GOP blocks Senate debate on Dem student loan bill

Clarise McCants of Philadel­phia, a Howard Uni­ver­sity polit­i­cal sci­ence major, cen­ter, flanked by Sen. Sher­rod Brown, D-Ohio, left, and Sen. Jack Reed, D-R.I., right, and accom­pa­nied by stu­dents, speaks dur­ing a news con­fer­ence on Capi­tol Hill in Wash­ing­ton, Tues­day, as the Sen­ate moves toward a show­down on a Demo­c­ra­tic pro­posal to keep fed­er­ally sub­si­dized loan inter­est rates from dou­bling for mil­lions of col­lege stu­dents. (AP Photo/J. Scott Applewhite)

ALAN FRAM

Asso­ci­ated Press

WASHINGTON — Sen­ate Repub­li­cans derailed a Demo­c­ra­tic bill on Tues­day that would keep inter­est rates on fed­eral col­lege loans from dou­bling July 1 in an election-year bat­tle aimed at the hearts — and votes — of mil­lions of stu­dents and their parents.

Repub­li­cans said they favor pre­vent­ing the inter­est rate increase but blocked the Sen­ate from debat­ing the $6 bil­lion mea­sure because they oppose how Democ­rats would pay for it: Boost­ing Social Secu­rity and Medicare pay­roll taxes on high-earning stock­hold­ers of some pri­vately owned corporations.

GOP sen­a­tors want a vote on their own ver­sion head­ing off the inter­est rate increases and paid for by elim­i­nat­ing a pre­ven­tive health fund cre­ated by Pres­i­dent Barack Obama’s 2010 health care over­haul. That financ­ing idea has no chance of pass­ing the Democratic-run Sen­ate and has drawn a veto threat from the White House.

Tuesday’s vote was 52–45 in favor of start­ing debate on the Demo­c­ra­tic leg­is­la­tion — eight votes shy of the 60 needed. Sen­ate Major­ity Leader Harry Reid, D-Nev., was the only one to defect his party’s posi­tion, a pro­ce­dural move that will allow him to hold the vote again should the two sides work out a deal later.

The vote was largely sym­bolic because the Demo­c­ra­tic bill had no chance of approval by the GOP-led House.

The mea­sure would extend today’s 3.4 per­cent inter­est rate on sub­si­dized Stafford loans for another year. Those rates would grow to 6.8 per­cent with­out con­gres­sional action, thanks to a 2007 law that grad­u­ally low­ered those rates but expires on July 1.

Dur­ing a stop at the State Uni­ver­sity of New York in Albany, Obama tried rais­ing pres­sure on law­mak­ers to act.

“Before they do any­thing else, Con­gress needs to keep stu­dent loan rates from dou­bling for stu­dents who are here and all across the coun­try,” he said. He added, “Don’t let pol­i­tics get in the way. Get this done before July 1.”

Both par­ties know full well that they will need a bipar­ti­san pact on financ­ing the mea­sure. They are both moti­vated to strike such an agree­ment because in the months before this November’s pres­i­den­tial and con­gres­sional elec­tions, nei­ther wants to be blamed for let­ting col­lege costs grow for stu­dents and their fam­i­lies strug­gling in today’s weak economy.

But before they strike a com­pro­mise — which both par­ties believe will hap­pen before July 1 — both were eager to use the debate to score par­ti­san points.

Sen­ate Minor­ity Leader Mitch McConnell, R-Ky., said Democ­rats were forc­ing that vote as “a way to drive a wedge between Repub­li­cans and a con­stituency that they’re look­ing to court ahead of November’s elec­tions. That’s what today’s vote is all about for them.”

McConnell said the Sen­ate “has ceased to be a place where prob­lems are resolved. It’s become, instead, a place where Democ­rats pro­duce cam­paign material.”

Reid said he might be will­ing to allow a vote on the GOP bill. But he also crit­i­cized Repub­li­cans for oppos­ing the Demo­c­ra­tic plan.

“They’re send­ing a clear mes­sage that they’d rather pro­tect wealthy tax dodgers, and that’s what they are, than help promis­ing stu­dents achieve their dreams of higher edu­ca­tion,” Reid said.

Both lead­ers acknowl­edged that a bipar­ti­san agree­ment on how to finance the leg­is­la­tion was needed for the effort to advance, but each dared the other to pro­pose such a plan.

“If they want some other way to pay for it, let’s take a look at that,” Reid said.

McConnell said Democ­rats should sup­port the GOP pro­posal “or at the very least offer a bipar­ti­san solu­tion of their own.”

The fight over stu­dent loans has become a high-profile, sym­bolic tus­sle over which party wants to do more for Amer­i­cans scroung­ing to get by at a time jobs are hard to find, and each side is happy to force the other to take embar­rass­ing votes.

With both par­ties focused on this November’s pres­i­den­tial and con­gres­sional elec­tions, it is no coin­ci­dence they each have cho­sen to pay for their bill with a favorite tar­get that they believe speaks to their core vot­ers: Democ­rats going after higher rev­enues from the rich, Repub­li­cans try­ing to punch a hole in Obama’s health care overhaul.

Sub­si­dized Stafford loans are for low– and middle-income stu­dents. The higher rates, should they occur, would only affect stu­dents tak­ing out new loans start­ing July 1.

Democ­rats who con­trolled Con­gress in 2007 and wrote the stu­dent loan law allowed the lower inter­est rates to rise again this sum­mer because they felt it would have been too expen­sive to per­ma­nently reduce those rates.

The Edu­ca­tion Depart­ment esti­mates 7.4 mil­lion stu­dents will bor­row $31.6 bil­lion in such loans in the year begin­ning July 1, aver­ag­ing $4,226 for each student.

These loans gen­er­ally are paid off over a decade or more after grad­u­a­tion. Allow­ing inter­est rates to dou­ble would cost the typ­i­cal stu­dent about $1,000 over the life of the loan, the admin­is­tra­tion says.

Posted by AP News on May 8 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.