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Student Loan Shift for GOP

Republican leaders have managed to shift the narrative on student loans in their favor, leaving Democrats and the White House flat-footed on an issue they thought they owned.

Democrats appear flummoxed by last week’s offer from House and Senate Republican leaders to pay for the $6 billion cost of delaying the doubling of student loan interest rates with proposals culled from President Barack Obama’s own budget blueprint. Indeed, Democrats are still talking about an earlier Republican bill that would have cut a program from Obama’s health care overhaul instead.

The offer, proposed in a letter to the White House, has gone five days without a response — and on Tuesday, Republicans were more than happy to pin the obstructionist label on the other party.

Senate Minority Leader Mitch
McConnell (R-Ky.) bashed the White House for not responding to the GOP’s offer even as Vice President Joseph Biden was set to hold an event at the White House on college costs.

“Why doesn’t the vice president just pick up the phone, choose one of the proposals we laid out in our letter and then announce at this meeting that the problem’s been solved?” McConnell asked. “That way he’ll give these folks some good news to bring back to their campuses, instead of just asking them to be props in this
elaborate farce the White House political team cooked up on this issue. … The only people dragging their feet on this issue are over at the White House.”

Biden seemed stuck on last week’s talking points.

“I hope to lord Congress decides to get serious about it and stop playing — my word — playing games” and taking it out of health care, Biden said. “This should not be that hard.”

Biden was asked by a pool reporter about the new GOP proposal.

“We’re looking at what [Speaker] John Boehner says he’s now going back and … we’re wide open to listen to him,” Biden said. But, “we’re not going to trade off student loans for other vital, vital programs.”

But the new GOP offsets are ones the White House itself has proposed separately.

Secretary of Education Arne Duncan also wouldn’t talk about specifics of the offer during a Tuesday press conference at the White House.

“If it’s a serious proposal, then we’ll entertain it seriously,” he said. “Again, I don’t know all the details. I have a lot of respect for Sen. McConnell, and he’s very serious about this. We want to sit down with him and Speaker Boehner and everybody else who wants to get this done and get it done.”

But so far, Republicans complain they can’t get anyone from the White House to give them a call. Boehner’s office released a “Post-it” note addressed to Biden reiterating the Republican offer.

Still, Senate Majority Leader Harry Reid (D-Nev.) questioned whether the GOP was acting in good faith. Reid referenced a Politico report from last week that said Boehner told his Conference a deal this month on student loans was unlikely on the same day Republican leaders sent their letter to the White House. The Ohio Republican reportedly called it a “phony” debate.

“When in doubt, wave your arms, scream and shout. That’s what they’re doing,” Reid told reporters Tuesday. “This is all just a game that’s being played. … If they want to negotiate in good faith, we’ll do that. But you can’t have someone sending a letter one day saying, ‘Let’s sit down and talk,’ when they say to their caucus, ‘We’re not going to extend this reduction.’”

Reid said he plans to bring up the massive five-year farm bill next, which could take weeks of floor debate. And with the House and Senate taking alternating breaks, the timeline to get a student loan agreement done before rates double on July 1 is short.

That deadline pressure, however, could work to lawmakers’ benefit. Even in one of the most dysfunctional Congresses on record, Members have found ways to strike deals before laws expire.

Senate Majority Whip Dick Durbin (D-Ill.) said he saw a place to at least start talks with Republicans in their letter to Obama. And though he stopped short of saying he was “optimistic” about a deal, Durbin said he is “realistic” and that “with a deadline, we’ve got a chance.”

“The deadline is coming. July 1 is coming. We’ll be back on it, as will the White House, because it’s a viable issue, an important issue,” Durbin said. “The fact that Republicans made an offer is rare around here, and although the first section of the offer is, I think, totally unacceptable, the second section at least opens the conversation, which is I think a good start.”

The GOP offered two options to Democrats. The first, which Durbin said would be unacceptable to his party, would offset the costs of the student loan bill with an increase to federal employee retirement contributions by 1.2 percent over three years.

The second option was a combination of three pay-fors: limiting the duration of borrowers’ in-school interest subsidy for Stafford loans, revising the Medicaid provider tax threshold and improving state and local pension collection information.