Legislation that would stave off a proposed rate hike for student loans failed to pass a key procedural hurdle today in the U.S. Senate—even though the basic policy has the support of President Barack Obama, presumed GOP presidential nominee Mitt Romney, and congressional Democrats and Republicans.
The measure failed, 52 to 45, to gain "cloture"—or having lawmakers agree to cut off debate and vote. And, as American government teachers know, a simple majority isn't enough here. Senators need at least 60 votes to cut ff debate.
Interest rates on new student loans are set double on July 1, to 6.8 percent from 3.4 percent, unless Congress acts. The U.S. House of Representatives, which is controlled by Republicans, already passed a bill to head-off the rate hike.
So what's the problem here? Lawmakers can't agree on how to pay for the plan. The Senate legislation would have covered the cost by making tax changes for certain businesses, which Senate Democrats say aren't paying their fair share. But Republicans countered that the proposal amounts to a tax on small businesses. The House legislation, by contrast, would cover the cost of the plan by cutting a portion of the controversial health care law aimed at preventative care—which nearly all Democrats say is the wrong way to go. A House Democratic bill takes aim at oil subsidies.
So what happens now? Will there be a compromise—or a round of finger-pointing if rates go up as scheduled? Stay tuned.
Photo: Sen. Dan Coats, R-Ind., talks to a reporter in an elevator on Capitol Hill in Washington following the May 8 vote on student loans. (Susan Walsh/AP)