Student-Loan Debate Comes Into (Familiar) Focus in the Senate

Republicans and Democrats are trading punches, even before the real debate begins.

 A general view during the college commencement ceremony for Westminister College on June 1, 2013 in Salt Lake City, Utah.
National Journal
Michael Catalin
May 7, 2014, 4:16 p.m.

Law­makers are already clash­ing over what is shap­ing up to be the next par­tis­an brawl in the Sen­ate: a Demo­crat­ic pro­pos­al that would al­low bor­row­ers to re­fin­ance stu­dent-loan debt, paid for by a tax on mil­lion­aires.

As de­tails emerge on the de­bate over col­lege af­ford­ab­il­ity, both sides are already throw­ing punches. Key Re­pub­lic­an sen­at­ors say the bill is simply polit­ic­al mes­saging, while Demo­crats are tak­ing to the floor to de­scribe the dire cir­cum­stances fa­cing stu­dent bor­row­ers.

The Bank on Stu­dents Emer­gency Loan Re­fin­an­cing Act is part of the Demo­crats’ Fair Shot Agenda, an elec­tion-year plat­form aimed at ex­cit­ing their base and demon­strat­ing the party’s con­cern for pock­et­book is­sues. The le­gis­la­tion has 26 co­spon­sors — all Demo­crats — and would let bor­row­ers with out­stand­ing stu­dent-loan debt re­fin­ance it at the 3.86 per­cent rate achieved after Con­gress passed the Bi­par­tis­an Stu­dent Loan Cer­tainty Act last year.

The bill pro­poses to pay for the meas­ure by ap­ply­ing the so-called Buf­fett Rule, a tax named after in­vestor War­ren Buf­fett that calls for a min­im­um rate of 30 per­cent on those earn­ing more than $1 mil­lion. Demo­crats are point­ing to the eco­nom­ic im­pact of stu­dent debt, with out­stand­ing loans now total­ing $1.2 tril­lion — even more than cred­it card debt, they say. Sen. Amy Klobuchar of Min­nesota re­mem­bers how her grand­fath­er paid her dad’s way through col­lege by sav­ing money in a cof­fee jar. There’s no jar big enough to pay today’s col­lege bills, she said.

“This stu­dent debt hangs like an an­chor around not just our stu­dents, but our en­tire eco­nomy,” Klobuchar said.

But the bill is a non­starter for many Re­pub­lic­ans, largely be­cause of the pro­vi­sion to pay for it.

“This looks like a dus­ted-off pro­pos­al to raise taxes, and that’s not something I think we need to do,” said Sen. John Cornyn, the minor­ity whip. “Our eco­nomy grew at 0.1 per­cent last quarter.”

Cornyn wouldn’t say un­equi­voc­ally that Re­pub­lic­ans would with­hold sup­port and keep the meas­ure from get­ting the 60 votes needed for floor ac­tion, be­cause he is still re­view­ing the le­gis­la­tion. But Re­pub­lic­ans gen­er­ally balk at the no­tion of rais­ing taxes. He also said Sen. Lamar Al­ex­an­der of Ten­ness­ee, the rank­ing Re­pub­lic­an on the Health, Edu­ca­tion, Labor, and Pen­sions Com­mit­tee, would mount the GOP’s re­sponse.

“This is kind of like a Tro­jan Horse, the best it looks to me,” Cornyn said. “I think you’re go­ing to hear very pos­it­ive and con­struct­ive pro­pos­als from our side. I think Sen­at­or Al­ex­an­der, among oth­ers, is go­ing to be lead­ing that ef­fort. We’re happy to en­gage on edu­ca­tion and on costs and af­ford­ab­il­ity, but I don’t think this is the right ap­proach.”

Pre­view­ing his con­fer­ence’s ex­pec­ted re­but­tal, Al­ex­an­der poin­ted to GOP pro­pos­als, in­clud­ing school-choice meas­ures and a re­vamp­ing of the Pell Grant sys­tem, as al­tern­at­ives. “The Demo­crats’ pro­pos­al is start­ing down the road of turn­ing a tril­lion dol­lars of stu­dent loans in­to grants and count­ing spend­ing in a way that the Con­gres­sion­al Budget Of­fice has told Con­gress not to do,” he said in a state­ment to Na­tion­al Journ­al, re­fer­ring to a de­bate over con­gres­sion­al ac­count­ing.

In­deed, Demo­crats ad­mit that they craf­ted this year’s le­gis­lat­ive agenda with midterm elec­tions in mind. Re­pub­lic­an cri­ti­cism of the bill has been swift, com­ing even be­fore the cham­ber be­gins de­bat­ing the meas­ure.

“It’s got a pay-for that’s un­ac­cept­able,” said Sen. Richard Burr of North Car­o­lina, who helped broker the stu­dent-loan bill last sum­mer.

Sen. Or­rin Hatch, the rank­ing Re­pub­lic­an on the Fin­ance Com­mit­tee, where the bill was re­ferred, also shot the le­gis­la­tion down.

“In­stead of lin­ing up polit­ic­al show votes, Demo­crats should be work­ing with Re­pub­lic­ans to ad­vance le­gis­la­tion that will cre­ate more jobs for young people and grow the eco­nomy,” he said in a state­ment.

What We're Following See More »
DONATING TO FOOD BANKS
Government Buying $20 Million in Cheese
2 hours ago
WHY WE CARE

Thanks to competition from Europe, America's cheese stockpiles are at a 30-year high. Enter the U.S. government, which announced it's buying 11 million pounds of the stuff (about $20 million). The cheese will be donated to food banks.

Source:
BRIEFER THAN TRUMP’S?
Clinton to Receive Classified Briefing on Saturday
4 hours ago
THE DETAILS
FHFA RULES APPLY
Judge: Freddie Mac Doesn’t Have to Open Its Books
6 hours ago
THE DETAILS

"Freddie Mac shareholders cannot force the mortgage finance company to allow them to inspect its records, a federal court ruled Tuesday." A shareholder had asked the United States District Court for the Eastern District of Virginia to allow him to inspect its books and records, as Virginia law allows him to do. "The court held that Freddie shareholders no longer possess a right to inspect the company’s records because those rights had been transferred to the Federal Housing Finance Agency when the company entered into conservatorship in 2008."

Source:
MANY BEING TRADED ON BLACK MARKET
Pentagon Can’t Account for 750k Guns Provided to Iraq, Afghanistan
6 hours ago
THE DETAILS

The Pentagon has "provided more than 1.45 million firearms to various security forces in Afghanistan and Iraq, including more than 978,000 assault rifles, 266,000 pistols and almost 112,000 machine guns." Trouble is, it can only account for about 700,000 of those guns. The rest are part of a vast arms trading network in the Middle East. "Taken together, the weapons were part of a vast and sometimes minimally supervised flow of arms from a superpower to armies and militias often compromised by poor training, desertion, corruption and patterns of human rights abuses."

Source:
SINCE JANUARY
Baltimore Is Spying on Its Residents from the Air
8 hours ago
WHY WE CARE

"Since the beginning of the year, the Baltimore Police Department" has been using a Cessna airplane armed with sophisticated camera equipment "to investigate all sorts of crimes, from property thefts to shootings." The public hasn't been notified about the system, funded by a private citizen.

Source:
×