Killing student-loan reform

While the U.S. Senate performed well with its bipartisan move to reform the Veterans Administration, when it came to student loans, it was petulant, partisan business as usual.

Sen. Elizabeth Warren, D-Mass., introduced a bill to allow borrowers with student loans issued before 2010 to refinance at 3.86 percent – the rate Congress set for federal student loans last year. While hardly a fix for the whole student-loan problem, the Obama administration had estimated it would have saved 25 million people $2,000 over the life of their loans.

Nonetheless, the bill died with a 56-38 vote on a now-routine cloture vote, which requires 60 votes to advance the bill to actual debate.

Republican opposition was nominally founded on the notion the bill was about election-year politics.

“It’s really all about Senate Democrats,” said Minority Leader Mitch McConnell, R-Ky. “They want an issue to campaign on to save their own hides this November.”

But if elected officials do what is good for their constituents, and the voters reward them with re-election, is that not how things are supposed to work? Republicans could have signed on and gotten the same benefit.

The real issue is that Warren’s bill would have covered the cost of lowering rates with the “Buffett Rule” – taxing incomes greater than $1 million as wages instead of capital gains, which is usually the case now. The GOP leadership was having none of that.

Warren had said the Democrats were open to alternative ways to pay for lower rates, but Republicans offered none. And Americans will continue to pay.

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