WH threatens veto on student loan bill because of health reform repeal

Updated at 12:21 p.m.

(CBS News) The Obama administration has issued a veto threat of the House version of a bill to extend low interest rates on student loans because the Republican version of the legislation would repeal part of President Obama's health care overhaul.

"This is a politically-motivated proposal and not the serious response that the problem facing America's college students deserves," the Office of Management and Budget (OMB) said in a statement. "If the President is presented with H.R. 4628, his senior advisors would recommend that he veto the bill."

The House is voting today on the legislation, which is primarily aimed at preventing a 3.4 percent increase in federal student loan interest rates. If Congress doesn't act by July 1, the interest rate on new subsidized Federal Direct Stafford Loans for undergraduate students will double from 3.4 percent to 6.8 percent.

Mr. Obama has campaigned aggressively for Congress to extend the low interest rates. Some Republicans in the House have opposed the extension on the grounds that it would come at a high cost to taxpayers, and they objected to the Democrats' proposal to pay for it by eliminating some of the subsidies on the oil industry. Republican presidential candidate Mitt Romney has said he "fully supports" the extension of the low interest rates.

The OMB in its statement reiterated Mr. Obama's full-throated support for the extension.

"The Administration strongly supports serious, bipartisan efforts to prevent interest rates from doubling for over 7 million college students in the coming year," the statement said. "Graduates should not be burdened with unmanageable college debt as they seek to launch a career or a business, start a family, or buy a house."

In order to pay for the student loan bill, the House bill would repeal the Prevention and Public Health Fund, a fund created as part of Mr. Obama's 2010 health care overhaul. The administration says women in particular would benefit from the fund, which would provide for hundreds of thousands of screenings for breast and cervical cancer.

Republicans were quick to criticize the White House's veto threat.

"The president is so desperate to fake a fight that he's willing to veto a bill to help students over a slush fund that he advocated cutting in his own budget," Brendan Buck, a spokesman for House Speaker John Boehner spokesman. "It's a simple as this: Republicans are acting to help college students and the president is now getting in the way."

Democrats, meanwhile, slammed Republicans for keeping up their "assault on women" by targeting the the Prevention and Public Health Fund. They also suggested Republicans aren't interested in extending the low interest rates but are bringing the bill forward for political reasons.

"On the floor of this House at this time on this day, the Republicans have folded because the president made the issue too hot to handle. That is why the bill is coming to the floor today," House Democratic Leader Nancy Pelosi told reporters. "And they're playing with fire... What we're saying here today is stop your assault on women."

Pelosi was asked why she allowed money to be taken from the fund to help pay for the payroll tax credit at the end of last year but opposes this measure.

"Good question, and all the more reason why we shouldn't be taking any more money out of it," she said. "We weren't happy that that was the only way that they would agree to the payroll tax reduction, but the fact is some money has already been taken out. All the more reason to leave the rest of the money in."

She added that Republicans are trying to eliminate the fund all together, not simply take out money from it.

While Republicans found a way to pay for the bill, some conservative advocacy groups are still calling on Congress to reject it. The influential Club for Growth, which produces an annual congressional scorecard, said today's vote would be a "key vote" that impacts each members' scorecard.

"The federal government should not be in the business of distorting the market for student loans," Club for Growth President Chris Chocola said in a statement. "Decades of government intervention have driven tuition costs to record highs and continuing these subsidies is simply bad policy. We urge members of Congress to oppose them."

Similarly, the conservative Heritage Action said in a statement, "Not only do the subsidies fail to stem the rising cost of a college education, the loans are also easily attained, increasing the likelihood taxpayers will be left on the hook when students default."

[Martha12345]

Obama can't have it both ways. No more debt increases. Down with the socialist turx.

[slatep]

Exactly what do college loans have to do with healthcare.?

REPEAL OBAMACARE and deal with all the bullcrap contained in it on an item by item basis.

Obamacare is nothing but 2,700 pages of Obama trying to get complete control over American lives all at one time so he can get on with his plans to make us a Socialist country when he buys the 2012 election.

[hhandyman]

Cut congressional and justices pay to near minimum wage hourly rates of the middle class and cut budgets on office funds to only 1 secretary per office holder disallow any gasoline allowance put them in solar powered electric cars so they wont use government cars after work day. or give em bicycles for after dark transportation get em on a health kick or to pay out of pocket for their own upkeep. if they feel middle class pain then they will better understand why the public is irritated at best with their governance.

[Thinkbeforeyouwrite]

The GOP complains about pitting one group against another (the old class warfare nonsense) and then proceeds to pit college students against women in need of health care. Political gamesmanship that only hurts the country.

[stormerF69]

Obama's budget called for the elimination of health care part of this bill,Now he wants it included in lower rates for student loans,with the Tax Payer subsidises? Must be nice to spend other people's money trying toget votes for yourself?

[parrots7]

Club for Growth President Chris Chocola said in a statement. "Decades of government intervention have driven tuition costs to record highs and continuing these subsidies is simply bad policy. We urge members of Congress to oppose them."

Similarly, the conservative Heritage Action said in a statement, "Not only do the subsidies fail to stem the rising cost of a college education, the loans are also easily attained, increasing the likelihood taxpayers will be left on the hook when students default."

***********************************************

Just wanted to point these out from the article. Dumb Dumb Repugs !!

[TimeToEvolve]

Can the greedy corrupt Republicons do ANYTHING for the good of the 99%. Or must they steal from some other social program just to have their corporate master job deleters maintain (or increase) their riches?

[stormerF69]

So the Tax payers are the 99%,did you even read the article? Obama wants this health program cut and offered it up in his own Budget,now he wants to play Santa Claus but does not want to pay for it.

[Jack_in_Ga]

This story is a load of crap. The democrats wrote the legislation in 2007 that doubles the cost of student loans today. Where is that in the story? What about the fact that the headline talks about repealing healthcare? It's not a repeal, we could only wish for that. It pulls 5.8 billion out of Obamacare that Dems rammed down Americans throats to pay to keep the student loan costs down.

The truth is that Bush spent 4 trillion in 8 years, Obama and dems have spent 5 trillion in 3 years. Now were broke so the time has come to make hard choices. If Dems want their socialized medicine then they should let the student rates double (like they knew it would when they wrote the legisation), if they want to pander to the whiners and greedy who think their healthcare should be paid for by someone else then go ahead an buy their votes at the expense of the students.

It's simple. Make a decision Obama, you can't buy off every American because you've already gone a long way to bankrupting America.

[retm-w]

You forgot to add in those two wars bush never paid for, and hid the cost.

[parrots7]

Jack in GA - just shamed a lot of repugs on these threads - especially with the debt info. Dumb Dumb Repugs !!

[slatep]

This i nothing new.

Congress and Obama seem to be determined to go down in history as the President and Congress who accomplished the LEAST in the four years from 2008 to 2012 than at any other four year time period ever.!!

[fiberglass3]

Republican'ts just don't get it. They knew this would be the outcome.

Just another game.

[littleoldguy]

Nothing will be done before the election, just like the game played in raising the national debt. All we voters can do is to let politicians in both parties know in November's election where we want the money come from and where we want the money spent.