Senate Republicans today filibustered the effort to prevent federal student loan rates from doubling, once again obstructing the majority and putting the finances of millions of college students at risk for the sake of protecting the leather wallets of the 1 percent.
Forty-five Republicans voted against allowing the measure to come to the floor for a full debate and up-or-down vote (52 voted in favor; 60 votes were required) even though Senate Majority Leader Harry Reid agreed to their demand that they be allowed to bring to the floor their proposal to eliminate an illness prevention and public health program to cover the $6 billion cost of keeping student loan interest rates as they are, at 3.4 percent. That was the proposal passed by Republicans in the House, which President Obama has already said he would veto.
Senate Republican Leader Mitch McConnell’s excuse? As reported by Politico, “While we don’t think young people should have to suffer any more than they already are as a result of this president’s failure to turn the economy around, we just disagree that we should pay for a fix by diverting $6 billion from Medicare and raising taxes on the very businesses we’re counting on to hire these young people.”
First things first. The real problem with this whole debate over student loan interest rates is the fixation over how to “pay for it.” The same conservatives who argue that we must, must cut something—hmm, health care’s not that important; let’s cut that—to cover the cost of keeping a lid on student loan rates don’t have the same fixation over students being loaded down with that debt to begin with.
Why? Because they argue that students will ultimately benefit from the increased salaries they are more likely to get with a college education and can therefore absorb the cost over time.
Frankly, that’s the argument we should be making as a nation to keep student debt as low as possible. If we’re serious about rebuilding our middle class and putting our federal finances on a sustainable footing, we should be doing everything we can to make college affordable so these young people will have the employability and earning power to buoy the economy in the future. Having the federal government borrow $6 billion at near-zero interest rates today, if need be, so that students won’t have to pay more than 3.4 percent interest on their student loans is a bargain. We should take it.
Last month, House Republicans voted for a tax cut in the name of boosting job creation, even though Congress’ Joint Committee on Taxation said the tax cut would have a too-small-to-calculate effect on job creation and economic growth. But Republicans nonetheless voted to add $46 billion to the deficit for a tax cut for which half the benefit would go to people earning more than $1 million. That’s worth remembering as they say we should not add to the deficit to help working-class people afford a college education.
What we should not do is buy the lie that the decision Democrats made to offer a particular “pay-for” anyway—one that would affect people earning more than $250,000 who are shareholders in Subchapter S corporations—would prevent small businesses from hiring college graduates.
The tax loophole Senate Democrats wanted to close would mainly target white-collar professionals who form companies with two or three partners and structure their compensation in a way that avoids payroll taxes, by making their earned income appear to be unearned income. Some call it the “Newt Gingrich/John Edwards loophole” since both of these former members of Congress used the trick as private citizens. These entities, like Edwards’ law firm and Gingrich’s various self-promotion vehicles, have no interest in growing their payrolls; these businesses are not set up to be job-creators for anyone other than the small clutch of people who form them and seek to make themselves rich from them. Simply put, Republicans would rather sanction rich people’s tax evasion than keep college graduates from being crushed by debt.
It’s good news that Senate Democrats were united in their rejection of this right-wing nonsense. There might not be hope that the Congress will do the ultimate right thing and just declare that $6 billion to keep the debt burden on students lighter is a burden we should be willing to shoulder for the good of the nation’s economic future. But the very least we can do is draw a line and declare that there are times when those who have already financially successful should give up something so that college students can have a fighting chance.