Last week, the Republican-managed House successfully passed HR 9 The Small Business Tax Cut … the cost $45.95Billion … for one year … with a projected 39,000 jobs created … with no offsets – so the National Debt will rise. The Republicans plan to find offsets later.
This week, the Republican-managed House is focused on H.R. 3336, the Small Business Credit Availability Act … a fancy way of dismantling previously enacted legislation … in this case involving banks and farm credit institutions when they enter into a swap with a customer that is managing or seeking to offset risk in connection with credit issued by the institution. (It‘s the stuff that the Commodity Futures Trading Commission (CFTC) is involved in … you know, speculations.)
The President has not officially weighed in on H.R. 3336, as his attention is on a more pressing matter. Quite possibly, while the House debates and votes on H.R. 3336, President Obama will be in Iowa talking about the impending increase in student loan interest rates.
During Saturday’s Weekly Presidential Address, President Obama alerted the public to situation : “If Congress doesn’t act, on July 1 interest rates on some student loans will double,” Obama said. “Nearly seven and a half million students will end up owing more on the loan payments.”
Yep, that’s one revenue-generating off-set found.
This rate increase is not something that snuck up on Congress … in fact, John Kline as Chairman of the Education and Workforce Committee has had legislation pending in his committee for months. In January, Joe Courtney (D-CT-02) offered H.R.3826 -To amend the Higher Education Act of 1965 to extend the reduced interest rate for Federal Direct Stafford Loans. Today, that legislation has 126 co-sponsors including Minnesotans Ellison, McCollum and Walz. There is a companion bill in the Senate (S. 2051) which Senators Franken and Klobuchar are co-sponsors.
But Chairman Kline has just let it sit.
Chairman Kline said “My colleagues and I are exploring options in hopes of finding a responsible solution that serves borrowers and taxpayers equally well.” The Committee even launched a survey … but the results have not been publicized on the Committee’s website.
Huh … well, when will you get moving on this … the clock is running.
Yet, a review of the history of this legislation suggests that Chairman Kline has been looking for options for a long time.
The U.S. Department of Education estimates that more than 10 million students each year borrow for college using subsidized Stafford loans — a program, named for the late U.S. Senator Bob Stafford (R) of Vermont, that effectively targets help to low- and middle-income families. Almost 40 percent of borrowers come from families with earnings below $40,000 per year, and another 20 percent have income between $40,000 and $60,000.
The program was last tweeked over a three month period in 2007, when the House, Senate and President George W. Bush came together to enact H.R. 2669 College Cost Reduction and Access Act … this was legislation that Jim Ramstad (R-MN-03) and 76 other House Republicans approved … along with Norm Coleman (R-MN) and 32 other Republican Senators … but not John Kline.
Here’s the key that concerns students and parents … the College Cost Reduction and Access Act reduced the fixed-interest rate on Stafford Loans from 6.8 percent to 3.4 percent, helping millions of American students better afford college education. That law is about to expire but the Republicans have other plans. Without new action, subsidized Stafford loan interest rates are set to double, returning to 6.8 percent on July 1. So today with loan interest rates are very low rates, the Government can simply raise interest rates for student loans … if Congress fails to prevent the July loan rate hike, American families could be forced to pay thousands more in interest payments to receive loans to attend college.
But like too many issues, this Republican-managed House keeps delaying address pressing needs while pushing legislation that is destined to die in the Senate … much less be approved by the President.
Some could argue that President Obama’s speech is purely to make political points … well, since candidate Romney said on Monday, “I fully support the effort to extend the low interest rate on student loans”, then the problem lies on the Republicans.
It should be noted that in less than a week DFL Second Congressional delegates will assemble to consider endorsing a candidate to run against Chairman Kline.
Seeking Saturday’s endorsement are Northfield City Council Patrick Ganey, Dakota County Commissioner Kathleen Gaylord and former state representative Mike Obermueller.
The student loan issue could be one for discussion especially from Ganey, who is a development officer at Carleton College and has said one of his priorities is to make education available for every American.
“We need to invest in our young children and also make sure that every college-bound student can afford it,” he said in his candidacy announcement last month. “We must support the young entrepreneur and the mid-career professional who have the bold ideas for a new business, and make sure they are not thwarted by a lack of local infrastructure or a lack of health care coverage.”
Yep, it may be politics at play … surely, Chairman Kline and the House Republicans are well-versed in that, but let’s give credit to candidate Ganey for recognizing the issue … after all, the next small business that Chairman Kline likes to promote could be created with the assistance of Stafford Loan funding … failure, could mean that entrepreneur never got a chance and the growth in jobs is more likely from a start-up entrepreneur business than the expansion of existing small business.
At one time, Republicans and Democrats could come together for the good of the country … but, Chairman Kline has exhibited a bad habit of delaying action and the clock is ticking.