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Senate Dems ready bill freezing student loan costs

By Alan Fram

Associated Press

Published: Wednesday, April 25 2012 12:20 p.m. MDT

This photo combo shows President Barack Obama in Chapel Hill, N.C. on April 24, 2012, and Republican presidential candidate, former Massachusetts Gov. Mitt Romney on April 18, 2012 in Charlotte, N.C. Obama and his likely GOP opponent, Romney, agree on an issue of importance to college students: Keeping the interest rate low on a popular federally subsidized student loan issued to low-and middle-income students. (AP Photo)

The Associated Press

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WASHINGTON — President Barack Obama is playing politics with his push to prevent interest rates on federal student loans from increasing in an election-year effort to embarrass Republicans, the Senate's GOP leader said Wednesday.

Senate Minority Leader Mitch McConnell, R-Ky., aimed his remarks at Obama as the president spent a second day addressing college campus audiences about the need to keep today's 3.4 percent interest rates on subsidized Stafford loans from doubling July 1.

Obama was scheduled Wednesday to visit the University of Iowa.

The president supports a bill introduced late Tuesday by Senate Majority Leader Harry Reid, D-Nev., that would keep the rate at 3.4 percent for another year, helping 7.4 million people. The $5.9 billion measure would be paid for by boosting payroll taxes on the owners of some privately held corporations, which Republicans oppose.

"Let's be honest," McConnell said on the Senate floor. "The only reason Democrats have proposed this particular solution to the problem is to get Republicans to oppose it, to make us cast a vote they think will make us look bad to the voters they need to win the next election."

McConnell said Republicans oppose letting student loan interest rates double, but said the payroll tax proposal would make it harder for businesses to hire workers. He said the two sides' differences could be resolved if Obama would negotiate and "choose results over rallies."

House Speaker John Boehner, R-Ohio, told reporters Wednesday that House Republicans are discussing the student loan problem and "trying to find a responsible way to fix it." He provided no details.

Democrats were happy to fire back.

On Air Force One, White House spokesman Jay Carney called on all members of Congress to back the effort and said, "Up until we saw a bit of the dam breaking in the last several days, the opposition to doing this was on the Republican side."

Rep. Joe Courtney, D-Conn., a sponsor of a student loan bill House Democrats were writing, said the House GOP leadership "so far has hardly shown a flicker of interest in terms of moving this issue."

Rep. Xavier Becerra, D-Calif., a member of the Democratic leadership, noted that House Republicans moved quickly last week to approve a $46 billion tax cut for most businesses that would be paid for by adding to the federal deficit and said, "We are going to attack this as aggressively as we can."

The congressional maneuvering highlighted the rivalry between the two parties over appealing to college voters, who leaned heavily toward Obama during his 2008 run for the White House. They are also competing to address the broader financial pressures facing Americans in an economy still struggling to regain strength.

Not willing to cede any ground, Obama's likely GOP rival, Mitt Romney, has also asked Congress to temporarily extend the lower rates. Congressional Republicans say they too support keeping students' interest rates low.

That apparent agreement on the overall goal is not stopping either side from seeking political advantage.

"Republicans in Congress have voted against new ways to make college more affordable for middle-class families, even while they're voting for huge tax cuts for millionaires and billionaires," Obama told college reporters Tuesday by telephone as he flew aboard Air Force One from North Carolina to Colorado, where he addressed university audiences on the subject.

Republicans trained their fire on Democrats' plan to finance the bill by making it harder for owners of smaller, privately owned companies called S corporations to avoid paying Social Security and Medicare payroll taxes on some of their income.

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