Speaker: House to vote Friday on student loans

ALAN FRAM

Asso­ci­ated Press

WASHINGTON — In an esca­lat­ing election-year clash, the House will vote Fri­day on a $5.9 bil­lion Repub­li­can bill pre­vent­ing inter­est rates on fed­eral stu­dent loans from dou­bling this sum­mer, paid for by cut­ting money from Pres­i­dent Barack Obama’s health care over­haul law.

Wednesday’s abrupt announce­ment by House Speaker John Boehner, R-Ohio, came with Obama and Democ­rats clam­or­ing daily for con­gres­sional action to pre­vent the cur­rent 3.4 per­cent inter­est rate on sub­si­dized Stafford stu­dent loans from auto­mat­i­cally increas­ing to 6.8 per­cent on July 1.

That increase, set by law unless Con­gress blocks it, would affect 7.4 mil­lion stu­dents at a time when both par­ties are com­pet­ing for the votes of young adults and their par­ents who must foot col­lege tuitions. Each is also try­ing to show vot­ers that it knows best how to shield peo­ple from pain inflicted by the weak economy.

With Obama engaged in a series of campaign-style speeches in recent days about the need to block the inter­est rate boost, Repub­li­cans came under even greater pres­sure when Mitt Rom­ney, the GOP’s pre­sump­tive pres­i­den­tial nom­i­nee, announced Mon­day that he, too, favored the move.

Also tak­ing the offen­sive were Sen­ate Democ­rats, who intro­duced leg­is­la­tion Tues­day block­ing the increase for a year. Sen­ate Repub­li­cans said they backed the idea of freez­ing the inter­est rate but opposed a tax on some pri­vate cor­po­ra­tions that Sen­ate Democ­rats would use to pay for it. Until Boehner’s announce­ment of Friday’s vote, Repub­li­cans had noth­ing tan­gi­ble they could vote for to demon­strate their support.

At a hur­riedly called news con­fer­ence, Boehner told reporters that Obama has been “try­ing to invent a fight where there wasn’t and never has been one” and said, “We can and will fix the prob­lem with­out a bunch of campaign-style theatrics.”

He added, “What Wash­ing­ton shouldn’t be doing is exploit­ing the chal­lenges that young Amer­i­cans face for polit­i­cal gain.”

Boehner spoke after Obama had wrapped up his third col­lege cam­pus visit in two days, using his cheer­ing young audi­ences as back­drops to laud Democ­rats’ efforts to keep stu­dent loans afford­able and to bash Republicans.

“Some of them sug­gest that stu­dents like you have to pay more so we can help bring down the deficit,” he said about Repub­li­cans on Wednes­day at the Uni­ver­sity of Iowa. “Now, think about that. These are the same folks who ran up the deficits for the last decade. They voted to keep giv­ing bil­lions of dol­lars in tax­payer sub­si­dies to big oil com­pa­nies who are rak­ing in record prof­its. They voted to let mil­lion­aires and bil­lion­aires keep pay­ing lower tax rates than middle-class workers.”

House Repub­li­cans would pay for their one-year mea­sure from a $17 bil­lion pre­ven­tion and pub­lic health fund Obama’s law cre­ated for immu­niza­tion cam­paigns, research, screen­ings and well­ness edu­ca­tion. Repub­li­cans have dubbed it a “slush fund” and sought to cut it to finance a vari­ety of projects that they favor. There is $13.5 bil­lion left in the fund for the com­ing decade, accord­ing to the administration.

The House GOP pro­posal ran into quick oppo­si­tion from the White House, where spokesman Nick Papas said the two sides should pay for the bill with sav­ings “that don’t penal­ize middle-class fam­i­lies or under­mine efforts to help more Amer­i­cans stay healthy.” Papas expressed con­fi­dence that an agree­ment could be reached.

House Minor­ity Leader Nancy Pelosi, D-Calif., said the GOP had made “a dra­matic rever­sal” because Repub­li­cans had pushed a fed­eral bud­get through the House that would have let stu­dent inter­est rates double.

Pelosi has opposed elim­i­nat­ing the health care fund, which was already cut ear­lier this year to help pay for leg­is­la­tion pre­vent­ing reduc­tions in Medicare pay­ments to doc­tors. But her state­ment stopped short of say­ing she would oppose the GOP bill on Friday.

“House Democ­rats will con­tinue to work to ensure that seven mil­lion stu­dents and their fam­i­lies do not face this harm­ful inter­est rate hike,” she said.

Sen­ate Democ­rats’ leg­is­la­tion would keep stu­dent loan inter­est rates at 3.4 per­cent for another year. It would be paid for by increas­ing the Social Secu­rity and Medicare pay­roll taxes owed by upper-income own­ers of some pri­vately held cor­po­ra­tions, includ­ing many lawyers’ and doc­tors’ practices.

Sen­ate Repub­li­cans have voiced adamant oppo­si­tion to that pay­roll tax pro­posal, say­ing it would make it harder for those firms to hire work­ers. But their lead­ers said they backed the goal of freez­ing inter­est rates for a year and accused Obama of try­ing to turn an eas­ily resolv­able issue into a polit­i­cal cudgel.

“Let’s be hon­est,” Sen­ate Minor­ity Leader Mitch McConnell, R-Ky., said on the Sen­ate floor. “The only rea­son Democ­rats have pro­posed this par­tic­u­lar solu­tion to the prob­lem is to get Repub­li­cans to oppose it, to make us cast a vote they think will make us look bad to the vot­ers they need to win the next election.”

McConnell said the two sides’ dif­fer­ences could be resolved if Obama would nego­ti­ate and “choose results over rallies.”

House Democ­rats also intro­duced a bill keep­ing the inter­est rates from ris­ing for a year and paid for by elim­i­nat­ing sub­si­dies to large oil and gas companies.

Under­scor­ing the free-swinging pol­i­tics in play, Obama said before Boehner’s remarks that House Repub­li­cans were indi­cat­ing that they would only extend the rate by cut­ting other stu­dent aid, a path the GOP did not follow.

With­out men­tion­ing him by name, Obama also took a swipe at Rep. Todd Akin, R-Mo., a GOP Sen­ate can­di­date who said the gov­ern­ment shouldn’t be involved in the stu­dent loan mar­ket and, Obama said, com­pared it to a “stage 3 can­cer of social­ism.” Obama said, “I don’t know where to start. What do you mean? What are you talk­ing about?”

Akin used the can­cer ref­er­ence at an April 21 forum to describe the fed­eral government’s involve­ment in areas he said should be left alone. He also crit­i­cized Democ­rats for elim­i­nat­ing pri­vate stu­dent loans and hav­ing that lend­ing taken over by the government.

Posted by AP News on Apr 25 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.