With deadlines looming, Senate Majority Leader Harry Reid (D-Nev.) today suggested a pair of offsets that he hopes can be used to pay for legislation to prevent an increase in student loan interest rates and to pass a transportation spending bill.

“The combination of these two proposals will provide sufficient resources to fund both a one-year extension of the current student loan interest rate and reauthorization of the nation’s surface transportation programs,” Reid said in a letter to Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.).

“My preference would be to use the funds raised by these two proposals to pay for both measures, and pass them immediately — since as you know, both are critical to the economic security of middle class families, and both must be addressed before the end of June,” he added.

Congress has until July 1 to prevent the increase in student loan interest rates and has until June 30 before the transportation funding stopgap measure expires.

One offset would change the way employers calculate their pension liabilities.

“This more flexible approach would narrow fluctuations in computing pension contributions and result in businesses taking fewer tax deductions for contributions,” Reid wrote.

A similar provision was included in the transportation bill passed 74-22 the Senate in late March.

The second offset would boost Pension Benefit Guaranty Corporation premiums, a proposal that was also included in President Barack Obama’s budget proposal.

House and Senate conferees are trying to draft legislation that would fund transportation programs. Identifying a funding source for the transportation bill beyond the revenues generated by the federal gas tax remains an outstanding issue.

Senate Environment and Public Works Chairman Barbara Boxer said Tuesday that Senate Finance Chairman Max Baucus (D-Mont.), a member of the conference committee, “is working on it. It depends on whether we decide to do a one-year, two-year or three-year bill. They are preparing the alternatives for that.”

Another issue is whether to include approval for the Keystone XL pipeline, a 1,700-mile oil project that would pump Canadian oil to the refineries in the Gulf Coast.

Reid recommended that the offset be passed even if an agreement on the transportation bill cannot be reached soon.

“However, if House Republicans are still not ready to pass the transportation jobs bill, I suggest that we use part of these offsets to pay for the student loan legislation, and pass that measure immediately so that middle class families will not see their interest rates double on July 1st,” Reid said. “The remainder of these offsets will still be available to finish completion of the transportation jobs bill once the conference committee completes its work.”

Reid’s offer comes after Republicans wrote to Obama and Democrats offering offsets for the student loan bill.

The GOP offered two options to Democrats. The first, which Democrats said would be unacceptable, would offset the costs of the student loan bill with an increase to federal employee retirement contributions by 1.2 percent over three years.

The second option was a combination of three pay-fors: limiting the duration of borrowers’ in-school interest subsidy for Stafford loans, revising the Medicaid provider tax threshold and improving state and local pension collection information.

The GOP argued that all these were included in Obama’s 2013 budget proposal.

“While we still haven’t heard from the White House on our bipartisan proposal, we are encouraged to see the Majority Leader drop his insistence on taxing job creators,” a McConnell aide said.

Democrats have pushed for paying for the student loan bill by eliminating a corporate tax loophole that allows wealthy individuals to pay less in Social Security and Medicare taxes, which Republicans opposed.

“We will review these new proposals and hope that they will finally review the bipartisan proposals we sent a week ago,” the spokesman said. “But bottom line, now that Democrats are willing to take this issue seriously, and not just use students as props, we may be making progress.”

“And we were particularly surprised to see the Majority Leader acknowledge that forcing businesses to ‘redirect money away from job creation’ is bad for jobs,” the McConnell spokesman continued. “As tax hikes on job creators would certainly redirect funds from job creation, we hope that sentiment will continue and we renew our call for Democrats to join our effort to prevent the largest tax hike in American history.”