By Thomas Ferraro, Reuters
WASHINGTON — The Republican-led House of Representatives, in an election-year showdown with U.S. President Barack Obama, moved on Wednesday to avert a doubling of a low federal student loan rate by taking money from Obama’s health care overhaul.
House Speaker John Boehner unveiled the proposal and announced that his chamber would vote on it on Friday — after Obama on a campaign-style tour pushed Congress to take action to preserve the low rate for millions of students.
While Boehner’s measure is expected to win House passage, it will face rejection in the Senate, controlled by Obama’s Democrats, said a spokesman for Senate Majority Leader Harry Reid.
The White House, which has sought to cast Obama as a champion of the middle class while painting the Republicans and their likely presidential nominee Mitt Romney as beholden to the rich, quickly pushed back against Boehner’s funding proposal but held out the prospect of an election-year deal. “This is no time to refight old political battles. We should be able to work together to find offsets that don’t penalize middle-class families or undermine efforts to help more Americans stay healthy,” White House spokesman Nick Pappas said. Unless Congress acts by July 1, the loan rate will double to 6.8 percent for more than 7.4 million students.
Democrats favor covering the projected US$6 billion cost of extending the low federal student loan rate for a year by a plugging a loophole that they say wealthy professionals use to avoid payroll taxes.
At a hastily called news conference, Boehner said: “Today I’m pleased to announce that on Friday the House will vote on a bill to extend the current interest rate on federal student loans for one year.” “We will pay for this by taking money from one of the slush funds in the president’s health care law,” Boehner said.