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Legal battle brewing over U.S. student loan debt
By Catholic Online (NEWS CONSORTIUM)
April 26th, 2012
Catholic Online (www.catholic.org)
April 26th, 2012
Catholic Online (www.catholic.org)
A Democratic proposal to pay for extending low rates for college loans
by imposing new payroll taxes on some small businesses currently exempt
from taxes is drawing heat from their Republican counterparts. Democrats
in both the House and Senate introduced legislation Wednesday to extend
student loan rates at 3.4 percent for another year, rather than
allowing them to jump to 6.8 percent July 1. The date is timed to
coincide with a tour of college campuses by U.S. President Barack Obama
highlighting the issue.
The increase in college loan rates is quickly developing into a key campaign issue. Democrats hope the issue will stir usually apathetic young voters who propelled Obama to victory four years ago. It could also appeal to their middle-class parents, concerned with the rising costs of college.
Apparent Republican presidential nominee Mitt Romney says that he too, favors keeping the loan rate low for seven million borrowers.
The messy details of how to pay the estimated $6 billion cost will be left to Congress, where a fight is brewing.
Senate Minority Leader Mitch McConnell (R-Ky.) accused Obama and Democrats in a scathing speech of playing deceptive politics, proposing a funding mechanism that Republicans will oppose so they can be painted as unsympathetic to the plight of college students.
"Look, if the president was more interested in solving this problem than in hearing the sound of his own voice or the applause of college students, all he'd have to do is pick up the phone and work it out with Congress," McConnell said.
"Let's be honest - the only reason Democrats have proposed this particular solution to the problem is to get Republicans to oppose it, to make us cast a vote they think will make us look bad to the voters they need to win the next election," he said.
McConnell says the business tax would make it harder for small businesses to hire and would raid Social Security and Medicare as payroll taxes are ordinarily used to fund those entitlement programs.
In the House, which recently adopted a budget authored by Rep. Paul Ryan (R-Wis.) which did not envision extending the lower loan rate, House Speaker John Boehner (R-Ohio) told reporters that Democrats and Republicans were working on the issue.
Ryan did not answer a question about the Democratic proposal on the issue. Ryan also accused Democrats of creating the problem by passing legislation in the first place in 2007 that allowed the lower rates to expire.
"Our members are talking about the student loan problem that was created by Democrats, trying to find a responsible way" to deal with it, he said.
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