Transportation spending is traditionally of bipartisan interest, which made the delay of a new transportation bill even more infuriating for those disenchanted with Washington gridlock. Yet a shimmer of hope that maybe our system isn’t broken is arising as Democrats and Republicans have come together, making key compromises, to piece together a new transportation bill that will be in effect for the next two years.

The newly announced agreement will extend federal highway funding while ending the debate about issues that the parties could not see eye to eye on:

The agreement will extend highway spending authority and the gas tax for roughly two years, sources said. But it comes at a price: Republicans had to drop their insistence that President Barack Obama approve the Keystone XL pipeline, and Democrats had to settle for allowing states to opt out of spending some funds on nonroad projects like bike and pedestrian paths. The GOP also rolled back its insistence on curtailing the EPA’s ability to regulate coal ash.

Both parties were summoned to the negotiating table in the past weeks to get this bill done before the July 4th recess. It will also be packaged with a bill that freezes student loan interest rates for a year. Without such action, interest rates would have doubled for many Americans next week (see our article from today) which President Obama labeled the equivalent of a $1,000 tax hike on 7.5 million students.

Republicans scored a victory when $1.4 billion was struck from the bill that would have gone to landscaping and bike path projects.

The extension of the highway funding bill prevents a situation where projects would have been disrupted at the height of construction season. Transportation conference committee chairwoman Barbara Boxer (D-CA) said the bill would preserve or create 3 million jobs in the construction industry.

“I am so glad that House Republicans met Democrats halfway, as Senate Republicans did months ago,” said Sen. Barbara Boxer (D-Calif.), the bill’s chief architect and advocate. “The bill is funded at current levels, and it will protect and create 3 million jobs.

“We speed up project delivery, cut red tape and do it without jeopardizing environmental laws,” Boxer said. “For the first time, we send half of the funds for bike paths and pedestrian walkways directly to local entities, and we protect those funds while giving states more flexibility on their share.”

Building and Construction Trades Department (AFL-CIO) President, Sean McGarvey, applauded the longer-term deal in a statement:

With significant infrastructure needs and unacceptable levels of unemployment in the construction sector, the enactment of this important legislation represents a significant legislative achievement that ends years of costly extensions, and prepares the foundation for a long-term surface transportation bill.

Lastly, the bill creates incentives for corporations to partner with government in funding infrastructure projects. This represents another bipartisan victory as private-public investment is an excellent way to fund such projects by combining government with business.

The proposed agreement marks the first time Congress has been able to pass a new transportation bill since 2005.