« Obama Campaign Highlights Bin Laden Success, Doubts About Romney in New Video | Main | Massachusetts Sen. Scott Brown Releases Six Years of Tax Returns »

Differences Persist in Congress’ Struggle to Extend Student Loan Rate

iStockPhoto/Thinkstock(WASHINGTON) -- The top congressional leadership was out in full force on Thursday as leaders from both political parties in both chambers of Congress promoted the position of their respective caucuses in the latest battle over congressional funding on Capitol Hill.

At issue is finding an amicable way to pay for or offset the costs of extending the current student loan interest rate of 3.4 percent, rather than permitting the rate to double on July 1 to 6.8 percent.

Republicans and Democrats have both proposed alternative methods to cover the cost of the extension and, judging by their comments on Thursday, a huge gulf remains between the two parties.  While House Speaker John Boehner, R-Ohio, announced on Wednesday that the House would vote Friday on a one-year extension that is paid for by pulling funds from the president’s health care law, Democrats prefer to raise taxes on small businesses in order to cover the $6 billion expense.

Senate Majority Leader Harry Reid, D-Nev., said he was “very disappointed” in Boehner’s plan to hold a vote on the GOP’s bill Friday, telling reporters that covering the cost by pulling from preventive health care funds “doesn’t sound like a very good deal to me.”

“We simply want to renew this, and it’s the right thing to do.  This affects seven million students.  They’ll get an average of about $1,000 a year increase in their interest and that’s a lot [for those] struggling to get through school,” Reid told reporters Thursday on Capitol Hill.  “We believe there’s an easy solution.  We can pay for this with a tax that people who make a lot of money have been avoiding for a long time by changing from ordinary income, they put this into sub-chapter S and avoid taxes.”

New York Democratic Sen. Charles Schumer, the number three ranked Democrat in the Senate, said that the House’s way of paying for the rate is a “poison pill” that stands no chance of passing the Democrat-controlled Senate.

“If it’s true Republicans support stopping the rate hike, they have a weird way of showing it.  In the House, the proposal they’re advancing has a poison pill attached to it,” Schumer said.  “Their offset is a partisan proposal that tries to refight the debate over the president’s health care law.  That’s not a serious attempt to pass this student loan bill.”

Schumer complained that Republicans are attempting to force Democrats to “choose between helping students afford college tuition or forcing women to go without mammograms.”

“They want to give to the middle class, but only when they take from the middle class and that’s because they don’t want to touch their true constituency, the wealthiest people in America who at every turn they try to make their lives even better,” he said.  “They’re not the people who need help in America.”

Copyright 2012 ABC News Radio

ABC News Radio