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GOP and Democrats squabble over student loan impasse

Political gamesmanship enveloped a battle over legislation to prevent student loan rates from doubling at the end of June, as House Speaker John Boehner (R-OH) denied that Republicans had resigned themselves to the notion that no deal could be struck.

Boehner and New York Sen. Charles Schumer (NY), Democrats’ messaging chief in the Senate, waged a war of words on Capitol Hill on Thursday following a Politico report that House Republican leaders had told their rank-and-file members that reaching an agreement to prevent student loan rates from jumping was “unlikely.”

The report prompted Schumer to pounce on the issue, which is imbued with election-year politics.

"These overheard comments by Speaker Boehner confirm our suspicions that Republicans were never serious about wanting to stop rates from doubling on college students,” he said in a statement. “To many on the hard right, government should not play a role in helping students afford college. Speaker Boehner seems to be following their lead and throwing in the towel on this issue a month before the deadline.”

If Congress does not act, student loan interest rates would rise from 3.4 percent to 6.8 percent. Both President Obama and presumptive Republican nominee Mitt Romney said they support legislation to prevent the jump, though the hangup in Congress has revolved around how to finance the cost of that bill.

Recognizing the political potency of the issue, Boehner’s office pushed back hard against Schumer and sought to clarify the speaker’s closed door comments.

"Boehner told the members that the president wants to fabricate fights on things like student loans because he's out of ideas; he doesn't want to talk about his record or his failed policies.  Told them the House has passed a responsible bill, and that we are waiting on Senate Democrats,” said spokesman Michael Steel. “But that if the interest rate lapses because of their inaction we can fix it retroactively.  He also reiterated what he's said before … that if there's a solution that can pass both chambers, we're ready to talk about it."

Congress has been in a stalemate over how to pay for extending the current student loan interest rates into 2013. The cost totals $6 billion, and House Republicans want to pay for it by taking money from a preventative health fund created under President Obama’s healthcare law. Senate Democrats want to close a tax loophole that large corporations use to avoid Federal taxes.

The House passed their version of the bill; so far, the Senate has not passed anything.

Going a step further so as to prevent being painted as intransigent, House and Senate Republican leaders sent a letter later on Thursday to Obama, outlining three possible ways they would be willing to pay for the price tag of the student loan bill. Those possibilities are outlined here.