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It is good to see President Obama getting behind the effort launched by Second District Rep. Joe Courtney to prevent the interest rates on federal student loans from doubling on July 1 to 6.8 percent.
The Connecticut Democrat introduced a bill that will keep interest rates at 3.4 percent. On Friday the White House announced that the president will travel this week to the universities of North Carolina at Chapel Hill, Colorado, and Iowa to push for approval of the legislation introduced by Rep. Courtney. The bill now has 127 co-sponsors.
The New York Times reports that the White House plans a sustained campaign to fight for the measure, with President Obama referencing it in his radio address Saturday after Education Secretary Arne Duncan discussed the proposal with the Washington press corps Friday.
The average student using federal loans will rack up an additional $1,000 in debt annually after graduation if Congress allows the doubling of the interest rates, the administration contends.
Rep. Courtney has been out in front on this critical issue and it's about time the Obama administration began roasting Republicans in Congress for their recalcitrance about helping out struggling students and their families.
In 2007 Congress approved the College Cost Reduction and Access Act of 2007, which cut the then-rate of 6.8 percent to the current 3.4 percent, but with an expiration date of July 1, 2012. Back then the proposal received significant bipartisan support, with 77 Republicans voting in favor, many of them still in the House. This time around, showing how intransigent Republicans in Congress have become in supporting any legislation that is remotely progressive, not one member of the GOP has come forward in support.
Rep. John P. Kline Jr., the Minnesota Republican who chairs the House Committee on Education and the Workforce, said he cannot support "piling billions of dollars on the backs of taxpayers."
What a profoundly hypocritical argument.
Rep. Kline had no problem voting in favor of a big tax cut for business owners. Under that bill, small business owners (500 employees or less) would be allowed to deduct 20 percent of their income taxes up to 50 percent of their W-2 wages. It's the scheme of House Majority Leader Eric Cantor in his never-ending quest to make the well off better off.
The ostensible motivation for the tax break is to create jobs, but there is no provision for those receiving the tax breaks to do anything other than stick the money in their pockets. And it's a one-time deal, so what is the motivation to hire new workers? The Joint Tax Committee, the objective scorekeeper on such matters, concluded the job-creation value would be "so small as to be incalculable."
Even the business-friendly Tax Foundation criticized the Cantor bill, concluding it could be "easily gamed" while doing little if anything to create jobs. The giveaway would blow another $46 billion hole in the budget, and Republicans offer no offset to make it up.
But Rep. Kline contends the nation cannot afford to help college students obtain federal loans with reasonable rates at a time of record low interest rates? Estimates of the cost of maintaining the current interest rate on the subsidized Stafford loans range from $4 billion to $6 billion a year.
Credit Rep. Courtney with not forgetting his campaign promises. Campaigning at the University of Connecticut in 2006, Mr. Courtney vowed to help students afford the means to pay for college. The election thrust him into Congress with a razor-thin 83-vote victory. Rep. Courtney took Mansfield, home to UConn, by a 4,397 to 1,753 margin. In one his first acts in Congress he backed the interest-rate cut that he now seeks to defend.
College-aged voters can play an important role in elections, a fact Rep. Courtney recognized back in 2006 and which the White House appears to be paying attention to now.