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A bill that would extend the current student loan rate is just the latest legislation stuck in partisan limbo despite support from both parties for the overall idea.
With as few as three legislative workdays left before its recess, the Senate has stalled on measures that have bipartisan support in theory but have hit roadblocks in practice, from the student loan rate bill to a small-business tax credit.
“Earlier this month, Republicans balked at an attempt to keep higher education affordable for 7 million students, but Democrats haven’t given up. I hope our Republican colleagues will come to their senses and allow us to prevent this crisis that affects 7 million young men and women before it’s too late,” Senate Majority Leader Harry Reid (D-Nev.) said on the floor Monday.
“We are frustrated with the slow pace of the Senate’s [action] to reauthorize the Violence Against Women Act, on Iran sanctions, on legislation to stop interest rates from doubling on federal student loans,” the Majority Leader said in a recitation of a laundry list of priorities that sounded like many other speeches he has given this year.
But the best example of how popular legislative ideas have stalled is the student loan rate.
The rates for some federal student loans are slated to double from 3.4 percent to 6.8 percent if Congress does not act by July 1. Though both parties believe the bill should get done, they disagree over how to pay for it. Republicans want to take funds from the health care law, and Democrats want to close a loophole on wealthy taxpayers who classify their pay as dividends in order to avoid certain kinds of taxes.
Now the parties can’t even agree on a vote schedule. Senate Democrats are open to having a vote on a House-approved bill that includes the health care funding provision, but only if Republicans agree to open debate on the underlying bill, which they already filibustered earlier this month on a 52-45 vote.
Republicans, meanwhile, have leveraged the Food and Drug Administration user fee bill to push for their own student loan amendment, which is essentially the House bill.
So in the tussle to rack up talking points to take home with them during recess next week, Republicans and Democrats have reached an impasse, with each side digging in on its view of how the calendar should proceed.
Democrats have little political incentive to allow a vote on the House-approved student loan measure before the Senate breaks. The House vote already took away momentum from the Democrats, who thought the loan issue was one they could own on the campaign trail. President Barack Obama even barnstormed on student loans in multiple appearances across the country, including on late-night television with NBC’s Jimmy Fallon.
Since then, Democrats have been oddly silent on the issue, with the Beltway small-talk of how to offset the legislation not a message that resonates as largely outside of Washington.
Republicans have been equally quiet but insist they still are working toward agreement.
“We are hoping to get a vote on our alternative ... in some fashion, I am not sure,” Senate Minority Whip Jon Kyl (R-Ariz.) said. “We are hoping to be able to do that this week.”
Meanwhile, the longer it takes to resolve the FDA user fee bill, which is considered must-pass legislation, the longer other issues have to stay on the back burner.
One of those issues is the small-business tax credit bill that was unveiled in March. Though leaders have repeatedly said they would like to approve the measure, which could garner bipartisan support, aides suggested that floor time continues to get put off because of other initiatives with stricter deadlines.
“It’s important, it’s not the only thing that has to be done that’s very important,” Senate Small Business and Entrepreneurship Chairman Mary Landrieu (D-La.) said. “That’s in Harry Reid’s department right now. I know that he’s intent on getting it to the floor. I think there was something that got in line before it, but he’s committed to bring that to the floor along with some other small-business pieces.”
The small-business tax credit legislation would provide a 10 percent income tax credit on new payroll in 2012 with a maximum increase in eligible wages of $5 million per employer and a cap of the amount of credit at $500,000. It also contains a depreciation provision that would allow for small businesses to write off the maximum amount of major purchases in the year they are made instead of depreciating those expenses over many years.