GOP Wants Retirement Costs to Pay for Student Loans
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UPDATED: Jun 1, 2012
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As July 1 fast approaches, the date that federal student loan interest rates are scheduled to double, the two major political parties have both struck down each other’s proposals at extending the artificial interest rate ceiling.
The most recent failed vote came as a result of Republican lawmakers voting against a Democratic proposal to pay for the cost of keeping college interest rates low by raising certain businesses taxes.
But a counteroffer has just been made, and conservatives are asking Democrats to consider raising retirement costs for federal employees in an attempt to pay for the multi-billion dollar cost of keeping student loan rates at their current 3.4 percent cap.
“We believe our alternative is reasonable and responsible, but in the interest of finding common ground on a way to pay for a one year extension of the current student loan interest rate we are open to other solutions that we have all supported in the past,” conservatives from both the House and Senate said in a letter addressed to President Obama.
Currently, most federal employees contribute 0.8 percent of their salary to their own civil service retirement benefit, plus an additional 4.2 percent towards social security.
In response, the National Treasury Employees Union (NTEU) submitted a letter of its own to the President, urging him to reject Republican’s proposal.
“While we have not always agreed with your budget proposals, you have consistently pushed for balanced proposals that require burdens to be broadly shared,” began NTEU President Colleen M. Kelley in the letter. “On the other hand, the House and Senate Republican leadership has sought to single out the federal workforce as virtually the only source of acceptable spending cuts and revenue increases.”
The letter from the Republicans suggested another proposal for funding the student loan interest rate reduction by changing the way federal student loans work, the way Medicaid currently works, and the way Social Security payments are collected.