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VOL. 127 | NO. 84 | Monday, April 30, 2012

White House Threatens to Veto Student Loan Bill

ALAN FRAM | Associated Press

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WASHINGTON (AP) – The White House threatened a veto Friday of a Republican bill keeping the interest rates on federal student loans from doubling this summer, objecting that the measure would finance its $5.9 billion cost by abolishing a health care program.

The veto warning came as GOP leaders hunted for votes for the measure, which they were trying to push through the House. They were running into opposition from outside conservative groups like the Club for Growth, which was pressuring Republicans to oppose the legislation because, they said, the government should not subsidize student loans.

The election-year clash between the White House and Republicans over the bill has escalated from a dispute over helping millions of students into a broader proxy battle over how to best help families cope with the weak job market and ailing economy, and how each side treats women's issues.

The GOP bill would repeal a preventive care program created under President Barack Obama's health care overhaul law of 2010. Picking up on a theme that House Democrats have been sounding this week, the White House said that "women in particular" benefit from the program – a message that reflects the Democratic effort to woo women voters by accusing Republicans of waging a war on them.

"This is a politically motivated proposal and not the serious response that the problem facing America's college students deserves," said the White House message. It said Obama's advisers would urge him to veto the bill.

Republicans have called the prevention program a "slush fund," saying the money is not controlled tightly enough.

"The president is so desperate to fake a fight that he's willing to veto a bill to help students over a slush fund that he advocated cutting in his own budget. It's a simple as this: Republicans are acting to help college students and the president is now getting in the way," said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio.

Republicans noted that many Democrats had voted earlier this year to take money from the preventive health fund to help pay to keep doctors' Medicare reimbursements from dropping. Obama's own budget in February proposed cutting $4 billion from the same fund to pay for some of his priorities.

The House bill would keep interest rates for subsidized Stafford loans at 3.4 percent, instead of letting them rise to 6.8 percent on July 1 without any congressional action.

Even if the House bill passes as expected, it seems certain to go nowhere in the Democrat-controlled Senate. Senate Democrats have a bill of their own extending the lower interest rate and paid for by boosting payroll taxes paid by high-earning owners of some private firms. Republicans oppose it.

Friday's vote comes with congressional Republicans and Democrats, as well as Obama and his near-certain GOP opponent this fall, Mitt Romney, competing at every turn over who has the best prescription to wring jobs out of the still-struggling economy. The student loan battle fits nicely into that theme, with 7.4 million low- and middle-income students and their parents reliant on Stafford loans and a college education symbolizing the ticket to economic success.

The vote also follows days of campaign-style road trips that Obama used to get in front of the issue and portray Republicans as foot-draggers on it. The week began with Romney saying he favored keeping loan rates low, remarks he hopes will prevent Obama from making the matter a campaign fight but may have helped prod congressional Republicans into action.

On Thursday, Boehner tried putting the focus on Obama's travel this week to three college campuses, where the president used rousing rallies to talk up his student loan effort. Boehner called the college visits "political stunts and, frankly, they aren't worth it and worthy of his office." He said Obama should repay taxpayers for the use of Air Force One for the trip.

White House spokesman Jay Carney defended the travel, saying it helped win over Republicans.

"This is official business. And he did it effectively," Carney said.

Democrats noted that Republicans previously had questioned the wisdom of keeping students' interest rates low. They also accused Republicans of reversing themselves, after voting earlier this month for a 2013 federal budget that let Stafford loan rates double as scheduled.

For House Minority Leader Nancy Pelosi, D-Calif., the emphasis was the GOP's cuts in the preventive health program, whose initiatives she said include breast cancer screening and children's immunizations. She contrasted that with a Democratic bill extending the low student rates by cutting subsidies to oil and natural gas companies, which is opposed by the GOP.

Pelosi characterized the Republican view as, "'We prefer tax subsidies for big oil rather than the health of America's women.'"

The higher interest rates, if triggered, would affect the 7.4 million undergraduates expected to borrow new Stafford loans beginning July 1. This year, 8 million students took out such loans, averaging $3,568, according to the Education Department.

Despite the partisan battle lines, it seemed possible that some members of both parties would defect from their leaders' positions.

Heritage Action for America, a conservative group, was lobbying Republicans to oppose the GOP bill and let interest rates rise, saying to do otherwise would burden taxpayers. Several conservative GOP lawmakers said Thursday they hadn't decided how to vote.

On the Democratic side, party leaders were pressuring their rank-and-file to oppose the Republican measure. Some Democrats were eager to vote to keep student loan rates low, though it meant accepting GOP health care cuts.

Rep. Gerald Connolly, D-Va., said some Democrats "may feel upon reflection that they've got to swallow hard but swallow" those health care reductions. He said he hadn't decided how to vote.

Associate Press writers Donna Cassata and Jim Kuhnhenn contributed to this report.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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