By John Crawley and Roberta Rampton
WASHINGTON (Reuters) - The U.S. Congress could begin voting as early as Thursday on a funding package covering highway construction, student loans, and flood insurance after reaching agreement this week on how to pay for the programs.
The agreement came just days before federal funding for transportation programs is set to expire, and ahead of a hike in interest rates on federal loans for college students.
The Senate could vote as early as Thursday on the 599-page bill, an aide said, while the House of Representatives is expected to vote on Friday.
The bill would extend funding for the National Flood Insurance Program to September 30, 2017. It had been set to expire at the end of July.
It also includes a one-year, $6 billion fix to prevent a doubling of interest rates on federal student loans.
Congress took more than two years to reach the point of finalizing a transportation bill, and only because the potential consequences of inaction proved too risky in an election year.
The bipartisan blueprint was largely crafted by the Democratic-led Senate and was in line with White House expectations.
One of the most liberal senators worked with one of the most conservative to convince other lawmakers to accept the deal, defying analysts who had predicted a short-term extension rather than a longer-term deal given the overheated political climate.
"This agreement provides stability and flexibility for the nation's transportation planners," said Democratic Senator Barbara Boxer, who chaired the negotiations, in a statement.
Senator James Inhofe, the top Republican on the Environment and Public Works Committee, has been credited with working with fiscally conservative House Republicans to find common ground.
"As with any compromise we didn't get everything we wanted, but I believe we truly have a good bill - one conservatives can be proud to support," Inhofe said.
The resolution was praised by business groups like the U.S. Chamber of Commerce. But environmental groups were unhappy that Republicans won some concessions on environmental reviews of highway projects.
Jettisoned in the final days of talks was a politically charged plan pushed by House Republicans to defy President Barack Obama and move ahead with the Keystone XL oil pipeline, which would run from Canada to Texas.
Republicans also lost out on another proposal that would have eased proposed environmental regulations on coal ash, a byproduct used in the construction industry.
In the past, there was less partisan fighting over highway funding because of the jobs associated with construction, and the practice of "earmarking," which guaranteed funding to projects requested by individual lawmakers.
Earmarks were banned last year, and highway funding fell victim to ferocious politics and shifting powers and allegiances in Congress.
Transportation leaders were at times convinced the gridlocked Congress was too divided to pass such a big bill without sweeteners so individual members could claim credit for infrastructure improvements in their states.
Their priorities in the end were to simply maintain current funding and give states some certainty about the financial commitment from Washington. States rely on federal transportation dollars to help them plan and carry out projects, especially road repairs.
(Additional reporting by Richard Cowan; Editing by Fred Barbash and Paul Simao)