National Journal

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It's classic Congress. Everyone agrees that student-loan rates should not double from 3.4 percent to 6.8 percent on July 1. But the arguments over how to fix the problem may end up keeping the rate in place.

The details are confusing, but basically, two ideas are competing for solving the problem with student-loan rates. One, which President Obama endorses, would tie the rates to the 10-year Treasury note while extending the current rate for two years. The rates would also be fixed, meaning an individual's rate would be locked throughout the course of the loan.

Certain Senate Democrats don't want to increase loan rates over time by tying them to the Treasury note. "We'd like to see a cap on the interest rates so that the students have some certainty as to their future debt," Senate Majority Whip Dick Durbin, D-Ill., told National Journal the other day.

The House has already passed a version of the bill that somewhat mirrors the president plan, although it would increase the rates at a higher percentage, and not fix the rates for students embarking on their loans. The president has threatened to veto this.

Got it? We don't blame you if you don't. This is the nitty-gritty of governance; the stuff that this Congress and the previous one have found such a hard time dealing with.

With 10 days to go, we've got a Congress scrambling to find a solution to a problem that everyone knows needs fixing. Angered at the holdup, Speaker John Boehner drafted a letter to the president, insisting that he get the Senate Democrats in order. After all, the president and the Republicans agree that the rates should increase with the market. Why hasn't  a compromise been worked out yet?

The speaker writes:

Republicans embraced the idea, and the House recently passed the Smarter Solutions for Students Act, a plan echoing your own. The Associated Press called this a "win" for your administration. This solution is even a part of the House GOP Plan For Economic Growth & Jobs. Unfortunately, Senate Democrats have thus far rejected your idea, and — with just 10 days until the deadline — the House is the only chamber of Congress that has passed legislation to prevent interest rates from doubling.

Boehner also couldn't resist rubbing the insubordination in the president's face:

On an issue you have made a top priority, it is astonishing that your fellow Democrats have been so openly hostile to your proposal. I, of course, respect that you are dealing with a variety of important issues, at home and abroad. But, still, I must ask: What are you and the members of your administration doing to get Senate Democrats to pass a market-based interest rate before the upcoming deadline?

The full text of the letter:

June 20, 2013

The President

The White House

1600 Pennsylvania Avenue, Northwest

Washington, DC 20500

Dear Mr. President:

Without your intervention, Senate Democrats are going to double interest rates for millions of college students.

In the administration's recent budget proposal, you called for converting to a market-based interest rate for federal student loans. Republicans embraced the idea, and the House recently passed the Smarter Solutions for Students Act, a plan echoing your own. The Associated Press called this a "win" for your administration. This solution is even a part of the House GOP Plan For Economic Growth & Jobs. Unfortunately, Senate Democrats have thus far rejected your idea, and — with just 10 days until the deadline — the House is the only chamber of Congress that has passed legislation to prevent interest rates from doubling.

That is unacceptable.

I must assume that you are as frustrated as I am by the actions of Senate Democrats. Last week, Republicans offered to bring up and pass your proposal on the Senate floor, but it was blocked by Senator Elizabeth Warren (D-MA). The Democratic Chairman of the Senate Committee on Health, Education, Labor, and Pensions, which has jurisdiction over this issue, publicly and sharply criticized your policy approach, telling the press he's "very upset" with you.

On an issue you have made a top priority, it is astonishing that your fellow Democrats have been so openly hostile to your proposal. I, of course, respect that you are dealing with a variety of important issues, at home and abroad. But, still, I must ask: What are you and the members of your administration doing to get Senate Democrats to pass a market-based interest rate before the upcoming deadline?

Frankly, there is no evidence that Democrats are making a sincere effort to get a bill passed in the Senate. With Republicans and you in general agreement on the policy, it is difficult to identify any motivation other than politics to explain why a solution has not already been signed into law.

This situation is exactly why we must take politics out of federal student loans and put in place a long-term solution tied to market rates, as you proposed. Republicans have worked in good faith every step of the way to enact a responsible, bipartisan solution. The House passed a plan that mirrors your own. The differences between the House plan and yours are minor. Unfortunately, they cannot be resolved if Senate Democrats refuse to even accept our shared approach and the need for a long-term solution.

Let me be clear: Senate Democrats' unwillingness to follow your lead is the only thing standing in the way of a long-term solution for students. I urge you, as president and the leader of your party, to compel your Democratic colleagues to pass a market-based student loan bill before you leave the country next week.

Sincerely,

John Boehner

This article is from the archive of our partner National Journal.

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