Senate Republicans Block Bill to Avert Rise in Student Loan Rate

Along party lines, the Senate voted 52 to 45 on a key procedural motion, failing to reach the 60 votes needed to begin debating the measure. Senator Olympia J. Snowe, the moderate Republican from Maine who is retiring, voted present.

Senators said quiet negotiations had begun to resolve the impasse, but Democrats sought to raise the political pressure, vowing to take to the Senate floor to show the cost of inaction for students in their states.

“Mitt Romney says he supports what we’re trying to do. I’d suggest he pick up the phone and call Senator McConnell,” said Senator Harry Reid of Nevada, the Senate majority leader, referring to the Senate Republican leader, Mitch McConnell of Kentucky.

Republicans blamed Democrats for the impasse and suggested that they were manufacturing a political controversy instead of working out differences in private.

“We all agree we’re not going to let the rate go up,” Mr. McConnell said.

The vote was the Senate Republicans’ 21st successful filibuster of a Democratic bill this Congress, which started in January 2011. Republicans have blocked consideration of President Obama’s full jobs proposal, as well as legislation repealing tax breaks for oil companies, helping local governments pay teachers and first responders, and setting a minimum tax rate for households earning more than $1 million a year. Republicans say the measures were flawed and potentially harmful to the economic recovery.

But the student loan filibuster may be the highest-profile stalemate yet, because unlike those earlier bills, this one is not likely to be abandoned. Mr. Obama has elevated the issue by hammering Republicans on it for weeks. American students took out twice the value of student loans in 2011, about $112 billion, as they did a decade before, after adjusting for inflation. Over all, Americans now owe about $1 trillion in student loans. In 2010, such debt surpassed credit card debt for the first time.

The bill in limbo addresses only part of that burden. Graduate students with Stafford loans pay a higher rate, as do students with unsubsidized Stafford loans. Most undergraduates take out both unsubsidized and subsidized loans.

Republicans say they want to extend Democratic legislation passed in 2007 that temporarily reduced interest rates for low- and middle-income undergraduates who receive subsidized Stafford loans to 3.4 percent from 6.8 percent. But the Republicans would not accept the Senate Democrats’ proposal to pay for a one-year extension by changing a law that allows some wealthy taxpayers to avoid paying Social Security and Medicare taxes by classifying their pay as dividends, not cash income.

“They want to raise taxes on people who are creating jobs when we are still recovering from the greatest recession since the Great Depression,” said Senator Lamar Alexander, Republican of Tennessee, who instead wanted to pay for the rate decrease by eliminating a fund for preventive health care in Mr. Obama’s health care law.

Before the vote, Senate Democrats arrayed college students to plead for a yes vote, including Clarise McCants, 21, a junior at Howard University in Washington who said she pulled herself out of a troubled neighborhood in North Philadelphia and relies on $13,500 in Stafford loans for her tuition.

“I know I’m not the only one with dreams,” she said. “I’m here to ask Congress, ‘Don’t double my rate.’ ”

Republicans have not always been so averse to closing the loophole that the Senate bill addresses. In 2004, when it emerged that John Edwards, then a vice-presidential hopeful, had classified himself as a “subchapter S corporation” to pay himself dividends rather than income, conservatives criticized him for avoiding payroll taxes.

But the Democratic line of attack has been complicated by the House’s actions. Shrugging off a veto threat, the House passed an extension of the subsidized rate last month, paid for with the preventive health care fund. Thirteen Democrats voted for the bill, making up for the 30 Republicans who voted no because they opposed federal subsidies for an interest rate that they believed should be set by market forces. Those Democratic defections put the House bill over the top and fortified Republican arguments that the Senate Democrats were now to blame for the stalemate.

Representative Steny Hoyer of Maryland, the House minority whip, said Tuesday that those Democratic votes were driven by politics, not substance. “They didn’t want that 30-second ad” attacking them for opposing a rate-subsidy extension, he said. “That was not a demonstration at all for the funding source.”

Republicans made clear they would go on offense, blaming Democrats if interest rates doubled July 1.

“Instead of compounding the problem with more bad policies that raise taxes on small businesses and raid Social Security and Medicare, we must work together to prevent a rate increase on students and make it easier for job creators to hire them when they graduate,” Senator Roy Blunt, Republican of Missouri, said after the vote.

