Republicans attempt to divert healthcare fund into student loans

The Republican-led U.S. House of Representatives defied Obama lead Democrats to divert money from the health care sector to go towards low-interest rates for federal student loans.

On a mostly party-line vote of 215-195, the House sent the measure to the Senate where Obama’s Democrats are certain to reject it. Like Obama, they want to renew the low rate, but favor covering the one-year, $6 billion cost by ending a tax break for the rich.

As usual, the move has huge political connotations. Both parties are vying for votes from the youth community and hard working parents, who are trying to get their children through college.

Democrats and Republicans have until July 1 to find a widely anticipated compromise. That’s when the rate is set to double on Stafford loans to 6.8 percent for more than 7 million students. Thirty Republicans broke ranks and voted against the House bill after the Club for Growth, an influential conservative advocacy group, came out against it. Overall, 13 Democrats joined 202 Republicans in voting for the bill, while 165 Democrats and 30 Republicans and voted no. Obama cranked up pressure on Congress in recent weeks with visits to college campuses where he portrayed Republicans as unsympathetic to their plight.

Democrats denounced the Republicans’ proposal to extend the student loan interest rate because it targets Obama’s 2010 healthcare law, which Republicans have sought to repeal. Their measure would eliminate the Prevention and Public Health Fund, which Republicans labeled a “slush fund.” Republicans noted that $4 billion had been taken out of it just months ago to finance an extension of a payroll tax and jobless benefits. “It’s a common-sense plan that deserves bipartisan support,” said Republican Representative Judy Biggert, a chief sponsor of the measure. Democrats complained it would eliminate the remaining $12 billion in the fund, which they say is critical to preventative healthcare, particularly for women and children.

The White House, in its veto threat, called the bill “a politically motivated proposal and not the serious response to a problem that America’s college students deserve.” The Senate is set to vote on May 8 on a bill to fund extending the loan rate by plugging a loophole that Democrats say wealthy professionals use to avoid payroll taxes.

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