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Dems Squeeze GOP Over Taxing Wealthy To Pay For Affordable Student Loans

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"We didn't propose something that would be rejected out of hand," Sen. Chuck Schumer (D-NY) told reporters in the Capitol last week. "They proposed something that they know we have rejected over and over again."

On Friday, House Republicans passed legislation to extend the rates over strong Democratic objection that would finance it by eliminating the health care law's Prevention and Public Health Fund. GOP leaders argue that since Dems have been willing to dip into the fund in the past to pay for other priorities, they should be amenable to doing so for college students. But that obscures the fact that the GOP measure would eliminate the fund altogether.

Senate Dems have countered with a measure that would close a loophole that allows certain high-income professionals to dodge payroll taxes -- and they claim that Republicans were open to the idea when the payroll tax holiday was at stake.

"We didn't propose the Buffett Rule in the Senate, we didn't propose [ending] the oil and gas [subsidies]," Schumer said. "It was on the table for a long time ... during the payroll tax discussions. They didn't take it off the table. It's a reasonable thing."

Senate Minority Leader Mitch McConnell's spokesman Don Stewart strongly objected to Schumer's characterization, claiming that Republicans never publicly nor privately entertained the idea of closing the loophole.

"The only thing bipartisan about their plan to raise taxes on small business and divert $6 billion from Medicare, is the opposition," he said.

Republicans have publicly opposed all revenue raisers in negotiations with Democrats over funding programs and reducing the deficit. It's possible that certain Republicans were privately warmer to closing the loophole than they have been to raising taxes on millionaires -- but that's never been their publicly held position. Democrats, though, see a chance to tighten their squeeze on the GOP for consistently opposing increasing the tax burden on the wealthy -- even in uncontroversial ways -- to pay for federal programs that enjoy broad public support.

So far the strategy hasn't suffocated the party's anti-tax absolutism, but recent signs suggest some moderate Republicans are trying to break free. Whether they do or not will have an enormous impact after the election, when a lame duck Congress must act to avoid about $7 trillion of economically devastating fiscal tightening set to happen automatically when the Bush tax cuts expire and across-the-board spending cuts kick in on Jan. 1.

About The Author

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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com