Pushing back on an aggressive campaign from Democrats and the White House for Congress to extend the temporary low interest rate for federally subsidized student loans, conservative groups are pressuring Republicans to kill the Interest Rate Reduction Act, which would keep the interest rate from doubling to 6.8 percent this year.
The Club for Growth and Heritage Action for America, the advocacy arm of the conservative Heritage Foundation think tank, announced this week that any lawmaker who votes for the bill will be dinged on their annual congressional ratings. The score cards issued by these groups are meant to measure the members' conservativism based on key votes throughout the legislative year.
"Decades of government intervention have driven tuition costs to record highs and continuing these subsidies is simply bad policy," Club for Growth President Chris Chocola said in a statement. "We urge members of Congress to oppose them."
Congress first set the 3.4 percent rate as a temporary measure in 2007, and a one-year extension of the low rate is expected to cost the Treasury $5.9 billion. To pay for the extension, the House version of the bill proposes gutting the Prevention and Public Health Fund, which was established by the federal health insurance reform law in 2010, and using that money to pay for the lower interest rate. The White House on Friday threatened to veto the Republican version if it passes to save the Health Fund.
Using the health care law as a vehicle to pay for the extension, however, could muddle the Republicans' call to repeal the law in the future. In effect, Republicans who vote for the bill would be using the health care law as a slush fund for new spending, even though they think that spending never should have been allocated in the first place.
The House is expected to vote on the bill Friday afternoon.
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