Democrat on Democrat: Warren spars with Manchin on student loan proposal

Liberal firebrand Sen. Elizabeth WarrenElizabeth Ann WarrenBoogeywomen — GOP vilifies big-name female Dems Overnight Health Care: Senate takes up massive HHS spending bill next week | Companies see no sign of drugmakers cutting prices, despite Trump claims | Manchin hits opponent on ObamaCare lawsuit Elizabeth Warren and the new communism MORE (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.

The clash, which is highly unusual among party colleagues in the upper chamber, came at a private caucus meeting about a subject that is helping Republicans land blows against their Democratic opponents.

“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’”

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Warren was referring to a deal Sen. Joe ManchinJoseph (Joe) ManchinOvernight Health Care: Senate takes up massive HHS spending bill next week | Companies see no sign of drugmakers cutting prices, despite Trump claims | Manchin hits opponent on ObamaCare lawsuit Manchin hits opponent on ObamaCare lawsuit with new ad The Hill's Morning Report: Dems have a majority in the Senate (this week) MORE (D-W.Va.) and two other members of the caucus, Sens. Tom CarperThomas (Tom) Richard CarperSenate panel spars with Trump administration over treatment of unaccompanied immigrant children Senate study: Trump hasn’t provided adequate support to detained migrant children Overnight Energy: Trump elephant trophy tweets blindsided staff | Execs of chemical plant that exploded during hurricane indicted | Interior to reverse pesticide ban at wildlife refuges MORE (D-Del.) and Angus KingAngus Stanley KingOvernight Energy: Judge revives clean water rule | Keystone XL pipeline to get new environmental review | Nominee won't say if he backs funding agency Trump nominee won't say if he supports funding agency he was selected to run Trump draws bipartisan fire over Brennan MORE (I-Maine), struck with Republicans to peg student-lending rates to the 10-year Treasury notes. 

Sen. Tom HarkinThomas (Tom) Richard HarkinOn Nicaragua, the silence of the left is deafening Dem Senator open to bid from the left in 2020 Senate GOP rejects Trump’s call to go big on gun legislation MORE (D-Iowa), the chairman of the Health, Education, Labor and Pensions Committee, stood up to announce to colleagues that a fact card passed out by Manchin summarizing his proposal contained two mistakes.

Harkin disputed Manchin’s claim that, under the bipartisan proposal, the interest rates for new Stafford loans would be 3.66 percent. Harkin said that claim failed to reflect that under the Manchin proposal, the rates on undergraduate Stafford loans would hit 7.1 percent by 2019.

Under the law that expired on July 1, the rate for subsidized Stafford loans was 3.4 percent. It has jumped to 6.8 percent and will remain at that level until Congress acts.

Harkin also hit Manchin for claiming the bipartisan plan places a cap on interest rates.

The bipartisan proposal in the Senate would cap student loan rates at 8.25 percent, but only for consolidated loans, not individual ones.

Manchin and his allies, Carper and King, pushed back against the pressure. They took the rare step of holding a competing press conference with reporters in the Ohio Clock corridor while Senate Majority Leader Harry ReidHarry Mason ReidGOP’s midterm strategy takes shape Battle of the billionaires drives Nevada contest Senate Democrats should stop playing politics on Kavanaugh MORE (D-Nev.) touted a separate Democratic proposal to reporters. That plan, sponsored by Sen. Jack ReedJohn (Jack) Francis ReedPentagon, GOP breathe sign of relief after Trump cancels parade Top Senate Democrat: Space Force is 'not the way to go' Sunday shows preview: Virginia lawmakers talk Charlottesville, anniversary protests MORE (D-R.I.), would freeze the rate for subsidized Stafford loans at 3.4 percent for another year.

The bipartisan plan endorsed by Manchin and the others would set interest rates for undergraduate Stafford loans at the 10-year Treasury rate plus 1.85 percent. It would set the rates for unsubsidized graduate Stafford loans at the 10-year Treasury rate plus 3.4 percent.

It would reduce the deficit by $1 billion over 10 years, which Warren and other liberals have characterized as balancing the budget on the backs of students.

The rival messages appeared to exasperate Sen. Charles SchumerCharles (Chuck) Ellis SchumerTo make the House of Representatives work again, make it bigger Reforms can stop members of Congress from using their public office for private gain Election Countdown: GOP worries House majority endangered by top of ticket | Dems make history in Tuesday's primaries | Parties fight for Puerto Rican vote in Florida | GOP lawmakers plan 'Freedom Tour' MORE (N.Y.), the Senate Democratic messaging chief, who engaged in an animated conversation with Manchin, Carper and King before they met with reporters.

