Votes on Student Loan Interest Rates Nothing But Political Theater

Republicans and Democrats agree student loan rates must stay at 3.4 percent, but cannot compromise.

By SHARE

The Senate is holding a vote Thursday to stop student loan rates from doubling on July 1, but don't hold your breath while awaiting the result.

The Senate is expected to veto both the Democratic and Republican proposals that would freeze student loan rates and keep them from doubling from 3.4 percent to 6.8 percent come July 1.

The outcome is inevitable and both sides agree it is just another example of political posturing on Capitol Hill. [Poll: Obama Leads Romney In Youth Vote, But Has Trouble Too]

Sen. Majority Leader Harry Reid's Spokesman Adam Jentleson says the Republicans requested the votes be brought to the floor so they can tell constituents back home that they are pursuing actions to stop Stafford loan interest rates from increasing.

Sen. Minority Leader Mitch McConnell's spokesman Don Stewart said the Democrats brought the vote to the floor to make headlines and to make it look as though Republicans are against keeping interest rates low.

"We already know how this story ends," Mitch McConnell said on the Senate floor Thursday. "So why are Democrats forcing us to vote on their failed proposal yet again? Because, as I've said, they're more interested in drawing our opposition—of creating a bad guy—than in actually solving the problem."

This is the second time the Senate has taken action on the Democrats' bill. The Democrats' proposal reached a stalemate on May 8 when they Republicans blocked them from getting the 60 votes necessary to debate their version of the bill on the Senate floor.

"The only thing stopping this bill from passing is Republican obstructionism," Jentleson says. "We could stop student loan interest rates form doubling today if Republicans stopped protecting millionaires who are exploiting a tax loophole to avoid paying the same taxes as middle-class Americans."

The Republican version of the bill passed the House of Representatives, and will have its first vote in the Senate Thursday. [Romney: President Obama Has Not Stood Up to Teachers Unions]

Both Republicans and Democrats agree the student loan interest rates must remain at 3.4 percent, but neither side can agree on how to pay for interest rate freeze.

"We are happy there is bipartisan support on this issue in that sense, but now our leaders have to take it one step forward and see a pay for," says Getachew Kassa, the Legislative Director at United States Student Association, a group committed to keeping college affordable for students.

Democrats want to finance their version of the $6 billion bill by closing tax loopholes for wealthy business owners. The bill would increase Medicare and Social Security taxes for the wealthy, something Republicans say attacks businesses who will hire recent college graduates.

Republicans wish to borrow the $6 billion from the a preventative health fund that the was established under President Obama's 2010 Affordable Care Act.

That proposal is destined for failure in a Democrat-controlled Senate, and the White House has vowed to veto any version of the bill that robs the preventative health fund.

The Senate minority argues that the Democratic version of the bill, sent over by the Obama Administration, was always a hopeless proposal.

"If you want to get something done, you have to go through committee," Stewart says. "This one was designed to fail because [Democrats] wanted the headlines that Republicans blocked the vote and they got them. This was always a political stunt."

Stewart argues the only way student loan rates will remain stable is for Republicans and Democrats to sit down together and hammer out a compromise everyone can agree upon.

"It doesn't do any kid any good to have a bunch of show votes on a bill that Democrats know won't pass," Stewart says.

Jentleson says students are being penalized by the GOP's aversion to the president's requests, adding that the interest rates will remain at 3.4 percent "as soon as Republicans decide they want to find a solution that helps middle class families instead of blindly blocking President Obama's agenda."