Despite what you may have heard from President Obama, both Republicans and Democrats in Congress favor extending low interest rates on student loans that are set to expire in July. The problem is they’re conflicted over how to pay for it. While Democrats support a payroll tax hike on certain businesses, the House GOP is planning to introduce a bill that would pay for the extension with some of the advanced appropriations included in ObamaCare. Politico reports:
House Republicans will announce by the end of this week their own bill to keep student loan rates from doubling, several Republican leadership sources said.
The GOP will offset its cost with money from what they dub a “slush fund” in the Democrats’ 2010 health care law. Speaker John Boehner (R-Ohio) is holding a media availability in the Capitol Wednesday afternoon to announce the effort.
The specter of government-subsidized student loan rates doubling is the most recent attempt by the White House and Democrats on Capitol Hill to paint Republicans as the model of inaction. President Barack Obama is on a nationwide college tour, slamming congressional Republicans for allowing the Stafford loan rate to jump on July 1. In reality, Republican leadership on Capitol Hill didn’t address how they would deal with the July 1 deadline, which would have allowed government subsidized student loan rates jump from 3.4 percent to 6.8 percent.
Democrats are reportedly claiming Republicans are only making a fuss about how to pay for the extension because they secretly want to raise interest rates on students. Right, because Republicans have never in the past had ideological objections to using tax hikes to pay for subsidy programs. The left is also pointing to quotes from random Republicans who oppose the student loan rate extension as evidence of party-wide opposition. But that ignores that the student loan bill wasn’t a particularly divisive issue in the past – it originally passed the Senate by a vote of 78 to 18 and was signed into law by President Bush in 2007.
The House will vote reportedly vote on the GOP bill on Friday. Then the Senate may pass the Senate Democrats’ student loan bill with some Republican support. Both sides will scramble to gain political leverage, and eventually there will be some sort of compromise, because neither party will want to be the one responsible for increased student loan rates. Of course, this process probably would have been much less partisan and volatile if President Obama hadn’t spent the last two days claiming Republicans are “obstructing” the extension because they support higher interest rates for college graduates.