Congressional Democrats and Republicans are once again engaged in what has become a common battle in Washington. While both parties want to pass legislation to extend current low rates on subsidized student loans, there remains a disagreement over how to pay for it.
Democrats are pushing proposals that would freeze rates by limiting or closing tax breaks and loopholes for wealthy taxpayers, while Republicans want to pay for a rate freeze by raiding a preventative care fund in the healthcare reform law.
At issue are the interest rates on subsidized Stafford loans belonging to 7 million students or former students in the U.S. The rate is currently at 3.4 percent, but it will double to 6.8 percent on July 1, 2012 without congressional action.
Such an increase would cost about an extra $1,000 per year for each loan. A one-year freeze would cost the government an estimated $6 billion.
Senate Majority Leader Harry Reid, D-Nev., issued a statement on Wednesday bashing the Republican version of the bill introduced in the House.
"Democrats are opposed to shortchanging an important program that supports crucial efforts to prevent disease and protect against public health emergencies just so Republicans can continue protecting millionaire tax dodgers," Reid said.
House Speaker John Boehner, R-Ohio, has called the preventative care fund in the health care law "a slush fund" and has scheduled a House vote on the GOP proposal on Friday.
In the Senate, no vote has been scheduled, but a similar GOP bill is being pushed by Sen. Lamar Alexander, R-Tenn.
Senate Democrats held a press conference Thursday to unleash a harsh attack against the proposals, accusing Republicans of protecting the wealthy at the expense of the country's middle class.
"That's their true constituency," said Democratic Conference Vice Chairman Charles Schumer, D-N.Y. "And they're willing to sacrifice immunizations, mammograms and screenings."
On the presidential campaign trail, President Barack Obama has been pushing the issue repeatedly this week in visits to college audiences in the battleground states of North Carolina, Colorado and Iowa.
But the presumptive GOP nominee, former Massachusetts Gov. Mitt Romney, has already said he agrees with Obama that the rates should be kept low, meaning the only real partisan friction is the disagreements in Congress.
by RTT Staff Writer
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