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Congress / CONGRESS

House Passes GOP Plan to Freeze Student-Loan Interest Rates

House Republicans ignore White House's veto threat.

(AP Photo/Butch Dill)

photo of Fawn Johnson
April 27, 2012

Thumbing their nose at a White House veto threat for the second time in as many days, House Republicans on Friday passed a bill, 215-195, to hold subsidized student-loan interest rates at 3.4 percent for one year. (The cybersecurity bill that the House passed on Thursday is also subject to a veto threat.)

The vote sets up a political showdown between the Democratic White House and congressional Republicans with a built-in deadline—the interest rates will double if Congress doesn’t act by June 30. The theatrics were on full display when House Speaker John Boehner, R-Ohio, delivered a booming speech on the floor prompting loud cheers from GOP members. “This is beneath the dignity of the House,” he declared. “Do we have to fight over everything?”

Well, yes. House Minority Leader Nancy Pelosi, D-Calif., has adopted the women’s health issue as her signature protest against GOP proposals to tap the health care prevention fund, which is part of President Obama’s health care law. “It should be no surprise to anybody because they have an ongoing assault on women’s health,” she said on the floor.

 

Obama has personally campaigned for the student-loan interest-rate freeze, but the administration and Democrats fiercely object to the manner in which the Republican bill would pay for the freeze. The health care prevention fund is used for screening programs that benefit women and children, Democrats said. But the White House’s veto threat came just in time to give Democrats some political cover for voting against the popular student-loan measure.

The White House says that the pay-for would cause particular harm to women who need breast-cancer and cervical-cancer screenings. Republicans claim that objection is purely political when presidential candidates are chasing the women’s vote. “What a surprise in this election year,” said House Education and the Workforce Committee Chairman John Kline, R-Minn. Republicans also note that Democrats and the president signed off on tapping the same fund earlier in the year in a payroll-tax bill.

Democrats were helped in their cause when student groups came out against the GOP bill, even though the same groups have been agitating for a rate freeze for months. “It’s counterintuitive,” acknowledged House Education and the Workforce Committee ranking member George Miller, D-Calif. “But it’s a 'Sophie’s Choice.' It’s unacceptable” to ask members to choose between students finances and children’s health care. Still, 13 Democrats flouted Pelosi’s recommendation that they reject the bill and voted for it. They include Democrats in more conservative districts such as Reps. John Barrow, D-Ga., and Jim Matheson, D-Utah.

Thirty Republicans—some tea party-endorsed members like Rep. Raul Labrador of Idaho, and some more established conservatives like Rep. Virginia Foxx of North Carolina—also voted against the bill, making for a minor cliff-hanger of a vote heading in to the weekend. Conservative groups like the Club for Growth and Heritage Action opposed the bill.

Republicans have given away some of their leverage on the issue bowing to pressure and endorsing a temporary interest-rate freeze. “They found religion, and that’s understandable. So we know they’ll eventually vote for it,” Miller told National Journal.

It’s still a delicate gamble for Democrats. The student vote will be important in upcoming elections. No one knows that better than Rep. Joe Courtney, D-Conn., who can thank the students at University of Connecticut for his seat. He ran in 2002 and lost, but he more than quadrupled the university's turnout for him in 2006 when he campaigned heavily on lowering the student-loan interest rate. He won by 83 votes. “It’s a validating message back home for kids. Participation actually translates into real results,” he told NJ.

The Senate is poised to begin debate on its own student-loan bill the week of May 7. The only difference between the House and Senate bills is how the interest-rate freeze is paid for. Senate Democrats want to raise taxes on so-called S corporations. Republicans say that’s a nonstarter, setting up a battle over pay-fors that will loom in the coming months.

It’s worth noting that June 30 also marks the expiration date of federal transportation authority, which has been extended multiple times by Congress. The last extension occurred just days before the authority was set to expire. Now lawmakers will face two must-pass bills with June deadlines.

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