Top congressional Republicans made a new offer to President Obama on Thursday in their fight over heading off a doubling of interest rates on federal college loans for 7.4 million students, proposing fresh ways to cover the effort's $6 billion cost.
The GOP ideas were modeled on savings that Obama had included in his budget for this year, suggesting that negotiations over ending the election year impasse could take a serious turn. Until now, both sides have favored extending today's 3.4 percent interest rates on subsidized Stafford loans for another year but clashed over how to pay for it.
House Speaker John A. Boehner, R-Ohio; Senate Minority Leader Mitch McConnell, R-Ky.; and other top Republicans made their proposals in a letter to Obama. They included savings from making it harder for states to collect some federal Medicaid reimbursements.
"There is no reason we cannot quickly and in a bipartisan manner enact fiscally responsible legislation," the letter said.
The leaders sent the letter on the same day that Boehner used a barnyard vulgarity in a meeting with GOP lawmakers to describe Democrats' efforts to use issues such as the student loan fight to distract voters from the country's economic woes, said Boehner spokesman Michael Steel.
Boehner told his colleagues that it would be the Democratic-led Senate's fault if Congress and the White House end up in stalemate and don't act before July 1, the day interest rates would automatically double to 6.8 percent. He also told them that even if there is a deadlock that day, Congress could retroactively reduce the interest rates later, making July 1 a phony deadline, Steel said.
The House approved a GOP-written bill paying for the extension by abolishing a preventive health care program, but that measure has drawn a White House veto threat. Republicans derailed a Senate Democratic bill financing the interest rate extension by boosting payroll taxes on some high-earning owners of private firms.
Citing the letter from the GOP leaders, White House spokesman Matt Lehrich said, "The president will work with members of both parties to prevent the interest rate from doubling."