In an awkward move Wednesday, Senate Republicans voted overwhelmingly for two GOP-written budgets that would each let student loan interest rates spike in July, even as they insist they want to avert such an outcome.Budget measures by Rep. Paul Ryan (R-WI) and Sen. Pat Toomey (R-PA) went down 41-58 and 42-57, respectively. Both let Stafford loan rates double from 3.4 to 6.8 percent, which President Obama and Democrats have been pushing to prevent. Mitt Romney and GOP leaders say they want to extend the existing rate but differ on how to pay for it.
The budget votes were largely a Republican effort to embarrass President Obama and Democrats for failing to coalesce around a long-term fiscal vision. But it also presented an opportunity for Sen. Tom Harkin (D-IA) and Senate Budget Chairman Kent Conrad (D-ND) to needle the GOP on a contradiction.
“Does this budget permit the interest rates on student loans to double on July 1?” Harkin asked of the Ryan budget, which has already passed the House.
“It does,” Conrad replied.
“Thank you, senator,” Harkin said.
Harkin and Conrad repeated the exchange prior to the vote on the Toomey budget.
“I hope that every senator who votes for this knows … they’re voting to double student interest rates on July 1,” Harkin said.
The awkwardness of the situation wasn’t lost on Senate Minority Leader Mitch McConnell (R-KY), who voted for the Ryan plan. In a readout of a Wednesday lunch between Obama and congressional leaders, his office sent reporters notice that he affirmed his support for continuing the lower rates.
“We all agreed that rates shouldn’t go up this year and that we need to resolve the differences and pass legislation together,” said McConnell.
Democrats and Republicans are at a standoff on how to fund the $6 billion cost of a one-year freeze on student loan rates.