By Richard Cowan and Roberta Rampton
WASHINGTON (Reuters) - Senate Democratic leader Harry Reid said on Tuesday odds are better than even that lawmakers can reach a last-minute compromise on a transportation spending package, but said it is up to the Republican-controlled House of Representatives to make the deal happen.
Federal funding for road, bridge and rail projects - and as many as 3 million construction jobs - expires on Saturday, putting lawmakers under pressure to either come to an agreement on a two-year package proposed by the Senate, or craft a short-term extension at current funding levels.
The political stakes are high. Neither Democrats nor Republicans want to be blamed for stalling a bill, which would hurt the economy ahead of the November 6 general election.
"There is a possibility that we can get that bill done. I think its chances today are better than 50-50 that we can get a bill done," Reid said on the Senate floor.
"But, we're still looking at Speaker (John) Boehner to help us get that over the finish line so we will see what happens on that," Reid said. Boehner is the top Republican in the House.
On Wednesday, senators involved in the talks, which are ongoing, said they might need to work through a Friday deadline to finish the package, or pass a very short-term extension to give staff a week or two to draft text.
The starting point for talks was a two-year, $109 billion transportation package passed by the Senate. Republicans have won some concessions to streamline environmental reviews for certain types of road projects, and to ease proposed regulations for coal ash, a power-plant byproduct used in cement.
But an outstanding hurdle has been a House Republican proposal to include a provision to fast-track approval of the Keystone XL crude oil pipeline from Canada.
President Barack Obama put the project on hold earlier this year pending further environmental review. He has threatened to veto legislation that would overturn his decision.
Senate negotiators have discussed ways to hold a separate vote on the pipeline.
After talks flagged last week, Boehner and Reid last urged their top negotiators - Representative John Mica and Senator Barbara Boxer - to give negotiations one last try.
Boehner has not commented this week on how talks are going.
"House negotiators, led by Chairman Mica, are continuing to work towards a bill that includes real reforms in the way we spend taxpayers' highway dollars - and common-sense jobs initiatives like Keystone," Boehner spokesman Michael Steel said.
Also in play as part of the talks is a one-year extension of an interest rate break for federal student loans, expected to be attached to the highway bill, or to an extension of current transportation funding, a senior Senate Democratic aide said.
Without that piece of the deal, interest rates on student loans are slated to double on July 1.
Reid said he hoped a student loan deal would soon be in place.
"The general feeling is we have worked out a compromise on that is acceptable," he said. (Additional reporting by Thomas Ferraro; Editing by Fred Barbash and Vicki Allen)