Democratic legislation that would prevent student loan interest rates from doubling in July was blocked in the Senate by Republicans on Tuesday. The 52-45 vote fell short of the 60 needed to begin debate on the bill.

If Congress does not act before July 1, interest rates on subsidized Stafford loans will increase from 3.4 percent to 6.8 percent, affecting millions of college students.

The Associated Press

Republicans said they favor preventing the interest rate increase but blocked the Senate from debating the $6 billion measure because they oppose how Democrats would pay for it: Boosting Social Security and Medicare payroll taxes on high-earning stockholders of some privately owned corporations.

GOP senators want a vote on their own version heading off the interest rate increases and paid for by eliminating a preventive health fund created by President Barack Obama’s 2010 health care overhaul. That financing idea has no chance of passing the Democratic-run Senate and has drawn a veto threat from the White House.

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Leadership on both sides of the political aisle accused the other of playing politics with the issue.

“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,” said Senate Minority Leader Mitch McConnell, blaming Democrats for what he called a “manufactured controversy.”

“If they want some other way to pay for it, let’s take a look at it,” Senate Majority Leader Harry Reid said. “Let them offer that. The stakes in this debate are too high to let partisanship get in the way.” –TEB


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