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Republicans aim to block Cal State chairman's second term - Los Angeles Times

Cal State Chancellor Charles B. Reed listens as board Chairman Herbert L. Carter addresses the trustees. (Mark Boster, Los Angeles Times / January 25, 2012)

As chairman of the governing board of the California State University system, Herbert L. Carter has positioned himself as a consensus builder at a time when the system has been battered as never before by budget cuts, student protests and discord over salary and hiring policies.

The former president of the United Way and chairman of the Los Angeles Commission on Human Relations has spent decades attempting to forge compromise with differing factions. But now he is struggling to bridge the gap between Republicans and Democrats in the state Legislature to win a second term on the Board of Trustees.

Senate Republicans have signaled that they will block the confirmation, citing Carter's role in controversial decisions last year to increase executive pay while also boosting student tuition.

Democrats see the opposition as partisan posturing having little to do with those actions. Although Democrats control both legislative houses, Republicans have leverage in this fight: nominations to the Cal State board are among the few that require a two-thirds majority, meaning at least two Republican votes are needed.

A decision must be made by Monday, the last Senate floor session before the confirmation deadline on Wednesday.

Last week, Sen. Joel Anderson (R-San Diego) sent a letter to Gov. Jerry Brown asking him to withdraw his appointment of Carter.

"Since 1984, Herbert Carter has been near the center of every CSU pay hike scandal,'' Anderson wrote. "The CSU trustees don't seem to understand that their 'compromise' of setting a CSU's president's pay at $325,000 is insulting to California students, parents, and taxpayers."

Anderson referred to the board's recent action — proposed by Carter — to cap the pay of new executives at 10% above that of their predecessor, with a limit of $325,000 in public funds.

Brown spokesman Evan Westrup said that Carter "has a long and distinguished record of service and commitment to higher education and he deserves the consideration and support of all senators, regardless of party affiliation."

Speaking to reporters on Friday in Washington, D.C., the governor said Republicans "get a little petty. They don't have much power left, so if they can take a shot they will."

Carter, 78, one of the few board members with an extensive education background, was appointed by former Gov. Arnold Schwarzenegger to the 25-member panel in 2004. Carter declined a request to be interviewed.

He became chairman in 2009, presiding over a system that has suffered devastating budget cuts and imposed steep tuition increases — from $2,334 in 2004 to $5,472 this academic year for undergraduates.

A board meeting in November at which trustees approved another 9% fee hike for fall 2012 was marked by violent disruptions. Trustees were criticized for leaving the session and reconvening in another room with no members of the public present. That followed a public outcry over the $400,000 salary — $100,000 more than his predecessor — awarded last summer to San Diego State President Elliot Hirshman.

Criticism of those actions, though, was led by Democrats including Sen. Leland Yee (D-San Francisco), Sen. Elaine Alquist (D-Santa Clara) and Sen. Ted Lieu (D-Torrance), all of whom crafted legislation to limit pay for campus presidents. Gov. Jerry Brown also wrote a scathing letter to Carter criticizing the moves.

Republicans cited Brown's letter about the pay packages and said the issue had not been adequately resolved.

"If they were consistent they would stand with us,'' Sen. Tony Strickland (R-Moorpark) said of his Democratic colleagues. "I'm going to oppose any of these trustees that come up for confirmation who voted for pay increases during these tough economic times. I would be shocked if some of these Democrats don't join us in opposing this appointment."

Lieu, however, supports Carter and accused Republicans of politicizing the appointment.

"He is the kind of trustee that you want — someone who will respond to what students, faculty and legislators say to him — and it would be a shame if he is not reconfirmed," Lieu said.

Carter was raised in Arkansas and received a bachelor's degree at the University of Arkansas, Pine Bluff, and a doctorate in public administration at USC. He was executive director of the Los Angeles Commission on Human Relations in the late 1960s, and president and chief executive of the United Way of Greater Los Angeles in the 1990s. He served in several academic posts in the Cal State system, including affirmative action officer, executive vice chancellor for administration and acting president of Cal State Dominguez Hills.

Those who have known or worked with Carter describe him as fair-minded and decent, an unlikely figure to have become a political foil in the rough and tumble jousting of state politics. While he presides over the sometimes contentious bi-monthly meeting of trustees in Long Beach, much of the ire over fee hikes and salary disputes has been aimed at Cal State Chancellor Charles B. Reed.

