WASHINGTON — The Senate rejected dueling Democratic and Republican plans on Thursday for averting a July 1 doubling of interest rates on federal college loans for 7.4 million students, pushing back efforts to resolve the electionseason showdown until next month.
In other action on Thursday, the Senate approved legislation that aims to step up oversight of the nation’s imported pharmaceutical supply.
In mostly party-line roll calls, senators voted 62-34 against the GOP package and 51-43 for the Democratic version, with each falling short of the 60 votes needed for approval. Though both defeats were preordained, the twin votes gave lawmakers from each party a chance to show they favor easing students’ financial burdens — and potential grist for campaign ads accusing the other side of opposing the effort.
Arkansas Democratic Sen. Mark Pryor voted for the Democratic version of the interestrate plan and against the Republican one. Republican Sen. John Boozman voted against the Democratic plan and for the Republican plan.
A 2007 law gradually reduced interest rates on subsidized Stafford loans for low- and middle-income undergraduates to 3.4 percent. To save money, it mandated that rates return to 6.8 percent for new loans as of July 1.
President Barack Obama has made preventing a rate increase a priority and has appeared at colleges and on television talk shows to promote it. Though some Republicans expressed early concerns that retaining the lower rate would fuel college tuition increases, likely GOP presidential candidate Mitt Romney endorsed freezing the rate and most GOP lawmakers have done the same.
Ten conservative GOP senators opposed their own party’s proposal, with some expressing concerns about budget costs and saying the loan market should set its own prices.
Both measures rejected Thursday would delay the interest-rate increase for a year at a cost of $6 billion, but each side’s bill was paid for in a way the other couldn’t tolerate. Democrats proposed raising Social Security and Medicare payroll taxes on high-earning owners of some privately held companies and professional practices, while Republicans would abolish an Obama preventive health program.
That idea drew a White House veto threat when Republicans used it to pay for their House-passed bill in April.
“The Republican proposal is paid for by stripping Americans of lifesaving preventive health care,” said Senate Majority Leader Harry Reid of Nevada, adding that “it would be a shame” to do that.
Senate Minority Leader Mitch McConnell of Kentucky argued that the Democratic plan showed they wanted “a scapegoat more than a solution” because they knew Republicans would oppose its tax provision.
He also tried goading Obama, saying, “If the president’s got time to run around to late-night comedy shows and college campuses talking about this issue, then he can pick up the phone and work out a solution.”
The Education Department expects 7.4 million undergraduates to borrow subsidized Stafford loans next year averaging $4,226. Doubled interest rates would add around $1,000 in costs, which for the typical loan taking 12 years to repay would mean less than $10 monthly in added expense.
The Federal Reserve Bank of New York estimates that at least 37 million Americans owe $870 billion for outstanding student loans, a figure that is growing and that exceeds the money owed for credit cards or auto loans. Four in 10 people under age 40 owe money for a college loan, the bank says.
Meanwhile, U.S. regulators would inspect more drug manufacturing facilities in China, India and other foreign countries as part of legislation approved Thursday that aims to step up oversight of the nation’s imported pharmaceutical supply.
The Senate bill, approved by an overwhelming 96-1 vote, addresses a number of concerns about the safety and quality of imported medicines. It also gives regulators new tools to combat drug counterfeiting and shortages.
The legislation represents a major shift in how the government oversees the pharmaceutical industry. For more than 70 years, the Food and Drug Administration has focused its inspections on U.S. factories. But over time, most companies have moved their operations overseas to take advantage of cheaper labor and materials. Between 2001 and 2008 the number of U.S. drugs made outside of the country doubled, according FDA figures. Today roughly 80 percent of the ingredients used in U.S. medicines are made overseas.
The Senate bill would do away with a requirement that FDA inspect all U.S. factories every two years, and give the agency more discretion to focus on foreign facilities. Currently, the FDA inspects the average foreign manufacturing facility just once every nine years. Under the bill, FDA inspectors would be instructed to target the most troubling manufacturing sites, regardless of location.
Both Boozeman and Pryor voted for the FDA bill.
Information for this article was contributed by Alam Fram and Matthew Perrone of The Associated Press.
Front Section, Pages 6 on 05/25/2012