June 29--WASHINGTON -- Finding rare political accommodation on the cusp of a holiday recess, Congress passed legislation Friday designed to salvage 2.8 million jobs and shield students from a sharp increase in loan interest rates.

The legislation, which also revamps highway and transit programs and shores up the federal flood insurance program, now goes to the White House for President Barack Obama's signatures.

Lawmakers trying to leave town for a weeklong Fourth of July recess had been facing twin deadlines: Federal highway and transit aid programs and the government's authority to levy federal fuel taxes were expiring Saturday. And interest rates on new student loans were set to double on Sunday.

The burst of legislating came just four months before the November elections, giving lawmakers achievements to show off to voters who have increasingly held Congress in low esteem while the economy continues to flounder.

"We have a bill that will boost this economy. We have a bill that is supported by conservatives and liberals, progressives and moderates. I think it's a great day," said U.S. Sen. Barbara Boxer, D-Calif., who led Senate negotiations on the transportation portion of the package.

Boxer estimated the bill would save about 1.8 million jobs by keeping aid for highway and transit construction flowing to states and create another 1 million jobs by using federal loan guarantees to leverage private sector investment in infrastructure projects.

U.S. Sen. Ben Cardin, D-Md. said Mountain Maryland's economy will benefit from renewal of the federal transportation programs. "Completion of the north-south Appalachian Highway connecting I-68 to the Pennsylvania Turnpike and Corridor H in West Virginia is expected to create more than 12,000 new permanent jobs and 20,000 construction jobs in the three affected states. Our economy is still recovering and these jobs are more important than ever to the region," Cardin said.

U.S. Rep. John Mica, R-Fla., chairman of the Transportation and Infrastructure Committee, said: "Probably millions would have been put out of work if we hadn't acted."

Not all lawmakers were happy.

"At least it's not as bad as our Republican colleagues wanted," complained U.S. Rep. Earl Blumenauer, D-Ore., who has championed bike and pedestrian programs that the measure would squeeze. "But make no mistake, it is not a bill to be proud of."

In the bargaining that led up to an agreement on the package earlier this week, House Republicans gave up their demands that the bill require approval of the contentious Keystone XL oil pipeline and block federal regulation of toxic waste generated by coal-fired power plants. Democrats gave ground on environmental protections and biking, pedestrian and safety programs.

The bill consolidates various transportation programs and reduces the number of programs by two-thirds. States would have more flexibility on how they spend transportation aid.

It also revamps rules on environmental studies of the potential impact of highway projects, with an aim toward cutting in half the time it takes to complete construction projects. And the measure contains an array of safety initiatives, including requirements that would make it more likely passengers would survive a tour bus crash.

The bill would spend about $100 billion on federal highway programs over two years, but puts off the politically tricky decision on how to pay for them after that.

The federal 18.4 cent-a-gallon gasoline tax and 24.4 cent-a-gallon diesel tax are no longer enough to pay for current spending on highway and transit programs. And two commissions and an array of private sector experts have said the U.S. should be spending about twice as much or more on its transportation infrastructure as it does now.

Congressional bargainers reached an agreement earlier this week on the $6 billion college loan portion of the bill that would avert a doubling of interest rates beginning Sunday on federal loans to 7.4 million students.

The current 3.4 percent interest rate on subsidized Stafford loans would balloon back to 6.8 percent on Sunday under a cost-saving maneuver contained in a 2007 law.

About $20 billion of the measure's cost is paid for by making changes in companies' pension calculations that will reduce their tax deductions, and increasing the payments businesses must make to insure their pension programs.

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