Speaker: House to vote Friday on student loans

In an escalating election-year clash, the House will vote Friday on a $5.9 billion Republican bill preventing interest rates on federal student loans from doubling this summer, paid for by cutting money from President Barack Obama's health care overhaul law.

Wednesday's abrupt announcement by House Speaker John Boehner, R-Ohio, came with Obama and Democrats clamoring daily for congressional action to prevent the current 3.4 percent interest rate on subsidized Stafford student loans from automatically increasing to 6.8 percent on July 1.

That increase, set by law unless Congress blocks it, would affect 7.4 million students at a time when both parties are competing for the votes of young adults and their parents who must foot college tuitions. Each is also trying to show voters that it knows best how to shield people from pain inflicted by the weak economy.

With Obama engaged in a series of campaign-style speeches in recent days about the need to block the interest rate boost, Republicans came under even greater pressure when Mitt Romney, the GOP's presumptive presidential nominee, announced Monday that he, too, favored the move.

Also taking the offensive were Senate Democrats, who introduced legislation Tuesday blocking the increase for a year. Senate Republicans said they backed the idea of freezing the interest rate but opposed a tax on some private corporations that Senate Democrats would use to pay for it. Until Boehner's announcement of Friday's vote, Republicans had nothing tangible they could vote for to demonstrate their support.

At a hurriedly called news conference, Boehner told reporters that Obama has been "trying to invent a fight where there wasn't and never has been one" and said, "We can and will fix the problem without a bunch of campaign-style theatrics."

He added, "What Washington shouldn't be doing is exploiting the challenges that young Americans face for political gain."

Boehner spoke after Obama had wrapped up his third college campus visit in two days, using his cheering young audiences as backdrops to laud Democrats' efforts to keep student loans affordable and to bash Republicans.

"Some of them suggest that students like you have to pay more so we can help bring down the deficit," he said about Republicans on Wednesday at the University of Iowa. "Now, think about that. These are the same folks who ran up the deficits for the last decade. They voted to keep giving billions of dollars in taxpayer subsidies to big oil companies who are raking in record profits. They voted to let millionaires and billionaires keep paying lower tax rates than middle-class workers."

House Republicans would pay for their one-year measure from a $17 billion prevention and public health fund Obama's law created for immunization campaigns, research, screenings and wellness education. Republicans have dubbed it a "slush fund" and sought to cut it to finance a variety of projects that they favor. There is $13.5 billion left in the fund for the coming decade, according to the administration.

The House GOP proposal ran into quick opposition from the White House, where spokesman Nick Papas said the two sides should pay for the bill with savings "that don't penalize middle-class families or undermine efforts to help more Americans stay healthy." Papas expressed confidence that an agreement could be reached.

House Minority Leader Nancy Pelosi, D-Calif., said the GOP had made "a dramatic reversal" because Republicans had pushed a federal budget through the House that would have let student interest rates double.

Pelosi has opposed eliminating the health care fund, which was already cut earlier this year to help pay for legislation preventing reductions in Medicare payments to doctors. But her statement stopped short of saying she would oppose the GOP bill on Friday.

"House Democrats will continue to work to ensure that seven million students and their families do not face this harmful interest rate hike," she said.

Senate Democrats' legislation would keep student loan interest rates at 3.4 percent for another year. It would be paid for by increasing the Social Security and Medicare payroll taxes owed by upper-income owners of some privately held corporations, including many lawyers' and doctors' practices.

Senate Republicans have voiced adamant opposition to that payroll tax proposal, saying it would make it harder for those firms to hire workers. But their leaders said they backed the goal of freezing interest rates for a year and accused Obama of trying to turn an easily resolvable issue into a political cudgel.

"Let's be honest," Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor. "The only reason Democrats have proposed this particular solution to the problem is to get Republicans to oppose it, to make us cast a vote they think will make us look bad to the voters they need to win the next election."

McConnell said the two sides' differences could be resolved if Obama would negotiate and "choose results over rallies."

House Democrats also introduced a bill keeping the interest rates from rising for a year and paid for by eliminating subsidies to large oil and gas companies.

Underscoring the free-swinging politics in play, Obama said before Boehner's remarks that House Republicans were indicating that they would only extend the rate by cutting other student aid, a path the GOP did not follow.

Without mentioning him by name, Obama also took a swipe at Rep. Todd Akin, R-Mo., a GOP Senate candidate who said the government shouldn't be involved in the student loan market and, Obama said, compared it to a "stage 3 cancer of socialism." Obama said, "I don't know where to start. What do you mean? What are you talking about?"

Akin used the cancer reference at an April 21 forum to describe the federal government's involvement in areas he said should be left alone. He also criticized Democrats for eliminating private student loans and having that lending taken over by the government.

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Associated Press writers Ricardo Alonso-Zaldivar and Jim Kuhnhenn contributed to this report.