In a rush of activity before the Fourth of July break, Congress approved a measure that provides $120 billion in federal highway funding over the next two years and freezes federal student loan interest rates for at least one more year, averting a major election-year political embarrassment with voters.

In addition to providing Maine transportation officials with long-term planning assurances, the federal highway bill continues $6 million in critical funding for Amtrak’s Downeaster rail service as well as exemptions needed to continue daily operations at Portland’s Metro bus service.

Without the exemption, Metro officials were facing the prospect of asking for additional financial support from member towns or raising rider fares.

“If we were going to maintain the same level of service, then we would need to make other arrangements,” said Steve Kirby, finance director at the Greater Portland Transit District.

House and Senate leaders have been scrambling to cobble together compromises on major issues before the weekend, which marked both the beginning of Congress’ scheduled break and several key deadlines.

Millions of college students across the country – including an estimated 35,000 in Maine – were on the verge of seeing the interest rates on their federally backed student loans double from 3.4 percent to 6.8 percent on July 1 unless Congress acted. The rate increase would have added, on average, $1,000 to the amount students would owe over the life of loans taken out after today.

Lawmakers on both sides supported maintaining the current rate, but the two parties disagreed on how to pay the $6 billion cost. Lawmakers incorporated the resulting compromise on student loans as well as a five-year extension of a national flood insurance program into the highway funding bill in order to speed passage of the measures.

It was also a chance for Congress to show voters that, despite recent bitter partisanship, they can get work done.

“I think it sends a tremendous signal to the people of America and that is, ‘We can work together. Don’t give up on us,’” Sen. Barbara Boxer, a California Democrat, said moments after the 74-19 vote on the bill. The House voted 373-52 in support of the bill.

The “federal surface transportation project authorization bill” essentially flat-funds highway construction for the next 27 months.

Maine is expected to receive roughly $178 million next year and $180 million in 2014 under the funding plan, according to U.S. Rep. Mike Michaud, D-2nd District. Federal highway funding bills typically do not contain earmarks for specific projects, however.

The last multi-year federal highway funding bill expired in 2009, and Congress has been authorizing temporary extensions ever since.

“I’d much rather see a more robust transportation bill, but the bottom line is we have already had nine (short-term) extensions,” Michaud, a member of the House Transportation and Infrastructure Committee, said in an interview. “And a two- to three-month extension is not good for contractors or for the state departments of transportation that need to do long-term planning.”

Progress on the highway bill was being closely tracked by Maine transportation officials and contracting companies.

“The short-term extensions are difficult because they don’t provide any predictability,” said Maria Fuentes, executive director of the Maine Better Transportation Association, an industry trade group.

“What is good about this is that, for the next 27 months, they will know that their apportionments are.”

The bill passed by Congress does feature provisions to protect funding for the Downeaster train service and Portland’s Metro service.

Members of Maine’s congressional delegation worked to incorporate language into the bill that extends federal funding for the Downeaster service between Boston and southern Maine. The program has received $6 million a year, money that was due to expire.

Portland Metro, meanwhile, was facing changes to the way it could use federal funds due to recent population growth. Under federal rules, urban areas with populations of 200,000 or larger can no longer use the federal funds to cover daily operational expenses at mass transit programs. Instead, the money must pay for capital costs, such as new buses or infrastructure.

The Metro system carries about 1.4 million riders a year.

Kirby, the Portland transit system’s finance director, said the $1.3 million Metro received this year represents about 24 percent of the budget, and 90 percent of that money was used for operational expenses.

Delegation members inserted language exempting the Portland metro area from the rule.

“The federal funding that Downeaster and Metro bus service have been getting over the years has been essential to their operation and to cut it off now, when state and local budgets are tight, would have been devastating,” U.S. Rep. Chellie Pingree, D-1st District, said in a statement.

Pingree is married to S. Donald Sussman, majority share owner of the Portland Press Herald/Maine Sunday Telegram.
 
Staff Writer Kevin Miller can be contacted at 317-6256 or at:

kmiller@mainetoday.com