Congressional Republicans on Wednesday announced their opposition to a Democratic proposal to pay for extending low rates for college loans by imposing new payroll taxes on some small businesses.
Instead, House Speaker John A. Boehner (R-Ohio) said the House would vote Friday on a proposal to hold the interest rates steady — offsetting the $6 billion cost with a cut in a health prevention fund created under President Obama’s health-care law.
“What Washington shouldn’t be doing is exploiting the challenges that young Americans face for political gain. And it shouldn’t be sticking small businesses with a health-care law that’s . . . making it more difficult for them to hire workers,” Boehner told reporters.
This sets up a showdown with Democrats, who introduced legislation Wednesday to extend student loan rates at 3.4 percent for another year, rather than allowing them to jump to 6.8 percent July 1. The move came as Obama toured college campuses. Democrats say their proposal would close a loophole that allows some businesses with three or fewer shareholders to avoid payroll taxes.
The impending jump in college loan rates is becoming a key campaign issue, with Democrats hoping it could rouse young voters who helped propel Obama to victory four years ago. It could also appeal to their middle-class parents. Apparent Republican presidential nominee Mitt Romney said Monday that he too favors keeping the loan rate low for 7 million borrowers.