Washington Digest: House acts to ease weight of student loans

WASHINGTON — With student loan interest rates ready to increase, the Republican-led House approved a bill that would lessen the blow for now.

Subsidized Stafford loans carry a fixed 3.4 percent rate that will double to 6.8 percent on July 1. The Republican plan would tie interest rates to 10-year Treasury notes, which the Congressional Budget Office said would make the rate 5 percent next year but could climb to 7.7 percent in 10 years.

“What the House is doing today is a responsible way to deal honestly with the issue of student loans,” said House Speaker John Boehner, R-Ohio.

Most Democrats opposed the GOP plan in favor of freezing rates for two more years, deferring the issue to a time when Congress is expected to rewrite its higher education law. Congress approved a one-year extension last year.

Republicans argued that the delay would cost taxpayers $9 billion.

The bill passed 221-198. Eight Republicans and four Democrats broke from their party.

The Democrat-led Senate is expected to set aside the House bill when they take up the issue after a Memorial Day holiday break.

“The bill passed today fails the first test of any policy: do no harm. It’s worse for students than if the rate doubles,” said Sen. Tom Harkin, D-Iowa, who leads the Senate Health, Education, Labor and Pensions Committee.

The Obama administration has threatened to veto the House bill.

Reps. Mark Amodei, R-Nev., and Joe Heck, R-Nev., voted for the bill. Reps. Steven Horsford, D-Nev., and Dina Titus, D-Nev., opposed it.

KEYSTONE PIPELINE

The House approved a bill that would bypass the president to approve construction of a pipeline that would carry up to 830,000 barrels of tar sands oil per day from Canada to refineries in the Gulf Coast of Texas.

The northern leg of the Keystone XL Pipeline Project is under review by the Department of State, which is expected to issue its report later this year. House Republicans say the project, which was first proposed in 2008, has been studied enough.

Environmental groups oppose the pipeline, saying the oil extracted from the tar sands in Alberta produces more pollution and will lead to additional greenhouse gas emissions they claim will harm the global climate.

“This House is considering a bill to cut corners for a foreign corporation to transport dirty fuel and raise gas prices for Americans. Why would we spend our time on this?” asked Rep. Jared Huffman, D-Calif.

“This project has been delayed long enough,” argued Rep. Markwayne Mullin, R-Okla. “The southern route, which runs directly through my congressional district, is already creating good-paying jobs … putting millions of dollars directly into the economies of small towns in my district.”

The bill was approved, 241-175, largely along party lines. The Obama administration has threatened a veto.

Amodei and Heck voted for the bill. Horsford and Titus opposed it.

NO FOOD STAMP CUTS

The Senate killed a proposal that would have slashed in half federal funding for the Supplemental Nutrition Assistance Program, formerly known as food stamps.

SNAP saw a rapid increase in enrollment over the past five years as more families struggled through the downturn in the economy and food prices rose. As a result, spending on SNAP rose from $28.6 billion in 2005 to $74.6 billion in 2012.

Sen. James Inhofe, R-Okla., proposed distributing SNAP funds as a “block grant” to states with a cap on federal funding at $45.5 billion in the next fiscal year.

“The funding provided is sufficient to provide benefits to the same number of participants as were enrolled in the mid-2000s,” Inhofe said.

Nearly 50 million Americans received SNAP benefits last year that amounted to about $4.50 per day for food.

Sen. Debbie Stabenow, D-Mich., who chairs the Senate Agriculture Committee, spoke against the amendment that Inhofe offered to a farm bill under debate in the Senate.

“Capping it and cutting it would not only hurt families who are counting on us for temporary help but it would create a situation where we couldn’t respond during an economic recession as we can right now,” Stabenow said.

The Senate vote on Inhofe’s amendment was 36-60.

Sen. Harry Reid, D-Nev., voted against the amendment. Sen. Dean Heller, R-Nev., voted in favor.

CROP AID LIMITED

During the farm bill debate, the Senate voted to reduce government crop insurance to the nation’s wealthiest farmers.

Sens. Dick Durbin, D-Ill., and Tom Coburn, R-Okla., proposed an amendment that would reduce subsidies available for crop insurance to farmers with adjusted gross income of more than $750,000.

“At a time we’re asking sacrifice from people in Head Start programs across America, can we be asking a little bit of sacrifice from 20,000 of the wealthiest farmers?” Durbin said.

Coburn said the amendment would save about $100 million a year.

The government now pays an average of 62 percent of crop insurance premiums. The proposed change would reduce the government subsidy to 47 percent for about 20,000 wealthy farmers.

Stabenow argued against the amendment saying it could cause farmers with large acreage to drop out of the crop insurance program that has conservation requirements built into it.

The result, she said, “will only reduce the environmental benefits and could lead to draining wetlands and plowing highly erodible land.”

The amendment was adopted, 59-33.

Reid voted in favor. Heller did not vote.

Contact Stephens Washington Bureau reporter Peter Urban at purban
@stephensmedia.com or 202-783-1760.

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