Differences Persist in Congress’ Struggle to Extend Student Loan Rate

Differences Persist in Congress’ Struggle to Extend Student Loan Rate -  The top congressional leadership was out in full force today as leaders from both political parties in both chambers of Congress promoted the position of their respective caucuses in the latest battle over congressional funding on Capitol Hill.

At issue is finding an amicable way to pay for or offset the costs of extending the current student loan interest rate of 3.4 percent, rather than permitting the rate to double on July 1 to 6.8 percent.

Republicans and Democrats have both proposed alternative methods to cover the cost of the extension and, judging by their comments today, a huge gulf remains between the two parties. While House Speaker John Boehner, R-Ohio, announced Wednesday that the House would vote Friday on a one-year extension that is paid for by pulling funds from the president’s health care law, Democrats prefer to raise taxes on small businesses in order to cover the $6 billion cost of a one-year extension.

Senate Majority Leader Harry Reid, D-Nev., said he was “very disappointed” in Boehner’s plan to hold a vote on the GOP’s bill Friday, telling reporters that covering the cost by pulling from preventive health care funds “doesn’t sound like a very good deal to me.”

“We simply want to renew this, and it’s the right thing to do. This affects 7 million students. They’ll get an average of about $1,000 a year increase in their interest and that’s a lot [for those] struggling to get through school,” Reid told reporters today on Capitol Hill. “We believe there’s an easy solution. We can pay for this with a tax that people who make a lot of money have been avoiding for a long time by changing from ordinary income, they put this into sub-chapter S and avoid taxes.”

New York Democratic Sen. Charles Schumer, the No. 3-ranked Democrat in the Senate, said that the House’s way of paying for the rate is a “poison pill” that stands no chance of passing the Democrat-controlled Senate.

“If it’s true Republicans support stopping the rate hike, they have a weird way of showing it. In the House, the proposal they’re advancing has a poison pill attached to it,” Schumer said. “Their offset is a partisan proposal that tries to refight the debate over the president’s health care law. That’s not a serious attempt to pass this student loan bill.”

Schumer complained that Republicans are attempting to force Democrats to “choose between helping students afford college tuition or forcing women to go without mammograms.”

“They want to give to the middle class, but only when they take from the middle class and that’s because they don’t want to touch their true constituency, the wealthiest people in America who at every turn they try to make their lives even better,” he said. “They’re not the people who need help in America.”

House Minority Leader Nancy Pelosi, D-Calif., also does not like the House GOP’s proposed way of finding the money, instead proposing to cover the cost by taking subsidies from Big Oil and gas.

Coupled with the Senate Democrats’ way of paying, the House GOP is faced with two alternatives that aides say are poison pills in the House. Asked if he could think of any other offsets that might win bipartisan support in both chambers of Congress, Reid indicated he had exhausted all options.

“If I had come up with that, I would have put it in the bill,” Reid said incredulously. “The point is Republicans oppose anything that increases taxes even for people who manipulate the system and have been doing it for a long time. Republicans, I’ve indicated, will not vote for any tax increase no matter how fair it is. [Speaker Boehner] calls the preventive care a slush fund? I mean, they should be ashamed of themselves. This is saving people’s lives, saving the country huge amounts of money.

“We’re doing the right thing,” he added. “We want this done, we think it’s important it’s going to be done and we’re not going to back off until we get it done.” ( ABC News )