* Deal could link passage of highway funding, loans
* Compromise possible on regulations for coal ash
* Still unresolved: Keystone pipeline approval
By Roberta Rampton
WASHINGTON, June 23 With only a week to go until
funding expires for federal highway construction and student
loan rates soar, negotiators in Congress are working to cut a
deal that would defuse two political time bombs ahead of the
November general election.
"All I can confirm is that work continues through the
weekend, the goal being a final agreement that can get wrapped
up next week," a House of Representatives Republican aide said
Failure would have a direct impact on the economy ahead of
the Nov. 6 vote. About 3 million road, rail and transit jobs
hinge on the transportation funding bill.
Without a deal, interest rates for federal student loans are
set to double on July 1 to 6.8 percent.
Combining the programs into one package could increase the
political stakes, making it harder for lawmakers to vote no on
issues that resonate with many voters across the country.
There were signs that Democratic negotiators had offered
concessions on Republican demands to streamline environmental
reviews for certain types of road projects to speed
construction, said aides from both parties.
Also in play was a possible compromise to ease proposed
environmental regulations for coal ash, a byproduct of
coal-fired power plants used to lower the cost of cement and
other construction materials.
But the battle over the Keystone XL crude oil pipeline from
Canada to Texas continues to loom over the talks.
The crux of the matter is how to make a two-year, $109
billion transportation bill passed by the Democratic-controlled
Senate palatable to Republicans who control the House.
House Republicans want quick approval of the pipeline as
part of the transportation bill, which has put Democrats in a
President Barack Obama put the project on hold this year,
pending further environmental reviews, and has threatened to
veto legislation that would override his decision.
A majority of lawmakers on the negotiating committee will
have to agree to any package, which would then need to get a
majority of votes in the House and Senate next week. Then the
bill would go to the White House for Obama's signature.
"There's no excuse for inaction," Obama said in his weekly
address on Saturday. "Right now, we are seven days away from
thousands of American workers having to walk off the job because
Congress hasn't passed a transportation bill.
"We are eight days away from nearly seven and a half million
students seeing their loan rates double because Congress hasn't
acted to stop it. This makes no sense."
Before the weekend push, many lawmakers and analysts had
written off chances for an agreement, expecting instead a
shorter-term, stopgap highway funding measure lasting three or
six months. That still could happen.
Lawmakers have said a short-term extension of highway
funding would not likely include approval of Keystone.
House Republicans have already been exploring alternatives
for attaching the Keystone fast-track provision to other crucial
legislation this year.
(Additional reporting by David Lawder, Thomas Ferraro, Richard
Cowan, Alina Selyukh; Editing by Xavier Briand)