The stalemate over how to prevent the interest rate on student loans from doubling in July played out behind closed doors and in dueling memos on Capitol Hill Thursday.
House Republicans made the first move, signaling that they are leaving it to the Democrats to come up with a plan to stop the pending increase.
The rates on many federal loans will double in July unless Congress passes legislation to extend the current 3.4 percent rate.
The GOP-led House passed legislation that would freeze the interest rate, but the measure would cover the $6 billion cost by stripping the money out of President Obama’s health care reform law.
House and Senate GOP leaders on Thursday wrote to Obama, outlining this plan and other options they say they would consider to pay for the rate freeze.
"We believe our alternative is reasonable and responsible, but in the interest of finding common ground on a way to pay for a one year extension of the current student loan interest rate we are open to other solutions that we have all supported in the past," said the letter, signed by House Speaker John Boehner, R-Ohio, Senate Minority Leader Mitch McConnell, R-Ky., and other GOP leaders.
The Democratically run Senate last month tried to pass a bill that would pay for the interest rate freeze by increasing payroll taxes on some small businesses, but Republicans blocked it.
In a closed-door House GOP meeting Thursday, Boehner told Republicans that if no deal is reached and the rates double in July, Democrats would be blamed. He said the rates could be lowered retroactively if a deal is worked out after July.
"The speaker told the members that the president wants to fabricate fights on things like student loans because he’s out of ideas," said an aide who was in the room. "He doesn’t want to talk about his record or his failed policies."
House Minority Leader Leader Nancy Pelosi, D-Calif., who got wind of the meeting, interpreted Boehner's remarks as a signal that he has given up on the effort to negotiate a deal to freeze the interest rate.
"As the clock ticks closer to the deadline for millions with student loans, Republicans have continued to make it clear that they were never interested in helping students in the first place," Pelosi said.
Republicans say their letter to Obama makes it clear they are ready to work out a compromise and are waiting for the Democrats to make a move. A suggestion Democrats derided.
“This letter is a complete and utter ruse," said Drew Hammill, a spokesman for Pelosi. "In the privacy of his Republican Conference meeting this morning, the speaker said that he will abandon efforts to prevent student loan interest rates from doubling by July 1st. This letter is nothing than a damage control effort to try to hide the disdain the House Republican leadership continues to show for the millions of American students who are struggling to afford to pay for college.”
