Senate Democrats are highlighting their efforts to avoid an increase in student loan interest rates over the recess as they look to position themselves against House Republicans who have proposed a different offset.
In a conference call today, Sen. Sherrod Brown (D-Ohio) argued that a bill approved by the Republican-run House last week would cost more money in the long run because it would seek to pay for the measure by eliminating a fund in the 2010 health care overhaul that covers prevention and public health. Both Senate Democrats and House Republicans are seeking a compromise to pay for the $6 billion cost of keeping Stafford loan interest rates at 3.4 percent.
“In the end, [the House measure] will cost taxpayers and insurance companies and individuals way more money” because preventative care is less costly than caring for individuals who have illnesses that could have been managed with preventative measures, Brown said.
The House approved the bill Friday by a vote of 215-195. The bill received 13 Democratic votes and all but 30 Republicans supported it.
The White House has threatened to veto the House bill, calling it a “politically motivated proposal and not the serious response that the problem facing America’s college students deserves.”
Next week, Senate Democrats will consider a bill that would prevent a doubling of the current 3.4 percent interest rate and cover the cost by eliminating a corporate tax loophole that allows wealthy individuals to pay less in Social Security and Medicare taxes.
Brown, a co-sponsor of the Senate bill, said he is encouraged that presumptive GOP presidential nominee Mitt Romney has indicated he, too, wants to keep the interest rate at 3.4 percent.
He pointed out that, as governor of Massachusetts, Romney embraced a similar offset to the one in the Democrats’ bill. Brown said he hopes that Romney’s past position can help influence Republicans, particularly in the Senate. Democrats, who control 53 votes in the Senate, will need at least seven Republicans to overcome a filibuster of their student loan bill.
“We know that Gov. Romney has said we should keep it at 3.4 [percent],” Brown said. “We know that Gov. Romney in the past has supported closing these tax loopholes ... as governor of Massachusetts and did some of that. He called it closing loopholes and not a tax increase.
“So we are hopeful that Gov. Romney can have the influence with the House Republicans and the Senate Republicans in getting cloture by doing this the right way. Not going after [health care] prevention.”
Sen. Patty Murray (Wash.), who runs the Democratic Senatorial Campaign Committee, also held an event today at the University of Washington.
“Unless Congress acts, interest rates for many here at @UW, & 100k+ across WA, will double on 7/1,” Murray said via Twitter.
On Tuesday, Rep. Chris Van Hollen (D-Md.) held an event in his district where he addressed a group of students that the nonprofit group CollegeTracks helped apply to college.
President Barack Obama visited three universities last week, where he urged Congress to extend the 2007 law that cut student loan rates. He plans to visit a Northern Virginia high school Friday “to speak with juniors and graduating seniors and their parents about the need to prevent interest rates on federal subsidized student loans from doubling July 1. While at the school, the president will hold a roundtable discussion with a group of seniors and their parents before delivering remarks to members of the junior and senior classes and many of their parents about the importance of their having a fair shot at an affordable higher education and the skills they need to find a good job,” according to the White House release announcing the event.
The Senate and the White House events are building up to a Senate test vote Monday evening on the Democratic bill.
If lawmakers don’t pass legislation to extend current law and keep the interest rate of Stafford loans as it is now, approximately 7.4 million students with federal student loans would see their interest rates double on July 1. That would mean the average student would pay an additional $1,000 in interest for each year that Congress allows the higher rate, according to the Department of Education.
Republicans have said Democrats are using the issue for political purposes, rather than seeking a solution both sides want.
Speaker John Boehner (R-Ohio) on Sunday predicted that Democrats and Republicans will be able to work together to pass legislation to avert the politically damaging increase in student loan interest rates.
“Democrats and Republicans have been working together to get this resolved and I believe that we will,” Boehner said on CNN’s “State of the Union.”
“If the Senate wants to do a different pay-for that will be up to them, but we will have this issue resolved,” Boehner continued.
The Speaker went on to chastise the president for using student loans as a campaign issue and “picking a fight where there is no fight,” rather than trying to work with Republicans to try to find bipartisan solutions to the nation’s problems.
“The president is getting some very bad advice from his campaign team,” Boehner said. “He is diminishing the presidency by picking fake fights, going after straw men every day.”