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Posted at 12:53 PM ET, 04/27/2012

House approves student loan plan; White House vows veto over health fund depletion


(Butch Dill - AP)

The House approved a Republican-backed plan Friday to keep subsidized student loan interest rates lower for another year, but the White House vowed to veto the measure because it would pay for the extension by taking money from a preventive care fund established by President Obama’s health-care overhaul law.

The disagreement has sparked an election-year fight over an otherwise uncontroversial issue as lawmakers go home this weekend for a week-long recess and Obama and presumptive Republican presidential nominee Mitt Romney continue campaigning across the country.

Roughly 7 million borrowers could see rates on student loans jump from 3.4 to 6.8 percent when the current rates expire July 1. Obama raised the issue during campaign-style appearances this week at college campuses in key battleground states as he urged Republicans to join Democrats in quickly extending the low rates for another year. Romney also said this week that he backs extending the rates.

But the White House said Friday that Obama would veto the GOP plan, calling it “a politically motivated proposal” because it taps the Prevention and Public Health Fund to pay for the extension.

Congressional Democrats agreed: “This bill goes in the wrong direction trying to do the right thing,” House Minority Whip Steny Hoyer (D-Md.) said before the vote. Hoyer and others blamed Republicans for picking another fight over the health-care law by trying to deplete a fund that they said provides money to city and state governments to help prevent obesity, the spread of HIV/AIDS and tobacco use and to train public health workers.

But House Speaker John Boehner (R-Ohio) struck back angrily at those claims during a floor speech ahead of the vote, slamming the podium several times for emphasis.

“Why do people insist that we have to have a political fight on something where there is no fight?” Boehner asked. “There is absolutely no fight. People want to politicize this because it’s a political year. But my God, do we have to fight about everything? And now we’re going to have a fight over women’s health. Give me a break.”

Republican lawmakers cheered as Boehner continued: “This is the latest plank in the so-called ‘War on Women.’ Entirely created by my colleagues across the aisle for political gain.”

Ultimately, lawmakers voted 215 to 195 to approve the measure. Thirteen Democrats joined Republicans in voting for the bill; 30 GOP lawmakers voted against it, including Rep. Virginia Foxx (R-N.C.), who Obama singled out this week during a visit to North Carolina for comments she made about college students who graduate with debt.

The GOP plan differs substantially from a Senate Democratic plan unveiled Wednesday that would pay for the extension by imposing new payroll taxes on some businesses with three or fewer shareholders — so-called “S corporations.” But the Senate won’t vote on its plan until after it returns from a week-long recess May 8, most likely prolonging the debate for at least the next 10 days and beyond as House and Senate leaders work to strike a compromise.

Anticipating the fight, Senate Democrats joined in faulting Republicans for protecting wealthy tax dodgers over college students.

“This is a clear definition of priorities between the parties,” Sen. Dick Durbin (D-Ill.) told reporters Thursday.

Sen. Charles E. Schumer (D-N.Y.) said Obama has successfully raised pressure on Republicans, forcing them to put forward a proposal on student loans. But he said they inserted a “poison pill” in their bill to ensure that it would not pass.

“To eliminate the public health prevention fund? Everyone who follows politics for five minutes in Washington knows that’s a nonstarter for Democrats. And they [Republicans] know it, too,” Schumer said Thursday.

Democrats acknowledge that they have agreed to make cuts to the preventative care fund before but they will not agree now to zero it out. They insisted that if they’d wanted to be purely political on the issue, they would have proposed paying for the student loan rate cut with the “Buffett rule” proposal on taxes for higher earners. Instead, they said closing the S-corporation loophole was an idea considered by members of both parties during negotiations.

“It seem that Republicans right now would rather protect tax loopholes for millionaires than stop loan rates from doubling on college students,” Schumer said.

But Boehner said Thursday that the simple task of keeping student loan rates low never would have developed into a partisan fight if Obama hadn’t visited college campuses this week to score political points and create “a fake fight.”

“Democrats and Republicans fully expected this would be taken care of,” Boehner said, “and for the president to make a campaign issue out of this — and then to travel to three battleground states and go to three large college campuses on taxpayer’s money to try to make this a political issue — is pathetic.”

Staff writer Rosalind S. Helderman contributed to this report.

This story has been updated since it was first published.

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