San Francisco State President Robert Corrigan said Carter has been an effective advocate for students and the university.

"The heart of the matter is that he has only the best interests of the university in mind," said Corrigan, who is retiring at the end of the school year after 24 years as president. "He speaks eloquently about the needs of students, he is open and fair in meetings and I think we will be weakened if we do in fact lose him as a member of board …It's not good for the campuses, not good for students and frankly, unfair to Herb."

As a trustee, Carter has sought student input and often seeks the middle ground on difficult issues, said Gregory Washington, a Cal State Fullerton student and president of the Cal State Student Assn.

"He has always seen students as an ally that can work with CSU and not as opponents," Washington said. "He was also a leader of civil rights in higher education and he offers the voice of compromise a lot of the time."

carla.rivera@latimes.com

patrick.mcgreevy@latimes.com

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Republicans block action on Bush trade pacts (Reuters)

WASHINGTON (Reuters) – Senate Republicans on Thursday blocked action on three free trade agreements they have long supported to protest against President Barack Obama's decision to include a retraining program for workers hurt by trade in one of the bills.

"We gave the administration fair warning on this," said Senator Orrin Hatch, the top Republican on the Senate Finance Committee, referring to the fight over the Trade Adjustment Assistance program.

"We made it clear time and time again that we would not stomach attaching a program as big as this on to these agreements. The president knew where we stood and he decided to ignore those who don't agree with him," he told reporters.

The deals with South Korea, Panama and Colombia are expected to boost exports by $13 billion, helping to support or create tens of thousands of jobs.

But the dispute clouds chances of their approval by the end of July, as both the Obama administration and many Republicans have said they want.

Democrats accused Republicans of a political stunt aimed at hurting Obama ahead of the 2012 presidential elections, after demanding for years he send the deals to Congress for a vote.

"Today the agreements were there -- and Senate Finance Committee Republicans were not," U.S. Trade Representative Ron Kirk said in a statement.

"Americans need their leaders at work -- in their seats, eyes on the ball, pushing every day to enact policies that create jobs here at home, advance this country's economic recovery, and help our working families."

Senate Finance Committee Chairman Max Baucus canceled a Thursday meeting of the panel after the Republican boycott.

Hatch said Republicans were making a principled stand and tried to persuade Democrats to reschedule the meeting to give senators more time to review the legislation and the 97 amendments expected to be offered.

"Why isn't this reasonable to give the senators on the committee the time to consider these agreements? What is the White House afraid of?" Hatch said.

$1 BILLION A YEAR

TAA was broadened in 2009 to cover more workers and provide more healthcare assistance. But those new benefits, which boosted the cost of the program to about $1 billion per year, expired early this year and Republicans in the House of Representatives, fresh from their victory at the polls in November, balked at renewing them.

That made Obama's job to win approval of the trade pacts more politically difficult since many Democrats blame previous agreements for the loss of manufacturing jobs.

In May, the White House warned it would not send the trade deals to Congress for votes until there was also a deal to renew TAA. They negotiated a compromise TAA program with House Ways and Means Committee Chairman Dave Camp, a Republican, and stuck it in the implementing bill for the South Korea deal, although Camp did not agree to that move.

Baucus, a Democrat, said U.S. exporters would pay a price for the setback.

"Every day we delay, we lose ground to our competitors. Tomorrow, Korea's trade agreement with the European Union goes into force. In August, Colombia's deal with Canada enters into force," said Baucus.

He said after the aborted meeting that he still hoped for action in July on the pacts.

The House Ways and Means Committee could take up the agreements next week, but Republicans in that chamber also are insisting on a separate vote on TAA.

The three deals were signed during the administration of former Republican President George W. Bush and have been languishing for more than four years.

The U.S. Chamber of Commerce, in a letter to Baucus and Hatch, said it strongly supported both the trade deals and renewal of TAA, as well as two trade programs for developing countries included in the Senate draft version of the Colombia implementing bill.

"A U.S. Chamber study has warned that the United States would lose more than 380,000 jobs and $40 billion in export sales if the pending agreements suffer further delays," said R. Bruce Josten, the group's executive vice president.

(Additional reporting by Donna Smith; editing by Mohammad Zargham)

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