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White House Sees House GOP as Useful Foil

Michael Francis McElroy/Getty Images

In a year when President Barack Obama is basing his re-election campaign on the issue of fairness, the White House believes House Republicans are playing into their hands, time and again.

Senior administration officials in background briefings for reporters repeatedly turn to the fairness issue — and the Republican push for more tax breaks for the wealthy — as a key issue for voters heading into the fall elections. And the GOP keeps giving them more fuel.

First, Republicans doubled down on Rep. Paul Ryan’s (R-Wis.) budget blueprint with big cuts to Medicare, Medicaid and food stamps alongside steep reductions in tax rates. Last week, they brought House Majority Leader Eric Cantor’s (R-Va.) 20 percent tax cut for small businesses to the floor — which Democrats, backed by a stinging veto threat, gleefully ripped for giving tens of billions of dollars more to the rich regardless of whether they create jobs. A Senate Democratic plan backed by the White House would reward companies that hire more workers or buy new equipment.

This week, Obama will travel to three swing states — North Carolina, Colorado and Iowa — to call on Republicans to keep student loan rates from doubling this summer.

Obama tied the issue to the tax cuts in his weekly radio address.

“Republicans in Congress have voted against new ways to make college more affordable for middle-class families, and voted for huge new tax cuts for millionaires and billionaires — tax cuts that would have to be paid for by cutting things like education and job-training programs that give students new opportunities to work and succeed,” he said.

The student loan fight is the kind of ready-made issue — like the payroll tax cut extension last Christmas — that Democrats hope will force Republicans to the bargaining table. But even if they don’t win on the legislative front, Democrats believe they can continue to hammer home the message of fairness and investing in the future that Obama is making the centerpieces of his re-election campaign.

Unless Congress acts, 7 million students will face an average $1,000 a year in higher interest costs, Education Secretary Arne Duncan warned Friday during an appearance at the White House. A law passed in 2007 cut student loan interest rates, but it left a ticking time bomb — a doubling of rates on June 30 — just months before the 2012 elections.

Duncan said the issue should be the kind of thing that transcends partisan bickering.

“You know, Congress is struggling these days, there’s no question about that,” Duncan said. “And if there’s going to be one issue that folks can unite behind, I can’t think of ... a better one than around education, educating our way to a better economy.”

Rep. John Kline (R-Minn.), chairman of the Education and Workforce Committee, said in a statement Friday that Republicans are looking for a solution, but he didn’t sound inclined to support a stopgap bill, which would cost $6 billion.

“We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers,” he said. “I have serious concerns about any proposal that simply kicks the can down the road and creates more uncertainty in the long run.”

Duncan said Obama will have more to say about how to pay for it this week.

The differences between the two parties crystallized during last week’s floor fights over taxes. Democrats and the White House are looking to raise taxes on millionaires by $47 billion over a decade with the Buffett Rule, while House Republicans passed their $46 billion one-year tax cut.

Senate Majority Whip Dick Durbin (D-Ill.) made a direct link to the payroll tax fight.

“Remember the battle not that long ago, just a few months ago, when we wanted a 2 percent payroll tax cut for working families and ... the House Republicans were resisting us until the very, very end?” Durbin asked. Cantor’s tax cut bill was “good news for Donald Trump, good news for Oprah Winfrey, bad news for working families across America.”

Cantor’s bill broadly defines small businesses, which means billion-dollar businesses with fewer than 500 employees would be eligible for a tax break under his legislation.

The White House veto threat blasted the Cantor plan as potentially hurting job growth, not helping it, by encouraging owners to delay hiring to juice short-term profits.

Cantor countered attacks on the bill with a simple message: “We need to let small-business owners keep more of their hard-earned money so they can start hiring again,” he said on the floor. “Our bill puts more money into the hands of small-business owners so they can reinvest those funds to retain and create more jobs and grow their businesses. Plain and simple.”

The fight is sure to play out over the coming weeks, with Senate Majority Leader Harry Reid (D-Nev.) planning a vote on the Democratic alternative package after next week’s recess.

House Republicans, meanwhile, are scoring victories of their own. They point to last week’s veto-proof majority for a transportation bill with the Keystone XL pipeline attached as a stunning rebuke for the president. They ridiculed Obama’s rollout of yet another effort aimed at taming oil market speculation even as the White House struggled to point to evidence that such speculation exists and to explain why it hasn’t used powers the administration already has to tackle it.

The move was no more than a desperate attempt to distract from the increase in gas prices on the president’s watch, Republicans said.

They also jumped on signs of weakening growth. And with polls showing Obama in a close race with presumptive GOP presidential nominee Mitt Romney, Republicans see a White House floundering for issues.

“While the White House fritters away its time on gimmicks and tertiary issues, Republicans are driving an agenda focused on the things Americans care about — jobs and gas prices,” said Brendan Buck, spokesman for Speaker John Boehner (R-Ohio). “Trite catchphrases and empty slogans can only distract folks for so long.”

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