WASHINGTON - The Senate held two votes Thursday on measures to ensure that student loan rates for millions of college students do not double July 1 - and the conclusion of the legislative outcome remains exactly where the issue began: stagnate.
The measures by both Democrats and Republicans failed to reach the 60-vote threshold needed to move forward in obtaining the $6 billion loan subsidy, reports The Washington Post.
If the dispute cannot be resolved, loan rates for college students will rise from 3.4 to 6.8 percent, increasing the cost of college for 7 million students.
Leaders in both parties have said they want to freeze rates for another year. President Barack Obama continues to argue for lowered rates. Mitt Romney, the Republican presidential nominee, has said he agrees that Congress should extend the lower rates.
Democrats are proposing paying for the additional year of loan subsidies by ending a tax provision that permits executives of some small businesses to collect some of their income as business profits instead of wages, allowing them to avoid paying payroll taxes, reports the Post.
Democrats say the provision is used primarily by professionals such as lawyers and consultants, and they want to end its use for those earning more than $250,000 a year.
Republicans say the Democrats' proposal amounts to tax increases on "job creators" in a sluggish economy. Additionally, the payroll taxes are earmarked to fund Medicare. And any new revenue, reports The Washington Post, should go to the retiree-health program.
On a 51-3 vote, the measure failed to advance.
The Republican proposal would have paid for the loan rate freeze by eliminating the preventive fund created in the 2010 healthcare act. Republicans call it a slush fund and have pointed to what they say are misuses in its spending. Democrats note that it funds HIV/AIDS screenings, obesity prevention and other key programs that could help bring down healthcare costs.
Democrats say the failure to find a compromise is a sign that Republicans do not want to freeze rates.
"The Republican proposal is paid for by stripping Americans of lifesaving preventive healthcare," Senate Majority Leader Harry Reid, D-Nev., told The Washington Post. "The Democratic proposal is paid for by closing a loophole that allows wealthy Americans to dodge their taxes."
Republicans tout that Democrats are more interested in finding a popular campaign issue for Obama than working out a solution to the loan issue.
"This problem could have been solved weeks ago," Senate Minority Leader Mitch McConnell, R-Ky., told The Washington Post. "Democrats weren't interested. They wanted a scapegoat more than a solution."
Source: The Washington Post; Star-Telegram