Reid tersely described Tuesday’s caucus meeting as “lively.”

While Manchin, Carper and King stood only a few yards down the ornate corridor outside the Senate chamber, Reid drew a line, declaring he would only back a plan that guarantees student loan rates will remain below the current 6.8-percent rate.

“I’ve told my caucus, I’ve told individual senators, if you can explain to me why doing something is better than doing nothing, then we’ll do it,” he said. “All the proposals, within two years, at the outside three years, make the rate more than 6.8 percent.”

Backers of tying the loan rates to Treasury bonds point out that it would result in lower rates now, but Reid said that interest rates are just now beginning to rise from all-time lows, with nowhere to go but up.

“We have the lowest interest rates we’ve had in the history of this country,” he said. “Interest rates are going to go up, and who’s going to suffer from that? Students.”

 After speaking to reporters, Reid planned to meet with Education Secretary Arne DuncanArne Starkey DuncanObama Education Secretary: US education system is 'top 10 in nothing' Obama Cabinet official: Trump doesn’t want educated workforce Obama Education secretary: DeVos's yacht set adrift a 'crazy metaphor' for her policy MORE and White House chief of staff Denis McDonoughDenis Richard McDonoughLive coverage: Justice IG testifies before House on report criticizing FBI Ex-Obama chief of staff: Obama's Russia response was 'watered down' Former Obama officials launch advocacy group aimed at Trump's foreign policy MORE to further discuss the matter.

Manchin and Carper said they hoped their proposal would receive a vote on the Senate floor, but Harkin said that would not happen Wednesday.

“Why should there be a side-by-side?” he said.

Harkin said Manchin could offer his plan as an amendment if the Senate votes to proceed on the Democratic alternative freezing the rate for subsidized Stafford loans at 3.4 percent for one year.  

The Senate will vote Wednesday to end debate on the motion to proceed to that measure.

Proponents of a one-year freeze of the lower, 3.4 percent rate argued ahead of the floor vote that Congress should tackle the rate as part of comprehensive reforms to higher education, coming as part of the reauthorization of the Higher Education Act.

“It will give us time to look at student lending in a comprehensive way,” said Reed.

There were indications Tuesday that Democrats were looking for some sort of compromise, and some may be enticed to join the market-based approach pushed by Manchin and others. Sen. Claire McCaskillClaire Conner McCaskillThe Hill's Morning Report: Dems have a majority in the Senate (this week) Schumer to meet with Kavanaugh on Tuesday GOP leader criticizes Republican senators for not showing up to work MORE (D-Mo.), said she could back student loan interest rates based on market movements as long as there are sufficient caps on the rates.

“We might find a sweet spot if we could do a little bit of market, a little bit of caps, and see if we can’t put together a bipartisan group on that,” she said.

And Sen. Bob CaseyRobert (Bob) Patrick CaseyTop Koch official fires back at critics: We are not an 'appendage' of the GOP Dem senator: Media should stop covering Trump rallies like they're breaking news The Hill's Morning Report: Trump tries to rescue Ohio House seat as GOP midterm fears grow MORE Jr. (D-Pa.), who is a co-sponsor on Reed’s one-year freeze bill, said he was very interested in finding a longer-term solution.

“I’m willing to listen to anything,” he said. “I think it’s vital we start trying to move forward on a longer-term plan.”

Despite the efforts of Manchin and King, it was clear that some liberal lawmakers would not be swayed.

Sen. Bernie SandersBernard (Bernie) SandersBoogeywomen — GOP vilifies big-name female Dems RealClearPolitics editor: Moderate Democrats are losing even when they win Sanders tests his brand in Florida MORE (I-Vt.), a strong proponent of freezing the lower rates, called the bipartisan bill “totally insane.”

“The American people would laugh at that. It’s not a proposal,” he told The Hill, adding that the administration’s push for a market-based student loan rate is also a nonstarter.

“We should make sure working families in this nation can afford college,” he said. “The White House’s proposal is absurd as well.”

Meanwhile, Senate Republicans looked to keep up pressure on Democrats, again highlighting that the White House has also called for student loan rates tied to Treasury bonds.

Sen. Lamar AlexanderAndrew (Lamar) Lamar AlexanderGovernor's race grabs spotlight in Tennessee primaries A single courageous senator can derail the Trump administration GOP worries trade wars will last as Trump engages in temporary tiffs MORE (R-Tenn.), who is a co-sponsor of the compromise bill, said a one-year freeze would leave students “twisting in the wind,” and make student loans a regular political football like the so-called “doc fix.”

— Published at 4:56 p.m. and updated at 8:23 p.m.