A bipartisan agreement was reached late Wednesday on a federal highway bill that includes provisions to prevent student loan rates from doubling as well as makes adjustments to defined benefit funding requirements.
The bill, the Surface Transportation Extension Act of 2012 (H.R. 4348), is headed for a vote in the House Rules Committee today and floor action is likely later in the day.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said the two-year bill “will make critical infrastructure investments across the country and support or create more than a million jobs.” The agreement, he said, “will also make a high-quality education affordable for millions of students across the country. We needed to reach across the aisle to get this done, and that’s exactly what we did.”
The final package funding the highway bill and the student loan rate provision, which is fully paid for, will cost $27.185 billion, Baucus said.
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Joe Lieber with Washington Analysis says that under the language currently being proposed in the highway bill, companies would be able to use the 25-year corporate bond average when determining the discount rate used to fund defined benefit plans. Under current law, he says, companies use the last two-year corporate bond average when determining their discount rate. Consequently, he says, companies’ discount rates will rise, meaning smaller pension contributions and higher net income.