Reid calls on GOP to accept Dem 'compromise' on student loans

By Pete Kasperowicz - 05/07/12 02:28 PM ET

Senate Majority Leader Harry Reid (D-Nev.) on Monday called on Senate Republicans to accept Democratic language to extend low interest rates on federally subsidized student loans for another year, language that Reid said is a "compromise" even though no Republican has expressed support.

"There's already a compromise that's on the table," Reid said on the Senate floor. "Our legislation closes a loophole that allows the rich to avoid taxes.

"Our proposal is not a new tax," he added. "It would simply stop wealthy Americans from dodging taxes they are required to pay."

The Senate is currently considering a proposal from Reid and other Democrats to keep the interest rate on Stafford loans at 3.4 percent, avoiding a scheduled jump to 6.8 percent in July. But Reid's proposal, which is co-sponsored by 15 Democrats and no Republicans, would pay for the $6 billion cost of the extension by eliminating language in the tax code that allows high-income earners to shield some of their earnings from the payroll tax.

House Republicans have already approved their own bill that pays for the lower interest rate by eliminating a preventive healthcare fund created in the 2010 healthcare law. But Reid on Monday sought to remind Republicans that their bill has no chance in the Senate.

"Republicans know their proposal would never pass the Senate, never," he said. "And President Obama has said he would veto more cuts to crucial preventive healthcare."

Despite Reid's warning, the Senate Democratic bill is equally unlikely to pass the House, if it can even be passed by the Senate. Reid said the Senate on Monday was debating a motion to proceed to the Democratic alternative, which could be voted down if there is enough Democratic opposition.

At the end of his opening remarks, Reid also asked for unanimous consent to approve the nominations of two officials to join the Federal Communications Commission. The Senate agreed, and quickly confirmed Ajit Pai of Kansas and Jessica Rosenworcel of Connecticut.