WASHINGTON – Senate Democrats failed to muster enough support last week to advance legislation to allow borrowers to refinance student loans.
Sen. Elizabeth Warren, D-Mass., proposed the bill as a way to provide relief to people saddled with student loans at interest rates topping 7 percent. Older loans could be refinanced for rates below 4 percent.
“This debt is crushing our young people and dragging down our economy by keeping borrowers from being able to buy homes, cars, and open small businesses,” she said.
Americans have about $1.2 trillion in outstanding student loan debt.
Senate Republicans objected to the measure, calling it an election year stunt that would do nothing to staunch the rising cost of higher education.
They also noted that it could not advance because revenue bills must start in the House. Warren’s bill paid for lower interest loans by raising taxes on millionaires – a strategy nicknamed the “Buffett rule” after billionaire Warren Buffett who once said his secretary paid a higher rate of tax than he did.
“The proposal before the Senate is not a serious proposal,” said Sen. Lamar Alexander, R-Tenn. “There is nothing in it for current or future students.”
The Senate voted 56-38 on a procedural motion that needed a 60-vote tally to advance. Only three Republicans voted in favor.
Sens. John Cornyn, R-Texas, Ted Cruz, R-Texas, Tom Coburn, R-Okla., and James Inhofe, R-Okla., voted against it.
House approves highway and housing spending
The House voted to provide $52 billion in discretionary spending in the next fiscal year for transportation, housing and urban development programs.
The total for the 2015 fiscal year fell $7.8 billion below what President Obama requested and $2.4 billion less than the Senate Appropriations Committee has suggested.
Republican proponents said the bill was fiscally sound while still maintaining a strong commitment to transportation and housing.
“This is sensible, balanced bill that prioritizes funding on important transportation programs that will help boost our economy and improve our quality of life, while also providing housing options to those Americans in need,” said House Appropriations Committee Chairman Hal Rogers, R-Ky.
Most Democrats opposed the bill saying it cuts spending too deeply for mass transit and housing programs.
“Deep cuts were made to Amtrak, cuts were made to grants for new transit systems, HUD’s HOME program, and HUD’s program to reduce hazards of lead,” said Rep. Ed Pastor, D-Ariz.
The House approved the bill on a 229-192 vote. Reps. Tom Cole, R-Okla., and Markwayne Mullin, R-Okla., voted in favor. Rep. Ralph Hall, R-Texas, did not vote.
House favors small business tax break
The House voted to make permanent a tax break that would allow small businesses to write off up to $500,000 in new equipment purchases.
Proponents argued that making the tax break permanent would give certainty to businesses looking to improve their operations.
Since 2010, small businesses are now able to write off up to $500,000 in equipment purchases up front but as that measure expires this year the maximum write off will drop to $25,000.
There are about 50 temporary tax breaks that similarly are ready to expire but to make them all permanent would cost nearly $1 trillion over the decade – giving Congress headaches over how to proceed.
Opposition to the small business extension came largely from some Democrats who argue instead for temporary extensions until Congress tackles the entire tax code.
The expensing provision measure was approved on a 272-144 vote. Hall, Cole and Mullin voted in favor.