WASHINGTON – In an escalating election-year clash, the House will vote Friday on a $5.9 billion Republican bill preventing interest rates on federal student loans from doubling this summer, paid for by cutting money from President Barack Obama’s health care overhaul law.
Wednesday’s abrupt announcement by House Speaker John Boehner, R-Ohio, came with Obama and Democrats clamoring daily for congressional action to prevent the current 3.4 percent interest rate on subsidized Stafford student loans from automatically increasing to 6.8 percent on July 1.
That increase, set by law unless Congress blocks it, would affect 7.4 million students at a time when both parties are competing for the votes of young adults and their parents who must foot college tuitions.
With Obama engaged in a series of campaign-style speeches in recent days about the need to block the interest rate boost, Republicans came under even greater pressure when Mitt Romney, the GOP’s presumptive presidential nominee, announced Monday that he, too, favored the move.
Also taking the offensive were Senate Democrats, who introduced legislation Tuesday blocking the increase for a year. Senate Republicans said they backed the idea of freezing the interest rate but opposed a tax on some private corporations that Senate Democrats would use to pay for it. Until Boehner’s announcement of Friday’s vote, Republicans had nothing tangible they could vote for to demonstrate their support.
At a hurriedly called news conference, Boehner told reporters that Obama has been “trying to invent a fight where there wasn’t and never has been one” and said, “We can and will fix the problem without a bunch of campaign-style theatrics.”
Boehner spoke after Obama had wrapped up his third college campus visit in two days, using his cheering young audiences as backdrops to laud Democrats’ efforts to keep student loans affordable and to bash Republicans.
“Some of them suggest that students like you have to pay more so we can help bring down the deficit,” he said about Republicans on Wednesday at the University of Iowa. “Now, think about that. These are the same folks who ran up the deficits for the last decade. They voted to keep giving billions of dollars in taxpayer subsidies to big oil companies who are raking in record profits. They voted to let millionaires and billionaires keep paying lower tax rates than middle-class workers.”
House Republicans would pay for their one-year measure from a $17 billion prevention and public health fund Obama’s law created for immunization campaigns, research, screenings and wellness education.
The House GOP proposal ran into quick opposition from the White House, where spokesman Nick Papas said the two sides should pay for the bill with savings “that don’t penalize middle-class families or undermine efforts to help more Americans stay healthy.”
Senate Democrats’ legislation would keep student loan interest rates at 3.4 percent for another year. It would be paid for by increasing the Social Security and Medicare payroll taxes owed by upper-income owners of some privately held corporations, including many lawyers’ and doctors’ practices.