Congressional leaders on Tuesday said they were close to a deal to solve two big issues facing lawmakers — student loan interest rates and federal highway funding.

Both issues with looming deadlines have high stakes for middle-income Americans: If Congress fails to reach agreements by this weekend, the federal highway program would come to a halt, and student loan interest rates would double, to 6.8 percent.

Student Loans

President Obama has been hammering on the issue of student loans for days.

"This issue didn't come out of nowhere; it's been looming for months," Obama said last week. "But we've been stuck watching Congress play chicken with another deadline."

This should be a no-brainer, the president said. If Congress doesn't act by July 1, more than 7 million students would see their interest rates double, costing them an average of $1,000 more per year.

Even more perplexing is the fact that almost everyone in Congress seems to agree that the interest rates should stay down.

So what's the problem? Well, how to pay for it. That's the root of just about every conflict in Congress these days. And it shows just how much the coming election plays into this year's policy debates.

Republicans want to pay for the lower interest rate by cutting money from health care programs. Democrats want to raise payroll taxes on wealthier Americans.

The Highway Bill

Then, there's the highway legislation. It's a massive bill — worth more than $100 billion to fund infrastructure projects for the next two years. It means thousands of construction jobs, and that's one reason three-quarters of the Senate voted for it earlier this year.

But in the House? Well, here's what Speaker John Boehner, the Ohio Republican, said after meeting with negotiators from his own party last week.

"They've been heavily engaged, and clearly there's some movement that's been under way," said Boehner, before quickly changing the subject during a Q-and-A with reporters. "So, we're continuing to do our work. Listen, the American people deserve the truth about what happened in 'Fast and Furious.' "

House Republicans seem far more interested in talking about the Justice Department's botched sting operation and a possible Thursday vote on whether to hold Attorney General Eric Holder in contempt of Congress.

Meanwhile, as negotiators try to work out thorny problems like construction spending and gasoline taxes, Washington's anti-tax guru has been lobbying Republicans hard, behind the scenes.

Grover Norquist, the head of Americans for Tax Reform, reminded many GOP lawmakers last week of their pledge not to raise taxes on anything, ever. Norquist exacted this pledge from nearly every Republican freshman elected in 2010.

Sen. Richard Durbin, D-Ill., the Senate's No. 2 Democrat, says that stance could jeopardize the highway bill altogether.

"All the good bipartisan work in the Senate is going to go for naught if the House Republicans, particularly the Tea Party Republicans, are gonna wait for the thumbs up from Grover Norquist," says Durbin.

When Senate Minority Leader Mitch McConnell, the Kentucky Republican, announced Tuesday afternoon that a deal was near on both standoffs, he had very little to say about the details.

He couldn't even say whether Congress would actually pass a highway bill or just extend the current one until after November's election: "That, to my knowledge, is not yet resolved, as to whether that will be some kind of extension or a full multiyear bill, but those two could end up together."

By "those two" he meant the highway funding and the student loan interest rate bill.

Negotiators are now debating whether to roll these two issues together and take one big vote on them. That might be easier, considering the huge distractions still to come this week: the Holder contempt vote, and Thursday's expected Supreme Court decision on the health care law.

As House Democratic leader Nancy Pelosi, D-Calif., put it, this week "so many things are coming together. Or not."

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