Friday, May 11, 2012

Senate Republicans Block Bill to Lower Student Loan Interest – Will Claim Democrats Are to Blame

Do Republicans Think Voters are Stupid – Apparently So

Student loans are a major crisis for men and women who have left college, either with or without a degree and incurred massive debts while in college.  We will leave aside the morality of a society that requires a college education for good jobs, and then burdens young people with huge debts to get that education and focus instead on the issue of student loan interest rates.  Without Congressional action they are scheduled to rise significantly.

Republicans said they wanted to extend Democratic legislation passed in 2007 that temporarily reduced interest rates for the low- or middle-income undergraduates who receive subsidized Stafford loans to 3.4 percent from 6.8 percent.

So what is the problem if both Republicans and Democrats both want to extend the law that produced lower rates?  Republicans, those supposedly fiscal conservatives who want a balanced budget, don’t like paying for the reduced interest rates.

Senate Republicans on Tuesday blocked consideration of a Democratic bill to prevent the doubling of somestudent loan interest rates, leaving the legislation in limbo less than two months before rates on subsidized federal loans are set to shoot upward.

The Democrats have proposed offsetting the lost revenue by closing a tax loophole that allows certain investor/business executives to avoid paying the Medicare portion of the payroll tax on a large part of their income from an S corporation (want details, no you don’t).  But since this would very slightly increase the taxes on very wealthy people Republicans naturally said no.

But the really unique thing is that having blocked the measure Republicans feel they can campaign on the issue, by blaming Democrats.

Republicans made clear they would go on offense, blaming Democrats if interest rates doubled July 1.

Will such a strategy work?  Sure, given the hundreds of millions Republicans have at their disposal from billionaires who can now make unlimited, and in some cases anonymous campaign contributions and ads, of course it will work.

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