assembled and approved in July.

The full Senate will work on a flood insurance bill this week,
while the House is scheduled to work on several fiscal year 2013
spending bills.

The House may vote this week to hold Attorney General Eric Holder
in contempt of Congress for his actions related to the anti-gun running
operation called “Fast and Furious.”

In other action this week, the Senate Finance Committee and the
House Ways and Means Committee will hold a joint hearing Thursday at 10
a.m. ET on how capital gains taxes should be adjusted as part of a
broader tax reform effort. A host of academic and private sector experts
will testify.

The Senate Banking Committee will hold a hearing Tuesday at 10 a.m.
ET on protecting members of the armed services from financial fraud.

The House Budget Committee will consider legislation Wednesday at
10 a.m. ET requiring the president to send Congress a detailed report on
how the scheduled across-the-board spending cuts would specifically
affect government agencies and programs.

A House Financial Services subcommittee will hold a hearing
Thursday at 2 p.m. ET on fractional reserve banking and its impact on
monetary policy.

Another subcommittee of the Financial Services Committee will hold
a hearing Thursday at 10 a.m. ET on the housing appraisal industry and
how it affects the single-family mortgage market.

Yet another subcommittee of the House Financial Services panel will
hold a hearing Friday at 9:30 a.m. ET on mobile payment services.

** MNI Washington Bureau: (202) 371-2121 **

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